圣晖集成：2023年年度报告(英文版)

Company Code: 603163 Company Abbreviation : Acter Group

Acter Technology Integration Group Co., Ltd.

Annual Report 2023

Important NoticesI. The Board of Directors, Supervisory Committee, Directors, Supervisors and Senior Management ofthe Company guarantee the truthfulness, accuracy and completeness of the contents of the annualreport, and assume individual and joint legal liabilities for any false records, misleading statements ormaterial omissions.II. All Directors of the Company attended the Board meeting.III. ShineWing Certified Public Accountants LLP has issued a standard unreserved audit report forthe Company.IV. Liang Jinli, the person in charge of the Company, Chen Zhihao, the person in charge of accountingwork, and Xiao Jingxia, the person in charge of the accounting organization (accounting supervisor)hereby certify that the financial report set out in the annual report is true, accurate and complete. V.Proposals for profit distribution or capitalization of provident fund for the reporting period adoptedby resolution of the Board of DirectorsThe Board of Directors of the Company proposes to distribute a cash dividend of RMB 8 (inclusive of tax)for every 10 shares to all shareholders on the basis of the total share capital of 100 million shares as at theend of 2023, totaling RMB 80,000,000.00 (inclusive of tax), with no stock dividend or capitalization, andthe remaining undistributed profits will be carried forward to be distributed in future years.VI. Risk Disclosure of Forward-Looking Statements

√ Applicable □ N/A

The forward-looking descriptions of future plans, development strategies and other forward-lookingstatements in this report do not constitute substantial commitments of the Company to investors, andinvestors are advised to pay attention to investment risks.

VII. Whether there is non-operational appropriation of funds by controlling shareholders and otherrelated partiesNoVIII. Whether there is any violation of the required decision-making procedures for the provision ofexternal guaranteesNoIX. Whether more than half of the directors are unable to guarantee the truthfulness, accuracy andcompleteness of the annual report disclosed by the CompanyNoX. Significant Risk WarningFor details, please refer to the possible risks mentioned in “Section III: Management Discussion and AnalysisVI、Discussion and Analysis of the Future Development of the Company (IV) Possible Risks”.XI. Others

□ Applicable √ N/A

Table of Contents

Section I Definitions ...... 4

Section II Company Profile and Key Financial Indicators ...... 6

Section III Management Discussion and Analysis ...... 11

Section IV Corporate Governance ...... 42

Section V Environmental and Social Responsibility ...... 64

Section VI Important Events ...... 66

Section VII Changes in Shares and Information about Shareholders ...... 87

Section VIII Relevant Information of Preferred Stock ...... 96

Section IX Relevant Information of Bonds ...... 97

Section X Financial Reporting ...... 97

Catalog of DocumentsAvailable for Inspection

The full text and abstract of this annual report signed by the current legalrepresentative and sealed by the Company;Financial statements containing the signatures and seals of the person incharge of the company, the person in charge of accounting work, and theperson in charge of the accounting organization (accounting supervisor).The original audit report containing the seal of the accounting firm and thesignature and seal of the certified public accountant;The originals of all the Company’s documents and announcements publiclydisclosed in the newspapers designated by the CSRC during the reportingperiod.

Section I DefinitionsI.DefinitionsIn this report, unless the context otherwise requires, the following terms shall have the meanings set outbelow:

Definitions of commonly used termsCompany, the Company, ActerGroup, Suzhou Acter

refer to Acter Technology Integration Group Co., Ltd.Sheng Huei Limited refers to

Sheng Huei (Suzhou) Engineering Co., Ltd., thepredecessor of the CompanySheng Huei International refers to

Sheng Huei International Co., Ltd., a direct controllingshareholder of the CompanyActer (Taiwan) refers to

Acter Co., Ltd., an indirect controlling shareholder of theCompanySuzhou Songhuei refers to

Suzhou Songhuei Business Management ConsultingPartnership (Limited Partnership), an employeeshareholding platform of the CompanySuzhou Shengzhan refers to

Suzhou Shengzhan Business Management ConsultingPartnership (Limited Partnership), a platform forshareholding by employees of the CompanyActer (Shenzhen) refers to

Shenghuei Engineering Technology (Shenzhen) Co., Ltd.Shenzhen Dingmao refers to Shenzhen Dingmao Trading Co., Ltd.Acter (Vietnam) refers to Sheng Huei Engineering Technology Company LimitedActer (Hong Kong) refers to Acter International LimitedActer (Singapore), Sheng Huei(Singapore)

refer to Acter Technology Singapore Pte. Ltd.Acter (Indonesia), Sheng Huei(Indonesia)

refer to Pt. Acter Technology IndonesiaActer (Malaysia), Sheng Huei(Malaysia)

refer to Acter Technology Malaysia Sdn. Bhd.Acter (Thailand), Sheng Huei(Thailand)

refer to Acter Technology Company LimitedSpace (Thailand) refers to Space Engineering Company LimitedNew Point (Seychelles) refers to New Point Group LimitedIndonesia Joint Venture refers to Pt. Acter Integration Technology IndonesiaHER SUO (Taiwan) refers to HER SUO ENG., CO., LTD.Enrich (Taiwan) refers to Enrich Tech Co., Ltd.NOVA (Taiwan) refers to NOVA Technology Corp.Winmega (Taiwan) refers to Winmega Technology Corp.WASTE refers to WASTE Recovery Technology Inc.Winmax (Shanghai) refers to Winmax Technology Corp.Winmax (Suzhou) refers to

Suzhou Winmax Technology Corp. It used to be calledSuzhou Guanbo Controlling Technology Co., Ltd.Novatech (Singapore) refers to Novatech Engineering & Construction Pte. Ltd.

Rayzher Industrial refers to Rayzher Industrial Co., Ltd.SMIC refers to

Smic Manufacturing (Shaoxing) Co., LTD

Foxconn Technology Group refers to

Lankao Yufu Precision Technology Co., Ltd.,Futaihua Industrial (Shenzhen) Co., Ltd.,Shanghai Foxconn Co., Ltd.,Yecheng Optoelectronics (Wuxi) Co., Ltd..,Interface Optoelectronics (SZ) Co., Ltd.,Interface Technology (Chengdu) Co., Ltd.Siliconware Technology refers to

Siliconware Technology (Suzhou) LimitedQuliang Electronics Co., LtdSanan Integrated refers to Xiamen Sanan Integrated Circuit Co., Ltd.Wistron InfoComm refers to Wistron Info Comm Co., Ltd.ASE refers to ASE WeiHai Inc.Nexchip refers to Nexchip Semiconductor CorporationWafer Works refers to Wafer Works (Shanghai) Co., Ltd.Reporting Period refers to The period from January 1, 2023 to December 31, 2023Articles of Association refers to

Articles of Association of Acter Technology IntegrationGroup Co., Ltd.General Meeting refers to

General Meeting of Shareholders of Acter TechnologyIntegration Group Co., Ltd.Board of Directors refers to

The Board of Directors of Acter Technology IntegrationGroup Co., Ltd.Supervisory Committee refers to

Supervisory Committee of Acter Technology IntegrationGroup Co., Ltd.CSRC refers to CSRCCompany Law refers to Company Law of the People’s Republic of ChinaSecurities Law refers to Securities Law of the People’s Republic of ChinaRMB/Yuan, RMBMillion/100, RMBMillion*100

refer to

Renminbi/Chinese Yuan, RMB Ten Thousand Yuan, RMBOne Hundred Million Yuan

Clean Room refers to

an enclosed space for high-end manufacturing industry,also known as clean plant and clean room, to controlairborne particles, harmful gases, microorganisms,temperature, relative humidity, spatial airflow distribution,airflow speed in all directions, as well as vibration, staticelectricity, electromagnetic interference and noise, etc., inorder to satisfy the needs of the production process ofproducts.Cleanliness refers to

the concentration of dust existedin the air within an airenvironment. Typically, it refers to the quantity of particlesequal to or exceeding a specified particle size within adesignated volume of air. Elevated dust levels are linked toreduced cleanliness, whereas low dust content signifieshigh cleanliness.System Integration refers to

the business of combining software, hardware andcommunication technology to solve information processingproblems for users. The separated parts of the integration

are originally independent systems, and the parts of theintegrated whole can work organically and coordinatelywith each other to bring out the overall effect and achievethe purpose of overall optimization.Hook-up refers to

the connection from the main system piping to the processequipment. Scope includes electricity, water supply anddrainage pipes, process piping, exhaust systems, etc.IC Semiconductor refers to

a semiconductor manufacturing process in which anumber of transistors, resistors, capacitors, and othercomponents are fabricated on a small monocrystallinesilicon wafer and assembled into a complete electroniccircuit using multi-layer wiring or tunnel wiring.Package refers to

the shell in which a semiconductor integrated circuit chip ismounted, which not only plays the role of placing, fixing,sealing, protecting the chip and enhancing the electrical andthermal properties, but also serves as a bridge between theinternal and external circuits of the chip.

Electronics Industry refers to

an industrial sector that manufactures electronic equipment,electronic components, electronic devices, and specializedraw materials. It mainly produces electronic computers,televisions, radios, and equipment for communication,radar, broadcasting, navigation, electronic control, andelectronic instrumentation; resistors, capacitors, inductors,printed circuit boards, plug-in components, and devicessuch as tubes, transistors, and integrated circuits; as well ashigh-frequency magnetic materials, high-frequencyinsulating materials, and semiconductor materials, andother specialized raw materials.BIM refers to

Building Information Modeling in short, which is a newtool for architecture, engineering and civil engineering, andis a computer-aided design tool based on three-dimensionalgraphics, object orientation and architecture.PCB refers to

Printed Circuit Board in short, which is an importantelectronic component, the support body of electroniccomponents, and the carrier for the electricalinterconnection of electronic components.EPCO refers to

the general contracting entrusted by the owner, inaccordance with the contract for the whole process ofdesign, procurement, construction, operation and otherintegration of engineering construction projects.GMP refers to

Good Manufacturing Practice in short, a system forensuring the continuous production of pharmaceuticalproducts at a specified quality.

Section II Company Profile and Key Financial Indicators

I. Company Information

Full Legal Name in Chinese 圣晖系统集成集团股份有限公司Short Legal Name in Chinese 圣晖集成Full Legal Name in English ACTER TECHNOLOGY INTEGRATION GROUP CO., LTD.Short Legal Name in English ACTER GROUP

Legal Representative Liang Jinli

II. Contact Information

Secretary of the Board of Directors Securities RepresentativeName Chen Zhihao Gao JiejieAddress

No. 189, Shilin Road, XushuguanEconomic Development Zone, Suzhou Hi-Tech Zone, Jiangsu Province, China

No. 189, Shilin Road, XushuguanEconomic Development Zone, Suzhou Hi-Tech Zone, Jiangsu Province, ChinaTel. 0512-85186368 0512-85186368Fax [phone] 0512-87773169E-Mail [e-mail] [e-mail]

III. Basic Information

Registered Address

No. 189, Shilin Road, Xushuguan EconomicDevelopment Zone, Suzhou Hi-Tech Zone, JiangsuProvince, ChinaHistorical Changes in Registered Address N/ABusiness Address

No. 189, Shilin Road, Xushuguan EconomicDevelopment Zone, Suzhou Hi-Tech Zone, JiangsuProvince, ChinaZip Code of the Business Address 215151, SuzhouCompany’s Website www.acter.com.cnE-mail [e-mail]

IV. Place for Information Disclosure and Deposit

Name and website of the media forinformation disclosure in annual report

China Securities Journal: https://www.cs.com.cn/Shanghai Securities News: https://www.cnstock.com/STCN: http://www.stcn.com/Securities Daily: http://www.zqrb.cn/Website of the stock exchange forpublishing annual reports

www.sse.com.cnDeposit place of annual report

Office of the Board of Directors of Acter Group, No. 189,

Shilin Road, Xuushuguan Economic Development Zone,

Suzhou Hi-Tech Zone, Jiangsu Province, China

V. Profile of Company Stock

Profile of Company StockStock Type

Stock Exchange ofShares Listed

Stock Short Name Stock Code

Stock Short NameBefore ChangeA-share

Shanghai StockExchange

Acter Group 603163 N/A

VI. Other Information

Accounting Firmengaged by theCompany (domestic)

Name of Firm ShineWing Certified Public Accountants LLPBusiness Address

8/F, Block A, Fuhua Mansion, No. 8Chaoyangmen North Street, DongchengDistrict, Beijing, China

Name of the SignatoryAccountants

Liu Yuehua, Hou Shoufeng

Sponsoringorganizationperformingcontinuoussupervision during thereporting period

Name of Sponsor Soochow Securities Co., Ltd.Office Address No. 5 Xingyang Street, Suzhou Industrial ParkName of Signatory SponsorRepresentative

Xia Jianyang, Zhang BoxiongPeriod of ContinuousSupervision

October 13, 2022 to December 31, 2024

VII. Key Accounting Data and Financial Indicators for the Previous Three Years(I) Key Accounting Data

Unit: Yuan Currency: RMB

Key Accounting Data

2023

2022

Yoy change(%)

2021Operating revenue 2,008,924,995.68 1,627,895,120.49 23.41 1,702,334,398.59Net profit attributable toshareholders of listedcompanies

138,590,474.42 122,867,982.79 12.80 123,603,770.26Net profit attributable toshareholders of the listedcompany afterextraordinary gains andlosses

136,061,341.30

113,463,515.78

19.92

123,839,170.02Net cash flows fromoperating activities

133,522,931.23 161,089,465.80 -17.11 -64,818,199.36End of 2023 End of 2022

Yoy change(%)

End of 2021Net assets attributableto shareholders of listedcompanies

1,082,257,514.27 1,009,348,273.61 7.22 423,289,612.23Total assets 1,904,362,490.44 1,777,146,294.25 7.16 1,159,716,566.13

(II) Key Financial Indicators

Key Financial Indicators 2023 2022 Yoy change (%) 2021Basic earnings per share (yuan/share) 1.39 1.51 -7.95 1.65Diluted earnings per share (yuan/share) 1.39 1.51 -7.95 1.65Basic earnings per share afterextraordinary gains and losses(yuan/share)

1.36 1.40 -2.86 1.65Weighted average return on net assets(%)

13.67 21.19 Decrease of 7.52% 33.59Weighted average return on equityafter extraordinary gains and lossesAverage return on net assets (%)

13.42 19.56 Decrease of 6.14% 33.65

Explanations on key accounting data and financial indicators of the Company for the previous three yearsas at the end of the reporting period

√ Applicable □ N/A

According to the “Proposal on the Profit Distribution Plan for the Year 2022” considered and approvedat the Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meeting of the Second

Session of the Supervisory Committee of the Company held on April 7, 2023 and the Annual GeneralMeeting of the Company held on April 28, 2023, based on the total share capital of 80,000,000 shares priorto the implementation of the equity distribution, the Company transferred 2.5 shares for every 10 shares toall shareholders by way of capitalization of capital reserve, resulting in a total of 20,000,000 shares. Afterthis capitalization, the total share capital of the Company became 100,000,000 shares. The equity distributionwas completed during the reporting period. In order to ensure the comparability of accounting indicators, thebasic earnings per share for 2022 and 2021 have been recalculated and presented based on the changednumber of shares.

VIII. Differences in Accounting Data under Domestic and Overseas Accounting Standards(I) Difference in net profit and net assets attributable to shareholders of the listed company betweenthe financial reports disclosed in accordance with international accounting standards and thosedisclosed in accordance with China accounting standards

□ Applicable √ N/A

(II) Difference in net profit and net assets attributable to shareholders of the listed company between

the financial reports disclosed in accordance with overseas accounting standards and thosedisclosed in accordance with China accounting standards

□ Applicable √ N/A

(III) Explanation of the differences between domestic and overseas accounting standards:

□ Applicable √ N/A

IX. Key Financial Data of 2023 by Quarter

Unit: Yuan Currency: RMB

Q1(January-March)

Q2(April-June)

Q3(July-September)

Q4(October-December)Operating Revenue 419,848,138.55 495,472,283.17 530,389,260.88 563,215,313.08Net profit attributable toshareholders of listedcompanies

36,223,388.39 40,844,180.88 37,061,523.72 24,461,381.43Net profit after extraordinarygains and losses attributable toshareholders of listedcompanies

34,320,192.92

41,129,128.30

36,239,469.39

24,372,550.69Net cash flows from operatingactivities

-32,077,131.59 73,739,081.78 -99,323,932.35 191,184,913.39Explanation of differences between quarterly data and data in disclosed periodic reports

□ Applicable √ N/A

X. Non-recurring Profit and Loss and Amount

√ Applicable □ N/A

Unit: Yuan Currency: RMBNon-recurring profit and loss items

Amount for2023

Note

(Ifapplicable)

Amount for

2022

Amountfor 2021Profits or losses on disposal of non-currentassets, including elimination of provision forasset impairment

52,564.23 237,578.33 352,738.82Government grants recognized in profit or lossfor the current period, except for thosegovernment grants that are closely related to

3,731,552.00 3,524,827.14 174,197.46

the Company’s normal business operations, inline with national policies and in accordancewith defined criteria, and have a continuingimpact on the Company’s profit or lossProfits or losses from changes in fair value offinancial assets and liabilities held by non-financial enterprises and profits or losses fromthe disposal of financial assets and liabilities,except for effective hedging business related tothe Company’s normal business operations

117,673.57

-11,643.74Occupancy fees charged to non-financialenterprises recognized in profit or loss for theperiod

Profits or losses on entrusted investment orasset management

Profits or losses on entrusted external loansLosses on assets due to force majeure, such asnatural disaster

Reversal of provision for impairment ofreceivables individually tested for impairment

-35,000.00Gain arising from the difference between thecost of investment in subsidiaries, associatesand joint ventures and the fair value of netidentifiable assets of the investee at the time ofinvestment acquisition

Subsidiaries arising from a businesscombination under the same control Net gainor loss for the period from the beginning ofthe period to the date of the combination

Gain or loss on exchange of non-monetaryassets

Profits or losses on debt restructuringOne-time costs incurred by the enterprise dueto discontinuation of relevant businessactivities, such as employee relocationexpenses, etc.

One-time impact on profit or loss due toadjustments in tax, accounting and other lawsand regulations.

One-time share-based payment expensesrecognized due to cancellation ormodification of the share incentive plan

Gains or losses arising from changes in the fairvalue of employee remuneration payable afterthe feasible date for cash-settled share-basedpayments

Gains or losses from changes in fair value ofinvestment properties subsequently measuredusing the fair value model

Profits or losses from transactions with anapparent unfair price

Gains or losses arising from contingenciesunrelated to the Company’s normal businessoperations

Custodian fee income from entrustedoperations

Non-operating revenue and expenses otherthan those mentioned above

-811,609.16 -840,019.94

-785,670.35Other profits or losses that meet the definitionof non-recurring profits or losses

9,569,293.94Less: Income tax effect 445,099.41 3,204,886.03 -69,978.05Effect of minority interests (after tax) -1,725.46Total 2,529,133.12 9,404,467.01

-235,399.76If the company recognizes as non-recurring profit and loss items that are not listed in “InterpretativeAnnouncement for Information Disclosure of Companies Issuing Public Securities No. 1 - Non-RecurringProfit and Loss” and the amount is material, and if the company defines non-recurring profit and loss itemslisted in “Interpretative Announcement for Information Disclosure of Companies Issuing Public SecuritiesNo. 1 - Non-Recurring Profit and Loss” as recurring profit and loss, the reasons shall be explained.

□ Applicable √ N/A

XI. Items Measured Using Fair Value

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Name Opening balance Closing balance

Current periodchanges

Amount of impacton current profitStructured deposits 122,119,888.89 0 122,000,000.00 -119,888.89

Total 122,119,888.89 0 122,000,000.00 -119,888.89

XII. Others

□ Applicable √ N/A

Section III Management Discussion and Analysis

I. Discussion and Analysis of Operating ConditionsIn 2023, the Company continues to implement the corporate culture policy of “doing it right the firsttime, doing it well every time”, consistently and wholeheartedly providing comprehensive services to everyclient, and is committed to becoming a creator of high-quality spaces. Looking back on the past year,“involution” has become the best summary cliche of the increasingly intense Chinese market competition,while the foreign market is facing pressure due to the increase in labor cases, leading to a shortage of versatileand professional talents. Facing the complex Chinese and international business environment, the Companycontinuously optimizes internal processes, actively takes risk response measures, focuses on the quarterlybusiness goals conveyed by the lean meeting, and implements strategic measures with small steps and steadyprogress. It diligently organizes various tasks, actively adjusts client and product structures, and lays a goodfoundation for stability and improvement of competitiveness in terms of cost, quality, safety, progress, andenvironmental protection.The year of 2023 marks a year in which the Company’s research and development technologyachievements are demonstrated. During the reporting period, the Company was honored as a “high-techenterprise”. As of the end of 2023, the Company held 61 patents, including 9 invention patents, 52 utilitymodel patents, and 3 software copyrights.

In 2023, the Company achieved steady growth in its business performance. The annual business goalswere met as scheduled, with substantial increases in both revenue and net profit. During the reporting period,the Company achieved operating revenue of RMB 2,009 million, an increase of 23.41% year-on-year, and anet profit of RMB 140 million, an increase of 13.86% year-on-year. The Company’s performance growthwas mainly due to increased demand from downstream application clients in the clean room industry, thefruitful results of the Company’s early layout in the Southeast Asia region, continuous development of newclients while maintaining stable relationships with existing high-quality clients, and strengthening serviceinnovation capabilities and overall competitiveness through talent development, skills training, and industry-university-research cooperation. The Company’s management team led all employees in standing up toexternal pressures, overcoming internal difficulties, and making strenuous efforts to successfully fulfill themain objective tasks.

As of the end of 2023, the Company has held a total of

authorized patents,including

invention patents,

utility model patents, and

softwarecopyrights. Besides, the Company has also registered a total of

trademarks.

Operating Revenue (RMB 100 million)

Year-on-yeargrowth rate:

23.41%

2022 2023

RMB 1,628 million

RMB 2,009 million

Net profit (RMB 100 million)

Year-on-yeargrowth rate:

13.86%

2022 2023

RMB 123 million

RMB 140 million

II. Industry in which the Company operated during the reporting period(I) Basic Overview of the Industry

The Company is primarily engaged in providing clean room system integration engineering solutionsfor the advanced manufacturing industry as a professional service provider. According to the classificationstandards of the “National Economic Industry Classification” and the “Industry Classification Guidelines forListed Companies” issued by the CSRC, the Company’s clean room engineering service belongs to the sub-category “E49 – Building Installation” within the “E – Construction” industry.From the perspective of the industrial chain, the clean room industry can be divided into upstreamsupply, midstream construction, and downstream applications. Specifically:

- Upstream involves suppliers of building materials, system equipment, and electromechanicalequipment, which directly impact the progress and completion of projects. Their prices directly affect theindustry’s costs and significantly influence the profits of industry enterprises.

- Midstream encompasses the Company’s industry, mainly including engineering survey, engineeringdesign, and engineering construction processes.

- Downstream refers to industries that require clean rooms in their production or operation processes,mainly in the fields of integrated circuits (IC), photovoltaics, and display panels. The IC semiconductorindustry in the electronics sector is currently the primary downstream industry for clean room engineering,and its development significantly influences the future development of industry enterprises. It drives thedemand for clean room engineering services, which are fulfilled by industry enterprises. With the continuousadvancement of industrial technology, downstream industries constantly raise their requirements for cleanrooms, thereby pushing industry enterprises to continually research and develop new technologies, and applynew construction techniques to adapt to the changing market demand.

The Company focuses on the integrated engineering of clean room systems in the advancedmanufacturing industry, with the “Engineering, Procurement, Construction, and Operation (EPCO)”. It canprovide clean workshop construction planning, design suggestions, equipment configuration, clean roomenvironmental system integration engineering, and maintenance services, belonging to the midstreamconstruction industry of the clean room industry chain.

(II) Development Overview of Clean Room Industry

The development of the clean room industry in China began in the 1960s, drawing on the earlytechnology of the former Soviet Union, mainly used in national defense, aerospace, atomic energy, andscientific research, and later gradually expanded to the control of environmental conditions in industries such

Cleanroom Industry Chain Diagram

Upstream Supply

MidstreamConstruction

BuildingMaterials/HardwareFire Protection/Control

EquipmentAirconditioning/Purification

EquipmentElectromechanical/Lighting

Equipment, etc.

Engineering Survey

Engineering Design

EngineeringConstruction

DownstreamA

licationsIC SemiconductorOptoelectronic PanelsPrecisionManufacturin

ppg

BiopharmaceuticalsFood & ChemicalsAerospaceNew Energy, etc.

as precision machinery, non-ferrous metal purification in metallurgical systems, and pulling monocrystallinesilicon.

The clean room industry in China experienced vigorous development from the 1970s to the 1990s. In1977, the first high-level biological clean room was established, and since the 1980s, the construction ofbiological clean rooms has gradually increased, extensively used in the daily chemical industry.Subsequently, clean rooms began to be applied in the pharmaceutical and food industries, especially afterthe announcement of China’s GMP certification in 1982, leading to a significant increase in the demand forclean room construction in the pharmaceutical industry. The construction of clean rooms for medicalfacilities such as aseptic operating rooms also rapidly expanded. After the reform and opening up, theintroduction of foreign-funded enterprises led to the widespread application of higher-level air cleaningtechnologies in various fields.From the 1990s to the present, China’s technological level has been developing vigorously. The globaltransfer of production capacity in precision electronics such as semiconductors and new displays hasaccelerated towards China, greatly increasing the market demand and technological research anddevelopment level of the clean room industry as a result of advances in the research and development ofpharmaceuticals and biotechnology. This has effectively driven the rapid development of China’s clean roomindustry. In order to achieve the strategic goal of “carbon neutrality,” China will reduce carbon emissionsthrough energy substitution, energy conservation, and efficiency improvement. According to data from theNational Energy Administration, it is expected that during the “14th Five-Year Plan” period, China’s averageannual increase in newly installed photovoltaic capacity will be between 70-90GW. As an important part ofthe construction of solar cell production plants, the demand for the construction of clean rooms will continueto grow alongside the vigorous development of photovoltaic production lines.

(III) Cyclical Characteristics of the Clean Room Industry

The downstream industries of the clean room engineering are influenced by the macroeconomicsituation, industry policy regulation, and downstream industry investment conditions, and therefore show acertain cyclical characteristic. The main downstream industries of the clean room engineering industry arestrategic emerging industries such as the electronics industry. In order to narrow the gap with developedcountries and promote the development of intelligent manufacturing, information technology, and otherindustries in China, a number of policies have been formulated in China in recent years to promote thedevelopment of related industries. This has also led to a relatively stable and sustained development markettrend in the clean room engineering industry.

The “Outline of the Fourteenth Five-Year Plan for National Economic and Social Development andthe Long-Range Objectives Through the Year 2035 of the People’s Republic of China” clearly states thecultivation of advanced manufacturing clusters, promoting the innovative development of industries such asintegrated circuits, aerospace, pharmaceuticals, and medical devices. It focuses on strategic emergingindustries such as next-generation information technology, biotechnology, new energy, new materials, high-end equipment, new energy vehicles, green environmental protection, as well as aerospace, and marineequipment. Industrial policies not only promote the development of industries such as semiconductors andintegrated circuits but also drive the development of the upstream industry, the clean room engineering

industry. The continuous expansion of the scale of downstream industries, the ongoing process oflocalization substitution, the rise of new fields such as new energy and automotive electronics, and thegradual improvement in the quality of life of the population have provided good development opportunitiesfor the clean room industry, with rapid construction of new production lines for downstream industryproducts.(IV) Industry Position of the CompanyCurrently, the competition in the Chinese clean room market is intense, with a larger number ofbusiness groups, but a smaller number of enterprises are capable of undertaking high-level clean roomsystem integration solutions. Enterprises with the strength to undertake clean room engineering projects aregradually gaining a stable market share in the high-end segment. Our focus lies on clean room engineeringprojects for high-tech plants in the electronic industry such as IC semiconductors and precisionmanufacturing. The investment in high-tech plants in the high-end electronic industry is substantial, withhigh requirements for clean room stability. To mitigate investment risks, lower costs, and ensure productyield, owners typically choose to collaborate with engineering service companies with rich experience,historical performance, and industry leadership. Only few companies in this fieldpossess the technical know-how to create high-level clean rooms for such specialized applications.

Our Company is currently the Chinese company with the capability and experience to construct cleanrooms for the entire semiconductor industry chain, possessing strong brand influence in enhancing clientproduct yield. With leading computational fluid dynamics analysis and air sampling and analysis technology,we can provide clients with pre-simulation analysis and post-sampling analysis, optimize clean room layout,improve production processes, reduce production costs, and enhance product yield, significantly improvingthe stability and reliability of clean room engineering projects.For the past twenty years, our Company has been focused on the integration and engineering ofadvanced manufacturing clean room systems. We have undertaken clean room projects for leadingcompanies in various industries, including Siliconware Technology, Sanan Integrated, ASE, FoxconnTechnology Group, Wistron Info Comm, SMIC, Nexchip, and Wafer Works. In 2023, we were honored withmultiple recognitions such as “Excellent Safety Vendor,” “Best Safety Management,” and “Best Supplier,”which reflects the consistent approval of our engineering quality by the clients. We hold a substantial marketshare in the high-end clean room engineering field, enjoying a strong reputation and market influence withinthe industry, and possess a high industry standing.(V) Major Laws and Regulations of the Industry and the Impact of Industrial PoliciesThe current legal and regulatory framework related to the clean room system integration engineeringservices provided by our Company mainly includes industry qualification management, industry businessstandards, and industry quality management, as follows:

The industrial policy support for the main downstream industries served by the Company is conduciveto the sustainable growth of the related industries, thus driving the overall market demand for clean roomengineering. In recent years, China has continuously introduced relevant policies to promote thedevelopment of industries such as semiconductors, new displays, life sciences, and food and pharmaceuticals,thereby promoting the growth of the clean room industry demand. In addition, clean room engineering ispart of the construction industry, and China has been continuously introducing policies to promote thegreening and intelligent development of the construction industry, vigorously promoting the application ofBIM technology and other information technologies used in clean room construction, and policies promotingthe development of prefabricated buildings have also driven the development of clean rooms.The main industrial policies of the downstream industries served by the Company are as follows:

III. Businesses in which the Company was engaged during the reporting period(I) Overview of the Main Business of the Company

The Company’s main business is to provide clean room engineering, electromechanical engineering,and other services for the construction of IC semiconductor, optoelectronics, high-tech electronic industries,as well as for the food, pharmaceutical, cloud computing centers, and related fields. This includes cleanfactory construction planning, design recommendations, equipment configuration, clean room environmentsystem integration engineering, and maintenance services.

The Company has the qualifications of Grade I General Contractor of Electromechanical Engineering,Grade I Specialist Contractor of Building Electromechanical Installation Engineering, Grade II SpecialistContractor of Electronic and Intelligent Engineering, Grade II Specialist Contractor of Building Decorationand Decoration Engineering and Grade II Specialist Contractor of Fire Fighting Facilities Engineering, whichprovide a solid technical foundation and professional guarantee for the development of the business of theCompany.The Company’s business scope includes system integration services; design and installation ofelectromechanical systems, HVAC systems, aseptic systems, and building equipment management systems;construction of air purification engineering, fire engineering, building construction engineering, interior andexterior decoration engineering, municipal public works, and pipeline engineering, as well as providingrelated technical consulting and after-sales services; research and development and manufacturing ofindustrial switch power converters and components; wholesale, import, and export of similar productsproduced by the company, as well as building materials, dust-free, aseptic purification equipment and relatedequipment, components; type III medical device operation; type II medical device sales; metal structuremanufacturing; construction decoration, plumbing and other building metal products manufacturing.Licensed projects include construction engineering design and building intelligent system design.

(II) Main Products and Their Uses

The production process of IC semiconductor and other advanced manufacturing industries has highrequirements on process precision, process media and process environment. As a professional clean roomsystem integration engineering service provider, the Company’s main business is centered around the coreprocess of downstream clients, combined with the characteristics of the industry, to provide standards-compliant process environment solutions, the main products are clean technology plant or clean room in abroad sense.

The clean rooms involved in the company are mainly industrial clean rooms. The clean room systemintegration provided by the Company includes clean room-related air treatment system, airflow and airwaysystem, water treatment system, interior system, vibration damping system, static electricity control system,electromagnetic interference control system, process system, environment inspection system, electric power

system, fire safety system and other clean room-related systems. The clean room system integration projectis shown as follows:

(III) Business ModelThe Company is a one-stop professional service provider of clean room system integration engineeringsolutions for advanced manufacturing industries, with the ability to implement a complete industry chainfrom engineering design to procurement, construction, operation and maintenance and other systemintegration. During the project implementation stage, the Company purchases the required equipment andmaterials in accordance with the specific project conditions and subcontracts the construction of clean roomsystem projects, and the Company organizes and coordinates the contracting units of each system, supervisesand guides them, and coordinates the overall progress of the project. The Company makes profits byproviding clients with overall solutions for clean room projects.

1. Sales Mode

The Company’s clean room engineering clients are mainly large-scale enterprises in semiconductor,electronics and other industries. The Company’s marketing staff obtains client resources through searchingmarket information, continuous service of existing clients, and recommendation of new clients by existingclients, etc., and makes contact with clients. The Company mainly approaches clients through client bidding,invitation for bidding and commercial negotiation. The bidding mode of the Company is generally as follows:

obtaining bidding information, purchasing bids, passing the qualification examination of the bidding party,bidding deposit, making bidding documents, on-site bidding, on-site opening of bids, obtaining thenotification of successful bid and signing the contract, and so on.

2. Procurement Mode

The Company conducts procurement of construction materials in accordance with the contract signedwith the owner or contractor, mainly including construction materials and equipment. The procurement planof the Company is prepared based on the project cost budget and the requirements of the project executionschedule, and the corresponding procurement plan is prepared and executed on a project basis. The personin charge of the project prepares the procurement plan according to the project progress, project materialinput plan, processing time requirements of customized materials, etc., and the procurement period of eachtype of materials is clearly defined.

3. Engineering Contracting Mode

CleanroomSystemIntegrationEngineering

Air handlin

s

y

stems

Pollutant detection

AMC controlParticle filtrationAir pressure control

Temperature

Humidity controlAtmosphere

Watersupply

Water treatment s

controly

stems

Temperature

ycontrol

Particle filtrationAcid-base

controladjustment

Particle filtrationComplianceWate

adjustmentr

Interior SystemsEnvironmental

r

InspectionSystem

Clean Room

Airflow & Ducting System

Vibration Damping System

Electromagneticinterference control systemStatic electricity

InspectionSystemcontrolsystem

Electricity SystemFire Safety System Other SystemsGeneralWastewaterSewerage

WasteliquidsWaste gasWaste liquid and gastreatment system

SpecialliquidSpecialtyGasesSpecialty liquid and gas

storage systems

In accordance with the Construction Law of the People’s Republic of China, Civil Code of the People'sRepublic of China, Labor Law of the People’s Republic of China, Provisions on the Administration of theQualifications of Construction Enterprises and other relevant laws and regulations, as well as the projectconstruction contract signed with the owner, the Company will contract out the clean room constructionprojects according to the specific clean room projects during the implementation stage of the clean roomproject. If there are restrictive clauses or explicit provisions in the general contract, the Company shall obtainthe consent of the owner before contracting before selecting the contracting manufacturer. The Companycentrally coordinates, organizes, supervises, guides and uniformly manages the contracting units of eachsystem during the construction process.

The Procurement Department of the Company is responsible for maintaining the list of suppliers andevaluating the contractors based on their qualifications, financial strength, engineering achievements andother relevant information. When there is a demand for contracting in a construction project, the person incharge of the project will initiate a requisition for contracting, and the Procurment Department will sign acontract after comparing the contractors’ experience, technology, price and other factors with the approvalof the corresponding supervisor. Subsequently, the Company organizes engineers and technicians to givetechnical briefings to the contractors, and conducts training, supervision and management of the contractorsin accordance with the terms of the contract, design documents and construction specifications to ensure thenormal progress of the construction.

IV. Analysis of Core Competitiveness During the Reporting Period

√ Applicable □ N/A

The core competitiveness of the Company is reflected in its strong clean room system integrationtechnology, high-end clean room project experience and engineering management capability. After years oftechnology research and development and project accumulation, the Company is able to plan the overallsolution of clean room project by taking into account the industrial characteristics and demands of clients,the timeliness of construction and reliability of operation, etc., to achieve the precise control of the mainindexes such as cleanliness, temperature and humidity, micro-vibration, AMC, etc., and to collaborate withthe clients in upgrading the production process, optimizing the product manufacturing process and improvingthe yield rate of production, etc. The core competitiveness of the Company is shown in the following. Thecore competitiveness of the company is specifically manifested in the following aspects:

(I) Advantage in Technology and R&D

The Company mainly focuses on the clean room engineering projects of high-tech plants in the field ofIC semiconductors, photoelectric panels and other electronic industries, which belongs to the high-end fieldof the clean room engineering industry and is characterized by high level of cleanliness, large scale ofinvestment, wide construction area, complex system integration and high requirements for engineeringquality. Since it takes a long time of research and development and accumulation of practical experience toacquire the construction technology required for such clean room projects, only a few enterprises in theindustry have the technical level to construct high-grade clean rooms in such fields. The Company hasundertaken many high-end clean room projects for high-tech plants in China and is a leading and well-knownenterprise in the industry.

In 2023, the Company adds 18 patents, including 7 invention patents and 11 utility model patents. TheCompany has set up an engineering database for clean room engineering projects, which is a systematizationof years of engineering experience, providing strong technical and data support for the company to contractand implement engineering projects. The Company has industry-leading computational fluid dynamicsanalysis application technology and air sampling and analysis technology, which can provide clients withpre-simulation analysis and post-sampling analysis, optimize the layout of the clean room, improve theproduction process, reduce the production cost and improve the yield rate of the finished products, andsignificantly improve the stability and reliability of the clean room project.

(II) Engineering Performance and Brand Advantage

The downstream industries served by the Company, especially the high-end electronics industry,demand high stability for clean rooms. In order to reduce investment risk, lower costs, and ensure productyield, clients typically choose to cooperate with engineering service companies that have rich experience, aproven track record, and industry-leading capabilities. With over 20 years of continuous development, theCompany has gained the ability to provide “Engineering, Procurement, Construction, and Operation(EPCO)”, successfully implementing thousands of clean room-related projects and accumulating richconstruction experience.The Company has become a professional clean room engineering service provider with strong industrystrength, high engineering service quality, and significant performance. “Acter” has also become a well-known brand in the Chinese clean room engineering industry, possessing strong competitive advantages.

(III) Project Management and Talent Advantages

1. Excellent management team

Excellent management personnel can do targeted research, development and innovation for clients indifferent industries and have rich experience in the industry. Since its establishment, the Company has beenengaged in clean room and other system integration engineering business, and the management personnelare professional and stable. Seventy percent of the middle management personnel are promoted from thegrassroots level, with a low staff turnover rate, which enables the Company to provide clients with long-termand sustainable engineering services. The core management team has many years of experience in theindustry, has long been serving the global famous enterprises in the industry, and has been developing andexpanding along with the growth of the clients. They have a deep understanding and accurate knowledge ofthe technical application, construction organization mode, competition pattern and future development trendof the clean room engineering industry, and have a deep knowledge of the technical development of thedownstream client industry.

The Company attaches great importance to business management and advocates the synergisticdevelopment of employees’ personal performance and corporate strategy. The Company carries outconstruction and inspection of projects in strict accordance with the requirements of ISO9001 quality systemmanagement, and has established a complete set of effective quality management system from supplierselection and management, raw material quality acceptance, construction process quality control, project

R&D Target Achievements in the Past Three YearsIn 2021,

intellectualproperty rights wereobtained, including

utility model patents and

software copyrights.

In 2022,

utility modelpatents were obtained.

In 2023,

patents wereobtained, including

utility model patents and

invention patents.

Acter Integration is committed to becoming ahigh-quality space shaper, impressing customerswith professional technology and attentiveservice, and has won over 50 customerrecognitions.

completion acceptance and project site management. Each project team of the Company organizes andcompiles project files for each project in accordance with the Company’s internal control requirements,covering the refined management and supervision of each step of the project process. The Company haspassed GB/T50430, ISO9001 quality management system certification, ISO14001 environmentalmanagement system certification and ISO45001 occupational safety and health management systemcertification, and participated in the implementation of clean rooms and other system integration projectswith good quality feedback, widely recognized by clients and unanimously praised.

2. Scientific and reasonable education and training

In recent years, the Company has vigorously implemented the “apprenticeship system”, primarilyassigning seasoned senior employees to provide one-on-one training for new employees with richconstruction experience, aiming to pass on construction experience to new employees and help themsmoothly navigate the initial stage, quickly become familiar with and handle related business. Regular“reserve manager training” is conducted every year, inviting a teaching team including lawyers, accountants,and technical experts to provide training on internal control, engineering management related laws andregulations, financial knowledge, etc., to enhance team management skills and improve businessmanagement skills. KPI, OKR, and skill competitions such as design and drawing skills are used to motivateemployees to understand the Company’s goals and achieve each goal in stages and tasks. The Companyopens a Magic Academy, E-Learning system, and organizes various offline trainings. Each quarter, seniorengineering personnel summarize and analyze closed cases, and monthly offline courses are conducted fordifferent professional systems, enabling everyone to understand the advantages and disadvantages of otherprojects while strengthening their own professional abilities, thus better exerting personal initiative andboosting operational efficiency.

(IV) Advantage of stable client relationship

The investment amount in the high-tech factory buildings of the high-end electronic industry issubstantial, with high requirements for the stability of clean rooms. In order to reduce investment risks, lowercosts, and ensure product yield, owners typically choose to collaborate with experienced engineering servicecompanies with leading industry expertise and a proven track record. If the initial quality of the engineeringwork is recognized, owners generally maintain a cooperative relationship with the service provider,increasing the likelihood of awarding subsequent clean room engineering projects to the same contractor. Asignificant proportion of the Company’s main business revenue comes from repeat orders from existingclients. The Company’s cooperative clients are mostly leading enterprises in segmented industries and well-known upstream and downstream companies in the industry chain, such as Siliconware Technology,Foxconn Technology Group, etc., with whom the Company has maintained a partnership for over 15 years.In addition, the Company has established a good, stable, and continuous partnership with Sanan Integrated,Wistron InfoComm, Nexchip, Wafer Works, SMIC, laying a solid foundation for business development. Asclient investment plans are implemented, there is a gradual increase in demand for clean rooms in the factory

SalesTechnicianFinancial StaffAdministrative StaffProfessio

nalStructure

Master’ DegreeBachelor’s DegreeAssociate DegreeBelow AssociateDegree

Education

alstructure

KeyPerformance

During the reporting period,

employee training sessions were conducted, totaling

10,935hours of training, with an average training duration of

hours per person,achieving a training coverage rate of100%.

eo

p

le

eo

p

le

eo

p

le

eo

p

le

eo

p

le

eo

p

le

eo

p

le

eo

p

le

construction process. The Company’s long-term efforts in establishing stable client relationships haveprovided strong support for the Company’s further development.

(V) Industrial diversification, geographical layout advantages

The Company has a diversified layout in IC semiconductor, optoelectronic panel, PCB, precisionmanufacturing, biomedical and other industries. With stable and reliable quality of engineering services andrich product structure, the Company’s engineering services have been recognized by many famousenterprises and have maintained long-term cooperative relationships. In China, the Company has twobusiness centers in Suzhou and Shenzhen, as well as branches in Shenzhen and Xiamen, with the servicescope radiating to the Yangtze River Delta and the Pearl River Delta, and through the establishment ofmarketing outlets in Hefei, Zhengzhou, Changsha, Wuhan, and Chongqing, the Company is able to directlyface the clients, quickly docking, and closely serve the downstream clients of the local advancedmanufacturing industry. Early deployment in Southeast Asia enables the Company to be more familiar withlocal regulations and requirements, and rely on its rich experience in plant construction to provide goodlocalized services to overseas clients. With steady growth in overseas revenue in 2023, the Company hasgreat potential for development in the Southeast Asian market.

V. Major Operating Conditions During the Reporting Period

The Company is committed to consistently providing good service to every client, optimizingconstruction management processes, continuously improving skills and R&D capabilities, responding toclient needs with localized service layout, and achieving the transformation from solution to mass productionfinished products. This has laid the foundation for the development of multiple industries and multiple clients,thereby realizing the “production,” “sales,” “people,” “development,” and “profit” five-step developmentroad-map. The Company actively maintains and stabilizes business relationships with existing clients whilealso laying a good foundation for the development of new clients. In 2023, the Company’s main businessrevenue was RMB 2,006 million, an increase of 23.38% year-on-year.

Wuhan

Chongqing

Suzhou

Zhengzhou

Hefei

Changsha

Shenzhen

Xiamen

Based on the different types of engineering services provided, the Company’s main business revenuein 2023 is divided as follows: 85.65% from clean room system integration-related projects, with 75.62%from system integration and 10.03% from hook-up works; 13.77% from other electromechanical installationprojects, and 0.58% from equipment sales.Clean room system integration-related projects include clean room system integration engineering andhook-up works. ①Clean room system integration engineering refers to clean room system-related designand construction projects before the factory is put into use, including systems directly related to clean rooms(such as air handling systems, water treatment systems, airflow systems, air molecular pollution controlsystems, static control systems, etc.) and clean room support system engineering (such as piping systems,power systems, fire safety systems, etc.). ②Hook-up works refer to secondary clean room support (such aspower systems, water treatment systems, and airflow systems) for new equipment and production lines afterthe clean room is put into operation, with minimal impact on the cleanliness, air molecular pollution,vibration, temperature, humidity, pressure, and static electricity of the original clean room area. The designand construction precision and fault tolerance of hook-up works are relatively low. Other electromechanicalinstallation projects refer to non-clean room-related factory and office building electromechanical projects.

Based on the segmentation by downstream client industries, in the main business of the Company in2023, clients from the IC semiconductor industry accounted for 67.09%, followed by precisionmanufacturing at 23.96%.

According to the division of revenue regions, the main business income of the company in 2023 wasRMB 1,570 million domestically, accounting for 78.27%, and RMB 436 million internationally, accountingfor 21.73%, showing an upward trend compared to last year. This indicates an upward trend compared to theprevious year, attributed mainly to the company's strategic presence in the Southeast Asian market. TheCompany initiated its operational bases in Vietnam in 2007, expanded to Malaysia in 2011, established asubsidiary in Indonesia in 2013, and initiated strategic deployment in Thailand in 2019. With the localizationof employee recruitment and education and the establishment of a stable supply chain relationship,familiarity with local customs, taxation, and various policies and regulations, riding the wave of investmentin Southeast Asia, the Company is optimistic about the future growth space of overseas performance.

2006Million(RMB)

Name Revenue (RMB) PercentageSystem Integration 1517 Million 75.62%Secondary DistributionEngineering

201 Million 10.03%Electromechanical Installation 276 Million 13.77%Equipment Sales 12 Million 0.58%

2006Million(RMB)

Name Revenue (RMB) PercentageIC Semiconductor Industry 1346 Million 67.09%Precision Manufacturing Industry 481 Million 23.96%Optoelectronics Industry 101 Million 5.06%Others 78 Million 3.89%

(I) Main Business Analysis

1. Analysis of changes in relevant accounts in the income statement and cash flow statement

Unit: Yuan Currency: RMB

Account

Number of current

eriod

Number of same

p

p

eriod last

ea

r

Change (%)Operating revenue2,008,924,995.68 1,627,895,120.49 23.41Operating costs1,738,841,241.47 1,376,528,425.17 26.32Cost of sales7,954,281.67 6,301,894.42 26.22Administrative expenses59,193,009.85 60,147,184.98 -1.59Finance costs-5,530,329.32 6,101,177.95 -190.64R&D expenses25,121,209.62 19,101,658.87 31.51Net cash flows from operatingactivities

133,522,931.23 161,089,465.80 -17.11Net cash flows from investingactivities

106,839,659.13 -126,308,081.06 N/ANet cash flows from financingactivities

-75,002,375.36 365,160,792.84 -120.54Taxes and surcharges4,370,539.18 3,800,051.12 15.01Other gains3,731,552.00 3,524,827.14 5.86Investment income1,661,794.44 -99,328.94 N/AGain on change in fair value-119,888.89 105,417.14 -213.73Credit impairment loss-3,860,633.85 -5,805,476.85 N/AImpairment loss on assets1,148,478.91 5,978,570.41 -80.79Gain on disposal of assets116,542.37 246,990.20 -52.81Non-operating revenue14,361.33 75,601.66 -81.00Non-operating expenses889,948.63 925,033.47 -3.79Income tax expense40,713,458.90 35,997,255.91 13.1Minority interests1,473,367.57 151,056.57 875.37Translation differences on foreigncurrenc

statements

290,286.73 2,027,897.54 -85.69Other comprehensive incomeattributable to minorityshareholders, net of taxes

79,151.41 84,748.55 -6.60

Name Revenue (RMB) PercentageDomestic 1570 Million 78.27%Overseas 436 Million 21.73%

2006Million(RMB)

Explanation for the changes in finance costs: Finance costs decreased by 190.64% compared with theprevious period, which was attributable to the higher interest income from bank wealth management in thecurrent period;Explanation for the changes in R&D expenses: Research and development expenses increased by 31.51%compared with the previous period, which was attributable to the increase in research and developmentinvestment in the current period and the higher amount of research and development expenses;Explanation for the changes in net cash flows from investing activities: The larger change in net cash flowsfrom investing activities compared with the previous period was due to the higher amount of structureddeposits recovered in the current period;Explanation for the changes in net cash flows from financing activities: Net cash flows from financingactivities decreased by 120.54% compared with the previous period, which was attributable to the higheramount of dividend payment in the current period and the receipt of large amount of fund-raising in theprevious period;Explanation for the changes in investment income: Investment income was higher than that of the previousperiod, which was mainly due to the higher income from the purchase of structured finance in the currentperiod;Explanation for the changes in gain on fair value changes: Gain on changes in fair value decreased by 213.73%compared to the previous period due to the change in fair value of structured deposits in the current period;Explanation for the changes in credit impairment losses: Credit impairment losses decreased by a largemargin compared with the previous period, mainly due to the decrease in bad debts provided for in the currentperiod as a result of the decrease in accounts receivable;Explanation for the changes in impairment losses on assets: The decrease of 80.79% in impairment losseson assets as compared with that of the previous period was attributable to the higher amount of reversal ofsingle provision in the previous period;Explanation for the changes in gain on disposal of assets: The decrease of 52.81% in gain on disposal ofassets as compared with that of the previous period was attributable to the higher gain on disposal of vehiclesin the previous period;Explanation for the changes in non-operating revenue: Non-operating revenue decreased by 81.00%compared with that of the previous period, which was due to the higher amount of write-off of long-termunpaid amount in the previous period;Explanation for the changes in minority interests: Minority interests increased by 875.37% compared withthe previous period, which was due to the substantial increase in net profit attributable to minority interestsin the current period;Explanation for the changes in translation differences of foreign currency statements: The decrease of 85.69%in translation difference of foreign currency statement compared with the same period of last year was dueto the smaller change of exchange rate fluctuation in the current period compared with the previous period.Detailed description of significant changes in the company's business type, profit composition or profitsources during the period

□ Applicable √ N/A

2. Revenue and Cost Analysis

√ Applicable □ N/A

During the Reporting Period, the operating revenue of the Company amounted to RMB 2,008,924,995.68,representing an increase of 23.41% as compared with the same period of the previous year, which was mainly

due to the fact that the Company expanded new clients and undertook projects of higher amount in the currentperiod; at the same time, the rapid growth of the overseas business in the current period led to a furtherincrease in profitability in the current period.

(1). Main business by industry, product, region and sales pattern

Unit: Yuan Currency: RMB

Main business by industryBy Industry

OperatingRevenue

Operating Cost

GrossProfitRate(%)

Yoy change inoperatingrevenue (%)

Yoy change inoperating costs(%)

Yoy change ingross profit margin(%)ICSemiconductor

1,345,947,194.70 1,203,919,098.11 10.55 54.35 66.52 Decrease of 6.54%PrecisionManufacturing

480,697,188.05 392,693.935.54 18.31 17.91 8.34 Increase of 7.22%Optoelectronics 101,391,692.37 80,642,910.19 20.46 -64.07 -67.39 Increase of 8.10%Others 78,023,584.38 61,470,990.91 21.21 21.95 47.70

Decrease of

13.74%

Total 2,006,059.659.50 1,738,726,934.75 13.33 23.38 26.32 Decrease of 2.01%Main business by productBy Product

OperatingRevenue

Operating Cost

GrossProfitRate(%)

Yoy change inoperatingrevenue (%)

Yoy change inoperating costs(%)

Yoy change ingross profit margin(%)Clean roomengineering

1,718,207,574.41 1,497,267,444.29 12.86 9.21 12.22

Decreased of

2.33%

Of which:

Systemintegration

1,516,916.425.65 1,324,585,896.16 12.68 9.84 13.10 Decrease of 2.52%Hook-up works 201,291,148.76 172,681.548.13 14.21 4.73 5.87 Decrease of 0.92%Other electricaland mechanicalinstallationworks

276,230,223.29 232,095.004.42 15.98 761.16 783.62 Decrease of 2.13%Equipment sales 11,621,861.80 9,364,486.04 19.42 -43.33 -32.62

Decrease of

12.81%

Total 2,006,059.659.50 1,738,726,934.75 13.33 23.38 26.32 Decrease of 2.01%Main business by regionBy Region

OperatingRevenue

Operating Cost

GrossProfitRate(%)

Yoy change inoperatingrevenue (%)

Yoy change inoperating costs(%)

Yoy change ingross profit margin(%)China 1,570,222,066.57 1,387,939,755.27 11.61 16.89 23.06 Decrease of 4.43%Of which: EastChina

801,380,310.95 686,106.791.33 14.38 -9.64 -9.23 Decrease of 0.39%Central China 351,672,073.28 326,136.350.31 7.26 137.60 228.66

Decrease of

25.70%

South China 318,483,907.01 296,248.742.42 6.98 464.18 469.27 Decrease of 0.83%Southwest 78,094,245.59 61,551,648.92 21.18 -65.98 -70.28 Increase 11.38%Other Areas 20,591,529.74 17,896,222.29 13.09 -8.42 31.73

Decrease of

26.49%

Overseas 435,837,592.93 350,787,179.48 19.51 54.28 42.27 Increase of 6.79%Of which:

Vietnam

301,368,854.86 238,845.934.40 20.75 58.02 40.60 Increase of 9.83%Indonesia 13,789,617.99 10,147,679.18 26.41 -67.17 -68.51 Increase of 3.13%

Thailand 111,326,700.08 92,907,698.80 16.54 123.64 108.97 Increase of 5.85%Other Areas 9,352,420.00 8,885,867.10 4.99 N/A N/A N/ATotal 2,006,059.659.50 1,738,726,934.75 13.33 23.38 26.32 Decrease of 2.01%

Explanation of main business by industry, product, region and sales mode

The reasons for the substantial increase in revenue and cost of main business by industry, product andregion were mainly due to the new orders signed during the period and the higher contract amount, whichled to the substantial increase in revenue and cost; the gross profit margin in the country Decreased of 4.43%as compared with the same period of the previous year, which was mainly due to the development of newclients and the acceptance of projects at a lower price.

(2). Analysis of production and sales volume

□ Applicable √ N/A

(3). Fulfillment of major purchase contracts and major sales contracts

□ Applicable √ N/A

(4). Cost analysis table

Unit: YuanBy IndustryByIndustry

CostComposition Item

Amount for thecurrent period

Percentage of totalcost forthe currentperiod (%)

Amount for thesame period ofthe previous year

Percentage

of totalcosts for thesame period

of thepreviousyear (%)

Percentagechangefrom sameperiod lastyear (%)

Explanation

BuildingConstruction

Equipmentandmaterials

975,046,287.01 56.08 812,667,645.72 59.04 19.98Laborsubcontracting

648,595,269.15 37.30 462,360,128.70 33.59 40.28

Note 1Labor cost 75,883,841.01 4.36 60,640,452.42 4.41 25.14Otherexpenses

39,201,537.58 2.26 38,728,323.98 2.81 1.22Share-based payment 2,017,567.63 0.15 -100.00Total 1,738,726,934.75 100.00 1,376,414,118.45 100.00 26.32Other notes on cost analysisNote 1: Represents a significant increase in labor subcontracting due to the large volume of work executedduring the period.

(5). Changes in the scope of consolidation due to changes in the equity interests of major

subsidiaries during the reporting period

□ Applicable √ N/A

(6). Significant changes or adjustments in the Company’s business, products or services during the

reporting period

□ Applicable √ N/A

(7). Major sales clients and major suppliers

A. Major sales clients of the Company

√ Applicable □ N/A

The sales of the top five clients amounted to RMB 889.0282 million, accounting for 44.25% of the totalannual sales; of which the sales of related parties among the sales of the top five clients amounted to RMB0 million, accounting for 0% of the total annual sales.No. Top 5 Clients Project Revenue (RMB Million/100) Percentage of Revenue (%)1 Client 1 30,620.79 15.242 Client 2 25,671.44 12.783 Client 3 13,087.55 6.514 Client 4 10,788.32 5.375 Client 5 8,734.72 4.35Total 88,902.82 44.25The proportion of sales to a single client exceeding 50% of the total amount, the existence of new clientsamong the top 5 clients, or heavy reliance on a small number of clients during the reporting period.

□ Applicable √ N/A

B. Major suppliers of the Company

√ Applicable □ N/A

The purchase amount of the top five suppliers is RMB 135.2609 million, accounting for 10.58% of thetotal annual purchase amount; among them, the purchase amount of related parties among the top fivesuppliers is RMB 0 million, accounting for 0% of the total annual purchase amount.No. Top 5 Suppliers Procurement amount (RMB Million/100)

Proportion of annualprocurement amount (%)

1 Supplier 1 3,500.16 2.742 Supplier 2 2,764.38 2.163 Supplier 3 2,591.22 2.034 Supplier 4 2,569.69 2.015 Supplier 5 2,100.64 1.64Total 13,526.09 10.58

The proportion of purchases from a single supplier exceeding 50% of the total amount, the existence of newsuppliers among the top 5 suppliers, or heavy reliance on a small number of suppliers during the reportingperiod.

□ Applicable √ N/A

Other NotesNone

3. Expenses

√ Applicable □ N/A

Item

2023 2022

Percentage of changein the current periodover the same periodof the previous year

(%)Amount (RMB)

Percentageof operatingrevenue (%)

Amount(RMB)

Percentageof operatingrevenue (%)

Sellingexpenses

7,954,281.67 0.40 6,301,894.42 0.39 26.22Administrative expenses

59,193,009.85 2.95 60,147,184.98 3.69 -1.59R&Dexpenses

25,121,209.62 1.25 19,101,658.87 1.17 31.51Finance costs -5,530,329.32 -0.28 6,101,177.95 0.37 -190.64Total 86,738,171.82 4.32 91,651,916.22 5.63 -5.36

4. R&D investment

(1). Table of R&D investment

√ Applicable □ N/A

Unit: YuanExpensed R&D investment for the period 25,121,209.62Capitalized R&D investment for the periodTotal R&D investment 25,121,209.62Total R&D investment as a percentage of operating revenue (%) 1.25Share of capitalized R&D investment (%)

(2). Table of R&D personnel

√ Applicable □ N/A

Number of R&D personnel of the Company 51Proportion of the number of R&D personnel to the total numberof employees of the Company (%)

7.97

Educational Structure of R&D personnelCategory of Educational Structure Education StructureDoctorate 0Master’s Degree 1Bachelor’s Degree 32College Degree 18High School and Below 0Age Structure of R&D personnelCategory of Age Structure Age StructureBelow 30 years old (excluding 30 years old) 3330-40 years old (including 30 years old, not including 40 yearsold)

40-50 years old (including 40 years old, not including 50 yearsold)

50-60 years old (including 50 years old, not including 60 yearsold)

60 and above 0

(3). Description of situation

□ Applicable √ N/A

(4). Reasons for significant changes in the composition of R&D personnel and impact on the

Company's future development

□ Applicable √ N/A

5. Cash flow

√ Applicable □ N/A

Account

Amount of the currentperiod (RMB)

Amount of the sameperiod of the previous

year (RMB)

Percentage change (%)Net cash flows fromoperating activities

133,522,931.23 161,089,465.80 -17.11Net cash flows frominvesting activities

106,839,659.13 -126,308,081.06 -184.59Net cash flows fromfinancing activities

-75,002,375.36 365,160,792.84 -120.54Net increase in cashand cash equivalents

167,656,624.74 400,390,070.99 -58.13

(II) Explanation of significant changes in profit due to non-principal businesses

□ Applicable √ N/A

(III) Analysis of assets and liabilities

√ Applicable □ N/A

1. Assets and liabilities

Unit: Yuan

Item Name

Closingbalance of thecurrent period

Percentage oftotalassets atthe endof theperiod(%)

Closingbalance of theprevious period

Percentage of totalassets atthe end ofthepreviousperiod(%)

Percentagechange in theamount at theend of theperiod overthe end of thepreviousperiod (%)

DescriptionCurrencyfunds

722,496,330.3

37.94 550,235,202.99 30.96 31.31 Note 1Financialassets fortrading

122,119,888.89 6.87 -100.00 Note 2Billsreceivable

43,157,918.28 2.27 20,790,441.73 1.17 107.59 Note 3Accountsreceivable

396,889,272.2

20.84 484,443,368.28 27.26 -18.07Receivablesfinancing

3,572,953.18 0.19 729,937.36 0.04 389.49 Note 4Prepayments 89,024,613.33 4.67 50,995,260.16 2.87 74.57 Note 5Otherreceivables

13,378,598.48 0.70 13,057,575.31 0.73 2.46Inventory 66,824.45 -100.00 Note 6Contract assets

424,897,205.6

22.31 389,293,108.13 21.91 9.15Other currentassets

97,604,166.69 5.13 58,265,105.32 3.28 67.52 Note 7

Item Name

Closingbalance of thecurrent period

Percenta

ge oftotalassets atthe endof theperiod

(%)

Closingbalance of theprevious period

Percentage of totalassets atthe end ofthepreviousperiod(%)

Percentagechange in theamount at theend of theperiod overthe end of thepreviousperiod (%)

DescriptionLong-termequityinvestments

2,332,022.40 0.12 2,314,172.96 0.13 0.77Investmentreal estate

598,758.96 0.03 713,065.68 0.04 -16.03Fixed Assets 38,895,511.08 2.04 40,095,530.47 2.26 -2.99Constructionin progress

13,103,863.94 0.69 0 N/A Note 8Intangibleassets

7,244,475.94 0.38 7,426,847.54 0.42 -2.46Utilizationright assets

3,840,232.40 0.20 4,672,377.60 0.26 -17.81Deferred taxassets

12,482,616.81 0.66 14,578,928.51 0.82 -14.38Other non-current assets

34,843,950.71 1.83 17,348,658.87 0.98 100.85 Note 9Short-termloans

31,249,307.82 1.76 -100.00 Note 10Accountspayable

629,857,317.3

33.07 589,919,678.26 33.19 6.77Salariespayable toemployees

47,459,670.87 2.49 39,456,513.03 2.22 20.28Taxes payable 7,980,749.03 0.42 7,330,079.22 0.41 8.88Other payables 25,427,208.65 1.34 1,611,097.74 0.09 1,478.25 Note 11Contractliabilities

73,351,891.04 3.85 74,584,070.11 4.20 -1.65Non-currentliabilities duewithin oneyear

1,748,003.79 0.09 1,710,381.30 0.10 2.20Leaseliabilities

2,150,631.55 0.11 3,151,902.66 0.18 -31.77 Note 12Projectedliabilities

11,292,847.91 0.59 9,238,016.80 0.52 22.24Long-termemployeeremunerationpayable

632,325.46 0.03 610,379.24 0.03 3.60Deferred taxliabilities

14,496,782.15 0.76 4,892,632.32 0.28 196.30 Note 13Equity

100,000,000.0

5.25 80,000,000.00 4.50 25.00Capital surplus

562,632,775.4

29.54 582,632,775.45 32.78 -3.43Othercomprehensiveincome

3,318,147.61 0.17 3,027,860.88 0.17 9.59

Item Name

Closingbalance of thecurrent period

Percentage oftotalassets atthe end

of theperiod(%)

Closingbalance of theprevious period

Percentage of totalassets atthe end of

theprevious

period

(%)

Percentagechange in theamount at the

end of the

period overthe end of the

previous

period (%)

DescriptionEarmarkedreserves

44,578,849.52 2.34 45,372,652.93 2.55 -1.75Surplusreserves

39,501,301.38 2.07 28,443,197.81 1.60 38.88 Note 14Undistributedprofits

332,226,440.3

17.45 269,871,786.54 15.19 23.11Minorityinterests

7,707,548.39 0.40 4,043,962.14 0.23 90.59 Note 15Other NotesNote 1: The increase of 31.31% in money funds as compared with that of the previous period was due to theredemption of all structured deposits at the end of the period and the increase in the amount of bank deposits;Note 2: The decrease of 100% in trading financial assets as compared with that of the previous period wasdue to the redemption of all structured deposits at the end of the period;Note 3: Bills receivable increased by 107.59% compared with the previous period, which was due to thehigher amount of commercial acceptance bills received at the end of the period;Note 4: The increase of 389.49% in receivables financing compared with the previous period was due to thereceipt of more bank acceptance bills with higher credit value during the period;Note 5: Prepayment increased by 74.57% compared with the previous period, which was caused by the largeamount of prepayment for materials and equipment in advance for the new projects undertaken in the currentperiod;Note 6: Inventory decreased by 100% compared with the previous period, which was caused by the fact thatall the remaining inventory in the current period was fully utilized in the projects, and there was no balanceat the end of the period;Note 7: Other current assets increased by 67.52% compared with the previous period due to the increase ofprepayment of taxes for more projects carried out in the field;Note 8: Construction in progress had a big change compared with the previous period, which was caused bythe newly purchased office space of Wuhan and Hefei branches and the company's workshop renovationproject in the current period;Note 9: Other non-current assets increased by 100.85% compared with the previous period, which was dueto the substantial increase of the unexpired warranty over one year compared with the same period of theprevious year;Note 10: Short-term borrowings decreased by 100% compared with the previous period, which was due tothe maturity of bank borrowings in the current period, which were all returned;Note 11: Other payables increased by 1,478.25% compared with the previous period, which was mainly dueto the higher amount of loan from Sheng Huei International during the current period;Note 12: Lease liabilities decreased by 31.77% compared with the previous period, which was due to theexpiration of part of the leasing contracts during the current period;Note 13: Deferred tax liabilities increased by 196.30% compared with the previous period, which was mainlydue to the increase of overseas net profit in the current period and the high amount of deferred tax arisingfrom profit distribution;Note 14: Surplus reserve increased by 38.88% compared with the previous period, which was due to theincrease in net profit for the current period compared with the previous period and the increase in the amountof surplus reserve;

Note 15: Minority interests increased by 90.59% compared with the previous period, which was due to thesignificant increase in net assets attributable to minority interests for the current period.

2. Foreign assets

√ Applicable □ N/A

(1) Asset size

Of which: Overseas assets 345,879,823.73 (Unit: Yuan Currency: RMB), accounting for 18.16% of thetotal assets.

(2) Explanations for the high proportion of overseas assets

□ Applicable √ N/A

3. Restrictions on major assets as at the end of the reporting period

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Carrying amount at the end of theperiod

Reason for restrictionCurrency funds 12,499,607.35

Mainly deposited as guarantee deposits

for the Group's application for issuance of

guarantee letters from banks

4. Other Notes

□ Applicable √ N/A

(IV) Analysis of industry operating information

√ Applicable □ N/A

For analysis of industry operating information, please refer to “Section III Management Discussion andAnalysis”, “II. Industry in which the Company operated during the reporting period”.Analysis of operating information of the construction industry

1. Projects completed and accepted during the reporting period

√ Applicable □ N/A

Unit: Million/100 Yuan Currency: RMBBreakdown byindustry

Housingconstruction

Infrastructureprojects

Specializedengineering

Architecturaldecoration

Others TotalNumber ofprojects

491 19 39 549Total amount 135,357.02 371.61 836.10 136,564.73

√ Applicable □ N/A

Unit: Million/100 Yuan Currency: RMBProject area Number of projects Total amount (untaxed)

Domestic430 120,087.41Oversea119 16,477.32

Of which:

Vietnam 84 6,761.57Indonesia 23 6,160.69Thailand 11 3,528.96Other 1 26.10

Total549 136,564.73Other Notes

□ Applicable √ N/A

2. Projects under construction during the reporting period

√ Applicable □ N/A

Unit: Million/100 Yuan Currency: RMBSegmentation byindustry

Housingconstruction

Infrastructure projects

Specializedengineering

Buildingdecoration

Others TotalNumber of projects 1 395 3 22 421Total amount(untaxed)

1,128.44 391,324.43 1,406.61 5,040.77 398,900.25

√ Applicable □ N/A

Unit: Million/100 Yuan Currency: RMBProject Area Number of projects Total amount (untaxed)Domestic278 288,523.46Oversea143 110,376.79Of which:

Vietnam 90 67,657.56Indonesia 33 15,268.21Thailand 17 20,392.18Other 3 7,058.84Total421 398,900.25Other Notes

□ Applicable √ N/A

3. Status of major projects under construction

√ Applicable □ N/A

Unit: Million/100 Yuan Currency: RMB

ProjectName

BusinessMode

ProjectAmount(untaxed)

DurationPercentage ofcompletion

Recognized incomefor theperiod

Cumulativerecognized income

Cumulativerecoveriesas at theend of theperiod(includingtax)

Projectprogress inlinewithexpectations

Progress ofpayments inlinewithexpectationsProject 1

Construction Contract

33,164.86 580

78.32

%

22,085.28 25,973.81 25,227.80 Yes Yes

Project II

Construction Contract

38,305.70 491

67.02

%

25,671.44 25,671.44 18,441.34 Yes Yes

Other Notes

√ Applicable □ N/A

1. As it involves commercial secrets and sensitive information of the Company, the cost inputs for the

current period and cumulative cost inputs are not disclosed;

2. As the transaction relating to Project 1 involves confidentiality-related provisions and for the

consideration of commercial secrets and strategic development, the specific project status of the counter-party is not disclosed. For details of the relevant announcement, please refer to the announcement of theCompany disclosed on the website of the Shanghai Stock Exchange on March 10, 2023 under theannouncement number of 2023-005, and the difference in the contract amount is for the additional works tobe incurred in the subsequent period;

3. As the transactions relating to Project 2 involve confidentiality-related clauses, and due to

considerations of commercial secrets and strategic development, the specific project information of thecounter-party will not be disclosed. For details of the relevant announcement, please refer to the Company’sannouncement on the website of the Shanghai Stock Exchange dated August 1, 2023 under theannouncement number 2023-032, and the difference in the contract amount is for the additional works arisingthereafter.

4. Accumulated new projects signed during the reporting period

√ Applicable □ N/A

The cumulative number of newly signed projects during the reporting period was 553 (by count),amounting to RMB 2,297.1984 million (including tax) and RMB 2,141.6111 million (before tax).

5. Orders in hand at the end of the reporting period

√ Applicable □ N/A

The total amount of orders in hand at the end of the reporting period was RMB 1319.4146 million (beforetax). Among them, the amount of projects for which contracts have been signed but construction has not yetcommenced is RMB 0 million, and the amount of uncompleted portion of projects under construction isRMB 1,319.4146 million (before tax).Other Notes

□ Applicable √ N/A

6. Other Notes

□ Applicable √ N/A

(V) Analysis of investment statusOverall analysis of external equity investments

□ Applicable √ N/A

1. Significant equity investments

□ Applicable √ N/A

2. Significant non-equity investments

□ Applicable √ N/A

3. Financial assets at fair value through profit or loss

√ Applicable □ N/A

Unit: Yuan Currency: RMBAssetcategory

Beginning of theperiod

Gain or loss on

fair valuechanges during

the period

Accumulated fairvalue changesrecognized in equity

Impairmentprovision forthe period

Purchase duringthe period

Amountsold/redeemedduring the period

Other changes

Amount at endof periodStructured

deposits

122,119,888.89 -119,888.89 225,000,000.00 347,000,000.00 0.00Total 122,119,888.89 -119,888.89 225,000,000.00 347,000,000.00 0.00Investment in securities

□ Applicable √ N/A

Explanation of investment in securities

□ Applicable √ N/A

Investment in private equity funds

□ Applicable √ N/A

Investment in derivatives

□ Applicable √ N/A

4. Specific progress of major asset reorganization and integration during the reporting period

□ Applicable √ N/A

(VI) Sale of major assets and equity interests

□ Applicable √ N/A

(VII) Analysis of major holding and participating companies

√ Applicable □ N/A

Company name

Mainbusiness

Registeredcapital

Shareholding ratio(%)

Total Assets(yuan)

Net assets

(yuan)

Net profit

(yuan)ActerEngineeringTechnology(Shenzhen) Co.,Ltd.

Developmentof onshoreclean roomengineeringbusiness

RMB 35.2967

million

100.00

76,384,006.2

56,361,008.2

-8,183,626.9

ShenzhenDingmao TradingCo., Ltd.

Purchase andsale ofdomesticequipment

RMB 5million

100.00

86,704,391.4

54,883,916.5

8,961,679.2

ActerInternationalLimited

Overseainvestmentplatform

HK$25.327397 million

100.00

44,712,312.3

23,035,494.8

830,977.68Acter TechnologySingapore Pte.,Ltd.

OverseasInvestmentPlatform

S$3.37585million

100.00

16,483,155.8

16,365,630.3

-172,029.20Sheng HueiEngineeringTechnologyCompany Limited

Developmentof overseaclean roomengineeringbusiness

US$3.5million

100.00

194,043,856.

91,624,738.4

41,682,402.

PT. ActerTechnologyIndonesia

Rp 10,100

million

100.00

29,961,907.3

21,211,040.1

1,959,545.9

Acter TechnologyMalaysia Sdn.Bhd

RM 2.6million

100.00 8,184,340.44 -714,256.11

-

1,044,253.2

Acter TechnologyCo., Ltd

Baht 30million

88.38

46,947,278.8

27,068,731.1

12,676,965.

PT ActerIntegrationTechnologyIndonesia

Rp 50,050

million

67.00 5,546,972.90 5,338,188.97 -591,849.42

Net profit from individual subsidiaries had an impact of 10% or more on the Company’s net profitRevenue from main business and profit from main business:

Unit: Yuan Currency: RMBCompany name

Revenue from mainbusiness

Profit from mainbusinessSheng Huei Engineering Technology CompanyLimited

298,027,836.06 59,278,380.51

(VIII) Structured entities controlled by the Company

□ Applicable √ N/A

VI. Discussion and Analysis of the Future Development of the Company(I) Industry pattern and trend

√ Applicable □ N/A

(1) Strong demand from downstream industries, providing broad market space for the clean room industry

In recent years, China has attached great importance to the semiconductor industry, and the “Outlinefor Promoting the Development of the National Integrated Circuit Industry”, “Made in China 2025”, “13thFive-Year Plan for the Development of National Strategic Emerging Industries”, “Several Policies forPromoting the Development of the Integrated Circuit Industry and the Software Industry in a New Era withHigh Quality”, and the “Fourteenth Five-Year” Plan and a number of favorable semiconductor localizationpolicies have been introduced intensively, with the semiconductor market scale continues to expand, therelevant enterprises to build factories and expand production boom, driven by the rapid construction of cleanroom plant.Semiconductor industry is one of the most widely used high-end clean room applications, along withcloud computing, Internet of Things, big data, 5G and other new-generation information technologyapplications, as well as data centers, drones and other industrial development drive, the global semiconductorindustry market size is showing steady growth. According to the World Fab Forecast, from 2022 to 2024,the global semiconductor industry plans to start operating 82 new fabs, including 11 projects in 2023 and 42projects in 2024, with wafer sizes ranging from 300mm to 100mm. Wafer processing plant belongs to thesemiconductor industry chain in the middle, its booming development will inevitably drive the industry chainupstream IC design and downstream packaging and testing expansion demand continues to intensify. Fromthe announcement of Chinese semiconductor wafer foundry factories such as SMIC and Nexchip, it can beseen that the Chinese semiconductor industry is still actively laying out the production expansion boomcontinues to promote IC semiconductor and other high-end electronics manufacturing industry is the mainfield of the clean room project.According to the relevant data, the global cleanroom technology market size was US$ 3,900 million in2022 and is expected to reach around US$ 6,960 million by 2032, with a projected compound annual growthrate of 5.97% during the 2023-2032 forecast period. Additionally, data from Zhiyan Consulting indicatesthat China’s cleanroom market is expected to reach approximately RMB 237,500 million by 2029.

(2) Specialized clean room system integration engineering enterprises “value" advantage highlighted

Clean room engineering belongs to the basic engineering of advanced manufacturing industry, whichis an essential part of high-end manufacturing industry such as electronics industry. The development ofadvanced manufacturing industry is largely affected by the quality and level of clean room, and thedevelopment of related industries will undoubtedly promote the growth of the scale of clean roomengineering. With different application fields, the focus of clean technology is also different. With theexpansion of market space and the evolution of specialization of technical needs, the clean room engineeringindustry shows a trend of further specialization.

In the electronics industry, the production program of specific precision electronic manufacturingusually requires factories to maintain 24-hour uninterrupted production, and clients have high requirementsfor the stability and reliability of clean rooms, which put forward higher requirements for the technical level

and comprehensive management level of clean room engineering companies. Since it takes a long time toacquire the construction technology required for such clean room projects, only a few companies in theindustry have the technical level to construct high-grade clean rooms in these fields. In order to minimizeinvestment risks, reduce costs, and ensure product yields, owners usually choose to cooperate withengineering service companies that have rich experience, proven track records, and are leaders in the industry.Small and medium-sized industrial clients are limited by the lack of professional factory construction team,so they are more inclined to choose professional system integration engineering enterprises with richexperience in factory construction to provide services for them.

The clean room industry is characterized by a large number of participants and intense competition inthe low-end segment, with a fragmented market structure. In contrast, high-end clean rooms have stringentcleanliness requirements, and the investment scale of individual projects is generally larger. The cleanlinessof the factory directly affects product yield, so project owners place greater emphasis on the historical projectexperience of the contractors. The bidding process is typically dominated by invitation-based tenders. As aprovider of integrated clean room system solutions, the Company has undertaken numerous high-end cleanroom projects for high-tech manufacturing facilities in China, placing it at the forefront of the industry. It isone of the most competitive clean room engineering service providers in the Chinese market.

(3) Southeast Asia’s “investment fever” drives the layout of clean room engineering enterprises to extend

Southeast Asia is gradually becoming a global semiconductor technology investor must contend.Diplomat Magazine said that many countries in Southeast Asia has established a wide range of chip assembly,packaging and testing industry clusters. Electronic circuits (semiconductors) have been identified as one ofVietnam’s nine key national industries. The Vietnamese media quoted Linda Tan, Chairman of the SoutheastAsian Semiconductor Industry Association, as saying that the Vietnamese semiconductor market is expectedto grow by 6.12% in the period from 2022 to 2027; Southeast Asian countries represented by Singapore andMalaysia are already an important link in the global semiconductor industry chain. Compared with Singaporeand Malaysia, which are at the forefront of the chip industry in Southeast Asia, Thailand, which is a regionalautomobile manufacturing center, focuses on building an automotive semiconductor industry chain.

Various countries have implemented a range of policies to support industrial development. A review ofindustry policies in Southeast Asian nations reveals the following:

The semiconductor companies’ investments in establishing manufacturing facilities in Southeast Asiawill objectively promote the further development of the local industry. However, Southeast Asia also faceschallenges in terms of power supply, technical workforce, and upstream and downstream industrial chainsupport. Accompanying the shift of industrial clients, based on announcements from relevant industry peers,a number of Chinese clean room construction companies have gradually set their sights on the SoutheastAsian region, and have begun to seize the overseas market through measures such as establishing subsidiariesand increasing investment amounts.

(II) Development strategy of the Company

√ Applicable □ N/A

The Company has conducted an analysis and forecast of the current macroeconomic situation and thelong-term planning of infrastructure construction in the main business regions, and combined with its own

actual situation, formulated the Company’s business development strategy and plan for the next three years,making reasonable expectations, plans and arrangements for the Company’s business development. Due tothe possibility that the Chinese macroeconomic policies may be moderately adjusted in the future accordingto the Chinese and foreign economic situation, regional and industrial development and characteristics, theCompany does not rule out the possibility of adjusting its business development goals based on the actualoperating conditions and economic development situation. The Company adheres to the belief of being a“high-quality space creator” and will continue to uphold the business philosophy of “integrity,professionalism, internationalization, and innovation”, implement the development strategy of “quality first,technology leadership, and perfect service”, focusing on clean room engineering services as its main business,with serving the high-tech industry as the core, client demand orientation, technology and R&D as thesupport, and green energy conservation as the direction, to form independent innovation and R&Dcapabilities, achieve sustainable corporate development, and grow into a leading international provider ofclean room system integration engineering services for the high-tech industry.

(III) Business plan

√ Applicable □ N/A

The Company is optimistic about future revenue and profit. Accompanied by the development trend ofthe industry, national policy drive, business development planning and corporate governance, the Companywill continue to adhere to the development strategy of “multi-client, multi-industry, multi-task, multi-region”,introduce ESG development concepts, assembly construction, and actively enhance its competitiveness. Atpresent, the construction of the R&D center project has officially begun, and the construction progress willcontinue to be pushed forward in 2024. After the completion of the project, the Company will actively carryout various research and development work to help clients shorten the construction period, save operatingcosts, and improve the yield rate of products.

The driving force for future growth and acquisition of better market share is mainly reflected in thefollowing aspects:

1. The booming development of downstream clean room industries such as domestic substitution, third-

generation compound semiconductors, AI intelligence and 5G will provide a broad market space for theCompany’s future growth.

2. Through horizontal integration and vertical division of labor in the industrial chain, we will seize the

core of the industry, gather more high-quality resources, and enhance the enterprise value.

3. Set up civil construction service team, obtain design qualification, introduce more quality teams and

talents to join Acter, and expand business development channels in different industries.

4. Steady business growth in Vietnam, Thailand and Indonesia, and accelerate the continuous expansion

of Malaysia market, and there is still room for growth of overseas revenue in 2024 compared with that in2023.

5. Promote “green engineering” management; the Company adheres to the path of green development,

introduces ESG development concepts, the concept of energy-saving machine rooms, fully integrates “greenplanning, green procurement, and green engineering methods”, and applies green engineering technologiesto help enterprises achieve carbon neutrality. We have introduced the concept of ESG development and theconcept of energy-saving server room.

6. Continuously increase the development of the Chinese market: the Company has now built a total of

eight molecular companies, including Shenzhen, Xiamen, Hefei, Zhengzhou, Wuhan, Chongqing, andconsolidate and establish the regional centers in East China, South China and Southeast Asia, whilecollecting, organizing and establishing an information resource base, giving full play to the Company’s brand,products, technology, talent and management advantages, extending marketing channels, expanding thescope of business regions, strengthening the allocation of resources, and promoting the sustainabledevelopment of the core business. We will give full play to our advantages in brand, products, technology,talents and management, extend marketing channels, expand the scope of business regions, strengthenresource allocation and promote the sustainable growth of core business.

7. Strengthening brand building: more and more clients take the initiative to invite tenders to the

company, and the brand building of Acter as “quality space creator” has achieved results. Next, the companywill further promote the Company’s brand through high-quality engineering quality and service, show theCompany’s brand image to clients in all aspects, penetrate the brand concept, and strengthen the brandrecognition. The Company will further realize the promotion of the Company’s brand through high-qualityprojects and services, show the Company’s brand image to clients in all directions, penetrate the brandconcept, strengthen the brand cognition and enhance the brand value.

8. Increase R&D investment: the Company will be recognized as a high-tech enterprise in 2023, and it

is expected to maintain more than 3% R&D investment in 2024. The Company will further improve theorganizational structure of technology R&D, enrich the team of talent in technology R&D, improve theperformance evaluation system for encouraging independent innovation, and put the R&D managementmethods and R&D incentive system into practice, so as to provide comprehensive R&D institutionalguarantee for technological innovation. Integrate drawing and resources with BIM to produce valueengineering and improve net profit; accelerate progress and improve project quality with “assemblyinstallation”.

9. Strengthen human resource development: human resource is the core driving force of the Company’s

development, and it is the Company’s long-term planning and goal of human resource management toreasonably allocate, integrate and develop human resources, and establish a perfect human resourcemechanism, so as to make the best use of them and bring their potentials into full play. Combined with theCompany’s future business development plan, we will enhance the Company’s overall human resource levelin the following aspects:

(1) Strengthen the continuing education of the employees, upgrade the qualification certificates of the

employees, increase the qualification of the existing employees in construction, environment and otherrelated practice, establish relevant incentive system to encourage colleagues, upgrade the number ofemployees with middle and senior titles, and encourage the on-the-job continuing learning of the servingcolleagues.

(2) Strengthen the construction of talent echelon, adopting the methods of rotation, academic upgrading,

external project management training, internal trainer, position agent, etc. to cultivate middle-level cadres;adopting the methods of master-apprentice system, passing on skills, on-the-job education, and the “ReserveCadre Academy” to cultivate grass-roots cadres and core backbone staffs. By “selecting, nurturing, utilizing,and retaining talents”, appropriate praise and affirmation, pertinent comments and suggestions, and positiveexpectations and concerns, we can form a succession of excellent cadres and a core reserve of manpower tomeet the needs of future business development.(IV) Possible risks

√ Applicable □ N/A

1. Macro policy risk

The Company is mainly engaged in clean room engineering services for IC semiconductors,optoelectronics and other high-tech industries. The market of the Company’s downstream industries has astrong correlation with the macroeconomic development cycle, and the fluctuation of the economic growthrate and macro economy will directly affect the operation and development of the entire downstreamindustries, which will in turn have an impact on the operation of the clean room engineering services business.Therefore, the slowdown in economic growth and macroeconomic fluctuations will affect the Company’sbusiness development and bring certain risks to the Company’s development and operation.

2. Industry competition risk

After years of development, China’s clean room engineering industry has been growing and entering asteady development stage. With the entry of various types of social capital into the clean room industry, thenumber of enterprises in the industry is increasing year by year, and the market competition is relativelyfierce. The Company’s service targets are mainly concentrated in the segmented market of electronic industry,and it has strong competitive strength and certain leading advantages. Acter Group is one of the enterprisesin the industry that possesses the first-class qualification of general contracting for electromechanicalengineering and the first-class qualification of specialized contracting for architectural electromechanicalinstallation, and ranks upstream in the industry in terms of business performance, business level, marketbrand and management level, and has a certain degree of popularity in the industry. With the increasingnumber of entrants in the industry, the Company will face competition from enterprises in the same industry.Therefore, if the company fails to maintain its advantages in technology, management, brand name andprocess, the Company’s position in the industry will be affected to a certain extent.

3. Risk of gross profit rate fluctuation

During the reporting period, the gross profit rate of the Company’s main business was 13.33%, withcertain fluctuation compared with the same period of last year. The fluctuation of gross profit margin ismainly related to the intensity of competition, and factors such as cost control, technology level, project sitemanagement ability and client groups will also affect the change of gross profit margin to a certain extent.If the competition in the industry further intensifies in the future and the Company fails to take furthermeasures to enhance its core competitiveness, the Company may face the risk of fluctuation in gross profitmargin.

4. Risk of higher concentration of clients

During the reporting period, the sales of the top five clients of the company amounted to RMB 889.0282million, accounting for 44.25% of the total annual sales, with a high concentration of clients. It is mainly dueto the fact that the company has high reputation and good word of mouth, and mainly undertakes key projectsand large-scale projects in the industry, and the amount of individual projects is large. clean roomengineering industry is a project-based business, the Company needs to continue to develop new clients,undertake new business to ensure that the Company’s operating results of sustained and stable growth, suchas the Company’s market development strategy does not meet the market changes or does not meet the needsof clients, the Company’s existence can not be sustained, stable development of new clients and maintainthe old clients to add new business may be, and thus face the risk of performance decline.

5. “Transnational” management risk

The Company has been dedicated to providing clean room engineering services for high-techmanufacturing projects since its inception. After years of development, the Company has accumulatedsubstantial expertise in business network layout, client resources, and technology. Particularly in recent years,the continuous growth of overseas business has not only promoted the Company’s development but alsoposed greater challenges to the Company’s risk control and asset management capabilities. If the Company’smanagement structure and capabilities cannot keep up with the needs of its sustained development, and itsasset management ability fails to be correspondingly enhanced, it will constrain the Company’s developmentpace and potentially adversely impact its operating performance.

(V) Others

□ Applicable √ N/A

VII. Information and reasons for the Company’s failure to disclose information in accordance withthe Guidelines due to non-application of the provisions of the Guidelines or for special reasons suchas state secrets or commercial secrets.

□ Applicable √ N/A

Section IV Corporate Governance

I. Explanation on Corporate Governance

√ Applicable □ N/A

During the reporting period, the Company continuously improved its corporate governance structure,internal management and internal control system and standardized its operation in accordance with therequirements of the Company Law, the Securities Law, relevant laws and regulations of the Shanghai StockExchange and the actual situation of the Company. The shareholders’ general meeting, the Board of Directorsand the Supervisory Committee of the Company have clear division of powers and responsibilities and eachof them performs its own duties, and the decision-making is independent, efficient and transparent. TheBoard of Directors of the Company has set up specialized committees such as the Remuneration andAssessment Committee, the Audit Committee, the Nomination Committee and the Strategy Committee tofurther improve the corporate governance structure of the Company. Details of the corporate governance ofthe Company are as follows:

(I) The Company and its controlling shareholders: The controlling shareholders of the Companyexercise their rights and obligations in accordance with the law, and effectively fulfill their obligations ofgood faith to the Company and other shareholders. The Company and the controlling shareholder arecompletely independent in five aspects, namely, business, assets, personnel, organization and finance, andthe Company has a complete business system and the ability to operate independently in the market.

(II) The shareholders’ meeting is the Company’s highest authority. The Company strictly follows theprovisions and requirements of the Articles of Association, the Rules of Procedure for Shareholders’Meetings, and other regulations to standardize the convening, holding, and deliberation procedures of theshareholders’ meeting. The Company engages lawyers to issue legal opinions on the legality of theshareholders’ meeting, ensuring the equal status of all shareholders, especially minority shareholders, fullyexercising the legitimate rights and interests of shareholders, and ensuring shareholders' right to know,participate, and vote on major corporate matters.

(III) The board of directors strictly exercises its powers in accordance with the Company Law, theArticles of Association, the Rules of Procedure for the Board of Directors, and other regulations. Thisincludes organizing and implementing the resolutions of the shareholders’ meeting, deciding on theCompany’s business plans and investment plans, formulating the Company’s annual financial budget, final

accounts, and profit distribution plans, drafting major acquisition plans, and appointing or dismissing theCompany’s general manager and other senior management personnel. All directors faithfully and diligentlyperform their duties, actively participate in the decision-making of the Company’s major matters, andactively participate in relevant training. The specialized committees under the board of directors operate well,and the convening of meetings and resolutions comply with the relevant system requirements, allowing themto play their normal role.(IV) The Supervisory Committee exercises its powers and functions in strict accordance with theCompany Law, the Articles of Association and the Rules of Procedure for the Board of Directors, andperforms its supervisory functions diligently and conscientiously, including the effective supervision of thefulfillment of duties by the Directors and senior management as well as the operation of the Company inaccordance with the law.(V) The company strictly follows the requirements of the Information Disclosure Management Systemand the Registration Management System for Insiders by implementing measures such as insider registrationand external information reporting registration. This strengthens the management of insiders, standardizesthe review process for external information reporting, clarifies the obligations and responsibilities of relevantpersonnel to maintain the confidentiality of undisclosed information, and enhances the Company’sawareness of information disclosure. This effectively avoids the occurrence of violations in informationdisclosure. Meanwhile, the Company strengthens communication and interaction with investors, and paysattention to maintaining investor relations.

Whether there is any material difference between the corporate governance and the laws, administrativeregulations and CSRC’s regulations on the governance of listed companies; if there is such a materialdifference, the reasons shall be explained.

□ Applicable √ N/A

II. Specific measures taken by the controlling shareholders and actual controllers of the Company toensure the independence of the Company in terms of assets, personnel, finances, organization andbusiness, as well as the solutions, work progress and follow-up plans in case of the company’sindependence being affected.

□ Applicable √ N/A

Controlling shareholders, actual controllers and other parties controlled by them engaged in business that aresame as or similar to the company, peer competition and impact of significant changes in peer competitionon the company, solutions adopted, working progress and subsequent solution plans

□ Applicable √ N/A

III. General Meeting of Shareholders

Session of themeeting

Date ofmeeting

Index ofsearches ondesignatedwebsites whereresolutions are

ublished

Date ofpublicationofresolutions

Resolutions

2022 AnnualGeneralMeeting

April 28, 2023

www.sse.com.cn

April 29,2023

1. Proposal on the Work Report of the

Board of Directors for the Year 2022

2. Proposal on the Work Report of the

Supervisory Board for the Year 2022

3. Proposal on the Full Text and Summary

of the Annual Report for the Year 2022

4. Proposal on the Financial Settlement

Report for the Year 2022

5. Proposal on the Financial Budget

Report for the Year 2023

6. Proposal on the Estimated Guarantee

Total for the Year 2023

7. Proposal on the Application for

Comprehensive Credit Limit fromFinancial Institutions for the Year 2023

8. Proposal on Changing the

Implementation Location and Method ofSome Raised Fund Investment Projects

9. Proposal on Adjusting the Construction

Content of Some Raised Fund InvestmentProjects

10. Proposal to Revise the “Major

Operating and Investment DecisionManagement System”

11. Proposal to Revise the “Articles of

Association”

12. Proposal on the Profit Distribution

Plan for the Year 2022The FirstExtraordinaryGeneralMeeting of2023

August 29,2023

www.sse.com.cn

August 30,2023

1. Proposal on the Reappointment of the

Accounting Firm

2. Proposal on the Absorption and Merger

of the Wholly-owned Subsidiary

3. Proposal on the Change of Registered

Capital, Revision of the Articles of

Association, and Handling of the

Industrial and Commercial Registration

Chan

e

Preferred shareholders whose voting rights have been restored requested an extraordinary generalmeeting□ Applicable √ N/AExplanation of general meetings

√ Applicable □ N/A

During the reporting period, the Company held 2 general meetings of shareholders, and the above meetingscomplied with the relevant laws and regulations and the Articles of Association in respect of the conveningmethod, proceedings, voting method and contents of resolutions.

IV. Directors, Supervisors and Senior Management Personnel(I) Changes in shareholdings and remuneration of incumbent and outgoing Directors, Supervisors and senior management during the reporting period

√ Applicable □ N/A

Unit: Share

Name

Position

Gender

Age

Appointmentdate

Expiration dateof appointment

Shareholdings at thebeginningof the year

Shareholdings atthe endof the

year

Increase/decrease insharesduringthe year

Reasons forincrease ordecrease

Total amount of pre-tax remunerationreceived from theCompany during thereporting period(RMB Million/100)

Whetherremunerationwas receivedfrom relatedparties of theCompanyLiang Jinli Chairman Male 62 July 1, 2019 July 1, 2025 0 0 0 Unchanged 48.57 YesChenZhihao

Vice Chairman,Secretary of theBoard

Male 58 July 1, 2019 July 1, 2025 0 0 0 Unchanged 111.66 NoZhu Qihua

Director,GeneralManager

Male 51 July 1, 2019 July 1, 2025 0 0 0 Unchanged 108.85 NoSuYuzhou

Director Male 48 July 1, 2019 July 1, 2025 0 0 0 Unchanged 49.02 NoShi Kang

Independent

Director

Male 59 July 31, 2020 July 1, 2025 0 0 0 Unchanged 8.00 NoWuWeihua

IndependentDirector

Male 53 July 1, 2019 July 1, 2025 0 0 0 Unchanged 8.00 NoGu Hailan

Independent

Director

Female 52 July 1, 2019 July 1, 2025 0 0 0 Unchanged 8.00 NoHuangYaping

Chairwoman ofthe SupervisoryBoard

Female 48 July 1, 2019 July 1, 2025 0 0 0 Unchanged 36.85 NoLiaoChongyou

Supervisor Male 47 July 1, 2019 July 1, 2025 0 0 0 Unchanged 58.40 NoWang Yu Supervisor Female 43 July 1, 2019 July 1, 2025 0 0 0 Unchanged 35.22 NoXiaoJingxia

Chief Financial

Officer

Female 55 July 1, 2019 July 1, 2025 0 0 0 Unchanged 37.61 NoTotal / / / / / / 0 0 / 510.18 /

Name Main Working Experience

Liang Jinli

Born in October 1962, with Chinese nationality of Taiwan, no permanent residence in foreign countries, master’s degree of EMBA, senior engineer. Hewas the Engineering Manager of Gongshan Air Conditioning & Refrigeration Co., Ltd.; the Director and Chairman of the board of Sheng Huei Limited;Supervisor of Winmax (Shanghai); and Supervisor of Winmax (Suzhou). Currently, he is the CEO and Chairman of Acter (Taiwan); Chairman of HERSUO (Taiwan); Director of Acter (Shenzhen); Director of Acter (Hong Kong); Director of New Point (Seychelles); Director of Sheng Huei International;Chairman of NOVA (Taiwan); Director of Acter (Singapore); Director of Acter (Malaysia); Director of Shenzhen Dingmao; Director and CEO of Enrich(Taiwan); Chairman of Winmega (Taiwan); Director of Novatech (Singapore); Chairman of Winmax (Suzhou); Chairman of Winmax (Shanghai);Managing Partner of Suzhou Songhuei; Director of Sheng Huei (Vietnam); Director of WASTE; Chairman of the Board of Directors of Rayzher Industrial;Director of Acter (Thailand); Chairman of the Board of Directors of Hengji Construction Company Limited; Director of Indonesia Joint Venture; andChairman of the Board of Directors of Acter Group from July 2019 to the present.Chen Zhihao

Born in May 1966, with Chinese nationality of Taiwan, no permanent residence in foreign countries, bachelor’s degree, senior engineer. He was the DeputyGeneral Manager of Wuhan Ronghuei Industry and Trade Co., Ltd; the Deputy General Manager of Guangzhou Danli International Trade Co., Ltd; theDeputy General Manager of Zhongshan Acter Mechanical and Electrical Engineering Co., Ltd.; the Deputy General Manager and General Manager ofActer (Shenzhen); General Manager and Director of ShengHuei Limited; Director and Secretary of the Board of Directors of Acter Group. Currently, heis the Director of Acter (Hong Kong); the Chairman of Acter (Shenzhen); the Chairman of Shenzhen Dingmao; the Director of Lantia Innovation Co., Ltd.;the Director of Acter (Singapore); the Director of Sheng Huei (Vietnam); the Director of Space (Thailand); and the Director of Indonesia Joint Venture;and from July 2020 to now, he has been the Vice Chairman and the Secretary of the Board Of Directors of Acter Group.Zhu Qihua

Born in April 1973, with Chinese nationality of Taiwan, no permanent residence in foreign countries, master degree in EMBA, mid-level engineer. He wasthe Assistant Manager of the Engineering Department of Kuang I Engineering Co., Ltd.; the Director of Acter (Taiwan), the Assistant Manager of theEngineering Department of Suzhou HongHuei Mechanical and Electrical Engineering Co., Ltd. and served as the Assistant Manager, Manager, AssociateManager, Deputy General Manager, General Manager and Director of Sheng Huei Limited. Currently, he is the Director and General Manager of Acter(Shenzhen); the Director and General Manager of Shenzhen Dingmao; the Supervisor of Sheng Huei (Vietnam); the Director of Acter (Hong Kong); theDirector of Acter (Malaysia); the Director of Acter (Thailand); the Supervisor of Acter (Indonesia); the Supervisor of Indonesia Joint Venture; and fromJuly 2019 to now, he has been the Director and General Manager of Acter Group.Su Yuzhou

Born in May 1976, with Chinese nationality of Taiwan, no permanent residence in foreign countries, bachelor’s degree, senior engineer. He was anengineer of Acter (Taiwan) and the Manager of the Engineering Department of Sheng Huei Limited. Currently, he is the Managing Partner of SuzhouShengzhan; the Director of Space (Thailand); from July 2019 to now, he is the Manager of the Engineering Department and the Director of Acter Group.

Shi Kang

Born on August 15, 1965, with Chinese nationality, no permanent residency in foreign countries, bachelor’s degree. He was the Secretary of the YouthLeague Committee and President of the Youth League School of the School of Computer and Information Engineering of Jiangsu University; President ofthe Youth League School of Jiangsu University Youth League Committee; the Lecturer of the Specialized Vehicle Teaching and Research Department ofthe School of Automotive Engineering in Jiangsu University; the Assistant General Manager of Jiangsu University Industrial Corporation; the ProfessionalLecturer of the Automobile Teaching Department of the School of Automobile Engineering in Jiangsu University; the Director of Office of the School ofBusiness Administration in Jiangsu University; the Deputy Secretary of the Party Committee and Vice Dean of the College of Finance and Economics inJiangsu University; the Vice President and Deputy Secretary of Jiangsu University Press and Magazines; the Deputy Director of the Labor Union of JiangsuUniversity; the President, General Manager and Executive Director of Jiangsu University Press Co., Ltd.; and the Director of Jiangsu University Asset

Management Co., Ltd. Currently, he is a Grade 5 staff member of the Logistics Department (Logistics Group) of Jiangsu University; from July 2020 topresent, he has been an Independent Director of Acter Group.Wu Weihua

Born in November 1971, with Chinese nationality, no permanent residency in foreign countries, master’s degree and licensed to practice law in China. Hewas a practicing lawyer of Suzhou Foreign Law Firm, a practicing lawyer of H&Z Group Law Firm, a practicing lawyer of Suzhou Renhai Fangzhou LawFirm, a Director of the Finance and Insurance Committee of Suzhou Lawyers Association, a member of Suzhou Hi-Tech District Government Lawyers’Advisory Group, and a Standing Director of the Bankruptcy Law Research Association of Jiangsu Law Society. Currently, he is a lecturer of SuzhouUniversity of Science and Technology; a practicing lawyer of Jiangsu Lantern Law Firm; the Deputy Secretary-General of Small and Medium-sizedEnterprises Committee of Jiangsu Federation of Industry and Commerce; the Vice President of Suzhou Bankruptcy Administrators’ Association; a Directorof Suzhou Lawyers’ Association; and an Independent Director of Acter Group from July 2019 to the present.Gu Hailan

Born in October 1972, with Chinese nationality, no permanent residency in foreign countries, master degree in MBA, certified public accountant in China.She was the Financial Manager of Kunshan Huaheng Welding Equipment Technology Co., Ltd; the Financial and Administrative Manager of HangzhouZhixing Automobile Co. Ltd. and Hangzhou Dongxingxing Auto Repair Co., Ltd.; the Chief Financial Officer of Kunshan Huaheng Welding EquipmentCo., Ltd.; Chief Financial Officer, Deputy General Manager and Chief Financial Officer, Deputy General Manager and Secretary of the Board of Directorsof Shanghai Qinsen Landscape Co., Ltd.; the Secretary to the Board of Directors and Chief Financial Officer of Origincell Technology Group Ltd.Currently, she is the Secretary of the Board Of Directors and Chief Financial Officer of Jiaxing Hechang Elevator Control Technology Co., Ltd.; from July2019 to present, he is an Independent Director of Acter Group.HuangYaping

Born in February 1976, with Chinese nationality of Taiwan, permanent residency in the United States and has a graduate degree. She was the AccountsReceivable Specialist of McAllister, the Finance Specialist of Texas Instruments Incorporated, the Finance Manager of Acter (Shenzhen), and the Managerof Administration Department of Sheng Huei Limited. Currently, she is the Supervisor of Shenzhen Dingmao; the Supervisor of Acter (Shenzhen); andfrom July 2019 to now, she is the Chief Executive Officer and Chairman of the Supervisory Committee of Acter Group.LiaoChongyou

Born in May 1977, with Chinese nationality of Taiwan, no permanent residency in foreign countries and college degree. He was an engineer of MingSheng Electromechanical Co., Ltd. and the Head of Engineering Department of SILPORT Technologies Inc. and the Manager of Engineering Departmentof Acter (Taiwan) and the Associate Manager of Engineering Department of Sheng Huei Limited. From July 2019 to now, he has been the AssociateManager and Supervisor of the Engineering Department of Acter Group.Wang Yu

Born in June 1981, with Chinese nationality, no permanent residency in foreign countries, bachelor’s degree. She used to work as a laborer in HaoweinaiPrecision Technology (Suzhou) Co., Ltd; a staff member in the Management Department of Suzhou Honghuei Mechanical and Electrical EngineeringCo., Ltd. From July 2019 to now, she has been the Assistant Manager, Deputy Manager and Employee Representative Supervisor of the ManagementIntegration Department of Acter Group.Xiao Jingxia

Born in April 1969, with Chinese nationality, no permanent residency in foreign countries and bachelor’s degree. She was the Team Leader of the AuditDepartment of the First Joint Accounting Firm; the Assistant Manager of the Underwriting Department of Fubon Securities Co., Ltd.; the Financial Managerof Taiwan Green Point Enterprises Co., Ltd.; the Financial Director of Megaforce Compan Limited; the Accountant of Shen Chuan Paper (Suzhou) Co.,Ltd.; the Finance Manager of Sheng Huei Limited; and the Supervisor of Suzhou Yumanchang Food Technology Co., Ltd. From July 2019 to present, sheis the Chief Financial Officer of Acter Group.Other Information

□ Applicable √ N/A

(II) Occupation of Directors, Supervisors and Senior Management Currently in Office and Outgoing During the Reporting Period

1. Appointments in shareholders’ organizations

√ Applicable □ N/A

Name of the incumbent Name of shareholder unit

Position held in the shareholders’organization

Date of commencement of termof office

Date of terminationLiang Jinli Acter (Taiwan)

Chief Executive Officer and Chairman ofthe Board

August 1993Liang Jinli Sheng Huei International Director May 2008Liang Jinli Suzhou Songhuei Managing Partner April 2018Su Yuzhou Suzhou Shengzhan Managing Partner April 2018Statement of employment inshareholders’ organizations

None

2. Employment in other organizations

√ Applicable □ N/A

Name of incumbent Name of other units Positions held in other units

Date of commencement of

term of office

Date of termination

Liang Jinli

New Point (Seychelles) Director March 2008Enrich (Taiwan)

Director, Chief ExecutiveOfficer

June 2014HER SUO (Taiwan) Chairman of the Board April 1998NOVA (Taiwan) Chairman of the Board March 2009Winmega (Taiwan) Chairman of the Board July 2014Novatech (Singapore) Director June 2016Winmax (Shanghai) Chairman of the Board May 2023Winmax (Suzhou) Chairman of the Board May 2023Rayzher Industrial Chairman of the Board June 2021WASTE Director October 2019Acter (Singapore) Director November 2009

Acter (Malaysia) Director December 2011Acter (Shenzhen) Director June 2005Shenzhen Dingmao Director October 2012Acter (Thailand) Director September 2019Acter (Hong Kong) Director November 2007Sheng Huei (Vietnam) Director September 2018Hengji Construction Corporation Chairman of the Board May 2023Indonesia Joint Venture Director April 2023Winmax (Suzhou) Supervisor May 2016 May 2023Winmax (Shanghai) Supervisor October 2016 May 2023

Chen Zhihao

Acter (Shenzhen) Chairman of the Board October 2009Shenzhen Dingmao Chairman of the Board October 2012Acter (Hong Kong) Director November 2007Sheng Huei (Vietnam) Director July 2019Acter (Singapore) Director October 2018Space (Thailand) Director October 2019Lantia Innovation Co., Ltd. Director September 2015Indonesia Joint Venture Director April 2023Zhu Qihua

Acter (Shenzhen) Director, General Manager January 2018Shenzhen Dingmao Director, General Manager January 2018Acter (Hong Kong) Director July 2019Sheng Huei (Vietnam) Supervisor December 2018

Acter (Malaysia) Director September 2019Acter (Thailand) Director September 2019Acter (Indonesia) Supervisor January 2023Indonesia Joint Venture Supervisor April 2023Su Yuzhou Space (Thailand) Director October 2019Huang Yaping

Acter (Shenzhen) Supervisor October 2018Shenzhen Dingmao Supervisor October 2018Xiao Jingxia

Suzhou Yumanchang Food TechnologyCo., Ltd.

Supervisor October 2021 April 2023Gu Hailan

Jiaxing Hechang Elevator ControlTechnology Co., Ltd.

Secretary of the Board of

Directors and Chief Financial

Officer

November 2022

Shi Kang

Jiangsu University Press Co., Ltd.

President, General Manager and

Executive Director

May 2017 December 2023Jiangsu University Asset ManagementCo., Ltd.

Director May 2017 December 2023Logistics Department of JiangsuUniversity (Logistics Group)

Grade 5 Staff January 2024

Wu Weihua

Suzhou University of Science andTechnology

Lecturer July 1993Jiangsu Lantern Law Firm Lawyer December 2004Small and Medium-sized EnterprisesCommittee of Jiangsu Federation ofIndustry and Commerce

Deputy Secretary General October 2018Suzhou Bankruptcy AdministratorsAssociation

Vice President June 2019Suzhou Lawyers Association Director February 2016Description of positions held inother organizations

None

(III) Remuneration of directors, supervisors and senior management personnel

√ Applicable □ N/A

Decision-making procedures for remuneration ofDirectors, Supervisors and senior managementpersonnel

With reference to the remuneration level of the Company’s industry and the region, and taking into account theCompany’s actual operating conditions and job responsibilities, the Company shall draw up a plan and implement itafter consideration and approval by the Board of Directors and the general meeting of shareholders. Among them,the remuneration of Directors and Supervisors shall be decided by the shareholder’' meeting, and the remunerationof senior mana

ement shall be decided b

y

the Board of Directors.Whether a director recuses himself/herself fromthe Board of Directors’ discussion on his/her ownremuneration?

YesDetails of the recommendations made by theRemuneration and Evaluation Committee or thespecial meeting of independent directors in respectof the remuneration of directors, supervisors andsenior mana

ement

p

ersonnel

On April 7, 2023, the Remuneration and Evaluation Committee considered and approved the “Proposal on the

Remuneration Plan for Senior Management for the Year 2023”.Basis for determining the remuneration ofDirectors, Supervisors and senior managementpersonnel

Except for the allowance for independent directors of the Company, the remuneration of Directors, Supervisors and

senior management who are in receipt of remuneration from the Company shall be determined on the basis of the

Company's overall remuneration policy, salary standards, the specific executive positions held by the individuals in

the Company, their work performance as well as the actual circumstances of the fulfillment of the Company’s

annual business

lan.Actual payment of remuneration to Directors,Su

pp

ervisors and senior mana

g

ement

ersonnel

The actual payment of the remuneration of Directors, Supervisors and senior management was made on time inaccordance with the relevant

p

p

rovisions mentioned above, and the remuneration data were true and accurate.Total actual remuneration received by allDirectors, Supervisors and senior management asat the end of the Re

ortin

g

Period

RMB 5.1018 million

(IV) Changes in Directors, Supervisors and senior management of the Company

□ Applicable √ N/A

(V) Explanation of penalties imposed by securities regulators in the previous three years

□ Applicable √ N/A

(VI) Others

□ Applicable √ N/A

V. Information on the Board of Directors’ meetings held during the reporting period

Session of the meeting Date of meeting Resolution of the meeting

The Sixth Meeting of the SecondSession of the Board ofDirectors

April 7, 2023

1. Proposal on the Work Report of the General Manager for the Year 2022

2. Proposal on the Work Report of the Board of Directors for the Year 2022

3. Proposal on the Performance Report of Independent Directors for the Year 2022

4. Proposal on the Report on the Performance of the Audit Committee of the Board of Directors for the Year

2022

5. Proposal on the Internal Control Evaluation Report for the Year 2022

6. Proposal on the Internal Control System Declaration for the Year 2022

7. Proposal on the Full Text and Summary of the Annual Report for the Year 2022

8. Proposal on the Financial Settlement Report for the Year 2022

9. Proposal on the Financial Budget Report for the Year 2023

10. Proposal on the Business Plan for the Year 2023

11. Proposal on the Remuneration Plan for Senior Management for the Year 2023

12. Proposal on the Confirmation of Routine Related Transactions for the Year 2022 and the Expected

Routine Related Transactions for the Year 2023

13. Proposal on Signing a Rental Contract for Real Estate and Related Transactions with Suzhou Winmax

Technology Corp.

14. Proposal on the Estimated Guarantee Total for the Year 2023

15. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees between the

Company and its Subsidiaries Holding Over 50% of Shares within the Scope of Consolidated FinancialStatements

16. Proposal on the Application for Comprehensive Credit Limit from Financial Institutions for the Year

2023

17. Proposal on Applying for Comprehensive Credit Limit from China Construction Bank Suzhou High-

Tech Industrial Development Zone Branch

18. Proposal on Providing Financial Support to the Holding Subsidiary Company

19. Proposal on Providing Loans to Employees for Home Purchases and Formulating the “Employee Home

Purchase Loan Management Measures”

20. Proposal on Changes in Accounting Policies

21. Proposal on the Special Report on the Deposit and Actual Use of Funds Raised by the Company in 2022

22. Proposal on Using Some Idle Own Funds for Cash Management

23. Proposal on Changing the Implementation Location and Method of Some Raised Fund Investment

Projects

24. Proposal on Adjusting the Construction Content of Some Raised Fund Investment Projects

25. Proposal to Request the Board of Directors to Approve the Establishment of the Joint Venture Company

for External Investment

26. Proposal to Revise the “Major Operating and Investment Decision Management System”

27. Proposal to Revise the “Articles of Association”

28. Proposal on the Profit Distribution Plan for the Year 2022

29. Proposal to Convene the 2022 Annual Shareholders’ Meeting.

Seventh Meeting of the SecondBoard of Directors

April 27, 2023

1. Proposal on the Q1 Report for 2023

2. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are

Not Included in Fund Lending

Eighth Meeting of the SecondBoard of Directors

August 11, 2023

1. Proposal on the Full Text and Summary of the Semi-Annual Report for the Year 2023

2. Proposal on the Special Semi-Annual Report on the Deposit and Actual Use of Funds Raised by the

Company in 2023

3. Proposal on Providing Financial Support to the Holding Subsidiary Company

4. Proposal on Capital Increase to the Hong Kong Subsidiary

5. Proposal on Applying for Comprehensive Credit Line from the Bank

6. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are

Not Included in Fund Lending

7. Proposal on Seeking the Board’s Approval for Relevant Matters

8. Proposal on the Reappointment of the Accounting Firm

9. Proposal on the Absorption and Merger of the Wholly-Owned Subsidiary

10. Proposal on the Change of Registered Capital, Revision of the Articles of Association, and Handling of

the Industrial and Commercial Registration Change

11. Proposal on Convening the First Extraordinary General Meeting of Shareholders in 2023

Ninth Meeting of the SecondBoard of Directors

October 27, 2023

1. Proposal on the Q3 Report for 2023

2. Proposal on the Expected Trading Volume of Financial Derivative Products

3. Proposal on Using Some Idle Raised Funds for Cash Management

4. Proposal on the Postponement of Some Raised Investment Projects

5. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3 Months Are

Not Included in Fund Lending

6. Proposal on the Outbound Investment

7. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees between the

Company and its Subsidiaries Holding Over 50% of Shares within the Scope of Consolidated FinancialStatements

VI. Fulfillment of Duties by Directors

(I) Participation of Directors in the Board of Directors’ Meetings and Shareholders’ Meetings

Name ofDirector

IndependentDirector or not

Participation in the Board of Directors

Participation inshareholders’meetings

Requiredattendances ofBoard meetings

Attendancein person

Attendance bytelecommunication

Attendancesby proxy

Absences

Whether there havebeen two consecutivefailures to attend inperson

Number ofattendances at theshareholders'meetingLiang Jinli No 4 4 4 0 0 No 2Chen Zhihao No 4 4 0 0 0 No 2Zhu Qihua No 4 4 0 0 0 No 2Su Yuzhou No 4 4 4 0 0 No 2Shi Kang Yes 4 4 4 0 0 No 2Wu Weihua Yes 4 4 4 0 0 No 2Gu Hailan Yes 4 4 4 0 0 No 2Explanation for two consecutive failures to attend in person

□ Applicable √ N/A

Number of board meetings held during the year 4Of which: Number of on-site meetings 0Number of meetings held via telecommunication 0Number of meetings held on-site and via communication 4

(II) Objections raised by directors to matters relating to the Company

□ Applicable √ N/A

(III) Others

□ Applicable √ N/A

VII. Specialized committees under the Board of Directors

√ Applicable □ N/A

(I) Membership of specialized committees under the Board of Directors

Type of specialized committees Name of memberAudit CommitteeLiang Jinli, Wu Weihua, Gu HailanNomination CommitteeLiang Jinli, Shi Kang, Wu Weihua

Remuneration and Appraisal CommitteeLiang Jinli, Shi Kang, Gu HailanStrategy CommitteeLiang Jinli, Chen Zhihao, Zhu Qihua

(II) The Audit Committee held 4 meetings during the reporting period

Date of meeting Contents of meetings

Important opinions andrecommendations

Other performanceof duties

April 7, 2023

1. Proposal on the Report on the Performance of the Audit Committee of the Board of

Directors for the Year 2022

2. Proposal on the Internal Control Evaluation Report for the Year 2022

3. Proposal on the Internal Control System Declaration for the Year 2022

4. Proposal on the Full Text and Summary of the Annual Report for the Year 2022

5. Proposal on the Financial Settlement Report for the Year 2022

6. Proposal on the Financial Budget Report for the Year 2023

7. Proposal on the Confirmation of Routine Related Transactions for the Year 2022 and the

Expected Routine Related Transactions for the Year 2023

8. Proposal on Signing a Rental Contract for Real Estate and Related Transactions with

Suzhou Winmax Technology Corp.

9. Proposal on the Estimated Guarantee Total for the Year 2023

10. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees

between the Company and its Subsidiaries Holding Over 50% of Shares within the Scope ofConsolidated Financial Statements

11. Proposal on the Application for Comprehensive Credit Limit from Financial Institutions

for the Year 2023

Considered andapproved

None

12. Proposal on Applying for Comprehensive Credit Limit from China Construction Bank

Suzhou High-Tech Industrial Development Zone Branch

13. Proposal on Providing Financial Support to the Holding Subsidiary Company

14. Proposal on Providing Loans to Employees for Home Purchases and Formulating the

“Employee Home Purchase Loan Management Measures”

15. Proposal on Changes in Accounting Policies

16. Proposal on the Special Report on the Deposit and Actual Use of Funds Raised by the

Company in 2022

17. Proposal on Using Some Idle Own Funds for Cash Management

18. Proposal on Changing the Implementation Location and Method of Some Raised Fund

Investment Projects

19. Proposal on Adjusting the Construction Content of Some Raised Fund Investment Projects

20. Proposal on the Profit Distribution Plan for the Year 2022

April 27, 2023

1. Proposal on the Q1 Report for 2023

2. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3

Months Are Not Included in Fund Lending

Considered andapproved

None

August 11, 2023

1. Proposal on the Full Text and Summary of the Semi-Annual Report for the Year 2023

2. Proposal on the Special Semi-Annual Report on the Deposit and Actual Use of Funds

Raised by the Company in 2023

3. Proposal on Providing Financial Support to the Holding Subsidiary Company

4. Proposal on Capital Increase to the Hong Kong Subsidiary

5. Proposal on Applying for Comprehensive Credit Line from the Bank

6. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3

Months Are Not Included in Fund Lending

7. Proposal on Seeking the Board's Approval for Relevant Matters

8. Proposal on the Reappointment of the Accounting Firm

Considered andapproved

None

October 27, 2023

1. Proposal on the Q3 Report for 2023

2. Proposal on the Expected Trading Volume of Financial Derivative Products

3. Proposal on Using Some Idle Raised Funds for Cash Management

4. Proposal on the Postponement of Some Raised Investment Projects

5. Proposal on Confirming that Overdue Accounts Receivable Exceeding Normal Credit for 3

Months Are Not Included in Fund Lending

6. Proposal on the Outbound Investment

7. Proposal to Request the Board of Directors’ Confirmation of the Detailed Guarantees

between the Company and its Subsidiaries Holding Over 50% of Shares within the Scope ofConsolidated Financial Statements

Considered andapproved

None

(III) The Nomination Committee held one meeting during the reporting periodDate of meeting Contents of the meeting

Important opinions andrecommendations

Other performance of dutiesOctober 27, 2023

1. Proposal to Review the Qualifications of the Current

Independent Directors of the Company

Considered and approved None

(IV) The Remuneration and Evaluation Committee held one meeting during the reporting period

Date of meeting Content of the meeting

Important opinions andrecommendations

Other performance of dutiesApril 7, 2023

1. Proposal on the Remuneration Plan for Senior Management

for the Year 2023

Considered and approved None

(V) The Strategy Committee held three meetings during the reporting period

Date of meeting Contents of meetings Important opinions and recommendations Other performance of dutiesApril 7, 2023

1. Proposal on the Business Plan for the Year 2023

2. Proposal to Request the Board of Directors to Approve the

Establishment of the Joint Venture Company for External Investment

Considered and approved NoneAugust 11, 2023

1. Proposal on the Absorption and Merger of the Wholly-Owned

Subsidiary

Considered and approved NoneOctober 27, 2023

1. Proposal on the Expected Trading Volume of Financial Derivative

Products

2. Proposal on the Outbound Investment

Considered and approved None

(VI) Details of disagreements

□ Applicable √ N/A

VIII. Explanation of risks found by the Supervisory Committee to exist in the Company

□ Applicable √ N/A

The Supervisory Committee has no objection to the supervisory matters during the reporting period.

IX. Employees of the parent company and major subsidiaries at the end of the reporting period(I) Employees

Number of employees in service of the Parent Company 442Number of employees on board of major subsidiaries 198Total number of staff 640Number of retired employees subject to expenses of the parent company and majorsubsidiaries

Specialty Composition

Type of breakdown by function Number of ProfessionalsProduction staff 0Sales staff 5Technical staff 525Finance staff 25Administrative staff 72Management staff 13Total 640Educational Level

Breakdown by educational background Number (persons)Master's degree and above 13Bachelor’s degree 324College 258College and below 45Total 640(II) Remuneration policy

√ Applicable □ N/A

The Company’s remuneration system closely follows the principles of prioritizing efficiency, taking into account fairness and incentives. Internally, it reflects the valuedifferences of different levels, grades and positions according to the differences in responsibilities, abilities and performance achievements; externally, it conducts annualmarket salary level surveys to ensure the market competitiveness of the Company’s salaries.

(III) Training program

√ Applicable □ N/A

In order to achieve the Company’s mission, vision, and development goals, Acter Group continues to invest resources in cultivating talents to maintain the corecompetitive advantage of “diversified layout and multi-tasking talents”. Following the “education and training program” and the strategic direction of talent development of“developing employees’ potentials and promoting self-learning”, Acter Group invests sufficient resources in employees of different positions and grades to learn and developin a systematic training program, such as new employee training, on-the-job training, and self-study, etc., to strengthen employees’ professional skills, improve work efficiencyand quality, and at the same time, satisfy employees’ lifelong learning needs and support the Company’s long-term growth.

The Company conducts a training needs survey in the Q4 of each year, plans corresponding development courses based on the functional needs of supervisors andemployees, and offers online or physical courses to achieve the goals of cultural inheritance, strengthening the management qualities of all levels of management, anddeveloping the strength of talents. In addition to setting up mandatory courses to assist employees in improving their work performance, employees can also participate invarious training courses based on their personal needs and future development plans, so as to prepare for the next stage of career planning and development in advance.

(IV) Labor Outsourcing

√ Applicable □ N/A

Total number of labor hours outsourced 18,960 hoursTotal remuneration paid for labor outsourcing RMB 391,200.00

X. Proposed profit distribution or capitalization of capital reserves(I) Formulation, implementation or adjustment of cash dividend policy

√ Applicable □ N/A

In accordance with the CSRC’s “Notice on Further Implementation of Matters Relating to Cash Dividends for Listed Companies”, “Supervisory Guideline for ListedCompanies No. 3 - Cash Dividends for Listed Companies” and other relevant regulations, the Company has formulated the cash dividend policy, and the decision-makingprocedures and mechanisms relating to profit distribution matters are clearly stipulated in the Articles of Association of the Company. As considered and approved at theTwelfth Meeting of the Second Session of the Board of Directors of the Company, the Company proposes to distribute profits for the year 2023 on the basis of the total sharecapital registered on the date of registration of the shareholders for the implementation of the equity distribution. The Company proposes to distribute a cash dividend of RMB8 (including tax) for every 10 shares to all shareholders. As at December 31, 2023, the total share capital of the Company was 100,000,000 shares, and the total cash dividendto be distributed is RMB 80,000,000 (including tax). The cash dividend distribution ratio of the Company for the year is 57.72%. The implementation of this profit distributionplan is in compliance with the provisions of the Articles of Association and the requirements of the resolution of the shareholders’ meeting. This profit distribution proposalhas yet to be submitted to the 2023 Annual General Meeting for consideration.During the reporting period, the Company did not adjust or change its profit distribution policy.

(II) Special explanation on cash dividend policy

√ Applicable □ N/A

Compliance with the provisions of the Articles of Association of the Company or the requirements of the resolutions of theshareholders’ general meeting

√ Yes □ No

Whether the criteria and proportion of dividend distribution are clear and unambiguous √ Yes □ NoWhether the relevant decision-making procedures and mechanisms are complete √ Yes □ NoWhether the independent directors have performed their duties and played their due role √ Yes □ NoWhether the small and medium-sized shareholders have sufficient opportunities to express their opinions and demands, and whethertheir legitimate rights and interests are adequately protected

√ Yes □ No

(III) If the reporting period is profitable and the parent company has positive profit available for distribution to shareholders but has not put forward a proposalfor a cash profit distribution plan, the Company shall disclose in detail the reasons therefor as well as the use of the undistributed profit and the plan for itsutilization

□ Applicable √ N/A

(IV) Proposals for profit distribution and capitalization of capital reserve for the reporting period

√ Applicable □ N/A

Unit: Yuan Currency: RMBNumber of bonus shares per 10 shares (shares) 0.00Dividend per 10 shares (yuan) (including tax) 8.00Dividend per 10 shares (shares) 0.00Cash dividend amount (including tax) 80,000,000.00Net profit attributable to ordinary shareholders of the listed company in theconsolidated statement for the year of dividend distribution

138,590,474.42Ratio to net profit attributable to ordinary shareholders of the listed company in theconsolidated statement (%)

57.72

Amount of shares repurchased for cash included in cash dividends 0.00Total amount of dividends (including tax) 80,000,000.00Ratio of total dividend amount to net profit attributable to ordinary shareholders ofthe listed company in the consolidated statement (%)

57.72

XI. Status of the Company’s share incentive scheme, employee shareholding plan or other employee incentives and their impacts

(I) Where the relevant incentive matters have been disclosed in the interim announcement and there is no progress or change in subsequent implementation

□ Applicable √ N/A

(II) Incentives not disclosed in the interim announcement or with subsequent progressEquity incentives

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

Employee Stock Ownership Plan

□ Applicable √ N/A

Other incentives

□ Applicable √ N/A

(III) Share incentives granted to Directors and senior management during the reporting period

□ Applicable √ N/A

(IV) Evaluation mechanism for senior management personnel and establishment and implementation of incentive mechanism during the reporting period

□ Applicable √ N/A

XII. Construction and Implementation of Internal Control System During the Reporting Period

√ Applicable □ N/A

For the evaluation of the Company’s internal control, please refer to the “Internal Control Evaluation Report for the Year 2023” disclosed by the Company on March 30,2024 on the website of Shanghai Stock Exchange (www.sse.com.cn).

Explanation on the existence of significant deficiencies in internal control during the reporting period

□ Applicable √ N/A

XIII. Management Control over Subsidiaries During the Reporting Period

√ Applicable □ N/A

During the reporting period, the Company formulated the “Management System for Subsidiaries” in accordance with the Company Law, the Securities Law, the Self-disciplinary Supervision Guidelines for Listed Companies of Shanghai Stock Exchange No. 1 - Standardized Operation and other laws and regulations as well as relevantprovisions of the Articles of Association of the Company, and in conjunction with the actual situation of the Company. The Company has strictly complied with the “SubsidiaryManagement System”, further strengthened the management of subsidiaries, established an effective control mechanism, and carried out risk control over the organization,resources, assets, investment and operation of the Company, so as to improve the overall operational efficiency and risk-resistant capability of the Company.The subsidiaries operate in compliance with the law within the framework of the Company’s overall policies and objectives and report information on material matters to theCompany in a timely, accurate, truthful and complete manner in strict accordance with the provisions of the Company’s “Information Disclosure Management System”, andthere is no information on material matters that shall be disclosed but has not been disclosed.

XIV. Explanation of the Relevant Information of the Internal Control Audit Report

√ Applicable □ N/A

The Company has engaged ShineWing Certified Public Accountants LLP to conduct an independent audit of the internal control of the Company and issued a standardunqualified opinion. Details of the internal control audit report can be found in the “Internal Control Audit Report for the Year 2023” disclosed by the Company on March30, 2024 on the website of Shanghai Stock Exchange (www.sse.com.cn).Whether to disclose the internal control audit report: YesType of opinion of the internal control audit report: Standard unqualified opinion

XV. Self-Inspection and Rectification of Issues in the Special Action on Governance of Listed CompaniesIn FY2023, the Company carried out the self-inspection activities of the special action for governance of listed companies, and there were no rectification matters after self-inspection of the Company.

XVI. Others

□ Applicable √ N/A

Section V Environmental and Social ResponsibilityI. Environmental Information

Whether to establish mechanisms related to environmental protection YesInvestment in environmental protection during the reporting period (Unit: RMB Million/100) 18.61

(I) Explanation of the environmental protection status of the Company and its major subsidiaries which are key emission units announced by the environmentalprotection department

□ Applicable √ N/A

(II) Explanation on the environmental protection situation of companies other than key emission units

□ Applicable √ N/A

(III) Information related to the protection of ecology, prevention of pollution and fulfillment of environmental responsibility

□ Applicable √ N/A

(IV) Measures taken to reduce its carbon emissions during the reporting period and their effects

Whether to take measures to reduce carbon emissions YesReduction of carbon dioxide equivalent emissions (unit: tons) N/AType of carbon reduction measures (e.g., use of clean energy forpower generation, use of carbon reduction technologies inproduction processes, R&D and production of new products thatcontribute to carbon reduction, etc.)

The Company implements pollution prevention for environmental factors involved in theconstruction and service process, controls and treats them in accordance with the regulations ofrelevant departments, controls sewage and noise emissions, reduces construction dust andconstruction waste, saves energy and reduces consumption, rationally utilizes resources and energy,and prevents or reduces pollution to the environment; it also cooperates with suppliers andcontractors to jointly prevent pollution and protect the ecological environment. We will take strongmeasures to prevent pollution throughout the construction process.Specific description

√ Applicable □ N/A

The Company has introduced modern environmental management methods and formulated environmental management systems such as Quality, Environment and SafetyManagement Manual, Safety and Civilized Construction Management Procedures and Energy Saving and Consumption Reduction Control Procedures in strict accordancewith the requirements of GB/T24001-2016/IS014001:2015. The environmental management involved in the construction of electromechanical installation works, fire-fightingworks and architectural works within the scope of qualification is evaluated by an external certification organization, and the company has obtained ISO14001 certification.

II. Social Responsibility(I) Whether to disclose social responsibility report, sustainable development report or ESG report separately

√ Applicable □ N/A

For details, please refer to the “2023 Environmental, Social and Governance (ESG) Report of Acter Technology Integration Group Co., Ltd.” disclosed on the website ofShanghai Stock Exchange (www.sse.com.cn) on March 30, 2024 by the Company.

(II) Details of social responsibility work

√ Applicable □ N/A

External donations and public welfare items Number/content DescriptionTotal input (RMB Million/100) 29.60Of which: Funds (RMB Million/100) 29.60Material Discount (RMB Million/100) 0.00Number of people benefited (persons) UnknownSpecific description

√ Applicable □ N/A

During the reporting period, the Company conscientiously fulfilled its social responsibilities, actively promoted the harmonious development of society, extensivelyparticipated in various social activities, and supported public welfare undertakings. The Company established and improved various rules and regulations internally,strengthened corporate culture construction, actively took various measures to protect the legitimate rights and interests of employees, and improved employee benefits.Externally, the Company has always adhered to sharing its development achievements with society, actively engaged in public welfare and charity undertakings, called onemployees to join the volunteer team, and invested resources in multiple public welfare and charity areas such as earthquake relief, education assistance, and assistance tovulnerable groups, continuously fulfilling social responsibilities and shaping the image of a responsible enterprise.Online public welfare delivers boundless love. The Acter Volunteer Group went to the Suzhou Social Welfare Home to bring stickers, coloring boards, puzzles, and othertoys to the children in the welfare home, and accompanied them in making delicate handicrafts, allowing them to feel the warmth and care of society.Caring for education, warming the heart. In order to encourage all students to achieve academic success, Acter Group held the second “Acter Scholarship” award ceremonyat Wuhan University of Science and Technology, with a total of 20 students receiving scholarships. In order to effectively improve the current lack of modern teachingequipment in schools in Tibetan areas and enhance the overall teaching quality of schools, the Company donated computers to Xueyu Civilization Charity School to help theschool cultivate more talents and contribute to the revitalization of rural education.In the future, the Company will continue to actively fulfill its social responsibilities, express the original intention of the enterprise to convey warmth and give back to societywith practical actions, take the initiative to assume the social responsibilities bestowed upon enterprises in the new era, and achieve high-quality and sustainable developmentof the enterprise through hard work.

III. Consolidating and Expanding the Results of Poverty Alleviation, Rural Revitalization and Other Specifics

□ Applicable √ N/A

Specific description:

□ Applicable √ N/A

Section VI Important EventsI. Fulfillment of commitments(I) Commitments made by the Company’s actual controllers, shareholders, connected parties, acquirers and other parties related to the Company’s commitmentsduring the reporting period or continuing into the reporting period

√ Applicable □ N/A

Background ofcommitments

Type ofcommitment

Commitment party

Commit

mentContent

Date ofCommitment

Whetherthere is adeadlineforfulfillment

Commitment period

Timelyand strictcompliance

If not fulfilledin time,specify thereasons forincompletefulfillment.

If notfulfilled intime, nextsteps shall beindicated.Commitmentsrelating to theIPO

Restriction on Saleof Shares

Sheng Huei International,Acter (Taiwan)

Note 1 June 22, 2021 Yes

October 13, 2022 toOctober 12, 2025

Yes N/A N/ACommitmentsrelating to theIPO

Restriction on Saleof Shares

Suzhou Songhuei, SuzhouShengzhan

Note 2 June 22, 2021 Yes

October 13, 2022 toOctober 12, 2023

Yes N/A N/ACommitmentsrelating to theIPO

Restriction on Saleof Shares

Liang Jinli, Chen Zhihao, ZhuQihua, Su Yuzhou, HuangYaping, Liao Chongyou,Wang Yu, Xiao Jingxia

Note 3 June 22, 2021 Yes

October 13, 2022 toOctober 12, 2023

Yes

Yes N/A N/ACommitmentsrelating to theIPO

Resolution of

competition

Sheng Huei International,Acter (Taiwan)

Note 4 June 22, 2021 No Long-term Yes N/A N/ACommitmentsrelating to theIPO

Others

Acter Group, Sheng HueiInternational, Acter (Taiwan),directors and seniormanagement of the Company

Note 5 June 22, 2021 No Long-term Yes N/A N/ACommitmentsrelating to theIPO

Others

Acter Group, Sheng HueiInternational, Acter (Taiwan),directors (excluding

Note 6 June 22, 2021 Yes

October 13, 2022 toOctober 12, 2025

Yes N/A N/A

independent directors) andsenior managementCommitmentsrelating to theIPO

Others

Acter Group, Sheng HueiInternational, Acter (Taiwan),directors, supervisors, seniormanagement, SuzhouSongHuei, SuzhouShengZhan

Note 7

June 22, 2021

No

Long-term

Yes

N/A

N/A

Note 1:

The direct controlling shareholder of the Company, Sheng Huei International, and the indirect controlling shareholder of the Company, Acter (Taiwan), undertook that:

(1) Within 36 months from the date of listing of the Company's shares, the Company will not transfer or entrust others to manage the shares issued before the public

offering of the Company directly or indirectly held by the Company, nor will the Company repurchase such shares.

(2) Within 6 months after the listing of the Company, if the closing price of the Company's shares is lower than the issue price for 20 consecutive trading days, or if the

closing price of the Company's shares is lower than the issue price at the end of the 6-month period after the listing (or if such day is not a trading day, then it shall be the firsttrading day thereafter), the lock-up period for the Company's shareholdings in the Company shall be automatically extended for 6 months. During the extended lock-up period,the Company shall not transfer or delegate the management of the shares directly or indirectly held by the Company that were issued prior to the public offering of theCompany, nor shall the Company repurchase such shares.

(3) Within two years after the expiration of the aforesaid lock-up period, the Company shall reduce its shareholding in each year by not more than 25% of the total

number of shares held by the Company directly and indirectly at a price not lower than the issue price. The said issue price refers to the issue price of the Company's IPO. Incase of ex-rights and ex-dividends due to equity distribution, capitalization of provident fund, share allotment, etc., the ex-rights and ex-dividends shall be dealt with inaccordance with the relevant provisions of the Shanghai Stock Exchange. The methods of share reduction include centralized bidding transactions, block trading, transfer byagreement and other methods in compliance with the regulations of the CSRC and the Shanghai Stock Exchange.

(4) When the Company reduces its shareholding in the Company, it will strictly comply with the provisions of the Securities Law of the People's Republic of China,

Certain Provisions on Reduction of Shareholdings by Shareholders, Directors and Supervisors of Listed Companies, Implementing Rules for the Reduction of Shareholdingsby Shareholders, Directors, Supervisors and Senior Management of Listed Companies of the Shanghai Stock Exchange, Rules for Listing of Stocks of the Shanghai StockExchange and other relevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange issue other regulations before the Company reducesits shareholding in the Company, the Company undertakes to strictly comply with the regulations in force at the time of the reduction of the Company's shareholding in theCompany to implement the reduction.

(5) In the event that the Company violates the aforesaid undertakings, the proceeds from the transfer of the Company's shares in breach of the undertakings ("proceeds

from the transfer in breach of the undertakings") shall belong to the Company. If the Company fails to hand over to the Company the proceeds from the aforesaid violation,the Company shall have the right to freeze the remaining shares of the Company held by the Company and may withhold the cash dividends payable to the Company andapply them against the proceeds from the violation due to the Company until the proceeds from the violation due to the Company have been remedied.Note 2:

The shareholders of the Company, Suzhou Songhuei and Suzhou Shengzhan, undertook that:

(1) Within 12 months from the date of listing of the Company's shares, the Company will not transfer or delegate the management of the shares held directly or indirectly

by the Company prior to the public offering of the Company's shares, nor will the Company repurchase such shares.

(2) If the Company reduces its holdings of the Company's shares within two years after the expiration of the lock-up period for the Company's shares, the price of such

reduction shall not be less than the issue price of the Company's IPO. The aforesaid issue price refers to the issue price of the Company's IPO. In the event of ex-rights andex-dividends due to equity distribution, capitalization of capital from provident fund, share allotment, etc., the ex-rights and ex-dividends shall be dealt with in accordancewith the relevant provisions of the Shanghai Stock Exchange.

(3) In addition to the aforesaid lock-up period, during the period when the shareholders/partners of the Company serve as directors/senior management personnel of the

Company, the shares of the Company to be transferred by the Company each year shall not exceed 25% of the total number of shares of the Company directly or indirectlyheld by the Company; and the shareholders of the Company shall not transfer the shares of the Company directly or indirectly held by the Company within half a year afterthey have ceased to serve as directors/senior management personnel of the Company.

(4) In reducing its shareholding in the Company, the Company will strictly comply with the provisions of the Securities Law of the People's Republic of China, Certain

Provisions on Reduction of Shareholdings by Shareholders, Directors and Supervisors of Listed Companies, Implementing Rules for the Reduction of Shareholdings byShareholders, Directors, Supervisors and Senior Management of Listed Companies of the Shanghai Stock Exchange, Rules for the Listing of Stocks on the Shanghai StockExchange and other relevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange have any other regulations before the Companyreduces its shareholding in the Company, the Company undertakes to strictly comply with the regulations in force at the time of the reduction of the Company's shareholdingin the Company to implement the reduction.

(5) In the event that the Company violates the aforesaid undertakings, the proceeds of the violation shall belong to the Company. If the Enterprise fails to hand over to

the Company the proceeds of the aforesaid violation of transfer, the Company shall have the right to freeze the remaining shares of the Company held by the Enterprise andmay withhold the cash dividends payable to the Enterprise and apply them against the proceeds of the violation of transfer due to the Company until it makes up for theproceeds of the violation of transfer due to the Enterprise.Note 3:

Directors, Supervisors and senior management who indirectly hold shares of the Company, Liang Jinli, Chen Zhihao, Zhu Qihua, Su Yuzhou, Huang Yaping, LiaoChongyou, Wang Yu and Xiao Jingxia undertook that:

(1) Within 12 months from the date of listing of the Company's shares, I will not transfer or delegate the management of the shares held by me directly or indirectly that

were issued before the Company's public offering, nor will the Company repurchase such shares.

(2) Within 6 months after the listing of the Company, if the closing price of the Company's shares is lower than the issue price for 20 consecutive trading days, or if the

closing price of the Company's shares is lower than the issue price at the end of the 6-month period after the listing (or if that day is not a trading day, then it is the first tradingday thereafter), the lock-up period of the Company's shares held by me shall be automatically extended for 6 months. During the extended lock-up period, I will not transferor delegate the management of the shares held directly or indirectly by me that were issued prior to the public offering of the Company, nor will the Company repurchasesuch shares.

(3) If I reduce my holdings of the Company's shares within two years after the expiration of the lock-up period, the price of such reduction shall not be less than the issue

price of the Company's IPO. The aforesaid issue price refers to the issue price of the Company's IPO. In case of ex-rights and ex-dividends due to equity distribution,capitalization of capital from provident fund, share allotment, etc., the ex-rights and ex-dividends shall be dealt with in accordance with the relevant provisions of the ShanghaiStock Exchange.

(4) In addition to the foregoing lock-up period, during the period in which I serve as a director, supervisor and senior manag

ement of the Company, and if I leave officebefore the expiration of my term of office, during the term of office determined at the time of my assumption of office and within 6 months after the expiration of the term of

office: (I) the transfer of the shares shall not exceed 25% of the total number of the shares of the Company held directly or indirectly by me each year; and (II) I shall nottransfer the shares of the Company held directly or indirectly by me within 6 months of my leaving office.

(5) When I reduce my shareholding in the Company, I will strictly comply with the provisions of the Securities Law of the People's Republic of China, Certain Provisions

on Reduction of Shareholdings by Shareholders, Directors and Supervisors of Listed Companies, Implementing Rules for the Reduction of Shareholdings by Shareholders,Directors, Supervisors and Senior Managers of Listed Companies on the Shanghai Stock Exchange, Rules for Listing of Stocks on the Shanghai Stock Exchange, and otherrelevant laws, regulations and standardized documents. If the CSRC and the Shanghai Stock Exchange have other regulations before I reduce my shareholding in the Company,I undertake to strictly comply with the regulations in force at the time I reduce my shareholding in the Company.

(6) I will not refuse to fulfill the above undertakings due to change of position or departure from office. If I violate the above undertaking, the proceeds of the violation

of the transfer shall belong to the Company. If I fail to hand over to the Company the proceeds of the aforesaid illegal transfer, the Company shall have the right to freeze theremaining shares of the Company held by me and may withhold the cash dividends payable to me and apply them against the proceeds of the illegal transfer due to theCompany until it makes up for the proceeds of the illegal transfer due to me.Note 4:

(I) Sheng Huei International, the direct controlling shareholder of the Company, has issued the "Commitment Letter on the Avoidance of Competition in the SameIndustry" in respect of the avoidance of competition in the same industry, with specific commitments as follows:

1. As at the date of this commitment letter, except for the investment company, the Company and the subsidiaries directly or indirectly controlled by the Company have

not engaged in any business which is or may be in the same line of competition with the Company and its subsidiaries in any manner, directly or indirectly, within or outsidethe PRC.

2. The Company and the subsidiaries directly or indirectly controlled by the Company will not in the future engage in any form of business or activity that constitutes or

has the potential to constitute competition in the same line of business with the business operated by the Company and its subsidiaries, and will not, directly or indirectly, takea controlling interest in, acquire or merge with any enterprise or other economic organization that competes or is likely to compete with the business operated by the Companyand its subsidiaries.

3. If the Company and its subsidiaries directly or indirectly controlled by the Company have any business opportunities to participate in or acquire shares in any business

which may compete or may compete with the business operated by the Company and its subsidiaries, the Company will immediately notify the Company and provide suchbusiness opportunities to the Company and its subsidiaries in an appropriate manner with priority, and the Company and its subsidiaries will have priority to acquire the assetsor equity involved in the business under the same conditions. The Company will immediately notify the Company of such business opportunities in an appropriate manner,and the Company and its subsidiaries will have priority in acquiring the assets or equity interests involved in the relevant business under the same conditions, so as to avoidcompeting with the Company and its subsidiaries.

4. From the date of this Undertaking, if the Company further expands its main products and main business scope, the Company and other enterprises controlled by the

Company at that time guarantee that they will not compete with the Company's expanded main products or main business; in case of competition with the Company's expandedmain products or main business, the Company and other enterprises controlled by the Company at that time guarantee to withdraw from the competition with the Companyin accordance with the following methods, including but not limited to

(1) Cessation of production of products that compete or may compete with the Company's expanded principal products;

(2) Cessation of the operation of businesses that compete or may compete with the Company's expanded main business;

(3) Incorporate into the Company, with the Company's consent, businesses that compete with the Company's expanded principal business;

(4) Transferring the business competing with the Company's expanded main business to an unrelated third party.

5. This commitment letter shall be effective from the date of issuance and shall remain effective during the period in which the Company is the controlling shareholder

of Acter Group.

6. In case of any breach of the above undertakings, the Company is willing to bear the corresponding compensation liability arising from the breach of the above

undertakings in accordance with the law.

(II) Acter (Taiwan), the indirect controlling shareholder of the Company, has issued the "Commitment Letter on the Avoidance of Competition in the Same Industry"in respect of avoidance of competition in the same industry, with specific commitments as follows:

1. As at the date of this commitment letter, except for the investment company, the Company and the subsidiaries directly or indirectly controlled by the Company have

not engaged in any business in any manner, directly or indirectly, other than in the Taiwan region of the PRC, that is in the same business competition or potential samebusiness competition with the Company and its subsidiaries.

2. The Company and the subsidiaries directly or indirectly controlled by the Company will not in the future engage in any form of business or activities that compete or

potentially compete with the business operated by the Company and its subsidiaries in any manner, directly or indirectly, in other regions outside of the Taiwan region ofChina, and will not directly or indirectly, in other regions outside of the Taiwan region of China, take a controlling stake in, acquire, merge or amalgamate businesses thatcompete or potentially compete with the business operated by the Company and its subsidiaries. We will not directly or indirectly hold, acquire, merge with or acquireenterprises or other economic organizations that compete or may compete with the business operated by the Company and its subsidiaries in any region other than Taiwan,China.

3. If the Company and its subsidiaries directly or indirectly controlled by the Company have any business opportunities in other regions outside of the Taiwan region of

China to participate in or acquire shares in any business that may compete or potentially compete with the business operated by the Company and its subsidiaries, the Companywill immediately notify the Company and provide such business opportunities to the Company and its subsidiaries on a priority basis in an appropriate manner so that theCompany and its subsidiaries can acquire the business involved on a priority basis under the same terms and conditions. The Company will immediately notify the Companyto provide such business opportunities to the Company and its subsidiaries on a priority basis in an appropriate manner, and the Company and its subsidiaries will acquire theassets or equity involved in the relevant business on a priority basis under the same conditions, so as to avoid competing with the Company and its subsidiaries.

4. From the date of this commitment letter, if Acter Group further expands its main products and main business scope, the Company and other enterprises controlled by

the Company at that time guarantee that they will not compete with the Company's expanded main products or main business; in case of competition with Acter Group'sexpanded main products or main business, the Company and other enterprises controlled by the Company at that time guarantee that they will withdraw from the competitionin accordance with the following methods The Company and other enterprises controlled by the Company at that time undertake to withdraw from competition with theCompany in the following manner, including but not limited to the following:

(1) Cease production of products that compete or may compete with the Company's expanded principal products;

(2) Cease to operate businesses that compete or may compete with the Company's expanded main business;

(3) Incorporate into the Company, with the Company's consent, businesses that compete with the Company's expanded principal business;

(4) Transferring the business competing with the Company's expanded main business to an unrelated third party.

5. This commitment letter shall be effective from the date of issuance and shall continue to be effective during the period in which the Company is an indirect controlling

shareholder of the Company.

6. In the event of any breach of the above undertakings, the Company is willing to bear the corresponding liability for compensation arising from the breach of the above

undertakings in accordance with the law.

Note 5:

(I) In order to ensure that the Company's measures to fill the immediate returns can be effectively fulfilled, the Company's direct controlling shareholder, Sheng HueiInternational, and its indirect controlling shareholder, Acter (Taiwan), have made the following undertakings:

1. Undertake not to intervene in the operation and management activities of the Company beyond their authority.

2. Undertake not to encroach on the interests of the Company.

3. Undertake not to harm the interests of the Company.

4. Undertake not to effectively fulfill any commitments made by the Company in relation to the measures to fill in the returns. If the Company violates such commitments

and causes losses to the Company or the investors, the Company is willing to bear the compensation liability to the Company or the investors in accordance with the law.

The Company, as the responsible party for the above undertakings, will be liable for compensation in accordance with the law if it violates the above undertakings andcauses losses to the Company or investors.

(II) In order to guarantee that the Company's measures to fill in the immediate returns can be practically fulfilled, the directors and senior management of the Companyundertake that:

1. I undertake not to transfer benefits to other units or individuals without compensation or on unfair terms, nor to use other means to harm the interests of the Company;

2. I undertake to restrain my consumption behavior in office;

3, I undertake not to use the Company's assets to engage in investment and consumption activities unrelated to the performance of their duties;

4. I undertake to fully support the remuneration system when it is formulated by the Board of Directors or the Remuneration and Evaluation Committee to link the

remuneration system with the implementation of the Company's measures to fill in the returns, and to vote in favor of the relevant motions when they are being considered (ifI have the right to vote);

5. If the Company subsequently launches the equity incentive policy, I undertake to fully support the Board of Directors' and shareholders' meetings' motions to be

announced that the exercise conditions of the Company's equity incentives are linked to the implementation of the Company's measures to fill in the returns and I will bewilling to vote in favor of (if I have the right to vote) such motions;

6. After the date of this undertaking and before the completion of the implementation of the IPO and listing of the Company, if the CSRC makes any other new regulatory

provisions on the measures and undertakings for filling the returns, and if the above undertakings fail to satisfy such provisions of the CSRC, I undertake to issue supplementaryundertakings in accordance with the latest provisions of the CSRC at that time;

7. I undertake to effectively fulfill the relevant measures formulated by the Company to fill in the returns and any commitments I have made in relation to the measures

to fill in the returns, and I am willing to bear the responsibility of compensating the Company or investors in accordance with the law in the event of any violation of suchcommitments by me and any loss caused to the Company or investors.

8. As one of the parties responsible for the measures to fill in the returns, if I violate the above undertakings or refuse to fulfill the above undertakings, I agree to be

punished or take relevant management measures in accordance with the relevant regulations and rules formulated or issued by the CSRC and the Shanghai Stock Exchangeand other securities regulatory authorities.

(III) In order to protect the right to information of small and medium-sized investors and safeguard the interests of small and medium-sized investors, the Company hasconducted a careful analysis of the impact of the IPO on the dilution of the immediate returns, and has put forward specific measures and undertakings to cover the dilutedimmediate returns:

1. Comprehensively enhance the management level of the Company and improve the efficiency of capital utilization

To improve the Company's operational efficiency, strengthen budget management, control the Company's expenses, improve the efficiency of capital utilization,comprehensively and effectively control the Company's operation and risk management, and enhance operational efficiency and profitability. In addition, the Company willimprove the remuneration and incentive mechanism, introduce outstanding talents in the market and maximize the motivation of its employees to tap the creativity and

potential power of the Company's employees. Through the above measures, the Company will comprehensively improve the operational efficiency, reduce costs and enhancethe Company's operating results.

2. Strengthen the supervision of investment projects to ensure the reasonable and legal use of funds raised.

In order to standardize the use and management of the Company's issue proceeds and ensure that the issue proceeds are used in a standardized, safe and efficient manner,the Company has formulated the "Proceeds Management System" and other relevant systems. The Board of Directors has passed a resolution on the establishment of a specialaccount for the use and management of the issue proceeds, and the issue proceeds will be deposited in the special account designated by the Board of Directors for the exclusiveuse of the special account. The Company will strictly manage the use of proceeds in accordance with relevant laws and regulations and the requirements of the "ProceedsManagement System", and will actively cooperate with the regulatory banks and sponsoring organizations in the inspection and supervision of the use of proceeds, so as toensure that the proceeds are reasonably used in a normal manner and to reasonably guard against the risk of the use of proceeds.

3. Accelerate the investment progress of the fund-raising projects and strive to realize the expected benefits of the projects as soon as possible.

The implementation of the fund-raising investment projects of the Offering is in line with the Company's development strategy, which can effectively enhance theCompany's business capacity and profitability, and is conducive to the Company's sustainable and rapid development. Prior to the availability of the proceeds, the Issuerintends to actively raise funds through a variety of channels to accelerate the investment progress of the fund-raising projects, and strive to realize the expected benefits of theprojects as early as possible, so as to enhance the shareholders' returns in the next few years and to reduce the risk of dilution of the current returns caused by the Issue.

4. Further improve the profit distribution system and strengthen the investor return mechanism.

The Company has amended the Draft Articles of Association in accordance with relevant laws and regulations and established a sound and effective shareholder returnmechanism. Upon completion of the Offering, the Company will, in accordance with the provisions of laws and regulations and the Draft Articles of Association, activelypromote the distribution of profits to shareholders where the conditions for profit distribution are met, so as to effectively maintain and increase the returns to shareholders.Note 6:

In order to protect the interests of investors and further specify the measures to stabilize the share price of the Company when the share price of the Company is lowerthan the net asset per share within three years after the listing of the Company, and in accordance with the relevant requirements of the Opinions on Further Promoting theReform of the New Issue System of New Shares issued by the CSRC, the Second Extraordinary Shareholders' General Meeting of the Company for the year 2021 consideredand passed the Proposal of Stabilizing the Share Price of Acter Technology Integration Group Co., Ltd.''.

(I) Effective period of the Plan

The Plan shall be valid for three years from the date of listing of the Company's shares.

(II) Conditions for activation and cessation of the share price stabilization plan

1. Conditions for activation

Within three years after the listing of the Company's shares, if the closing price of the Company's shares for 20 consecutive trading days is lower than the Company'saudited net asset value per share as at the end of the most recent period (in the event that the closing price of the said shares is not comparable with the Company's audited netasset value per share as at the end of the most recent period due to ex-rights and ex-dividend matters, the said net asset value per share shall be adjusted accordingly) and ifthe provisions of relevant laws, regulations and standardized documents relating to the buyback and holding of additional shares are also met, the plan shall be triggered.normative documents, then the Company, controlling shareholders, directors (excluding independent directors) and senior management shall be triggered to fulfill the measuresto stabilize the Company's share price.

2. Cessation Conditions

During the implementation period, if any of the following circumstances occurs, the implementation of the stock price stabilization measures and the fulfillment of thecommitments shall be deemed to be completed and the announced stock price stabilization plan shall cease to be implemented:

① The closing price of the Company's shares for 5 consecutive trading days is higher than the Company's unaudited net assets per share for the latest period (if the

closing price of the said shares is not comparable with the Company's audited net assets per share at the end of the latest period due to ex-rights and ex-dividend matters, thesaid net assets per share shall be adjusted accordingly);

② Continuing to repurchase or hold additional shares of the Company will result in the Company's shareholding distribution failing to meet the listing conditions;

③ Continuing to hold additional shares will result in the need to fulfill the obligation to make a tender offer and it has not planned to implement the tender offer.

3. Specific measures of the share price stabilization plan

(1) Buyback by the Company

① The Company shall convene the Board of Directors within 10 trading days from the date of triggering the activation conditions of the share price stabilization measures

in accordance with the laws, regulations and the Articles of Association of the Company. The Board of Directors shall formulate a clear and specific buyback plan, the contentof which shall include, but not be limited to, the types of shares to be repurchased by the Company, the number of ranges, the price ranges, the period of implementation, etc.,and submit it to the General Meeting of Shareholders of the Company for deliberation and approval; the buyback plan will become effective upon consideration and approvalby the General Meeting. The buyback plan shall become effective after it is considered and approved by the general meeting of the Company. However, if the share price ofthe Company before or during the implementation of the share buyback plan already fails to meet the conditions for initiating measures to stabilize the Company's share price,the program may not be continued.

② After the share buyback plan is approved by the shareholders' meeting, the Company will notify creditors in accordance with the law and submit relevant materials to

the competent authorities, such as the securities regulatory authorities and stock exchanges, for approval or filing. The buyback price of the Company shall not be higher thanthe Company's audited net asset value per share as at the end of the most recent period (if the closing price of the said shares is not comparable to the Company's audited netasset value per share as at the end of the most recent period due to ex-rights and ex-dividend matters, the said net asset value per share shall be adjusted accordingly), and themethod of buyback of shares shall be by way of centralized competitive bidding and trading, by way of an offer, or by other methods approved by the securities regulatoryauthorities.

③ If the share price of the Company triggers the above conditions for price stabilization measures several times in a fiscal year, the Company will continue to implement

the above share price stabilization plan, but shall follow the following principles: (i) the amount of funds used for share buyback in a single buyback shall not be higher than10% of the audited net profit attributable to the shareholders of the parent company of the previous fiscal year; (ii) the total amount of buyback funds used to stabilize theshare price in a single fiscal year shall not exceed 30% of the audited net profit attributable to shareholders of the parent company in the preceding fiscal year. If the abovecriteria are exceeded, the relevant share price stabilization measures will not be continued in the current year. However, in the event that circumstances requiring the activationof share price stabilization measures continue to arise in the following year, the Company will continue to implement the share price stabilization plan in accordance with theabove principles.

(2) Increase in shareholdings by controlling shareholders

① If the board of directors fails to formulate and announce a share buyback plan within 10 trading days after triggering the obligation, or if the share buyback plan is

rejected by the shareholders' meeting, or if the company fails to fulfill or is unable to fulfill the obligation to repurchase shares within 30 days after announcing the specificimplementation plan for the buyback, or if the company fails to stabilize the closing price of its stock above the audited net asset value per share for more than 5 consecutivetrading days after reaching the upper limit of the buyback plan, it will trigger the obligation for the controlling shareholder to increase its shareholding.

② On the premise of not affecting the company's listing conditions, the company's controlling shareholders shall be triggered within 3 trading days from the date of the

obligation to increase the proposed plan to increase the company's shareholding (including the number of shares to be increased, price range, time, etc.), and in accordancewith the law to carry out the necessary approvals, and notify the company within 3 trading days of approval, the company shall be in accordance with the relevant provisionsof the disclosure of the plan for the increase in the purchase of shares. The Company shall disclose the plan to increase its shareholding in accordance with the relevant

regulations. Three trading days after the Company discloses the plan to increase its shareholding in accordance with the plan, the Company shall commence the implementationof the plan to increase its shareholding in accordance with the plan.

③ The method for the controlling shareholder of the Company to increase its shareholding shall be by way of centralized bidding and trading, offer or other methods

approved by the securities regulatory authorities, and the price of the additional shareholding shall not exceed the audited net asset value per share as at the end of the mostrecent period (in the event that the closing price of the aforesaid shares is not comparable with the audited net asset value per share as at the end of the most recent period dueto ex-rights and ex-dividend, etc., the aforesaid net asset value per share shall be adjusted accordingly). However, if the share price of the Company no longer meets theconditions for activating the measures to stabilize the Company's share price prior to or in the course of the implementation of the plan to increase the shareholding of theCompany, the plan may not be continued.

If the Company's share price triggers the above conditions for the need to take share price stabilization measures several times within a fiscal year, the controllingshareholder will continue to implement the share price stabilization plan in accordance with the above, but shall follow the following principles: (i) the amount of funds usedto increase shareholdings on a single occasion shall not be less than 20% of the amount of after-tax cash dividends received by the controlling shareholder from the Companyon the most recent occasion; (ii) the amount of funds used to stabilize the share price to increase shareholdings in a single year shall not exceed 50% of the amount of after-tax cash dividends received by the controlling shareholder from the Company on the most recent occasion. If the above criteria are exceeded, the relevant share pricestabilization measures will not be continued in the current year. However, in the event that circumstances requiring the activation of share price stabilization measures continueto arise in the following year, the Company will continue to implement the share price stabilization plan in accordance with the above principles. In the event that the shareprice stabilization measures are triggered in the following year, the amount of funds already used for share price stabilization in previous years will no longer be counted aspart of the cumulative cash dividends.

(3) Increase in shareholdings by directors (excluding independent directors) and senior management personnel

① If the controlling shareholder of the Company fails to propose a plan to increase the shareholding of the Company within 10 trading days from the date of triggering

the obligation to increase shareholding, or fails to commence the implementation of the plan to increase shareholding within 30 days from the date of the Company'sannouncement of the plan to increase shareholding, or if, after the controlling shareholder of the Company has reached the maximum limit of the plan to increase shareholding,the closing price of the Company's shares still fails to be stabilized at a level higher than the Company's audited net asset value per share as of the end of the most recentperiod for a period of more than 5 trading days, then the obligation of the Company's directors (excluding independent directors) and senior management will be triggered toincrease their holdings of the Company's shares.

② Without affecting the listing conditions of the company, the company's directors (excluding independent directors), senior management shall be triggered within 3

trading days from the date of the obligation to increase the proposed plan to increase the company's shares (including the number of shares to be increased, the price range,time, etc.), and comply with the law to carry out the necessary approval procedures, and notify the company within 3 trading days of approval, the company shall disclose theplan to increase the acquisition of shares in accordance with the relevant provisions. The Company shall disclose the plan to increase its shareholding in accordance with therelevant regulations. After 3 trading days from the date of disclosure of the Company's plan to increase its shareholding in the Company, it will commence the implementationof the plan to increase its shareholding in the Company in accordance with the plan.

③ The directors (excluding independent directors) and senior management of the Company will purchase the Company's shares through competitive bidding transactions

to stabilize the Company's share price at a price not higher than the Company's audited net asset value per share as at the end of the most recent period (in the event that theclosing price of the aforesaid shares is not comparable to the audited net asset value per share as at the end of the most recent period due to ex-rights and ex-dividend, etc.,the aforesaid net asset value per share shall be adjusted accordingly). However, if the share price of the Company does not meet the conditions for the activation of measuresto stabilize the Company's share price within 3 trading days of the disclosure of the Company's purchase plan or in the course of the implementation of the plan, the Companymay cease to implement the above plan to increase the Company's shareholding. If the share price of the Company triggers the above conditions for price stabilization measuresseveral times within a fiscal year, the directors (excluding independent directors) and senior management of the Company will continue to implement the above share price

stabilization plan, but shall comply with the following principles: (i) the amount of funds used for the purchase of shares on a single occasion shall not be less than 20% ofthe after-tax remuneration that he/she received from the Company during the previous fiscal year while he/she was serving as a director or a senior manager; (ii) the amountof funds used to stabilize the share price in a single year shall not exceed 50% of the after-tax remuneration received from the Company in the previous fiscal year during theperiod in which he or she held the position of director or senior executive. If the above criteria are exceeded, the relevant share price stabilization measures shall not becontinued in the current year. However, in the event that circumstances requiring the activation of price stabilization measures continue to arise in the following year, theshare price stabilization plan will continue to be implemented in accordance with the above principles.If the Company appoints new directors (excluding independent directors) and senior management, the Company will require the newly appointed directors and seniormanagement to fulfill the corresponding commitments made by the directors and senior management when the Company was listed.

4. Restrictive measures for failure to activate share price stabilization measures

If the Company, controlling shareholders, directors (excluding independent directors) and senior management fail to take the above specific measures to stabilize theshare price when the conditions for the activation of the price stabilization measures are met, the Company undertakes to accept the following binding measures:

(1) The Company, controlling shareholders, directors (excluding independent directors) and senior management will publicly explain the specific reasons for failing to

take the aforesaid stock price stabilization measures and apologize to the shareholders of the Company and public investors in the general meeting of the Company and inthe disclosure media designated by the CSRC.

(2) The controlling shareholder of the Company undertakes that if the controlling shareholder fails to take the above specific measures to stabilize the share price when

the conditions for the initiation of the share price stabilization measures are met, the Company shall have the right to withhold or deduct the cash dividends payable to theUnit in an amount equal to the amount used for the implementation of the Share Increase Plan.

(3) The directors (excluding independent directors) and senior management of the Company undertake that when the conditions for the activation of the share price

stabilization measures are met, the Company shall have the right to withhold or reduce the remuneration and cash dividends payable to the Company if the Company fails totake the aforesaid specific measures to stabilize the share price.

5. Legal Procedures of the Proposal

In the event that the Company shall make adjustments to the proposal in the event that the proposal is inconsistent with the relevant provisions due to revisions of lawsand regulations or changes in policies, such adjustments shall be approved by more than two-thirds of the total number of voting shares held by shareholders present at thegeneral meeting of shareholders.Note 7:

(I) Restrictive measures by the Company regarding non-fulfillment of public commitments:

The Company will strictly fulfill all matters of public commitments made by the Company in connection with the IPO and listing of shares and actively accept socialsupervision. Unless otherwise specifically constrained, if the Company fails to fully and effectively fulfill the undertakings made in the course of its IPO and listing, theCompany undertakes to take the following measures to be constrained:

1. If the Company fails to fulfill its public commitments or if the fulfillment of the commitments is not conducive to the protection of the Company's rights and interests

due to reasons other than force majeure, the Company shall propose to replace the original commitments with new commitments or propose to waive the fulfillment of theobligations under the commitments. The above changes shall be submitted to the shareholders' general meeting for consideration, and the Company will provide shareholderswith the means of internet voting and will urge the shareholders involved in the commitment matters to abstain from voting. If new commitments are proposed to replace theoriginal ones, the relevant commitments shall comply with the prevailing laws, regulations and the Articles of Association of the Company, and the Company undertakes toaccept the following constraints until the fulfillment of the commitments or the implementation of the corresponding remedial measures is completed:

(1) Publicly explain the specific reasons and apologize to the shareholders and public investors in the general meeting of shareholders and the disclosure media designated

by the CSRC;

(2) Reduction or suspension of the remuneration or allowances of directors, supervisors and senior management who are personally liable for the Company's failure to

fulfill the undertakings (if such persons are on the Company's payroll);

(3) Not to approve the application for voluntary departure of directors, supervisors and senior management who have failed to fulfill their undertakings, but may make

changes in their positions;

(4) In case of losses caused to investors, the Company will be liable to compensate investors in accordance with the law;

(5) In accordance with the laws, regulations and the requirements of the relevant regulatory bodies to assume the corresponding responsibilities.

2. If the company fails to fulfill its public commitments or fails to fulfill its public commitments on schedule due to force majeure, the Company shall propose new

commitments (the relevant commitments shall comply with the laws, regulations, articles of association and fulfill the relevant approval procedures) and shall be subject tothe following constraints until the commitments have been fulfilled or the corresponding remedial measures have been implemented:

(1) To publicly explain the specific reasons and apologize to shareholders and public investors in the shareholders' general meeting and in the disclosure media designated

by the CSRC;

(2) To expeditiously study the handling plan to minimize the loss of investors' interests and submit it to the shareholders' general meeting for consideration, so as to

protect the interests of the Company's investors as far as possible.

(II) Controlling Shareholders' Restrictive Measures on Failure to Fulfill Public UndertakingsUnless otherwise specifically constrained, if Sheng Huei International, the direct controlling shareholder of the Company, and Acter (Taiwan), the indirect controllingshareholder of the Company, fail to fully and effectively fulfill the undertakings they have made in the course of the IPO and listing of Acter Group, they undertake to takethe following measures to be constrained:

1. In the event that the Company fails to fully and effectively fulfill its obligations or responsibilities under the aforementioned undertakings, the Company undertakes

to actively cooperate with the relevant regulatory authorities in their investigations and accept the corresponding penalties;

2. To compensate public investors with its own funds for direct losses suffered as a result of relying on the relevant undertakings to implement the transactions, with the

amount of compensation to be determined on the basis of the amount negotiated between the Company and the investor, or in the manner or in the amount determined by therelevant regulatory authorities or judicial organs;

(3) If income is obtained as a result of non-performance of the undertakings (i.e. such income cannot be obtained in the case of performance of the undertakings), the

income obtained shall belong to the Company, which will pay the aforesaid income to the Company's designated account within 5 days of obtaining the income; and if lossesare incurred by the Company or other investors as a result of the non-performance of the undertakings, the Company or other investors shall be held liable for compensationaccording to the law.

(III) Restrictive measures for directors, supervisors and senior management of the Company in respect of non-fulfillment of the undertakings:

The directors, supervisors and senior management of the Company undertake:

I have made relevant undertakings in the process of IPO and listing of shares of Acter Group, and if I fail to fulfill them, or if I am unable to fulfill them, or if I am unableto fulfill them on schedule (except for those due to relevant laws and regulations, policy changes, natural disasters, and other force majeure, and other objective reasons beyondmy control), or if the fulfillment of the relevant undertakings will be detrimental to the safeguarding of the rights and interests of the Company and the investors, I will takethe following measures:

1. Through the Company to disclose in a timely manner the specific reasons why I have failed to fulfill my commitments, unable to fulfill them or unable to fulfill them

on schedule;

2. To submit to the Company and its investors an application for change of undertakings or exemption from fulfillment of undertakings and submit it to the shareholders'

general meeting for consideration in order to protect the rights and interests of the Company and its investors. I will recuse myself from voting at the shareholders' meetingwhen the matter is considered (if I am a shareholder of the Company at that time);

3. Attribute to the Company the proceeds from my breach of my undertaking.

If any loss is caused to the Company or investors as a result of my undertaking not being fulfilled, not being able to be fulfilled, or not being able to be fulfilled on time,I will compensate the Company or investors in accordance with the law and the following procedures:

1. I agree that the Company shall reduce or cease to pay my salary, bonus, allowance, dividend (if any), etc., and use the reduced or ceased salary, bonus, allowance,

dividend (if any), etc., to implement the unfulfilled commitments or to compensate for the losses caused to the Company and the investors as a result of the unfulfilledcommitments;

2. If I reduce my shareholding before the compensation is completed, the funds obtained from the reduction will be supervised by the Board of Directors of the Company

and used exclusively for the fulfillment of the commitments or compensation until I have fulfilled my commitments or compensated for the losses incurred by the Companyand the investors (if I am a shareholder of the Company at that time).

In the event that I fail to fulfill my commitments, unable to fulfill them or unable to fulfill them on schedule due to objective reasons beyond my control, such as relevantlaws and regulations, policy changes, natural disasters, etc., I will disclose through the Company in a timely manner the specific reasons why I fail to fulfill my commitments,unable to fulfill them or unable to fulfill them on schedule, and will actively take measures to change my commitments, supplement my commitments and other means tosafeguard the rights and interests of the Company and the investors.

I will not refuse to fulfill the above commitments due to change of position, departure and other reasons.

(IV) Suzhou Songhuei and Suzhou Shengzhan on the binding measures for failure to fulfill the commitments

The shareholders of the Company, Suzhou Songhuei and Suzhou Shengzhan, undertake:

As shareholders of the Company, unless otherwise specified, if the Company fails to fully and effectively fulfill the undertakings made in the course of the Company'sIPO and listing, the Company undertakes to take the following measures to bind itself:

1. If the Enterprise fails to fully and effectively fulfill the obligations or responsibilities in the foregoing undertakings, the Company undertakes to actively cooperate

with the relevant regulatory authorities in their investigations and accept the corresponding penalties;

2. To compensate public investors with its own funds for direct losses suffered as a result of relying on the relevant undertakings to implement the transactions, with the

amount of compensation to be determined on the basis of the amount negotiated between the Company and the investor, or in the manner or in the amount determined by therelevant supervisory authorities or judicial organs;

3. If the Company obtains income from the non-fulfillment of the commitments (i.e. such income cannot be obtained in the case of fulfillment of the commitments), the

income obtained shall belong to the Company, and the Company will pay the aforesaid income to the designated account of the Company within 5 days from the date ofobtaining the income; and if the non-fulfillment of the commitments causes losses to the Company or other investors, the Company will be liable to compensate for the lossesto the Company or other investors according to the law.

(II) If there is a profit forecast for the Company's assets or projects and the reporting period is stillin the profit forecast period, the Company shall make a statement on whether the assets or projectshave met the original profit forecast and the reasons thereof.

□ Achieved □ Not achieved √ N/A

(III) Completion of performance commitments and their impact on the impairment test of goodwill

□ Applicable √ N/A

II. Non-operational appropriation of funds by controlling shareholders and other connected partiesduring the reporting period

□ Applicable √ N/A

III. Violation of guarantees

□ Applicable √ N/A

IV. Explanation of the Board of Directors of the Company on the "Non-standard Opinion AuditReport" of the Accounting Firm

□ Applicable √ N/A

V. Explanation of the Company's analysis of the reasons for and impact of changes in accountingpolicies, accounting estimates or correction of material accounting errors(I) Explanation of the Company's analysis of the reasons for and impact of changes in accountingpolicies and accounting estimates

√ Applicable □ N/A

Unit: YuanContents and reasons for changes in accounting policies

Name of statement itemsmaterially affected

Amount ofimpactOn November 30, 2022, the Ministry of Finance ("MOF")issued "Interpretation No. 16 of the Accounting Standardsfor Business Enterprises (ASBE)" (C.K. [2022] No. 31,hereinafter referred to as Interpretation No. 16),"Accounting Treatment of Deferred Taxes Related toAssets and Liabilities Arising from Individual Transactionsto which the Initial Recognition Exemption Doesn't Apply"has been implemented since January 1, 2023, allowingenterprises to implement it in advance from the year ofissuance.

Deferred tax assets 1,135,468.71Deferred tax liabilities 1,316,653.59Undistributed profits -177,717.08

Minority interests

-3,467.80

(II) Explanation of the Company's analysis of the reasons for and impact of the correction ofsignificant accounting errors

□ Applicable √ N/A

(III) Communication with the former accounting firm

□ Applicable √ N/A

(IV) Approval procedures and Other Notes

□ Applicable √ N/A

VI. Appointment and Dismissal of Accounting Firms

Unit: Yuan Currency: RMBCurrent AppointmentName of domestic accounting firm ShineWing Certified Public Accountants LLPRemuneration of domestic accounting firm 801,886.79Years of audit experience of domestic accounting firm 2Name of certified public accountants of the domesticaccounting firm

Liu Yuehua, Hou ShoufengCumulative years of audit service of the certified publicaccountants of the domestic accounting firms

Name of overseas accounting firm N/ARemuneration of the overseas accounting firm N/AYears of audit by overseas accounting firms N/A

Name RemunerationInternal control audit accountingfirm

ShineWing Certified Public Accountants LLP 188,679.25Financial consultant N/A N/ASponsor N/A N/A

Appointment and dismissal of accounting firm

√ Applicable □ N/A

At the Eighth Meeting of the Second Session of the Board of Directors held on August 11, 2023 and the FirstExtraordinary General Meeting of Shareholders of the Company held on August 29, 2023, the Companyconsidered and passed the "Resolution on the Re-appointment of Accounting Firm", and agreed to re-appointShineWing Certified Public Accountants LLP as the auditing organization of the Company's annual financialreport and internal control for the year of 2023.Explanation on the reappointment of the accounting firm during the audit period

□ Applicable √ N/A

Explanation on the decrease of 20% or more (including 20%) in the audit fee as compared with that of theprevious year

□ Applicable √ N/A

VII. Situations facing the risk of delisting(I) Reasons for delisting risk warning

□ Applicable √ N/A

(II) Countermeasures to be taken by the Company

□ Applicable √ N/A

(III) Circumstances and reasons for termination of listing

□ Applicable √ N/A

VIII. Matters Relating to Bankruptcy and Reorganization

□ Applicable √ N/A

IX. Significant Litigation and Arbitration Matters

□ Major litigation and arbitration matters in the current year

√ No major litigation and arbitration matters in the current year

X. Punishment and rectification on the listed company, its directors, supervisors, seniormanagement, controlling shareholders and actual controllers due to suspect of law violations.

□ Applicable √ N/A

XI. Explanation on the integrity status of the Company, its controlling shareholders and actualcontrollers during the reporting period

□ Applicable √ N/A

XII. Significant Related Transactions(I) Related transactions related to daily operations

(1) Matters disclosed in the interim announcement and with no progress or change in subsequent

implementation

□ Applicable √ N/A

2. Matters disclosed in the interim announcement but with progress or changes in subsequent

implementation

√ Applicable □ N/A

On April 7, 2023, the Company held the Sixth Meeting of the Second Session of the Board of Directors andthe Fifth Meeting of the Second Session of the Board of Supervisors to consider and approve the ''Resolutionon the Confirmation of Daily Related Transactions of the Company for the Year 2022 and the Estimation ofDaily RelatedTransactions for the Year 2023'' respectively. As at the end of the reporting period, the dailyrelated transactions between the Company and the proposed connected persons are as follows, and have notexceeded the projected amounts:

Category of relatedtransactions

Related party

Estimated amountfor 2023 (RMBMillion/100)

Actual amount in2023 (RMBMillion/100)Rental of buildings torelated parties

Suzhou Winmax TechnologyCorp.

350 330.09Acceptance of rentalhousing from related parties

NOVA TECHENGINEERING &CONSTRUCTION PTE.

10 3.86Total 360.00 333.95For details of the relevant matters, please refer to the ''Proposal on the Confirmation of Routine RelatedTransactions for the Year 2022 and the Expected Routine Related Transactions for the Year 2023''(Announcement No. 2023-009) disclosed by the Company on the website of the Shanghai Stock Exchange(www.sse.com.cn) and the designated media on April 8, 2023.

3. Matters not disclosed in the interim announcement

□ Applicable √ N/A

(II) Related transactions arising from the acquisition or disposal of assets or equity interests

1. Matters disclosed in the Interim Announcement with no progress or changes in subsequent

implementation

□ Applicable √ N/A

2. Matters that have been disclosed in the interim announcement but with progress or changes in

subsequent implementation

□ Applicable √ N/A

3. Matters not disclosed in the interim announcement

□ Applicable √ N/A

4. If performance agreement is involved, the performance realization of the reporting period shall be

disclosed.

□ Applicable √ N/A

(III) Significant related transactions of joint foreign investment

1. Matters that have been disclosed in the interim announcement and there is no progress or change

in subsequent implementation

□ Applicable √ N/A

2. Matters that have been disclosed in the interim announcement but with progress or change in

subsequent implementation

□ Applicable √ N/A

3. Matters not disclosed in the interim announcement

□ Applicable √ N/A

(IV) Related debt transactions

1. Matters disclosed in the interim announcement with no progress or change in subsequent

implementation

□ Applicable √ N/A

2. Matters that have been disclosed in the interim announcement but with progress or changes in

subsequent implementation

□ Applicable √ N/A

3. Matters not disclosed in the interim announcement

□ Applicable √ N/A

(V) Financial business between the Company and finance companies with which it has a connectedrelationship, and between the Company's holding company and connected parties

□ Applicable √ N/A

(VI) Others

□ Applicable √ N/A

XIII. Significant Contracts and Their Fulfillment(I) Trusteeship, contracting and leasing matters

1. Trusteeship

□ Applicable √ N/A

2. Contracting

□ Applicable √ N/A

3. Leasing

□ Applicable √ N/A

(II) Guarantees

√ Applicable □ N/A

Unit: Yuan Currency. RMBExternal guarantees of the Company (excluding guarantees to subsidiaries)Guaranto

r

Relationship withthe listedcompany

Guaranteedparty

Amount

ofguarantee

Date ofguarantee(date ofagreement)

Guarantee startingdate

Guaranteeexpirationdate

Type ofguarante

e

Collateral (if

any)

Whether theguaranteehas beenfulfilled

Whethertheguaranteeis overdue

Amountoverdue

Counter-guarantee

Guaranteefor relatedparties

Relationship

Total amount of guarantees incurred during the reporting period (excludingguarantees to subsidiaries)

Total guarantee balance at the end of the reporting period (A) (excludingguarantees to subsidiaries)

Guarantees by the Company and its subsidiaries to subsidiariesTotal amount of guarantee incurred for subsidiaries during the reporting period 296,188,978.35Total balance of guarantees to subsidiaries at the end of the reporting period (B) 537,116,975.79

Status of total corporate guarantees (including guarantees to subsidiaries)Total amount of guarantees (A+B) 537,116,975.79Ratio of total guarantees to the company's net assets (%) 49.63Of which:

Amount of guarantees in favor of shareholders, actual controllers and their relatedparties (C)

Amount of debt guarantees provided directly or indirectly for guaranteed objectswith asset-liability ratio exceeding 70% (D)

Amount of the portion of total guarantees exceeding 50% of net assets (E) 0Total amount of the above three guarantees (C+D+E) 0

Explanation of possible joint and several liability for outstanding guaranteesNoneDescription of guarantees None

(III) Entrusted Cash Asset Management

1. Entrusted financial management

(1) Overall entrusted wealth management

√ Applicable □ N/A

Unit: Yuan Currency: RMBType Source of funds Amount incurred Outstanding balance Overdue amount not recoveredBank financial products Collected Funds 92,000,000.00Bank financial products Own Funds 100,000,000.00Others

□ Applicable √ N/A

(2) Individual entrusted financial management

□ Applicable √ N/A

Others

□ Applicable √ N/A

(3) Provision for impairment of entrusted finance

□ Applicable √ N/A

2. Entrusted loans

(1) Overall situation of entrusted loans

□ Applicable √ N/A

Others

□ Applicable √ N/A

(2) Individual entrusted loans

□ Applicable √ N/A

Others

□ Applicable √ N/A

(3) Provision for impairment of entrusted loans

□ Applicable √ N/A

3. Others

Others □ Applicable √ N/A

(IV) Other significant contracts

□ Applicable √ N/A

XIV. Explanation on the Progress of the Use of Proceeds

√ Applicable □ N/A

(I) Overall utilization of proceeds raised

√ Applicable □ N/A

Unit: YuanSource offund-raisingTime ofarrival ofthe fund-raising

Total amountof fund-raising

Of which:

Amount ofover-raisedfunds

Net proceedsafter issueexpenses

Total committedinvestment ofproceeds

Adjusted totalcommittedinvestment ofproceeds (1)

Cumulative totalamount ofproceedsinvested as of theend of thereporting period(2)

Cumulativeprogress ofinputs as atthe end of thereportingperiod (%)

(3)=(2)/(1)

Amountinvestedduring theyear (4)

Percentageof currentyear's inputamount (%)

(5) = (4)/(1)

Totalamount

of

procee

ds

fromchange

of useIPO

September 29, 2022

545,000,000.

485,347,160.3

485,347,160.34 485,347,160.34 458,213,767.30 94.41%

311,140,820.

64.11% /

(II) Details of the fund-raising projects

√ Applicable □ N/A

Unit: Million/100 Yuan

Item name

Projectnatur

e

Involvinginvestmen

tchangeProceedsSource

Time

offundraisingfundsinplace

Whether touseover-raisedfunds

Totalcommittedinvestment ofprojectfund-raising

Adjusted totalinvestment ofproceeds(1)

Amountinvestedthisyear

Accumulated totalamountof issueproceedsinvestedas of theend of thereportingperiod (2))

Cumulativeinputprogress as ofthe endof thereportingperiod(%) )(3)=(2)/(1)

Dateprojectreachesintendeduseablecondition

Closed ornot

Whethertheprogressof inputsis in linewith theplannedschedule

Specificreasonswhyinputsdid notprogress asplanned

Benefitsrealizedduring

theyear

Benefit

srealize

d orR&Dresultsof theproject

Has there

been asignifican

t change

in thefeasibility

of theproject,and if so,

pleaseprovide

details

Amo

untofsavings

Supplement

al Clean

RoomProjectSupporting

Working

CapitalProject

O&

M

No IPO

September 29,

2022

No

43,764.

43,764.

29.7

03.2

43,988.47

100.51

%

/ Yes Yes / N/A N/A No /

R&DCenterConstructio

n Project

R&D No IPO

September 29,

2022

No

2,539.5

2,539.5

117.

230.64 9.08 %

January

2025

No Yes / N/A N/A No /Marketingand ServiceNetworkConstructio

n Project

O&

M

No IPO

September 29,

2022

No

2,230.8

2,230.8

1,29

3.47

1,602.26

71.8

2%

October

2024

No Yes / N/A N/A No /

(III) Changes in or termination of fund-raising investments during the reporting period

□ Applicable √ N/A

(IV) Other use of proceeds during the reporting period

1. Prior investment and replacement of issue proceeds investment projects

□ Applicable √ N/A

2. Temporarily supplementing liquidity with idle proceeds

□ Applicable √ N/A

3. Cash management of idle issue proceeds and investment in related products

√ Applicable □ N/A

Unit: Million/100 Yuan Currency: RMBConsidered by theBoard of Directors

Effective ConsiderationAmount of Proceeds Used forCash Management

Start Date Ending date

Cash management balance at theend of the reporting period

Whether the maximum balance forthe period exceeds the authorizedamountOctober 27, 2022 40,000.00 November 22, 2022 November 21, 2023 / NoOctober 27, 2023 3,000.00 October 27, 2023 October 26, 2024 1,600.00 No

Other NotesNone

4. Permanent replenishment of working capital or repayment of bank loans with over-provisioned funds

□ Applicable √ N/A

5. Others

□ Applicable √ N/A

XV. Explanation of other significant matters that have a significant impact on investors’ value judgment and investment decisions

□ Applicable √ N/A

Section VII Changes in Shares and Information about Shareholders

I. Changes in Share Capital(I) Table of changes in shares

1. Table of changes in shares

Unit: Shares

Before this change Increase/decrease (+, -) After this change

Number

Proportion(%)

Issueofnewshare

s

BonussharesConversion ofsharesfromprovidentfund

Others Subtotal

Number of

shares

Proportion (%)I.Restrictedshares

60,000,00

75.00

15,000,00

-10,002,750

4,997,250 64,997,250 65.00

1. Shares

held bythe state

2. Shares

held bystate-ownedcorporations

3. Other

domesticshares

8,002,200 10.00 2,000,550

-10,002,750

-8,002,200 0Of which:

sharesheld bydomesticnon-statelegalpersons

8,002,200 10.00 2,000,550

-10,002,750

-8,002,200 0Sharesheld bydomesticnaturalpersons

4.Overseasshares

51,997,80

65.00

12,999,45

12,999,45

64,997,250 65.00Of which:

sharesheld byoverseaslegalpersons

51,997,80

65.00

12,999,45

12,999,45

64,997,250 65.00Sharesheld byoverseasnaturalpersons

II.Unlimitedshares in

20,000,00

25.00 5,000,000 10,002,750

15,002,75

35,002,750 35.00

circulation

1. RMB

commonshares

20,000,00

25.00 5,000,000 10,002,750

15,002,75

35,002,750 35.00

2. Domest

ic listedforeignshares

3. Overse

as listedforeignshares

4. OthersIII. Totalnumber ofshares

80,000,00

100.00

20,000,00

20,000,00

100,000,000 100.00

2. Description of changes in shares

√ Applicable □ N/A

The Company held the Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meetingof the Second Session of the Supervisory Committee on April 7, 2023 and the Annual General Meeting of2022 on April 28, 2023 respectively, and considered and passed the Proposal on the Profit Distribution Planof the Company for the Year 2022. Based on the total share capital of 80,000,000 shares before theimplementation of the profit distribution and capitalization plan, the Company will transfer 2.5 shares forevery 10 shares to all shareholders, and after the transfer of 20,000,000 shares, the total share capital of theCompany will be 100,000,000 shares. For details, please refer to "Announcement on Implementation of 2022Annual Equity Distribution of Acter Technology Integration Group Co., Ltd." (Announcement No. 2023-028) published on the website of Shanghai Stock Exchange on June 9, 2023 at www.sse.com.cn.

3. Impact of changes in shares on financial indicators such as earnings per share and net assets per

share for the last year and the last period (if any)

√ Applicable □ N/A

Major financial indicators Current reporting period

The same period of the

previous yearBasic earnings per share (yuan/share) 1.39 1.51Net assets per share attributable to shareholders oflisted companies (yuan/share)

10.82 12.42According to the "Proposal on the Profit Distribution Plan for the Year 2022" considered and approved atthe Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meeting of the SecondSession of the Supervisory Committee of the Company held on April 7, 2023 and the Annual GeneralMeeting of the Company for the year 2022 held on April 28, 2023, the Company shall transfer 2.5 shares forevery 10 shares to all shareholders by way of capitalization of capital reserve on the basis of the total sharecapital of 80,000,000 shares prior to the implementation of the equity distribution, with the total number ofshares to be transferred by way of capitalization of capital reserve to be increased by a total of 20,000,000shares. After this capitalization, the total share capital of the Company became 100,000,000 shares. Theequity distribution was completed during the reporting period. In order to ensure the comparability ofaccounting indicators, the basic earnings per share for the year 2022 has been recalculated and presented onthe basis of the changed number of shares.

4. Other disclosures deemed necessary by the Company or required by securities regulatory

authorities

□ Applicable √ N/A

(II) Changes in restricted shares

√ Applicable □ N/A

Unit: SharesName of shareholder

Number of

restrictedshares at thebeginning of

the year

Number ofsharesreleased

fromrestrictedsale duringthe year

Increase inthe number ofrestrictedshares during

the year

Number ofrestrictedshares at theend of theyear

Reasonforrestriction

Date ofrelease ofrestrictedsharesSHENG HUEIINTERNATIONALCO. LTD.

51,997,800 12,999,450 64,997,250 IPO

October13, 2025Suzhou SonghueiEnterpriseManagementConsultingPartnership (LimitedPartnership)

6,498,000 8,122,500 1,624,500 IPO

October13, 2023Suzhou ShengzhanEnterpriseManagementConsultingPartnership (LimitedPartnership)

1,504,200 1,880,250 376,050 IPO

October13, 2023Total60,000,000 10,002,750 15,000,000 64,997,250/ /

II. Issuance and Listing of Securities(I) Issuance of securities up to the reporting period

□ Applicable √ N/A

Explanation of securities issuance as of the reporting period (for bonds with different interest rates duringthe subsistence period, please explain separately)

□ Applicable √ N/A

(II) Changes in the total number of shares and shareholder structure of the Company and changesin the Company's asset and liability structure

√ Applicable □ N/A

According to the ''Proposal on the Profit Distribution Plan for the Year 2022'' considered and approvedat the Sixth Meeting of the Second Session of the Board of Directors and the Fifth Meeting of the SecondSession of the Supervisory Committee of the Company held on April 7, 2023 and the Annual GeneralMeeting of the Company for the year 2022 held on April 28, 2023, the Company shall, on the basis of thetotal share capital of 80,000,000 shares prior to the implementation of the distribution of the Company'sshare capital, increase 2.5 shares for every 10 shares by way of capitalization of capital reserve to allshareholders, totaling 20,000,000 shares. After this capitalization, the total share capital of the companybecame 100,000,000 shares. Before the implementation of this equity distribution, Sheng Huei Internationalheld 51.9978 million shares with a shareholding ratio of 65.00%, Suzhou Songhuei held 6.498 million shareswith a shareholding ratio of 8.12%, and Suzhou Shengzhan held 1.5042 million shares with a shareholdingratio of 1.88%; the shareholding ratio remained unchanged after the implementation of the equity distribution,with Sheng Huei International's shareholding changed to 64.99725 million shares, Suzhou SongHuei to

8.1225 million shares and Suzhou ShengZhan to 1.88025 million shares.

At the beginning of the reporting period, total assets amounted to RMB 1778.2818 million and totalliabilities amounted to RMB 765.0707 million, with an asset-liability ratio of 43.02%; at the end of thereporting period, total assets amounted to RMB 1904.3625 million and total liabilities amounted to RMB

814.3974 million, with an asset-liability ratio of 42.76%.

(III) Existing internal employee shares

□ Applicable √ N/A

III. Shareholders and actual controllers(I) Total number of shareholders

Total number of common shareholders as of the endof the re

ortin

g

eriod

(

households

10,170Total number of common shareholders as of the endof the month prior to the date of the annual report

)(

households

)

9,715Total number of preferred stockholders with votingrights restored as of the end of the reporting period

households

)

N/ATotal number of preferred stockholders with votingrights restored at the end of the month preceding theannual re

ort disclosure date

(

households

N/A

(II) Shareholdings of top ten shareholders and top ten outstanding shareholders (or shareholderswith unlimited rights to sell) as at the end of the reporting period

Unit: sharesShareholdings of the top ten shareholders (excluding shares lent through transfer)Name of shareholders(full name)

Increase/decrease duringthe reportingperiod

Number ofshares held atthe end of theperiod

Proportion (%)

Number ofshares heldunder limitedsellingconditions

Pledged,marked orfrozen

NatureofshareholdersShareholdingStatus

NumberSHENG HUEIINTERNATIONALCO. LTD.

12,999,450 64,997,250 65.00 64,997,250 None 0

OverseaslegalpersonSuzhou SonghueiEnterpriseManagementConsulting Partnership(Limited Partnership)

1,624,500 8,122,500 8.12 0 None 0 OtherSuzhou ShengzhanEnterpriseManagementConsulting Partnership(Limited Partnership)

376,050 1,880,250 1.88 0 None 0 OtherPing An Asset - ICBC- Ping An Asset RuyiNo. 15 AssetManagement Product

581,125 581,125 0.58 0 None 0 OtherHuang Junfeng 460,600 460,600 0.46 0 None 0

Domestic naturalpersonZhu Zexin 390,900 390,900 0.39 0 None 0

Domestic naturalpersonIndustrial andCommercial Bank ofChina Limited - CITICPrudential Multi-Strategy FlexibleAllocation MixedSecurities InvestmentFund (LOF)

325,800 325,800 0.33 0 None 0 Other

Tian An Life InsuranceCompany Limited -Ping An Asset Multi-Asset Portfolio

300,000 300,000 0.30 0 None 0 OtherZhu Zejia 287,800 287,800 0.29 0 None 0

Domestic naturalpersonKelsang Rinzin 112,525 257,525 0.26 0 None 0

Domestic naturalpersonShareholdings of the top ten shareholders with unlimited sales conditionsName of shareholders

Number of shares held incirculation with unlimitedselling conditions

Type and number of sharesType

Number ofsharesSuzhou Songhuei EnterpriseManagement Consulting Partnership(Limited Partnership)

8,122,500

Renminbi ordinaryshares

8,122,500Suzhou Shengzhan EnterpriseManagement Consulting Partnership(Limited Partnership)

1,880,250

Renminbi ordinaryshares

1,880,250Ping An Assets - ICBC - Ping AnAssets Ruyi No. 15 AssetManagement Product

581,125

Renminbi ordinaryshares

581,125Huang Junfeng 460,600

Renminbi ordinaryshares

460,600Zhu Zexin 390,900

Renminbi ordinaryshares

390,900Industrial and Commercial Bank ofChina Limited - CITIC-PrudentialMulti-Strategy Flexible AllocationMixed Securities Investment Fund(LOF)

325,800

Renminbi ordinaryshares

325,800Tian An Life Insurance CompanyLimited - Ping An Asset Multi-AssetPortfolio

300,000

Renminbi ordinaryshares

300,000Zhu Zejia 287,800

Renminbi ordinaryshares

287,800Kelsang Rinchen 257,525

Renminbi ordinaryshares

257,525Zhu Xuewen 240,950

Renminbi ordinaryshares

240,950Description of buyback specialaccounts among the top tenshareholders

NoneExplanation of the above

shareholders' proxy voting rights,entrusted voting rights and waiver ofvoting rights

NoneDescription of the above shareholders'affiliation or concerted action

NoneDescription of preferred stockholderswhose voting rights have beenrestored and the number of shares theyhold

NoneParticipation of the top ten shareholders in lending of shares in the transfer and financing business

□ Applicable √ N/A

Changes in the top ten shareholders compared with the previous period

√ Applicable □ N/A

Unit: sharesChanges in the top ten shareholders from the end of the previous periodName ofshareholders (fullname)

New/withdrawn duringthe reportingperiod

Number of shares lent ontransfer and not yet returnedat the end of the period

Number of shares held in shareholders'ordinary accounts and credit accountsand outstanding shares lent on transfer atthe end of the periodTotal Quantity

Proportion (%)

Total Quantity Proportion (%)Bank of China -E-Funds PositiveGrowth SecuritiesInvestment Fund

Withdrawal N/A N/A 0 0.00Sun Qinghua Withdrawal N/A N/A 0 0.00Shao Jialin Withdrawal N/A N/A 0 0.00CITIC SecuritiesCo., Ltd.

Withdrawal N/A N/A 200,351 0.20Guotai JunanSecurities Co.,Ltd.

Withdrawal N/A N/A 77,161 0.08EverbrightSecurities Co.,Ltd.

Withdrawal N/A N/A 47,604 0.05Ping An Asset -ICBC - Ping AnAsset Ruyi No. 15AssetManagementProduct

New N/A N/A 581,125 0.58Huang Junfeng New N/A N/A 460,600 0.46Zhu Zexin New N/A N/A 390,900 0.39Industrial andCommercial Bankof China Limited -CITIC-PrudentialMulti-StrategyFlexibleAllocation MixedSecuritiesInvestment Fund(LOF)

New N/A N/A 325,800 0.33

Tian An LifeInsuranceCompany Limited- Ping An AssetMulti-AssetPortfolio

New N/A N/A 300,000 0.30Zhu Zejia New N/A N/A 287,800 0.29

Number of shares held by the top ten shareholders with limited selling conditions and the conditions oflimited selling

√ Applicable □ N/A

Unit: shares

No.

Name ofrestrictedshareholders

Number of sharessubject to sellingrestrictions

Listing and trading of shares subject toselling restrictions

RestrictedsharesTime of availabilityfor listing and trading

Number of newshares availablefor listing andtrading

SHENG HUEIINTERNATIONAL CO. LTD.

64,997,250 October 13, 2025 0

Lock-up ofshares for 36months fromthe date oflistingDescription of therelationship or concertedaction of the aboveshareholders

None

(III) Strategic investors or general corporations becoming top 10 shareholders as a result of placingof new shares

□ Applicable √ N/A

IV. Controlling shareholders and actual controllers(I) Controlling shareholders1 Legal person

√ Applicable □ N/A

Name of the Company:

SHENG HUEI INTERNATIONAL CO. LTD.Person in charge of the organization or legalre

resentative

Liang JinliDate of Establishment July 15, 2003Main Businesses Equity investmentEquity interests in other domestic and overseaslisted companies held and participated in during there

pp

ortin

g

eriod

NoneOther information None

2 Natural persons

□ Applicable √ N/A

3 Special explanations on the absence of controlling shareholders of the Company

□ Applicable √ N/A

4 Explanation on the change of controlling shareholders during the reporting period

□ Applicable √ N/A

5 Block diagram of the ownership and control relationship between the Company and thecontrolling shareholders

√ Applicable □ N/A

(II) Situation of actual controllers1 Legal person

□ Applicable √ N/A

2 Natural person

□ Applicable √ N/A

3 Special explanation on the absence of actual controllers of the Company

□ Applicable √ N/A

4 Explanation on the change of control of the Company during the reporting period

□ Applicable √ N/A

5 Block diagram of the ownership and control relationship between the Company and the actualcontroller

□ Applicable √ N/A

6 Control of the Company by the actual controller through trust or other asset managementmethods

□ Applicable √ N/A

(III) Other information of controlling shareholders and actual controllers

□ Applicable √ N/A

V. The proportion of shares pledged by controlling shareholders or the largest shareholder andpersons acting in concert with them to the number of shares held by them reaches more than80%.

Acter Co., Ltd.

Acter TechnologyInte

ration Grou

p

Acter TechnologyIntegration GroupCo., Ltd. ShenzhenBranchActer TechnologyIntegration Group

Co., Ltd. Hefei

BranchActer TechnologyIntegration GroupCo., Ltd.Zhengzhou BranchActer TechnologyIntegration GroupCo., Ltd. WuhanBranch

Acter Engineering

Technology(Shenzhen) Co.,Ltd.Acter EngineeringTechnology(Shenzhen) Co.,Ltd. Xiamen

Branch

Shenzhen DingmaoTrading Co., Ltd.

□ Applicable √ N/A

VI. Other legal shareholders holding more than 10% of the company's shares

□ Applicable √ N/A

VII. Explanation on the restriction on the reduction of shareholding

□ Applicable √ N/A

VIII. Specific implementation of share buyback during the reporting period

□ Applicable √ N/A

Section VIII Preferred Stock

□ Applicable √ N/A

Section IX Relevant Information of Bonds

I. Enterprise bonds, corporate bonds and debt financing instruments for non-financial enterprises

□ Applicable √ N/A

II. Convertible corporate bonds

□ Applicable √ N/A

Section X Financial ReportingI. Audit Report

√ Applicable □ N/A

Audit Report

XYZH/2024SUAA1B0017Acter Technology Integration Group Co., Ltd.

All shareholders of Acter Technology Integration Group Co., Ltd.

I. Audit Opinion

We have audited the financial statements of Acter Technology Integration Group Co., Ltd., Ltd(hereinafter referred to as "Acter Group"), which comprise the consolidated and parent companybalance sheets as of December 31, 2023, the consolidated and parent company income statements, theconsolidated and parent company cash flow statements, and the consolidated and parent companystatements of changes in stockholders' equity for the year ended December 31, 2023, and the relatednotes to the financial statements.In our opinion, the accompanying financial statements present fairly, in all material respects, theconsolidated and parent company financial position of Acter Group as of December 31, 2023 and theconsolidated and parent company results of operations and cash flows for the year ended December 31,2023 in conformity with the Accounting Standards for Business Enterprises (ASBE).II. Basis of Audit Opinion

We have performed our audit in accordance with the provisions of the Chinese Standards onAuditing for Certified Public Accountants. Our responsibilities under those standards are furtherdescribed in the "Responsibilities of Certified Public Accountants for the Audit of Financial Statements"section of the audit report. In accordance with the Code of Ethics for Certified Public Accountants ofthe People's Republic of China, we are independent of Acter Group and have fulfilled our otherresponsibilities with respect to professional ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our audit opinion.

III. Key Audit Matters

Key audit matters are matters that, in our professional judgment, are of most significance to theaudit of the financial statements. These matters are dealt with in the context of the audit of the financialstatements as a whole and the formation of an audit opinion, and we do not express an opinion on thesematters separately.

1. Revenue recognition for construction contracts

Please refer to the accounting policies described in "IV. Significant Accounting Policies andAccounting Estimates" 32 in the notes to the financial statements and "VI. Notes to the FinancialStatements" 35 in the notes to the financial statements.Key Audit Matters Audit ResponseActer Group is mainly engaged in thedesign and construction of MEP related toclean room projects, and the revenue fromconstruction contracts in FY2023amounted to RMB 1,994,437,797.70,accounting for 99.28% of the operatingrevenue in the consolidated incomestatement.Starting from January 1, 2020, ActerGroup will implement “ASBE No.14,"Revenue (Revised)”. Acter Groupevaluated the terms of the contracts andbusiness arrangements and concluded thatconstruction contracts are performanceobligations to be fulfilled within a certainperiod of time, and recognized revenuebased on the progress of performanceover the period of time in which theconstruction contracts are performed. Theprogress of performance is determinedbased on the proportion of actual contractcosts incurred by Acter Group to theestimated total contract costs.Management of Acter Group is requiredto make reasonable judgments regardingthe progress of completion orperformance of construction contracts.During the course of execution of thecontracts, Acter Group is required tocontinually evaluate and makeadjustments to the contract amounts andestimated total contract costs, whichinvolves the exercise of significantmanagement judgments.

The audit procedures related to the evaluation of revenuerecognition of construction contracts mainly include thefollowing procedures:

(1) Understanding and evaluating the design and operating

effectiveness of key internal controls over financialreporting related to revenue recognition for constructioncontracts;

(2) Selecting the construction contracts signed between

Acter Group and its clients, examining the main terms ofthe contracts and evaluating whether the accountingpolicies of Acter Group for revenue recognition are incompliance with the requirements of the AccountingStandards for Business Enterprises (ASBE);

(3) Selecting construction contracts and examining the

basis for the estimated total cost of the contracts and therelated cost budget information. If there is any adjustmentto the estimated total cost of the contract, check whetherthe adjustment to the estimated total cost has beenapproved and inquire the management about the reasonsand basis for the adjustment to evaluate whether theestimation made by the management is reasonable andbased on sufficient information;

(4) Selecting contract costs actually incurred during the

reporting period and checking relevant supportingdocuments such as procurement contracts, purchase orders,material receipts, requisition ratios, invoices, etc. toevaluate the authenticity and accuracy of the actualconstruction costs;

(5) Contract costs incurred around the balance sheet date

are selected and reconciled to the relevant supportingdocuments, including purchase contracts, purchase orders,material receipts, requisition ratios, invoices, and otherrelevant supporting documents, in order to evaluate

1. Revenue recognition for construction contracts

Please refer to the accounting policies described in "IV. Significant Accounting Policies andAccounting Estimates" 32 in the notes to the financial statements and "VI. Notes to the FinancialStatements" 35 in the notes to the financial statements.Key Audit Matters Audit ResponseWe identified revenue recognition forconstruction contracts as a key auditmatter because revenue is one of the keyperformance indicators of Acter Group,there is an inherent risk that Acter Groupmay manipulate revenue to meet certainobjectives or expectations, and revenuerecognition for construction contractsinvolves significant managementjudgment.

whether the relevant contract costs are recorded in theappropriate accounting period;

(6) Selecting construction contracts that have not been

completed at the end of the reporting period, reviewing theaccuracy of the calculation of the percentage of completionor progress of performance, and recalculating thecumulative revenue recognized and the revenue to berecognized in the current period, and reconciling them withthe financial records;

(7) Selecting clients and conducting correspondence

regarding the amount of construction contracts andreceivables signed between Acter Group and them duringthe reporting period;

(8) Selecting construction contracts not yet completed as at

the end of the reporting period, conducting on-siteinspections of the project sites, observing the image of theon-site works, interrogating the project engineers ormanagement personnel, and checking the progressinformation of the projects at the construction sites, so asto evaluate the reasonableness of the management'sestimation on the progress of the project completion or theprogress of the fulfillment of the contract;

(9) Selecting construction contracts, checking the total

costing sheet of the approved contract budget and the actualimplementation of the budget during the reporting period,reviewing the difference between the total budgeted costand the actual cost of completed contracts, and evaluatingwhether there is any indication of management bias;

(10) Evaluating whether the revenue from construction

contracts has been appropriately disclosed in the financialstatements.

2. Evaluation of bad debt

rovision for accounts receivablePlease refer to the accounting policies described in "IV. Significant Accounting Policies andAccounting Estimates" 13 in the notes to the financial statements and "VI. Notes to the FinancialStatements" 4 in the notes to the financial statements.Ke

py

Audit Matters Audit Res

y

p

onseAs at December 31, 2023, the original value ofaccounts receivable in the consolidated

alancesheet of Acter Group was RMB

The audit procedures related to the evaluation of the

b

b

ad debt provision for accounts receivable includedthe following procedures:

2. Evaluation of bad debt

rovision for accounts receivablePlease refer to the accounting policies described in "IV. Significant Accounting Policies andAccounting Estimates" 13 in the notes to the financial statements and "VI. Notes to the FinancialStatements" 4 in the notes to the financial statements.Ke

py

Audit Matters Audit Res

y

p

onse432,299,306.51, and the provision for baddebts was RMB 35,410,034.25. Based on theexpected credit loss rate of accountsreceivable, the management measured the baddebt provision for accounts receivable at anamount equivalent to the expected credit lossesover the life of the accounts receivable.The expected credit loss rate takes into accountthe age of the accounts receivable, historicalpayments, current market conditions andforward-looking information, and thisassessment involves significant managementjudgment and estimates.

(1) Understanding and evaluating the design and

operating effectiveness of Acter Group’s key internalcontrols over financial reporting related to credit riskcontrol, collection and provisioning for bad debts;

(2) Evaluating whether the accounting policy for bad

debt provision of Acter Group for the reporting periodcomplies with the requirements of enterpriseaccounting standards;

(3) Evaluating the appropriateness of the aging of

accounts receivable by selecting items from theaccounts receivable aging table, reviewing relevantsupporting documents, and taking into account theinformation on the credit periods granted by ActerGroup to its clients;

(4) Understanding the key parameters and

assumptions used in Acter Group’s expected creditloss model, including management’s judgment onwhether to group accounts receivable based onclients’ credit risk characteristics and the historicalloss data included in Acter Group’s expected lossratio;

(5) Evaluating the appropriateness of Acter Group’s

estimate of expected credit losses by examining theinformation used by Acter Group to make theestimate, including examining the accuracy of thehistorical loss data, and evaluating whethermanagement has adjusted the historical loss rate bytaking into account the current market conditions andforward-looking information in determining theexpected credit loss rate;

(6) Recalculation of bad debt allowance as of

December 31, 2023 based on the expected credit lossmodel of accounts receivable of Acter Group.

IV. Other Information

The management of Acter Group (hereinafter referred to as "management") is responsible for theother information. Other information includes the information covered in the 2023 annual report ofActer Group, but excludes the financial statements and our audit report.

Our audit opinion on the financial statements does not cover the other information, and we do notexpress any form of assurance conclusion on the other information.In connection with our audit of the financial statements, it is our responsibility to read the otherinformation and, in doing so, to consider whether the other information is materially inconsistent with,or appears to be materially misstated in relation to, the financial statements or our knowledge gained inthe course of the audit.Based on the work we have performed, if we determine that other information is materiallymisstated, we shall report that fact. We have no matters to report in this regard.

V. Management’s and Governance’s Responsibility for the Financial Statements

The management is responsible for the preparation of financial statements that present fairly, inaccordance with the provisions of the Ind AS, and for designing, implementing and maintaining internalcontrol necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing Acter Group'sability to continue as a going concern, disclosing, as applicable, matters related to going concern andapplying the going concern assumptions, unless management plans to liquidate Acter Group,discontinue operations or has no realistic alternative.

Governance is responsible for overseeing the financial reporting process of Acter Group.

VI. CPA's Responsibility for the Audit of Financial Statements

Our objective is to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an audit reportcontaining an audit opinion. Reasonable assurance is a high level of assurance, but it does not guaranteethat an audit performed in accordance with auditing standards will always detect a materialmisstatement when it exists. Misstatements may result from fraud or error and are generally consideredto be material if it is reasonable to expect that the misstatements, individually or in the aggregate, couldaffect the economic decisions of users of financial statements based on the financial statements.

We use professional judgment and maintain professional skepticism in performing the audit inaccordance with auditing standards. We also perform the following tasks:

(1) Identifying and assessing the risks of material misstatement of the financial statements due to

fraud or error, design and perform audit procedures to address those risks, and obtaining sufficientappropriate audit evidence as a basis for an audit opinion. The risk of not detecting a materialmisstatement due to fraud is higher than the risk of not detecting a material misstatement due to errorbecause fraud may involve collusion, forgery, willful omission, misrepresentation, or overridinginternal controls.

(2) Obtaining an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of internal control.

(3) Evaluating the appropriateness of accounting policies selected and the reasonableness of

accounting estimates and related disclosures made by management.

(4) Expressing a conclusion on the appropriateness of management's use of the going concern

assumption. At the same time, based on the audit evidence obtained, we conclude whether there is amaterial uncertainty regarding the matters or circumstances that may cast significant doubt on the abilityof Acter Group to continue as a going concern. If we conclude that a material uncertainty exists, auditingstandards require that we draw the attention of users of the financial statements to the relevantdisclosures in our audit report; if the disclosures are not sufficient, we shall express an unqualifiedopinion. Our conclusions are based on information available at the date of the audit report. However,future events or circumstances may cause Acter Group to be unable to continue as a going concern.

(5) Evaluating the overall presentation, structure and content of the financial statements and to

evaluate whether the financial statements present fairly the related transactions and events.

(6) Obtaining sufficient and appropriate audit evidence about the financial information of the

entities or business activities of Acter Group to express an opinion on the financial statements. We areresponsible for directing, supervising and performing the audit of the Group and accept fullresponsibility for the audit opinion.We communicate with governance on matters such as the scope, timing and significant findings ofthe planned audit, including internal control deficiencies of concern identified in our audit.We also provide governance with a statement of compliance with ethical requirements related toindependence and communicate with governance all relationships and other matters that couldreasonably be perceived to affect our independence, as well as related safeguards.From the matters communicated with governance, we determined which matters were mostsignificant to the audit of the current financial statements and therefore constituted key audit matters.We describe these matters in our audit report except where public disclosure of the matters is prohibitedby law or regulation or, in rare circumstances, we determine that a matter shall not be communicated inthe audit report if it is reasonably foreseeable that the adverse consequences of communicating thematter would outweigh the benefits to the public interest.

ShineWing Certified Public Accountants LLP Certified Public Accountants, China:

(Project Partner)

Certified Public Accountant, China:

Beijing, China March 29, 2024

II. Financial Statements

Consolidated Balance SheetDecember 31, 2023Prepared by: Acter Technology Integration Group Co., Ltd.

Unit: Yuan Currency: RMBItem Notes December 31, 2023 December 31, 2022Current assets

Monetary funds

722,496,330.38 550,235,202.99Provision for settlement fund

Funds lent

Financial assets held fortradin

122,119,888.89Derivative financial assets

Bills receivable

43,157,918.28 20,790,441.73Accounts receivable

396,889,272.26 484,443,368.28Receivables financing

3,572,953.18 729,937.36Prepayments

89,024,613.33 50,995,260.16Premiums receivable

Reinsurance receivables

Reserve for reinsurancecontracts receivable

Other receivables

13,378,598.48 13,057,575.31Of which: Interest receivable

Dividends receivable

Financial assets purchased forresale

Inventories

66,824.45Contract assets

424,897,205.60 389,293,108.13Assets held for sale

Non-current assets due withinone

gy

ea

r

Other current assets

97,604,166.6958,265,105.32Total current assets

1,791,021,058.201,689,996,712.62Non-current assets:

Loans and advances granted

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments

2,332,022.40 2,314,172.96Investments in other equityinstruments

Other non-current financialassets

Investment properties

598,758.96 713,065.68Fixed assets

38,895,511.08 40,095,530.47Construction in progress

13,103,863.94

Producing biological assets

Oil and gas assets

Utilization right assets

3,840,232.40 4,672,377.60Intangible assets

7,244,475.94 7,426,847.54Development expenditure

Goodwill

Long-term prepaid expenses

Deferred income tax assets

12,482,616.81 14,578,928.51Other non-current assets

34,843,950.71 17,348,658.87Total non-current assets

113,341,432.24 87,149,581.63Total assets

1,904,362,490.44 1,777,146,294.25Current liabilities:

Short-term borrowings

31,249,307.82Borrowing from the central

ank

Funds borrowed

Financial liabilities held fortradin

bg

Derivative financial liabilities

Bills payable

Accounts payable

629,857,317.33 589,919,678.26Advance receipts

Contract liabilities

73,351,891.04 74,584,070.11Amounts for sale and buybackof financial assets

Deposit-taking and interbankde

gp

osits

Securities trading agency

Underwriting of securities

Employee remuneration

pp

a

y

able

47,459,670.8739,456,513.03Taxes payable

7,980,749.03 7,330,079.22Other payables

25,427,208.65 1,611,097.74Of which: Interest payable

Dividends payable

Fees and commissions payable

Sub-insurance payable

Liabilities held for sale

Non-current liabilities duewithin one

ea

r

1,748,003.79 1,710,381.30Other current liabilities

Total current liabilities

785,824,840.71 745,861,127.48Non-current liabilities:

Reserves for insurancecontracts

Long-term borrowings

Bonds payable

Of which: Preferred stock

Perpetual bonds

Lease liabilities

2,150,631.55 3,151,902.66Long-term accounts payable

Long-term employeeremuneration

a

y

able

632,325.46 610,379.24Projected liabilities

11,292,847.91 9,238,016.80Deferred income

Deferred tax liabilities

14,496,782.15 4,892,632.32Other non-current liabilities

Total non-current liabilities

28,572,587.0717,892,931.02

Total liabilities

814,397,427.78 763,754,058.50Owners' equity (or shareholders' equity)Paid-in capital (or shareca

ital

)

100,000,000.00 80,000,000.00Other equity instruments

Of which: Preference stock

Perpetual bonds

Capital surplus

562,632,775.45 582,632,775.45Less: Treasury stock

Other comprehensive income

3,318,147.613,027,860.88Earmarked reserves

44,578,849.52 45,372,652.93Surplus reserves

39,501,301.38 28,443,197.81Provision for general risks

Undistributed profits

332,226,440.31 269,871,786.54Total owners' equity (orshareholders' equity) attributableto the

arent com

p

an

1,082,257,514.27 1,009,348,273.61Minority interests

7,707,548.39 4,043,962.14Total owners' equity (orshareholders' equity)

1,089,965,062.66 1,013,392,235.75Total liabilities andowners' equity (or shareholders'e

yq

uit

y)

1,904,362,490.44 1,777,146,294.25Person in charge of the Company: Liang JinliPerson in charge of Accounting: Chen ZhihaoPerson of Accounting Organization: Xiao Jingxia

Parent Company Balance SheetDecember 31, 2023 Prepared by: Acter Technology IntegrationGroup Co., Ltd.

Unit: Yuan Currency: RMBItem Notes December 31, 2023 December 31, 2022Current assets

Monetary funds

562,122,045.11 426,921,105.55Financial assets held for trading

122,119,888.89Derivative financial assets

Bills receivable

41,826,722.94 3,741,507.00Accounts receivable

315,117,444.36389,406,545.69Receivables financing

2,161,091.23 350,000.00Prepayment

62,282,120.10 30,190,351.40Other receivables

31,069,788.93 39,103,210.81Of which: Interest receivable

Dividends receivable

Inventories

62,842.15Contract assets

316,838,756.89 307,849,835.96Assets held for sale

Non-current assets due withinone

ea

r

Other current assets

45,758,769.25 21,837,642.67Total current assets

1,377,176,738.81 1,341,582,930.12Non-current assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments

88,485,289.33 84,542,333.88Investments in other equityinstruments

Other non-current financialassets

Investment properties

598,758.96 713,065.68Fixed assets

36,738,851.20 38,986,702.82Construction in progress

13,103,863.94

Producing biological assets

Oil and gas assets

Utilization right assets

2,451,451.14 2,760,402.11Intangible assets

7,206,780.52 7,379,278.80Development expenditure

Goodwill

Long-term amortization

Deferred tax assets

9,838,099.85 11,724,393.96Other non-current assets

29,178,404.91 3,168,562.17Total non-current assets

187,601,499.85 149,274,739.42Total assets

1,564,778,238.66 1,490,857,669.54Current liabilities:

Short-term borrowings

Transaction financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable

521,711,872.40 504,944,256.04Receipts in advance

Contract liabilities

46,861,981.30 38,253,734.48Employee remuneration payable

36,511,580.37 32,483,986.99Taxes payable

810,992.90 3,265,740.36Other payables

1,806,759.40 1,278,644.31Of which: Interest payable

Dividends payable

Liabilities held for sale

Non-current liabilities duewithin one

ea

r

968,648.33 902,393.93Other current liabilities

Total current liabilities

608,671,834.70 581,128,756.11Non-current liabilities:

Long-term loans

Bonds payable

Of which: Preferred stock

Perpetual bonds

Lease liabilities

1,797,832.84 2,118,253.78Long-term accounts payable

Long-term employeeremuneration

a

y

able

Projected liabilities

7,199,017.54 5,723,958.25Deferred income

Deferred tax liabilities

367,717.70

Other non-current liabilities

Total non-current liabilities

9,364,568.08 7,842,212.03Total liabilities

618,036,402.78 588,970,968.14Owners' equity (or shareholders' equity)

Paid-in capital (or share capital)

100,000,000.00 80,000,000.00Other equity instruments

Of which: Preferred stock

Perpetual bonds

Capital surplus

564,223,330.95 584,223,330.95Less: Treasury stock

Other comprehensive income

Earmarked reserves

36,814,726.26 37,608,529.67Surplus reserves

39,501,301.38 28,443,197.81Undistributed profits

206,202,477.29 171,611,642.97Total owners' equity (orshareholders' equity)

946,741,835.88 901,886,701.40Total liabilities and owners'equity (or shareholders' equity)

1,564,778,238.66 1,490,857,669.54Person in charge of the Company: Liang JinliPerson in charge of Accounting: Chen ZhihaoPerson in charge of Accounting Organization: Xiao Jingxia

Consolidated Income Statement

January-December 2023

Unit: Yuan Currency: RMBItem Notes FY2023 FY2022I. Total operating revenue

2,008,924,995.68 1,627,895,120.49Of which: operating revenue

2,008,924,995.68 1,627,895,120.49Interest income

Earned premiums

Fee and commission income

II. Total operating costs

1,829,949,952.47 1,471,980,392.51Of which: Operating costs

1,738,841,241.47 1,376,528,425.17Interest expenses

Handling fee and commissionex

enses

Surrender premiums

Net claims expenses

Net withdrawal of insuranceliabilit

py

reserve

Policy dividend expense

Reinsurance expenses

Taxes and surcharges

4,370,539.18 3,800,051.12Selling expenses

7,954,281.67 6,301,894.42Administrative expenses

59,193,009.85 60,147,184.98R&D expenses

25,121,209.62 19,101,658.87Finance costs

-5,530,329.32 6,101,177.95Of which: Interest expense

1,360,920.96 3,693,006.56Interest income

6,309,355.80 1,787,232.96Add: Other gains

3,731,552.00 3,524,827.14Investment income (loss denotedby "-")

1,661,794.44 -99,328.94Of which: Investment incomefrom associates and joint ventures

Gain on derecognition offinancial assets measured at amortizedcost

Foreign exchange gains (lossdenoted by "-")

Gain on net open hedges (lossdenoted by "-")

Gain on change in fair value (lossdenoted by "-")

-119,888.89 105,417.14

Credit impairment loss (lossdenoted by "-")

-3,860,633.85 -5,805,476.85

Impairment loss on assets (lossdenoted by "-")

1,148,478.91 5,978,570.41

Gain on disposal of assets (lossdenoted by "-")

116,542.37 246,990.20III. Operating profit (loss denoted by "-")

181,652,888.19 159,865,727.08Add: Non-operating revenue

14,361.33 75,601.66Less: Non-operating expenses

889,948.63 925,033.47

IV. Total profit (total loss denoted by " -")

180,777,300.89 159,016,295.27Less: Income tax expense

40,713,458.90 35,997,255.91V. Net profit (net loss denoted by "-")

140,063,841.99 123,019,039.36(I) Classification by continuity of operations

1. Net profit from continuing

operations (net loss denoted by "-")

140,063,841.99 123,019,039.36

2. Net profit from discontinued

operations (net loss denoted by "-")

(II) Classification by ownership attribution

1. Net profit attributable to

shareholders of the parent company (netloss denoted b

"-"

y

)

138,590,474.42 122,867,982.79

2. Gains and losses of minority

shareholders (net loss denoted by "-")

1,473,367.57 151,056.57VI. Other comprehensive income, net oftax

369,438.14 2,112,646.09(I) other comprehensive incomeattributable to owners of the parentcom

an

y

, net of taxes

290,286.73 2,027,897.54

1. Other comprehensive income

that cannot be reclassified to profit orloss

(1) Remeasurement of changes in

defined benefit plans

(2) Other comprehensive income that

cannot be reclassified to profit or lossunder the e

uit

y

method

(3) Changes in fair value of

investments in other equity instruments

(4) Changes in fair value of own

credit risk

2. Other comprehensive income to

be reclassified to profit or loss

290,286.73 2,027,897.54

(1) Other comprehensive income

available for reclassification to profit orloss under the e

uit

y

method

(2) Changes in fair value of other debt

instruments

(3) Reclassification of financial assets

to other comprehensive income

(4) Provision for credit impairment of

other debt investments

(5) Cash flow hedge reserve

(6) Translation difference of foreign

currenc

financial statements

290,286.73 2,027,897.54

(7) Others

(II) Other comprehensive incomeattributable to minority shareholders, netof taxes

79,151.41 84,748.55VII. Total comprehensive income

140,433,280.13 125,131,685.45(I) Total comprehensive incomeattributable to owners of the parentcom

yp

an

y

138,880,761.15 124,895,880.33

(II) Total comprehensive incomeattributable to minority shareholders

1,552,518.98 235,805.12VIII. Earnings per share:

(I) Basic earnings per share

uan/share

)

1.39 1.51

(II) Diluted earnings per share

uan/share

)

1.39 1.51

In the event of a business combination under the same control during the current period, the netprofit realized by the party to be merged before the merger was RMB 0. The net profit realized by theparty to be merged in the previous period was RMB 0.Person in chage of of the Company: Liang JinliPerson in charge of Accounting: Chen ZhihaoPerson in charge of Accounting Organization: Xiao Jingxia

Income Statement of the Parent Company

January-December 2023

Unit: Yuan Currency: RMBItem Notes FY2023 FY2022I. Operating Revenue

1,515,434,141.27 1,205,851,820.93Less: Operating costs

1,338,966,817.43 1,039,711,074.27Taxes and surcharges

4,057,620.88 3,006,779.95Selling expenses

3,076,194.29 1,981,006.21Administrative expenses

38,930,717.90 43,029,776.70R&D expenses

25,121,209.62 19,101,658.87Finance costs

-5,338,139.72 -1,787,439.33Of which: Interest expense

153,118.72 1,494,488.49Interest Income

5,636,874.72 1,844,141.45Add: Other gains

3,731,552.00 2,766,188.78Investment income (lossdenoted by "-")

18,594,851.659,000,000.00Of which: Investment incomefrom associates and joint ventures

Gain on derecognition offinancial assets carried at amortizedcost

Gain on net exposure hedge(loss denoted by "-")

Gain on changes in fair value(loss denoted by "-")

-119,888.89 119,888.89

Credit impairment loss (lossdenoted by "-")

-3,623,180.11 -7,083,121.30

Impairment loss on assets (lossdenoted by "-")

521,068.35 5,527,231.49

Gain on disposal of assets (lossdenoted by "-")

115,572.93 224,175.66II. Operating profit (loss denoted by "-")

129,839,696.80 111,363,327.78Add: Non-operating revenue

0.01 1.75

Less: Non-operating expenses

612,922.35 820,188.78III. Total profit (total loss denoted by "-")

129,226,774.46 110,543,140.75Less: Income tax expense

18,645,738.73 22,934,895.19IV. Net profit (net loss denoted by "-")

110,581,035.73 87,608,245.56(I) Net profit from continuingoperations (net loss denoted by "-")

110,581,035.7387,608,245.56(II) Net profit from discontinuedoperations (net loss denoted by "-")

V. Other comprehensive income, net oftax

(I) Other comprehensive income thatcannot be reclassified to profit or loss

1. Remeasurement of changes in

defined benefit plans

2. Other comprehensive income

that cannot be reclassified to profit orloss under the e

uit

y

method

3. Changes in fair value of

investments in other equity instruments

4. Change in fair value of own

credit risk

(II) Other comprehensive income tobe reclassified to profit or loss

1. Other comprehensive income

that can be reclassified to profit or lossunder the e

uit

y

method

2. Changes in fair value of other

debt investments

3. Reclassification of financial

assets to other comprehensive income

4. Provision for credit impairment

of other debt investments

5. Cash flow hedge reserve

6. Translation differences on

foreign currency financialstatements

7. Others

VI. Total comprehensive income

110,581,035.73 87,608,245.56VII. Earnings per share:

(I) Basic earnings per share

uan/share

)

(II) Diluted earnings per share

uan/share

)

Person in charge of the Company: Liang JinliPerson in charge of Accounting: Chen ZhihaoPerson in charge of Accounting organization: Xiao Jingxia

Consolidated Cash Flow Statement

January-December 2023

Unit: Yuan Currency: RMBItem Notes FY2023 FY2022I. Cash flows from operating activities:

Cash received from sales of goods andrenderin

of services

2,167,140,386.68 1,676,483,526.48

Net increase in client deposits andinterbank

gp

lacin

g

s

Net increase in borrowings from the

central bank

Net increase in borrowings from otherfinancial institutions

Cash received from premiums for

rimar

y

insurance contracts

Net cash received from reinsurance

usiness

Net increase in policyholders' deposits

and investment funds

Cash received from interest, fees andcommissions

Net increase in funds received

Net increase in buyback transactions

Net cash received from securities trading

Tax rebates received

4,870,426.57 21,093,638.18

Cash received from other operatingactivities

18,560,464.10 34,436,667.12Subtotal of cash inflow fromo

bp

eratin

g

activities

2,190,571,277.35 1,732,013,831.78Cash paid for goods and services

1,805,795,893.11 1,343,472,760.93Net increase in loans and advances toclients

Net increase in deposits with central

anks and interbanks

Cash paid for original insurance contractclaims

Net increase in funds withdrawn

Cash paid for interest, fees andcommissions

Cash paid for policy dividends

Cash paid to and for employees

130,630,318.35 99,870,108.89

Taxes paid

76,654,922.21 77,937,514.35

Cash paid for other operating activities

43,967,212.45 49,643,981.81Subtotal of cash outflow fromo

bp

eratin

g

activities

2,057,048,346.12 1,570,924,365.98Net cash flows from operatingactivities

133,522,931.23 161,089,465.80II. Cash flows from investing activities:

Cash received from recovery ofinvestments

371,000,000.00 202,252.61

Cash received from investment income

1,809,868.77

Net cash received from the disposal offixed assets, intangible assets and otherlon

-term assets

28,000.00 273,005.91

Net cash received from the disposal ofsubsidiaries and other o

gp

eratin

g

units

Cash received from other investingactivities

Subtotal of cash inflow from investingactivities

372,837,868.77 475,258.52

Cash paid for acquisition andconstruction of fixed assets, intangibleassets and other lon

-term assets

16,998,209.64 4,783,339.58

Cash paid for investment

249,000,000.00 122,000,000.00

Net increase in pledged loans

Net cash paid for acquisition ofsubsidiaries and other business units

Cash paid for other investing activities

Subtotal of cash outflow frominvestin

gg

activities

265,998,209.64126,783,339.58Net cash flows from investingactivities

106,839,659.13 -126,308,081.06III. Cash flows from financing activities:

Cash received from investmentabsor

gp

tion

2,114,535.07 504,551,886.80Of which: Cash received by subsidiariesfrom minorit

py

investment

Cash received from loans

6,388,838.45 233,739,019.50Cash received from other financingactivities

22,605,625.00

Subtotal of cash inflow fromfinancin

yg

activities

31,108,998.52 738,290,906.30Cash paid for debt repayment

37,837,088.45317,108,556.88Cash paid for distribution of dividends,

gp

rofits or re

p

p

a

ment of interest

66,094,012.34 33,149,681.50Of which: Dividends and profits paid tominorit

yy

shareholders b

y

subsidiaries

Cash paid for other financing activities

2,180,273.09 22,871,875.08Subtotal of cash outflow fromfinancin

activities

106,111,373.88 373,130,113.46Net cash flows from financing activities

-75,002,375.36 365,160,792.84IV. Impact of exchange rate changes oncash and cash e

gq

uivalents

2,296,409.74 447,893.41V. Net increase in cash and cashe

qq

uivalents

167,656,624.74 400,390,070.99Add: Cash and cash equivalents balanceat be

qg

innin

g

of

eriod

542,340,098.29 141,950,027.30VI. Cash and cash equivalents at end of

pp

eriod

709,996,723.03 542,340,098.29Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia

Cash flow statement of the parent company

January-December 2023

Unit: Yuan Currency: RMBItem Notes FY2023 FY2022I. Cash flows from operating activities:

Cash received from sales of

oods and renderin

g

of services

1,647,517,583.36 1,092,516,773.62Tax refunds received

3,748,084.73

Cash received from othero

eratin

g

activities

14,972,801.49 7,963,498.00Subtotal of cash inflow fromo

eratin

g

activities

1,666,238,469.58 1,100,480,271.62Cash paid for goods and services

1,406,939,420.43 969,724,417.70Cash paid to and for employees

96,230,925.37 71,802,528.56Taxes paid

60,761,461.48 49,226,203.45Cash paid for other operatingactivities

27,542,918.50 27,217,857.28Subtotal of cash outflow fromo

eratin

g

activities

1,591,474,725.78 1,117,971,006.99Net cash flows from operatingactivities

74,763,743.80 -17,490,735.37II. Cash flows from investing activities:

Cash received from recovery ofinvestments

347,000,000.00

Cash received from investmentincome

19,008,542.749,000,000.00Net cash recovered from disposalof fixed assets, intangible assetsand other lon

-term assets

20,000.00 88,000.00Net cash received from disposalof subsidiaries and other businessunits

Cash received from otherinvestin

gg

activities

Subtotal of cash inflow frominvestin

gg

activities

366,028,542.74 9,088,000.00Cash paid for the purchase andconstruction of fixed assets,intangible assets and other long-term assets

15,334,338.59 3,625,785.24Cash paid for investment

225,000,000.00 122,000,000.00Net cash paid for acquisition ofsubsidiaries and other operatingunits

4,242,955.45

Cash paid for other investingactivities

Subtotal of cash outflow frominvestin

gg

activities

244,577,294.04 125,625,785.24Net cash flows frominvestin

gg

activities

121,451,248.70 -116,537,785.24III. Cash flows from financing activities:

Cash flows from financingactivities

504,551,886.80Cash received from obtainingloans

89,551,555.00Cash received from otherfinancin

activities

34,906,384.33 64,016,599.07Subtotal of cash inflow fromfinancin

gg

activities

34,906,384.33658,120,040.87Cash paid for debt repayment

89,551,555.00Cash paid for distribution ofdividends, profits or interestre

gp

a

y

ment

65,000,000.00 31,177,990.13Cash paid for other financingactivities

29,198,376.93 63,272,188.69Subtotal of cash outflow fromfinancin

activities

94,198,376.93 184,001,733.82Net cash flows fromfinancin

gg

activities

-59,291,992.60 474,118,307.05IV. Impact of exchange ratechanges on cash and cashe

gq

uivalents

7,753.07 125,339.27V. Net increase in cash and cashe

qq

uivalents

136,930,752.97 340,215,125.71Add: Opening balance of cashand cash e

qq

uivalents

425,166,975.58 84,951,849.87VI. Cash and cash equivalents atend of

qp

eriod

562,097,728.55 425,166,975.58Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia

Consolidated Statement of Changes in Owners' Equity

January-December 2023

Unit: Yuan Currency: RMBItem

Year 2023Owners' equity attributable to the parent company

Minority interests Total equityPaid-incapital (orequity)

Other equityinstruments

Capitalsurplus

Less:

Treasurystock

Othercomprehensiveincome

Earmarkedreserves

Surplusreserves

Generalriskallowance

Undistributedprofits

Undistributed profit

SubtotalPreferredstock

Perpetual debt

OtherI. Closing balanceof the previousyear

80,000,00

0.00

582,632,775.

3,027,860.88

45,372,652.9

28,443,197.81 269,871,786.54 1,009,348,273.61 4,043,962.14 1,013,392,235.75Add: change inaccounting policy

-177,717.08 -177,717.08 -3,467.80 -181,184.88Correction ofprior-period errors

OthersII. Openingbalance for theyear

80,000,00

0.00

582,632,775.

3,027,860.88

45,372,652.9

28,443,197.81 269,694,069.46 1,009,170,556.53 4,040,494.34 1,013,211,050.87III.Increases/decreases during the period

20,000,00

0.00

-20,000,000.0

290,286.73 -793,803.41 11,058,103.57 62,532,370.85 73,086,957.74 3,667,054.05 76,754,011.79Amount (Decreasedenoted by " - ")

(I) Totalcomprehensiveincome

290,286.73 138,590,474.42 138,880,761.15 1,552,518.98 140,433,280.13(II) Owners' inputsand capitalreduction

2,114,535.07 2,114,535.07

1. Ordinary shares

invested by owners

2,114,535.07 2,114,535.07

2. Contribution of

capital by holdersof other equityinstruments

3. Share-based

paymentsrecognized inowners' equity

4. Others(III) Profitdistribution

- - - - - - - - 11,058,103.57 -

-76,058,103.57

-

-65,000,000.00

-

-65,000,000.00

1. Withdrawal of

surplus reserves

11,058,103.57 -11,058,103.57

2. Provision for

general risks

3. Distribution to

owners (orshareholders)

-65,000,000.00 -65,000,000.00 -65,000,000.00

4. Others(IV) Internaltransfer ofownership interest

20,000,00

0.00

-20,000,000.0

1. Capitalization of

capital surplus tocapital (or sharecapital)

20,000,00

0.00

-20,000,000.0

2. Transfer of

surplus reserves tocapital (or sharecapital)

3. Surplus reserves

to cover losses

4. Amount of

changes in definedbenefit plancarried forward toretained earnings

5. Other

comprehensiveincome Transfer ofothercomprehensiveincome to retainedearnings

6. Others(V) Earmarkedreserves

-793,803.41 -793,803.41 -793,803.41

1. Withdrawal

during the period

2. Used during the

period

793,803.41 793,803.41 793,803.41(VI) OthersIV. Closingbalance of theperiod

100,000,0

00.00

- - -

562,632,775.

-3,318,147.61

44,578,849.5

39,501,301.38 - 332,226,440.31-1,082,257,514.27 7,707,548.39 1,089,965,062.66

Year 2022Equity attributable to owners of the parent company

Minorityinterests

Total owners'equity

Paid-incapital (orshare capital)

Other equity instruments

Capital surplus

Less:

Treasurystock

Othercomprehensive income

Earmarkedreserves

Surplusreserves

Generalriskallowance

Undistributedprofits

Undistributed profit

SubtotalPreferred stock

Perpetual debt

OtherI. Closing balanceof the previousyear

60,000,000.0

110,110,859.85 999,963.34 46,731,787.48 19,682,373.25 185,764,628.31 423,289,612.23

3,808,157.0

427,097,769.25Add: change inaccounting policy

Correction ofprior-period errors

OthersII. Openingbalance for theyear

60,000,000.0

110,110,859.85 999,963.34 46,731,787.48 19,682,373.25 185,764,628.31 423,289,612.23

3,808,157.0

427,097,769.25III.Increases/decreases during the period(Decrease denotedby " - ")

20,000,000.0

472,521,915.60 2,027,897.54 -1,359,134.55 8,760,824.56 84,107,158.23 586,058,661.38 235,805.12 586,294,466.50(I) Totalcomprehensiveincome

2,027,897.54 122,867,982.79 124,895,880.33 235,805.12 125,131,685.45(II) Owners' inputsand capitalreduction

20,000,000.0

472,521,915.60 492,521,915.60 492,521,915.60

1. Ordinary shares

invested by owners

20,000,000.0

465,347,160.33 485,347,160.33 485,347,160.33

2. Contribution of

capital by holdersof other equityinstruments

3. Share-based

paymentsrecognized inowners' equity

7,174,755.27 7,174,755.27 7,174,755.27

4. Others(III) Profitdistribution

8,760,824.56 -38,760,824.56 -30,000,000.00 -30,000,000.00

1. Withdrawal of

surplus reserves

8,760,824.56 -8,760,824.56

2. Provision for

general risks

3. Distribution to

owners (orshareholders)

-30,000,000.00 -30,000,000.00 -30,000,000.00

4. Others

(IV) Internaltransfer ofownership interest

1. Capitalization of

capital surplus tocapital (or sharecapital)

2. Transfer of

surplus reserves tocapital (or sharecapital)

3. Surplus reserves

to cover losses

4. Amount of

changes in definedbenefit plancarried forward toretained earnings

5. Other

comprehensiveincome Transfer ofothercomprehensiveincome to retainedearnings

6. Others(V) Earmarkedreserves

-1,359,134.55 -1,359,134.55 -1,359,134.55

1. Withdrawal

during the period

2． Used duringthe period

1,359,134.55 1,359,134.55 1,359,134.55(VI) OthersIV. Closingbalance of theperiod

80,000,000.0

582,632,775.45 3,027,860.88 45,372,652.93 28,443,197.81 269,871,786.54

1,009,348,273.6

4,043,962.1

1,013,392,235.7

Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia

Statement of changes in equity of the parent company

January-December 2023

Unit: Yuan Currency: RMB

Item Year 2023

Paid-in capital(or sharecapital)

Other equity instruments

Capital surplus

Less: Treasurystock

Othercomprehensiveincome

Earmarkedreserves

Surplusreserves

Undistributedearnings

Total owners'equityPreferred stock Perpetual debt OthersI. Balance at the end of the previousyear

80,000,000.00 584,223,330.95 37,608,529.67 28,443,197.81 171,611,642.97 901,886,701.40Add: Change in accounting policy 67,902.16 67,902.16Correction of prior period errorsOthersII. Opening balance for the year 80,000,000.00 584,223,330.95 37,608,529.67 28,443,197.81 171,679,545.13 901,954,603.56III. Amount of increase or decreaseduring the period (Decrease denoted by" - ")

20,000,000.00 -20,000,000.00 -793,803.41 11,058,103.57 34,522,932.16 44,787,232.32(I) Total comprehensive income 110,581,035.73 110,581,035.73(II) Owners' contributions and capitalreduction

1. Ordinary shares invested by owners

2. Capital contributions from holders of

other equity instruments

3. Share-based payments recognized in

owners' equity

IV. Others(III) Distribution of profits 11,058,103.57 -76,058,103.57 -65,000,000.00

1. Withdrawal of surplus reserves 11,058,103.57 -11,058,103.57

2. Distribution to owners (or

shareholders)

-65,000,000.00 -65,000,000.00

3. Other -(IV) Internal transfer of owners' equity 20,000,000.00 -20,000,000.00

1. Transfer of capital surplus to capital

(or share capital)

20,000,000.00 -20,000,000.00

2. Transfer of surplus to capital (or

share capital)

3. Making up of losses from surplus

surplus

4. Carry-over of changes in defined

benefit plans to retained earnings

5. Other comprehensive income carried

forward to retained earnings

6. Others(V) Earmarked reserves -793,803.41 -793,803.41

1. Withdrawal during the period-

2. Utilized during the period 793,803.41 793,803.41(VI) Others-IV. Closing balance for the period 100,000,000.00 564,223,330.95 36,814,726.26 39,501,301.38 206,202,477.29 946,741,835.88

Item

Year 2022Paid-in capital(or sharecapital)

Other equity instruments

Capital surplus

Less: Treasurystock

Othercomprehensiveincome

Earmarkedreserves

Surplusreserves

Undistributedearnings

Total owners'equityPreferred stock Perpetual debt OtherI. Balance at the end of the previousyear

60,000,000.00 111,774,134.07 38,967,664.22 19,682,373.25 122,764,221.97 353,188,393.51Add: Change in accounting policyCorrection of prior period errorsOthersII. Opening balance for the year 60,000,000.00 111,774,134.07 38,967,664.22 19,682,373.25 122,764,221.97 353,188,393.51III. Amount of increase or decreaseduring the period (Decrease denoted by" - ")

20,000,000.00 472,449,196.88 -1,359,134.55 8,760,824.56 48,847,421.00 548,698,307.89(I) Total comprehensive income 87,608,245.56 87,608,245.56(II) Owners' contributions and capitalreduction

20,000,000.00 472,449,196.88 492,449,196.88

1. Common shares invested by owners 20,000,000.00 465,347,160.33 485,347,160.33

2. Capital contributions from other

equity instrument holders

3. Share-based payment Share-based

payments recognized in owners' equity

7,102,036.55 7,102,036.55

4. Others(III) Distribution of profits 8,760,824.56 -38,760,824.56 -30,000,000.00

1. Withdrawal of surplus reserves 8,760,824.56 -8,760,824.56

2. Distribution to owners (or

shareholders)

-30,000,000.00 -30,000,000.00

3. Others(IV) Internal transfer of owners' equity

1. Transfer of capital surplus to capital

(or share capital)

2. Transfer of surplus to capital (or

share capital)

3. Coverage of losses from surplus

surplus

4. Carry-over of changes in defined

benefit plans to retained earnings

5. Other comprehensive income carried

forward to retained earnings

6. Others(V) Earmarked reserves -1,359,134.55 -1,359,134.55

1. Withdrawal during the period

2. Used during the period 1,359,134.55 1,359,134.55(VI) OthersIV. Closing balance for the period 80,000,000.00 584,223,330.95 37,608,529.67 28,443,197.81 171,611.642.97 901,886,701.40

Person in charge of the Company: Liang Jinli Person in charge of Accounting: Chen Zhihao Person in charge of AccountingOrganization: Xiao Jingxia

III. Basic Information of the Company

1. Company profile

√ Applicable □ N/A

Acter Technology Integration Group Co., Ltd. (the “Company”), formerly known as Sheng Huei(Suzhou) Engineering Co., Ltd. (“Sheng Huei Limited”), was established on September 3, 2003 inSuzhou City, Jiangsu Province. At the time of its establishment, the Company's initial registered capitalwas US$0.45 million. After a series of capital increase, as at December 31, 2017, the registered capitalof Sheng Huei Limited was US$7.98 million, and the sole shareholder of Sheng Huei Limited is SHENGHUEI INTERNATIONAL CO., Ltd.

In January 2018, Sheng Huei International increased the capital of Sheng Huei Limited, and theregistered capital was increased from US$7.98 million to US$9.03 million. In May 2018, Acter Groupentered into an equity transfer agreement with Suzhou Songhuei Enterprise Management ConsultingPartnership (Limited Partnership) (“Suzhou Songhuei”) and Suzhou Shengzhan EnterpriseManagement Consulting Partnership (Limited Partnership) (“Suzhou Shengzhan”). Pursuant to theagreement, Acter Group agreed to transfer the corresponding registered capital of Sheng Huei Limitedof US$0.977918 million and US$0.226403 million held by Sheng Huei Limited to Suzhou Songhueiand Suzhou Shengzhan at RMB 14,282,400.00 and RMB 3,306,600.00 respectively. After thecompletion of the above transactions, the registered capital of Sheng Huei Limited is US$9.03 millionand the equity structure is as follows:

No. Shareholder

Amount of investment(USD Million/100)

Shareholdingratio (%)

1 Sheng Huei International 782.567986.6630

2 Suzhou Songhuei 97.791810.8300

3 Suzhou Shengzhan 22.64032.5070

Total 903.0000100.0000

In June 2019, all the investors of Sheng Huei Limited entered into a promoter agreement, agreeingto change the whole of Sheng Huei Limited into a joint stock limited company and renamed as “ActerTechnology Integration Group Co., Ltd.”. All the investors converted the net assets of Sheng HueiLimited as of April 30, 2019 into 60,000,000 shares with par value of RMB 1 each. The shareholdingstructure after the overall change is as follows:

No. Shareholder

Share capital(RMB)

Shareholdingratio (%)

1 Sheng Huei International 51,997,800.00 86.6630

2 Suzhou Songhuei 6,498,000.00 10.8300

3 Suzhou Shengzhan 1,504,200.00 2.5070

Total 60,000,000.00 100.0000

On August 23, 2022, the Company applied for the IPO of A shares of not more than 20,000,000.00shares by CSRC (“Official Reply to the Approval of the IPO of Acter Technology Integration GroupCo., Ltd.”) (CSRC License No. [2022] 1915), which was approved by the CSRC. As at December 31,2022, the Company had received the monetary funds obtained through the public offering of A shares,of which the paid-in capital (share capital) amounted to RMB 20,000,000.00 (SAY RMB TWENTYMILLION YUAN ONLY).

The shareholding structure after the overall change is as follows:

No. Shareholders

Share capital(RMB)

Shareholdingratio (%)1 Sheng Huei International 51,997,800.0064.9973

RMB ordinary shares (A shares)shareholders

20,000,000.0025.00003 Suzhou Songhuei 6,498,000.008.12254 Suzhou Shengzhan 1,504,200.001.8803

Total 80,000,000.00100.0000Pursuant to the resolution of the 2022 annual general meeting held on April 28, 2023, the Companypaid a cash dividend of RMB 0.8125 per share (inclusive of tax) to all shareholders on the basis of thetotal share capital of 80,000,000.00 shares as at June 14, 2023, and transferred 0.25 shares to allshareholders by way of capital reserve to increase the share capital by a total of 20,000,000.00 shareswith par value of RMB 1 per share, increasing the share capital by RMB 20,000,000.00 in total.

As at December 31, 2023, the shareholding structure after the overall change is as follows:

No. Shareholder

Share capital(RMB)

Shareholdingratio (%)1 Sheng Huei International 64,997,250.0064.9973

RMB ordinary shares (A shares)shareholders

25,000,000.0025.00003 Suzhou Songhuei 8,122,500.008.12254 Suzhou Shengzhan 1,880,250.001.8803

Total 100,000,000.00100.0000The Company's parent company is Sheng Huei International and its ultimate holding company isActer Co., Ltd. (Acter (Taiwan)) The Company's business term is from September 3, 2003 to anindefinite period.Scope of Business: Engaged in system integration services; design and related equipmentinstallation of mechanical and electrical systems, HVAC systems, aseptic systems, and buildingequipment management systems: construction of air purification engineering, fire engineering, buildingconstruction engineering, interior and exterior decoration engineering, municipal public works, pipelineengineering, and provision of related technical consultation and after-sales service; research anddevelopment and manufacturing of industrial switch power converters and components; wholesale,import, and export of similar products produced by the company and building materials, dust-free,aseptic purification equipment and related equipment, and assembly parts (for products involving quotasand license management, applications shall be handled according to relevant national regulations).Category III medical device business; Category II medical device sales; manufacturing of metalstructures; manufacturing of building decoration, plumbing parts, and other metal products forconstruction (the project shall be carried out only after approval by relevant authorities in accordancewith the law).Licensed Projects: Construction engineering design; intelligent building system design (thespecific business projects shall be subject to the approval results, and only after approval by relevantauthorities in accordance with the law can the business activities be conducted).

The financial statements were approved by the Board of Directors of the Group on March 29, 2024by resolution.

IV. Basis of Preparation of the Financial Statements

1. Basis of preparation

The financial statements of the Company are prepared in accordance with the "AccountingStandards for Business Enterprises" issued by the Ministry of Finance (hereinafter collectively referredto as the "ASBE") and its application guidance, interpretations, and other relevant regulations, as wellas the disclosure requirements of the China Securities Regulatory Commission's (hereinaftercollectively referred to as the "CSRC") "General Provisions of Financial Reports - No. 15 - Rules onthe Information Disclosure of Companies Issuing Securities" (Revised in 2023), based on the actualtransactions and events.

2. Going concern

√ Applicable □ N/A

The Group evaluated its ability to continue as a going concern for the twelve months endedDecember 31, 2023, and found no matters or circumstances that cast significant doubt on its ability tocontinue as a going concern. The financial statements are presented on a going concern basis.

V. Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimates

√ Applicable □ N/A

The preparation of financial statements requires the management of the Group to make estimatesand assumptions that affect the application of accounting policies and the amounts of assets, liabilities,income and expenses. Actual results may differ from these estimates. The Group's managementcontinually evaluates its judgment regarding critical assumptions and uncertainties involved in makingestimates. The effects of changes in accounting estimates are recognized in the period in which theestimate is changed and in future periods.

The following accounting estimates and critical assumptions have a significant risk of causing amaterial adjustment to the carrying amount of assets and liabilities in future periods.

(1) Revenue recognition

Under the new revenue standard, the Group recognizes revenue from construction contracts overa period of time. The recognition of revenue and profit from construction depends on the Group'sestimation of the outcome of the contract and the progress of performance. If the actual amount of totalrevenues and total costs incurred is higher or lower than management's estimates, it will affect theamount of revenue and profit recognized by the Group in future periods;

(2) Impairment of receivables and contract assets

Effective January 1, 2019, the Group uses the expected credit loss model to assess the impairmentof financial instruments. The application of the expected credit loss model requires significantjudgments and estimates that take into account all reasonable and supportable information, includingforward-looking information. In making such judgments and estimates, the Group extrapolates theexpected changes in the credit risk of debtors based on historical repayment data and factors such aseconomic policies, macroeconomic indicators and industry risks. Therefore, the amount of provisionfor impairment of receivables and contract assets may change in accordance with the changes in theabove estimates, and the adjustments to the provision for impairment of receivables and contract assetswill affect the profit or loss in the period in which the estimates are changed.

(3) Accounting estimates for provision for impairment of fixed assets and investment properties

The Group performs impairment tests on fixed assets such as buildings, machinery and equipment,and investment properties at the balance sheet date if there is any indication of impairment. Therecoverable amount of property, plant and equipment and investment properties is the higher of the

present value of estimated future cash flows and the fair value of the assets less costs of disposal, whichrequires the use of accounting estimates.If management revises the gross margins used in the calculation of future cash flows for assetgroups and portfolios of asset groups and the revised gross margins are lower than the currently usedgross margins, the Group is required to increase the provision for impairment for property, plant andequipment and investment properties.If the pre-tax discount rate used for discounting cash flows is revised by the management and therevised pre-tax discount rate is higher than the current rate, the Group is required to make additionalprovision for impairment of fixed assets and investment properties.If the actual gross profit margin or pre-tax discount rate is higher or lower than the management'sestimate, the Group cannot reverse the provision for impairment of fixed assets and investmentproperties.

(4) Useful lives of fixed assets and investment properties

The Group reviews the estimated useful lives of fixed assets and investment properties at leastannually at the end of each year. The estimated useful lives are determined by the management basedon historical experience of similar assets, reference to estimates generally used in the industry andexpected technological updates. Depreciation and amortization expenses for future periods are adjustedaccordingly when there is a significant change in the previous estimates.

(5) Income tax expense

The Group recognizes current and deferred taxes in profit or loss, except for those arising frombusiness combinations and transactions or events directly attributable to owners' equity (including othercomprehensive income).

Current income tax is the expected income tax payable calculated on the basis of the taxableincome for the year at the rates specified in the tax law, plus adjustments to prior years' income taxpayable. At the balance sheet date, if the Group has a legal right to settle on a net basis and intends tosettle on a net basis, or to acquire assets and settle liabilities simultaneously, current income tax assetsand current income tax liabilities are shown net of tax. Deferred tax assets and deferred tax liabilitiesare recognized for deductible temporary differences and taxable temporary differences, respectively. Atemporary difference is the difference between the carrying amount of an asset or liability and its taxbasis, including deductible losses and tax credits that can be carried forward to future years. Deferredtax assets are recognized to the extent that it is probable that taxable income will be available againstwhich the deductible temporary differences can be utilized. Deferred tax is not recognized for temporarydifferences arising from transactions that are not part of a business combination and that at the time ofthe transaction affect neither the accounting profit nor taxable income (or deductible losses). At thebalance sheet date, the Group measures the carrying amount of deferred tax assets and liabilities basedon the expected manner of recovering or settling those assets and liabilities, in accordance with enactedtax laws, at the tax rates that are expected to apply to the period when the assets are recovered or theliabilities are settled. The carrying amount of deferred tax assets is reviewed at the balance sheet date.The carrying amount of deferred tax assets is written down to the extent that it is more likely than notthat sufficient taxable income will not be available to allow the benefit of the deferred tax assets to berealized in future periods. When it is more likely than not that sufficient taxable income will be availableto offset the deferred tax assets, the amount written down is reversed.

On the balance sheet date, deferred tax assets and liabilities are netted out when the followingconditions are met:

A taxable entity has a legal right to settle current income tax assets and current income tax liabilitieson a net basis;

Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxauthority on the same taxable entity or on different taxable entities, provided that in each future periodin which significant deferred tax assets and liabilities reverse, the taxable entity intends to settle the

current tax assets and liabilities on a net basis, or to realize the assets and settle the liabilitiessimultaneously.

1. Statement of Compliance with ASBE

The financial statements prepared by the Company comply with the requirements of the ASBE andgive a true and complete account of the Company's financial position, results of operations, changes inshareholders' equity, cash flows and other relevant information.

2. Accounting period

The Company's fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.

3. Business cycle

√ Applicable □ N/A

The Group uses 12 months as the business cycle and the criteria for classifying the liquidity ofassets and liabilities.

4. Currency of accounts

The Group and its Chinese subsidiaries use Renminbi ("RMB") as the local currency of account;Acter International Limited ("Acter (Hong Kong)") uses United States dollars ("USD") as the localcurrency of account; Acter Technology Singapore Pte. Ltd ("Acter (Singapore)") is denominated inSingapore dollars; PT Acter Technology Indonesia ("Acter (Indonesia)") and PT Acter IntegrationTechnology Indonesia ("Indonesia Joint Venture") are denominated in Indonesian Rupiah; ActerTechnology Malaysia Sdn. Bhd ("Acter (Malaysia)") is denominated in Malaysian Ringgit and Sheng HueiEngineering Technology Company Limited ("Sheng Huei (Vietnam)") is denominated in Vietnamese Dong;Acter Technology Company Limited ("Acter (Thailand)") uses Thai Baht as its local currency. The Groupand its subsidiaries have selected the local currency of accounts based on the currency of valuation andsettlement of major business receipts and expenditures. Some subsidiaries of the Group have adoptedcurrencies other than the Group's local currency as their local currency, and the foreign currency financialstatements of these subsidiaries have been translated in accordance with this Section V.10 in the preparationof these financial statements.

5. Method of determining materiality criteria and basis of selection

√ Applicable □ N/A

Item Materiality CriteriaSignificant accounts payable with an age of morethan one

ea

r

Individual amount exceeding RMB 3 millionImportant prepaid accounts with an age of morethan one

ea

r

Individual amount exceeding RMB 1 million

6. Accounting treatment of business combinations under the same control and non-same control

√ Applicable □ N/A

(1) Business combination under the same control

Assets and liabilities acquired by the Group as a consolidated party in a business combination under thesame control are measured at the carrying amount of the party being consolidated in the consolidatedstatements of the party ultimately in control at the date of consolidation. The difference between the carryingamount of net assets acquired and the carrying amount of the consideration paid for the merger is adjustedto capital surplus; if the capital surplus is not sufficient to cover the difference, it is adjusted to retainedearnings.

(2) Business combination not under common control

A business combination under non-identical control occurs when the parties involved in thecombination are not under the ultimate control of the same party or parties before and after the combination.Identifiable assets, liabilities and contingent liabilities of the acquiree acquired in a business combinationnot under common control are measured at fair value at the acquisition date. The cost of consolidation is the

sum of the fair values of cash or non-cash assets paid, liabilities issued or assumed, and equity securitiesissued by the Group at the date of acquisition for the purpose of obtaining control over the acquiree, as wellas all directly related expenses incurred in the business combination (for business combinations effected instages through multiple transactions, the cost of consolidation is the sum of the costs of each individualtransaction). If the cost of combination is greater than the fair value of the acquiree's identifiable net assets,goodwill is recognized. If the cost of combination is less than the fair value of the acquiree's identifiable netassets, the fair value of the identifiable assets, liabilities and contingent liabilities acquired in the combinationas well as the fair value of the non-cash assets or equity securities issued as consideration for the combinationare first reviewed. If, after the review, the cost of consolidation is still less than the fair value of the netidentifiable assets of the acquiree, the difference is recognized as non-operating revenue in the current periodof consolidation.

7. Criteria for judging control and method of preparing consolidated financial statements

√ Applicable □ N/A

The scope of consolidation of the Group's consolidated financial statements is determined on the basisof control, which includes the Company and all subsidiaries controlled by the Company (includingenterprises, divisible parts of invested entities and structured entities controlled by enterprises, etc.). TheGroup determines control on the basis of the Group's power over an investee, the Group's ability to earnvariable returns from participating in the investee's activities, and the Group's ability to exercise its powerover the investee to affect the amount of the investee's returns.In the preparation of consolidated financial statements, if the subsidiaries adopt accounting policies oraccounting periods that are different from those of the Company, the subsidiaries' financial statements shallbe adjusted as necessary in accordance with the Company's accounting policies or accounting periods.The effects on the consolidated financial statements of internal transactions between the Company andits subsidiaries and between subsidiaries are eliminated on consolidation. The share of ownership interest ofsubsidiaries that is not attributable to the parent company and the share of net profit or loss, othercomprehensive income and total comprehensive income that is attributable to minority interests are presentedin the consolidated financial statements under the headings of "Minority interests, minority interests in profitor loss, other comprehensive income attributable to minorities and total comprehensive income attributableto minorities", respectively.

The results of operations and cash flows of subsidiaries acquired in a business combination under thesame control are included in the consolidated financial statements from the beginning of the period in whichthe combination occurs. In preparing the comparative consolidated financial statements, adjustments aremade to the relevant items in the prior year's financial statements, and the consolidated entity is deemed tohave been in existence since the point in time when the ultimate controlling party began to exercise control.

For subsidiaries acquired in a business combination not under common control, the results of operationsand cash flows are included in the consolidated financial statements from the date the Group obtains control.In preparing the consolidated financial statements, the financial statements of subsidiaries are adjusted onthe basis of the fair value of each identifiable asset, liability and contingent liability determined at the dateof purchase.

8. Classification of joint arrangements and accounting treatment of joint operations

√ Applicable □ N/A

The Group's joint venture arrangements include joint operations and joint ventures. Joint operationrefers to a joint arrangement in which the parties to the arrangement are entitled to the assets and bear theliabilities related to the arrangement. A joint venture is a joint arrangement in which the joint venturers haverights only to the net assets of the arrangement.

For joint ventures, the Group recognizes assets held and liabilities assumed individually or in proportionto the assets held and liabilities assumed by the Group as a joint venturer, and recognizes revenues andexpenses individually or in proportion to the relevant agreements. When a joint venture enters into atransaction for the purchase or sale of an asset that does not constitute part of the business, only the portionof the gain or loss arising from the transaction that is attributable to the other participants in the joint ventureis recognized.

9. Criteria for determining cash and cash equivalents

Cash equivalents are investments held by an enterprise that have a short maturity (generally maturingwithin three months from the date of purchase), are highly liquid, are readily convertible to known amountsof cash, and are subject to an insignificant risk of changes in value.

10. Foreign currency operations and translation of foreign currency statements

√ Applicable □N/A

(1) Foreign currency transactions

The Group's foreign currency transactions are translated into RMB at the spot exchange rate on the dateof the transaction. At the balance sheet date, foreign currency monetary items are translated into RMB usingthe spot exchange rate at the balance sheet date, and the resulting translation differences are recognizeddirectly in profit or loss for the current period, except for exchange differences arising from special loans inforeign currencies for the purpose of purchasing, constructing or producing assets eligible for capitalization,which are dealt with in accordance with the principle of capitalization. Non-monetary items carried at fairvalue that are denominated in foreign currencies are translated using spot exchange rates at the date whenthe fair value is determined, and the difference between the translated amount in the local currency of theaccount and the original amount in the local currency of the account is treated as a change in fair value(including exchange rate changes) and recognized in profit or loss for the period. Capital received frominvestors in foreign currencies is translated using the spot exchange rate on the date when the transactionoccurs, and the difference in the translated amount between the invested capital in foreign currencies and thecorresponding local currency of the monetary items does not result in a difference between the foreign-currency capital and the corresponding local currency of the monetary items.

(2) Translation of foreign currency financial statements

Assets and liabilities in the foreign currency balance sheet are translated at the spot exchange rate at thebalance sheet date; owners' equity items, except for "undistributed profits", are translated at the spotexchange rate at the time of occurrence of the business; and income and expenses in the income statementare translated at the spot exchange rate at the date of occurrence of the transaction. Translation differencesarising from the above translations are recognized in other comprehensive income. Cash flows in foreigncurrencies are translated using the spot exchange rate on the date of cash flows. The effect of exchange ratechanges on cash is shown separately in the statement of cash flows.

11. Financial Instruments

√ Applicable □ N/A

The Group recognizes a financial asset or a financial liability when it becomes a party to a financialinstrument contract.

The effective interest method is a method of calculating the amortized cost of a financial asset or afinancial liability and of allocating interest income or interest expense over the accounting period.

The effective interest rate is the rate that exactly discounts estimated future cash flows through theexpected life of the financial asset or financial liability to the book balance of the financial asset or theamortized cost of the financial liability. In determining the effective interest rate, the expected cash flowsare estimated by taking into account all contractual terms of the financial assets or liabilities (e.g. earlyrepayment, rollover, call option or other similar options, etc.), but not the expected credit losses.

The amortized cost of a financial asset or a financial liability is the initial recognized amount of thefinancial asset or the financial liability, less the principal repaid, plus or minus the cumulative amortizationusing the effective interest rate method to amortize the difference between the initial recognized amount andthe maturity amount, and less the cumulative loss allowance (only applicable to financial assets).

(1). Classification, recognition and measurement of financial assets

The Group classifies financial assets into the following three categories based on the business model ofthe financial assets under management and the contractual cash flow characteristics of the financial assets:

1) Financial assets measured at amortized cost

2) Financial assets at fair value through other comprehensive income.

3) Financial assets at fair value through profit or loss.

Financial assets are measured at fair value on initial recognition, except for accounts receivable or billsreceivable arising from the sale of goods or provision of services, etc., which do not contain significantfinancing components or do not take into account the financing components that are not more than one yearold, which are measured initially at the transaction price.

For financial assets at fair value through profit or loss, transaction costs are recognized directly in profitor loss, while transaction costs related to other types of financial assets are recognized in their initialrecognition amounts.

Subsequent measurement of financial assets depends on their classification. All affected financial assetsare reclassified when, and only when, the Group changes its business model for managing financial assets.

1) Financial assets classified as at amortized cost

The Group classifies a financial asset as amortized cost if the contractual terms of the financial assetstipulate that the only cash flows to be generated at a specific date will be payments of principal and interestbased on the amount of principal outstanding, and the business model for managing the financial asset is tocollect the contractual cash flows. The Group recognizes interest income on these financial assets using theeffective interest method, partially measured at amortized cost, bills receivable, accounts receivable, otherreceivables, investments in debt securities and long-term receivables.

The Group uses the effective interest rate method to recognize interest income on these financial assets,which are subsequently measured at amortized cost. Gains or losses arising from impairment orderecognition or modification of such financial assets are recognized in profit or loss for the current period.The Group determines interest income by multiplying the book balance of the financial assets by the effectiveinterest rate, except in the following cases.

a. For financial assets acquired or originated that are impaired, the Group determines interest incomeon the basis of the amortized cost of the financial assets and the effective interest rate adjusted forcreditworthiness from the initial recognition of the financial assets.

b. For financial assets acquired or originated without credit impairment that become impaired in asubsequent period, the Group determines interest income in the subsequent period based on the amortizedcost of the financial assets and the effective interest rate. If, in a subsequent period, the credit risk of afinancial instrument has improved and the financial instrument is no longer impaired, the Group calculatesinterest income by multiplying the effective interest rate by the carrying amount of the financial asset.

2) Financial assets at fair value through other comprehensive income

If the contractual terms of a financial asset stipulate that the cash flows to be generated at a specificdate will consist solely of payments of principal and interest based on the outstanding principal amount, andthe business model for managing the financial asset is based on the objective of collecting the contractualcash flows as well as the objective of selling the financial asset, the Group classifies the financial asset as afinancial asset at fair value through other comprehensive income.

The Group recognizes interest income on such financial assets using the effective interest method.Changes in fair value are recognized in other comprehensive income, except for interest income, impairmentlosses and exchange differences, which are recognized in profit or loss. When the financial assets arederecognized, the cumulative gain or loss previously recognized in other comprehensive income istransferred from other comprehensive income and recognized in profit or loss.

Notes and accounts receivable at fair value through other comprehensive income are presented asreceivables financing, and other financial assets are presented as other debt investments, of which. Otherdebt investments maturing within one year from the balance sheet date are presented as non-current assetswith maturity of less than one year, and other debt investments with original maturity of less than one yearare presented as other current assets.

3) Financial assets designated as at fair value through other comprehensive income

On initial recognition, the Group may irrevocably designate investments in non-trading equityinstruments as financial assets at fair value through other comprehensive income on an individual financialasset basis.

Changes in the fair value of such financial assets are recognized in other comprehensive income and noprovision for impairment is required. Upon derecognition of the financial assets, the cumulative gain or losspreviously recognized in other comprehensive income is transferred from other comprehensive income toretained earnings.

The Group recognizes dividend income and recognizes it in profit or loss when the Group's right toreceive dividends has been established, it is probable that the economic benefits associated with the dividendswill flow to the Group and the amount of dividends can be measured reliably during the period in which theGroup holds the investment in the equity instrument. The Group reports such financial assets underinvestments in other equity instruments.

Investments in equity instruments are classified as financial assets at fair value through profit or loss ifthey meet one of the following conditions: the financial asset is acquired principally for the purpose of sellingin the near future; it is part of a centrally managed portfolio of identifiable financial assets at initialrecognition, and there is objective evidence that a pattern of short-term profit-taking actually exists in thenear future; and It is a derivative (except for derivatives that meet the definition of a financial guaranteecontract and are designated as effective hedging instruments).

4) Financial assets classified at fair value through profit or loss

Financial assets that do not meet the criteria for classification as financial assets at amortized cost or atfair value through other comprehensive income and are not designated as at fair value through othercomprehensive income are classified as financial assets at fair value through profit or loss.The Group uses fair value for subsequent measurement of these financial assets, and recognizes gainsor losses arising from changes in fair value, as well as dividend and interest income related to these financialassets in profit or loss for the current period.

The Group reports these financial assets under the items of trading financial assets and other non-currentfinancial assets according to their liquidity.

5) Financial assets designated as at fair value through profit or loss

At initial recognition, the Group may irrevocably designate financial assets as financial assets at fairvalue through profit or loss on an individual basis in order to eliminate or significantly reduce accountingmismatches.

If a hybrid contract contains one or more embedded derivatives and the host contract is not one of theabove financial assets, the Group may designate the entire contract as a financial instrument at fair valuethrough profit or loss. However, except for the following situations: a. The embedded derivatives will not

a. The embedded derivatives will not materially alter the cash flows of the hybrid contract.

b. When determining for the first time whether a similar hybrid contract needs to be unbundled, littleanalysis is required to clarify that the embedded derivatives it contains shall not be unbundled. For example,if the embedded loan has an early repayment right that allows the holder to repay the loan early at an amountclose to amortized cost, the early repayment right does not need to be spun off.

The Group uses fair value for subsequent measurement of these financial assets, and recognizes gainsor losses arising from changes in fair value, as well as dividend and interest income related to these financialassets in profit or loss.

The Group reports such financial assets under the items of trading financial assets and other non-currentfinancial assets according to their liquidity.

(2). Classification, recognition and measurement of financial liabilities

The Group classifies a financial instrument or its component parts as a financial liability or an equityinstrument upon initial recognition based on the contractual terms of the financial instrument issued and theeconomic substance reflected therein rather than in legal form only, taking into account the definitions offinancial liabilities and equity instruments. Financial liabilities are classified on initial recognition asfinancial liabilities at fair value through profit or loss, other financial liabilities and derivatives designatedas effective hedging instruments.

Financial liabilities are measured at fair value on initial recognition. For financial liabilities at fair valuethrough profit or loss, transaction costs are recognized directly in profit or loss; for other types of financialliabilities, transaction costs are recognized in the initial recognition amount.

The subsequent measurement of financial liabilities depends on their classification.

1) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading(including derivatives that are financial liabilities) and financial liabilities designated at fair value throughprofit or loss on initial recognition.

Financial liabilities are classified as trading liabilities if they meet one of the following conditions: theyare assumed principally for the purpose of selling or repurchasing in the near future; they are part of acentrally managed portfolio of identifiable financial instruments and there is objective evidence that theenterprise has recently adopted a short-term profit-taking model; they are derivatives, except for thosedesignated as effective hedging instruments and those subject to financial guarantee contracts. Financialliabilities held for trading (including derivatives that are financial liabilities) are subsequently measured atfair value, with all changes in fair value recognized in profit or loss, except for those related to hedgeaccounting.

At initial recognition, in order to provide more relevant accounting information, the Group irrevocablydesignates financial liabilities as financial liabilities at fair value through profit or loss if they meet one ofthe following conditions:

a. Eliminating or significantly reducing accounting mismatches.

b. Managing and evaluating the performance of a portfolio of financial liabilities or a portfolio offinancial assets and financial liabilities on a fair value basis in accordance with an enterprise riskmanagement or investment strategy as set out in a formal written document, and reporting to keymanagement personnel within the enterprise on this basis.

The Group subsequently measures such financial liabilities at fair value, with changes in fair valuerecognized in profit or loss, except for changes in fair value arising from changes in the Group's own credit

risk, which are recognized in other comprehensive income. The Group recognizes all fair value changes(including the effect of changes in the Group's own credit risk) in profit or loss, unless the recognition of fairvalue changes in other comprehensive income caused by changes in the Group's own credit risk would resultin an accounting mismatch in profit or loss or would magnify the accounting mismatch in profit or loss.

(2) Other financial liabilities

Except for the following items, the Company classifies its financial liabilities as financial liabilitiesmeasured at amortized cost, which are subsequently measured at amortized cost using the effective interestmethod, with gains or losses arising from derecognition or amortization recognized in profit or loss for thecurrent period.a. Financial liabilities at fair value through profit or loss.b. Financial liabilities resulting from transfers of financial assets that do not meet the conditions forderecognition or from continuing involvement in the transferred financial assets.c. Financial guarantee contracts that do not fall into the first two categories of this article, and loancommitments to lend at below-market interest rates that do not fall into category 1) of this article.A financial guarantee contract is a contract that requires the issuer to pay a specified amount of moneyto the holder of the contract who suffers a loss when a specified debtor fails to make payments when due inaccordance with the terms of the original or modified debt instrument. Financial guarantee contracts that arenot financial liabilities designated as at fair value through profit or loss are measured at the higher of theamount of the allowance for losses and the amount initially recognized net of accumulated amortization overthe guarantee period after initial recognition.

(3). Derecognition of financial assets and financial liabilities

1) A financial asset is derecognized, i.e., removed from the accounts and balance sheet, when one of

the following conditions is met

a. The contractual right to receive cash flows from the financial asset is terminated.

b. The financial asset is transferred and the transfer meets the requirements for derecognition offinancial assets.

2) Conditions for derecognition of financial liabilities

A financial liability (or a portion of a financial liability) is derecognized when the present obligation ofthe financial liability (or the portion of the financial liability) has been discharged. If the Group enters intoan agreement with the lender to replace the original financial liability by assuming a new financial liability,and the contractual terms of the new financial liability are substantially different from those of the originalfinancial liability, or the contractual terms of the original financial liability (or a portion thereof) aresubstantially modified, the original financial liability is derecognized and a new financial liability isrecognized at the same time. The difference between the carrying amount and the consideration paid(including non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

When the Group repurchases a portion of a financial liability, the Group allocates the carrying amountof the financial liability as a whole according to the proportion that the fair value of the continuing portionand the derecognized portion of the financial liability bears to the fair value of the financial liability as awhole at the date of buyback. The difference between the carrying amount allocated to the derecognizedportion and the consideration paid (including non-cash assets transferred or liabilities assumed) shall berecognized in profit or loss.

(4). Basis of recognition and measurement of transfer of financial assets

The Group assesses the extent to which it retains the risks and rewards of ownership of a financial assetwhen a transfer of a financial asset occurs and handles the transfer in each of the following situations:

1) If substantially all the risks and rewards of ownership of a financial asset are transferred, the financial

asset is derecognized and the rights and obligations arising from or retained in the transfer are separatelyrecognized as assets or liabilities.

2) If substantially all the risks and rewards of ownership of the financial asset are retained, the financial

asset continues to be recognized.

3) If neither the transfer nor substantially all the risks and rewards of ownership of the financial asset

are retained (i.e., in cases other than those in 1) and 2)), the financial asset is recognized and treated asfollows, depending on whether or not control over the financial asset is retained:

a. If control over the financial asset is not retained, the financial asset is derecognized and the rights andobligations arising from or retained in the transfer are recognized separately as assets or liabilities.

b. If control over the financial asset is retained, the financial asset continues to be recognized to theextent of its continuing involvement in the transferred financial asset, and the related liability is recognized

accordingly. The extent to which the Group continues to be involved in the transferred financial asset is theextent to which it bears the risk or rewards of changes in the value of the transferred financial asset.In determining whether a transfer of financial assets meets the above conditions for derecognition offinancial assets, the principle of substance over form is applied.

The Company distinguishes between transfers of financial assets as a whole and partial transfers offinancial assets:

1) If the transfer of financial assets as a whole meets the conditions for derecognition, the difference

between the following two amounts is recognized in profit or loss:

a. The carrying amount of the transferred financial asset at the date of derecognition.

b. The sum of the consideration received for the transfer of the financial asset and the amount of thederecognized portion of the cumulative change in the fair value of the transferred financial asset that isrecognized in other comprehensive income (the transferred financial asset is a financial asset at fair valuethrough other comprehensive income).

2) If part of a financial asset is transferred and the transferred part meets the conditions for derecognition,

the carrying amount of the financial asset as a whole before the transfer is apportioned between thederecognized part and the derecognized part (in which case, the retained service asset shall be regarded as apart of the derecognized financial asset) in accordance with their respective relative fair values at the date oftransfer, and the difference between the following amounts is recognized in the profit or loss for the currentperiod:

a. The carrying amount of the derecognized portion at the date of derecognition.

b. The sum of the consideration received for the derecognized portion and the amount corresponding tothe derecognized portion of the cumulative changes in fair value previously recognized in othercomprehensive income (involving transfers of financial assets at fair value through other comprehensiveincome).and

If the transfer of a financial asset does not meet the conditions for derecognition, the financial assetcontinues to be recognized and the consideration received is recognized as a financial liability.

(5). Methods of determining the fair value of financial assets and liabilities

The fair value of a financial asset or a financial liability for which there is an active market is determinedusing quoted prices in an active market, unless there is a period of restriction on the sale of the financialasset. The fair value of a financial asset that is subject to a sales restriction on the asset itself is determinedbased on quoted prices in an active market, less the amount of compensation that a market participant wouldrequire to assume the risk of not being able to sell the financial asset in the open market within a specifiedperiod of time. Quoted prices in active markets include quoted prices for the relevant assets or liabilities thatare readily and regularly available from exchanges, dealers, brokers, industry groups, pricing agencies orregulatory bodies, etc., and that are representative of actual and regularly occurring market transactions onan arm's length basis.

The fair value of financial assets or liabilities that are initially acquired or derived from financial assetsor liabilities assumed is determined on the basis of quoted market prices.

The fair value of financial assets or financial liabilities for which no active market exists is determinedusing valuation techniques. In valuing financial assets or financial liabilities, the Group uses valuationtechniques that are appropriate in the circumstances and supported by sufficient available data and otherinformation, and selects inputs that are consistent with the characteristics of the assets or liabilities that wouldbe considered by a market participant in a transaction for the relevant assets or liabilities, giving priority tothe use of relevant observable inputs where possible. Unobservable inputs are used where relevant observableinputs are not available or practicable to obtain.

(6). Impairment of financial instruments

The Group applies impairment accounting for financial assets carried at amortized cost, financial assetsclassified as at fair value through other comprehensive income, lease receivables, contract assets, loancommitments that are not financial liabilities at fair value through profit or loss, financial liabilities that arenot financial liabilities at fair value through profit or loss, and financial guarantee contracts that do not meetthe conditions for derecognition due to the transfer of financial assets or financial liabilities arising fromcontinued involvement in the transferred financial assets, based on expected credit losses and recognizes aloss provision.

Expected credit losses are the weighted average of credit losses on financial instruments that areweighted by the risk of default. Credit loss is the difference between all contractual cash flows receivableand all cash flows expected to be received by the Group under the contract, discounted at the original

effective interest rate, i.e. the present value of all cash shortfalls. Financial assets purchased or originated bythe Group that are credit-impaired are discounted at the financial asset's credit-adjusted effective interest rate.For receivables, contract assets and lease receivables arising from transactions governed by the IncomeStandards, the Group applies a simplified measurement approach and measures the allowance for losses asan amount equal to the expected credit losses over the life of the asset.For purchased or originated financial assets that are impaired, only the cumulative change in expectedcredit losses over the life of the asset since initial recognition is recognized as a loss allowance at the balancesheet date. At each balance sheet date, the amount of the change in expected credit losses for the entireduration of the asset is recognized as an impairment loss or gain in profit or loss. Even if the expected creditlosses determined at that balance sheet date are less than the amount of expected credit losses reflected inthe estimated cash flows at the time of initial recognition, the favorable change in expected credit losses isrecognized as an impairment gain.

For financial assets other than the above simplified measurement method and purchased or originatedfinancial assets that have been impaired, the Group assesses at each balance sheet date whether the creditrisk of the relevant financial instruments has increased significantly since the initial recognition, andmeasures the allowance for losses, recognizes expected credit losses and the changes in expected credit lossesin accordance with the following scenarios:

1) If the credit risk of the financial instrument has not increased significantly since initial recognition

and is in the first stage, the allowance for losses is measured at an amount equal to the expected credit lossesof the financial instrument in the next 12 months, and interest income is calculated on the basis of the bookbalance and the effective interest rate.

2) If the credit risk of the financial instrument has increased significantly since initial recognition but

credit impairment has not yet occurred, in the second stage, the Group measures the allowance for losses atan amount equal to the expected credit losses for the entire duration of the financial instrument and calculatesinterest income based on the carrying amount and the effective interest rate.

3) If the financial instrument has been impaired since initial recognition, in the third stage, the Group

measures the allowance for credit losses at an amount equal to the expected credit losses over the life of thefinancial instrument and calculates interest income at amortized cost and effective interest rate.

Any increase or reversal of the allowance for credit losses on financial instruments is recognized as animpairment loss or gain in profit or loss. The allowance for credit losses is offset against the carrying amountof the financial asset, except for financial assets classified as at fair value through other comprehensiveincome. For financial assets classified as at fair value through other comprehensive income, the Grouprecognizes the allowance for credit losses in other comprehensive income, which does not reduce thecarrying amount of the financial assets in the balance sheet.

If the Group has measured the allowance for losses in a previous accounting period at an amount equalto the expected credit losses over the entire life of the financial instrument, but at the current balance sheetdate the financial instrument no longer represents a significant increase in credit risk since initial recognition,the Group measures the allowance for losses for the financial instrument at an amount equal to the expectedcredit losses over the next 12 months at the current balance sheet date. The reversal of the resulting lossprovision is recognized as an impairment loss.

1) Significant increase in credit risk

The Group uses available reasonable and reliable forward-looking information to determine whetherthere has been a significant increase in the credit risk of a financial instrument since initial recognition bycomparing the risk of default at the balance sheet date with the risk of default at the date of initial recognition.For financial guarantee contracts, the Group applies the provisions for impairment of financial instrumentsby considering the date on which the Group became a party to the irrevocable commitment as the initialrecognition date.

The Group considers the following factors when assessing whether there has been a significant increasein credit risk:

a. Whether there has been a significant change in the debtor's operating results, actual or expected.

b. Whether there has been a significant adverse change in the regulatory, economic or technological

environment in which the debtor operates.

c. Whether there has been a significant change in the value of the collateral pledged as security for thedebt, or in the quality of guarantees or credit enhancements provided by third parties, which is expected toreduce the debtor's financial incentive to repay the debtor within the contractual timeframe or affect theprobability of default; and

d. Whether there has been a significant change in the debtor's expected performance and repaymentbehavior

e. Changes in the Group's approach to credit management of financial instruments.At the balance sheet date, if the Group determines that a financial instrument has only low credit risk,the Group assumes that there has been no significant increase in the credit risk of the financial instrumentsince initial recognition. A financial instrument is considered to have low credit risk if the risk of default islow, the borrower's ability to meet its contractual cash flow obligations in the short term is high, and theborrower's ability to meet its contractual cash flow obligations may not necessarily be reduced byunfavorable changes in the economic situation and business environment in the long term.

2) Financial assets that have suffered credit impairment

A financial asset is impaired when one or more events that have an adverse effect on the expected futurecash flows of the financial asset occur. Evidence that a financial asset is impaired includes observableinformation such as

a. Significant financial difficulty of the issuer or debtor; or

b. A breach of contract by the debtor, such as a default or delinquency in interest or principal payments;

or

c. The creditor has made concessions to the debtor that the debtor would not have made otherwisebecause of economic or contractual considerations related to the debtor's financial difficulties.

d. The debtor is likely to enter into bankruptcy or other financial reorganization.

e. The disappearance of an active market for the financial asset as a result of financial difficulties of the

issuer or the debtor; or

f. A financial asset is purchased or acquired at a significant discount that reflects the fact that a credit

loss has been incurred.

The occurrence of a credit impairment of a financial asset may be the result of a combination of eventsand not necessarily the result of separately identifiable events.

3) Determination of expected credit losses

The Group assesses expected credit losses on financial instruments on an individual and portfolio basis.In assessing expected credit losses, the Group takes into account reasonable and supportable informationabout past events, current conditions and forecasts of future economic conditions.

The Group categorizes financial instruments into different portfolios based on common credit riskcharacteristics. The common credit risk characteristics adopted by the Group include: ageing portfolio,construction bidding deposit, receivables within the scope of consolidation, etc. The individual evaluationcriteria and portfolio credit risk characteristics of related financial instruments are described in theaccounting policies of related financial instruments. The individual evaluation criteria and portfolio creditrisk characteristics of the related financial instruments are described in the accounting policies of the relatedfinancial instruments.

The Group determines the expected credit losses of related financial instruments in accordance with thefollowing methods.

a. For financial assets, credit losses represent the present value of the difference between the contractualcash flows to be received by the Group and the cash flows expected to be received.

b. For lease receivables, the credit loss is the present value of the difference between the contractualcash flows to be received by the Group and the cash flows expected to be received.

c. For financial guarantee contracts, the credit loss is the present value of the difference between theamount the Group expects to pay to the holder of the contract in respect of credit losses incurred by theholder of the contract, less the amount the Group expects to collect from the holder of the contract, the debtoror any other party.

d. For financial assets that are impaired at the balance sheet date but not purchased or originated, thecredit loss is the difference between the book balance of the financial asset and the present value of theestimated future cash flows discounted at the original effective interest rate.

The Group's method of measuring expected credit losses on financial instruments reflects factors suchas: an unbiased, probability-weighted average amount determined by evaluating a range of possibleoutcomes; the time value of money; and reasonable and substantiated information about past events, currentconditions, and projections of future economic conditions that is available at the balance sheet date withoutundue additional cost or effort.

4) Write-down of financial assets

When the Group no longer has a reasonable expectation that the contractual cash flows of a financialasset will be recovered in whole or in part, the book value of the financial asset is written down directly.Such write-downs constitute derecognition of the related financial assets.

(7). Offsetting financial assets and financial liabilities

Financial assets and financial liabilities are presented separately in the balance sheet and are not offset.However, if the following conditions are met, they are presented in the balance sheet as net amounts afteroffsetting.

1) The Group has a legal right to offset the recognized amounts and the legal right is currently

enforceable; and

2) The Group intends to settle the net amount, or to realize the financial asset and settle the financial

liability at the same time.

12. Bills receivable

√ Applicable □ N/A

Method of determining expected credit losses and accounting treatment of bills receivable

√ Applicable □ N/A

For bills receivable, regardless of whether they contain significant financing elements or not, the Groupalways measures the loss provision at an amount equal to the expected credit losses over the entire duration,and the resulting increase or reversal of the loss provision is recognized as an impairment loss or gain inprofit or loss for the current period.

For details of the Group's method of determining expected credit losses on bills receivable and itsaccounting treatment, please refer to Section V.11. (6) Impairment of financial instruments.Categories of bad debt provision according to credit risk characteristics and the basis of determination

√ Applicable □ N/A

When sufficient evidence of expected credit losses cannot be assessed at a reasonable cost at the levelof individual instruments, the Group classifies bills receivable into certain portfolios based on credit riskcharacteristics with reference to historical credit loss experience, current conditions and judgment of futureeconomic conditions, and calculates expected credit losses on a portfolio basis. The basis for determiningthe portfolio is as follows:

Portfolio name Basis for determining portfolios Method of calculationCommercial acceptances(portfolio 1)

The risk characteristics ofcommercial acceptances aresubstantially the same as those ofaccounts receivable for similarcontracts.

Expected credit losses areaccrued by reference toaccounts receivable.

Bank acceptance portfolio(portfolio 2)

The acceptors have high creditratings, no historical defaults, verylow risk of credit loss, and strongability to fulfill their obligations topay contractual cash flows in theshort term.

Expected credit losses aremeasured based on historicalcredit loss experience,current conditions andexpectations of futureeconomic conditions.

Ageing method for recognizing a portfolio of credit risk characteristics based on the age of theaccounts.

√ Applicable □ N/A

For commercial paper receivables, the expected credit loss accrual method is based on the bad debtpolicy for accounts receivable, and the aging point of commercial paper receivables is retroactively adjustedto the aging point of the corresponding accounts receivable.

Judgmental criteria for individual provisioning according to individual provisioning for bad debts

√ Applicable □ N/A

If there is objective evidence that an item is impaired, the Group makes a provision for bad debts andrecognizes expected credit losses for that item.

13. Accounts receivable

√ Applicable □ N/A

Method of determining expected credit losses and accounting treatment of accounts receivable

√ Applicable □ N/A

For details of the Group's method of determining expected credit losses on accounts receivable andaccounting treatment, please refer to this Section V.11. (6) Impairment of financial instruments.Categories of portfolio and basis of determination of bad debt provision according to credit riskprofile portfolio

√ Applicable □ N/A

The Group provides for expected credit losses on an individual basis for accounts receivable withsignificantly different credit risks from those of the portfolio. The Group determines credit losses separatelyfor receivables for which sufficient evidence of expected credit losses can be assessed at a reasonable costat the level of individual instruments.

When sufficient evidence of expected credit losses cannot be assessed at a reasonable cost for anindividual instrument, the Group divides accounts receivable into portfolios based on credit riskcharacteristics by reference to historical credit loss experience, current conditions and judgment of futureeconomic conditions, and calculates expected credit losses on the basis of the portfolios. The basis fordetermining the portfolios is as follows:

Risk portfolio

Segmentation of portfolio by credit risk characteristics based onageing of receivablesPortfolio of related transactionswithin the scope of consolidation

The relationship between the receivable and the counterparty isused to characterize the credit risk.Provisioning method for bad debt provisioning by portfolioRisk portfolio (portfolio 1) Provision for bad debts by ageing analysis methodPortfolio of related transactionswithin the scope of consolidation(portfolio 2)

Unless there is evidence of impairment, no provision for baddebts is generally made.

Calculation of ageing method for recognizing credit risk characteristics based on the age of theportfolio

√ Applicable □ N/A

The Group combines accounts receivable classified as risky portfolios with similar credit riskcharacteristics (aging) and estimates the percentage of bad debt provision for such accounts receivable basedon all reasonable and supportable information, including forward-looking information.

The following is a table comparing the aging of the accounts receivable - credit risk characteristicsportfolio with the expected credit loss rate over the entire life of the portfolio:

Ageing

Expected credit loss rate of accounts receivable(%)1-6 months (including 6 months) 3.007-12 months (including 12 months) 5.001-2 years (including 2 years) 10.002 to 3 years (including 3 years) 20.003 to 4 years (including 4 years) 50.004 to 5 years (including 5 years) 80.00More than 5 years 100.00

Determination of bad debt provisioning according to individual items Individual item provisioningjudgment criteria

√ Applicable □ N/A

If there is objective evidence that a receivable is impaired, the Group makes a separate provision forbad debts and recognizes expected credit losses on that receivable.

14. Receivables financing

√ Applicable □ N/A

Method of determining expected credit losses and accounting treatment of receivables financing

√ Applicable □ N/A

For notes and accounts receivable with contractual cash flow characteristics that are consistent withthe underlying lending arrangements and for which the Company's business model for managing suchfinancial assets is to collect the contractual cash flows with the objective of both collection and sale, theGroup classifies them as accounts receivable financing, which are measured at fair value with changesrecognized in other comprehensive income. Interest income, impairment losses and exchange differencesrecognized using the effective interest rate method on receivables financing are recognized in profit or loss,while the remaining changes in fair value are recognized in other comprehensive income. Uponderecognition, the cumulative gain or loss previously recognized in other comprehensive income isremoved from other comprehensive income and recognized in profit or loss.Categories of portfolios and basis of determination of bad debt provisioning according to credit riskcharacteristic portfolios

√ Applicable □ N/A

For details of the Group's method of determining expected credit losses on receivables financing andaccounting treatment, please refer to this Section V.11. (6) Impairment of financial instruments.Aging calculation method for recognizing a portfolio of credit risk characteristics based on aging

√ Applicable □ N/A

For receivable financing classified as a portfolio, the Group calculates the expected credit losses byreferring to the historical credit loss experience, taking into account the current situation and the forecastof the future economic situation, through the default risk exposure and the expected credit loss rate for theentire duration.Judgmental criteria for individual provisioning of bad debt according to individual items

□ Applicable √ N/A

15. Other receivables

√ Applicable □ N/A

Method of determining expected credit losses and accounting treatment of other receivables

√ Applicable □ N/A

The Group measures the provision for losses on other receivables in accordance with the followingcircumstances:

① For financial assets with no significant increase in credit risk since initial recognition, the Group

measures the allowance for losses based on the amount of expected credit losses in the next 12 months;

② For financial assets whose credit risk has significantly increased since initial recognition, the Group

measures the allowance for losses at an amount equal to the expected credit losses over the entire life ofthe financial instrument;

③ For purchased or originated financial assets that are impaired, the Group measures the allowance

for loss at an amount equal to the expected credit loss over the entire life of the financial instrument.Categories of bad debt provision according to the portfolio of credit risk characteristics and thebasis of determination

√ Applicable □ N/A

For other receivables, the Group is unable to obtain sufficient evidence of significant increase in creditrisk at a reasonable cost at the level of individual instruments, and it is feasible to assess whether there is asignificant increase in credit risk on a portfolio basis. Therefore, the Group groups other receivablesaccording to the type of financial instruments, credit risk ratings, initial recognition dates, and remaining

contractual maturities as the common risk characteristics and considers them on a portfolio basis. The Groupassesses whether there is a significant increase in credit risk.

To measure expected credit losses on a portfolio basis, the Group groups the expected credit lossaccrual percentage according to the corresponding ageing credit risk characteristics.Basis of portfolio determinationRisk portfolio

The ageing of other receivables is used as the credit riskcharacteristic to classify the portfolio.Portfolio of related transactionswithin the scope ofconsolidation

The credit risk characteristics of other receivables are based on therelationship between the receivables and the counterparties.Portfolio of risk-free receivablessuch as social securityreceivables

The credit risk characteristics of other receivables are based on thenature of the receivables.Provisioning method for bad debt by portfolioRisk portfolio Provision for bad debts is based on the aging analysis method.Portfolio of risk-free receivablessuch as social securityreceivables

Unless there is evidence of impairment, no provision for bad debts isgenerally made.Portfolio of related transactionswithin the scope ofconsolidation

Unless there is evidence of impairment, no provision for bad debts isgenerally made.Aging method for recognizing credit risk characteristics based on the age of the portfolio

√ Applicable □ N/A

The Group combines other receivables classified as risky portfolios with similar credit riskcharacteristics (ageing) and estimates the percentage of bad debt provision for such other receivables basedon all reasonable and supportable information, including forward-looking information.

A table comparing the aging of the other receivables - credit risk characteristics portfolio with the

expected credit loss rate over the entire duration is shown below:

Ageing Expected credit loss rate of other receivables (%)Within 1 year (including 1 year) 5.001 to 2 years (including 2 years) 10.002 to 3 years (including 3 years) 30.003 to 4 years (including 4 years) 50.004 to 5 years (including 5 years) 80.00More than 5 years 100.00Judgmental criteria for individual provisioning according to individual provisioning for bad debts

√ Applicable □ N/A

Other receivables arising from non-operating low-risk businesses are individually impaired accordingto the nature of the business.

For other receivables secured by mortgage, the original value less the recoverable value of the collateralis recognized as the risk exposure for credit losses.

16. Inventories

√ Applicable □ N/A

Categories of inventories, issue valuation method, inventory system, amortization method of low-value consumables and packages

√ Applicable □ N/A

The actual cost of inventories issued is measured using the individual valuation method.Recognition criteria and accrual method for provision for decline in value of inventories

√ Applicable □ N/A

Net realizable value is the estimated selling price of inventories in the ordinary course of business, lessestimated costs to be incurred to completion, estimated selling expenses and related taxes. The net realizablevalue of inventories held for the purpose of executing sales or service contracts is calculated on the basis ofthe contract price.Categories and basis for determining the provision for decline in value of inventories based onportfolios, and basis for determining the net realizable value of different categories of inventories

√ Applicable □ N/A

The net realizable value of inventories is determined on the basis of reliable evidence obtained, takinginto account the purpose of holding the inventories, the impact of events after the balance sheet date, andother factors.

① The net realizable value of inventories held for sale, such as finished goods, merchandise and

materials for sale, is determined as the estimated selling price of the inventories in the ordinary course ofproduction and operation, less estimated selling expenses and related taxes. The net realizable value ofinventories held for the purpose of executing sales contracts or labor contracts is measured at the contractprice; if the quantity of inventories held exceeds the quantity ordered under the sales contract, the netrealizable value of the excess quantity is measured at the normal selling price. The net realizable value ofmaterials for sale is measured at market price.

② The net realizable value of inventories of materials requiring processing is determined in the normal

course of production and operation by the estimated selling price of finished goods produced, less estimatedcosts to be incurred until completion, estimated selling expenses, and related taxes. If the net realizable valueof finished goods produced from the materials is higher than the cost, the materials are measured at cost; ifthe decrease in the price of the materials indicates that the net realizable value of the finished goods is lowerthan the cost, the materials are measured at the net realizable value, and a provision for decline in value ofinventories is made for the difference.

③ Provision for decline in value of inventories is generally made on the basis of individual inventory

items; for large quantities of inventories with low unit prices, provision is made on the basis of categories ofinventories.

④ If the factors affecting the write-down of inventories have disappeared as of the balance sheet date,

the amount of the write-down is restored and reversed to the extent of the provision for decline in value ofinventories, and the amount of the reversal is recognized in profit or loss.Calculation method and basis for determining the net realizable value of each age group of inventoriesfor which the net realizable value of inventories is recognized based on the age of the inventories

□ Applicable √ N/A

17. Contract assets

√ Applicable □ N/A

Methods and criteria for recognizing contract assets

√ Applicable □ N/A

A contract asset is a right to receive consideration for merchandise that the Group has transferred to aclient and which depends on factors other than the passage of time. If the Group sells two clearlydistinguishable commodities to a client and has the right to receive payment because one of the commoditieshas been delivered, but the receipt of such payment is also dependent on the delivery of the other commodity,the Group recognizes the right to receive payment as a contract asset.Method of determining expected credit losses on contract assets and accounting treatment

√ Applicable □ N/A

The methods of determining expected credit losses on contract assets and the accounting treatment aredescribed in detail in this Section V.11. (6) Impairment of financial instruments.

Categories of portfolios and basis of determination of bad debt provision according to portfolios ofcredit risk characteristics

√ Applicable □ N/A

The Group classifies contract assets into portfolios based on credit risk characteristics by reference tohistorical credit loss experience, current conditions and judgment of future economic conditions, andcalculates expected credit losses on the basis of the portfolios. The basis for determining the portfolios is asfollows:

Portfolio name

Portfolio name basis for determining

portfolios

Provision methodOutstanding guaranteedeposits (portfolio 1)

The risk characteristics of outstandingwarranties are substantially the same asthose of accounts receivable for similarcontracts.

Provision for expectedcredit losses is made byreference to accountsreceivable.Completed unsettled assetsarising from constructioncontracts (portfolio 2)

Completed unsettled assets resultingfrom construction contracts do not resultin true accounts receivable; therefore, theexpected credit loss rate for completedunsettled assets is generally no higherthan the expected credit loss rate foraccounts receivable within one year, and

0.5% is used as the expected credit loss

rate for the contracted assets

Expected credit losses aremeasured by reference tohistorical credit lossexperience, taking intoaccount current conditionsand expectations of futureeconomic conditions.

Aging calculation method for recognizing credit risk characteristics based on the age of theaccounts.

√ Applicable □ N/A

For details, please refer to Section V.13. Accounts receivableDetermination of bad debt provisioning according to individual items Individual provisioningjudgment criteria

□ Applicable √ N/A

18. Non-current assets held for sale or disposal groups

□ Applicable √ N/A

Recognition criteria and accounting treatment for non-current assets or disposal groups classified asheld for sale

□ Applicable √ N/A

Recognition criteria and presentation of discontinued operations

√ Applicable □ N/A

Discontinued operation means a separately distinguishable component of the Group that has beendisposed of or classified as held for sale if one of the following conditions is met: (1) the componentrepresents a separate principal business or a separate principal operating region; (2) the component is partof an associated plan to dispose of a separate principal business or a separate principal operating region; and

(3) the component is a subsidiary acquired exclusively for resale.

In the income statement, the Group has added the items "Net profit from continuing operations" and"Net profit from discontinued operations" to the item "Net profit”, reflecting the profit or loss fromcontinuing operations and the profit or loss from discontinued operations, respectively, on a net after-taxbasis. Gains and losses related to discontinued operations shall be reported as discontinued operations, andthe discontinued operations gains and losses shall be reported for the entire reporting period, not only forthe reporting period after it is recognized as discontinued operations.

19. Long-term equity investments

√ Applicable □ N/A

The Group's long-term equity investments are mainly investments in subsidiaries, investments inassociates and investments in joint ventures.The Group judges joint control on the basis that all participants or a portfolio of participants collectivelycontrol the arrangement and that the policies governing the activities of the arrangement must be agreedupon by those participants who collectively control the arrangement.

The Group is generally considered to have significant influence over an investee when it owns, directlyor indirectly through subsidiaries, more than 20% but less than 50% of the investee's voting rights. If theGroup owns less than 20% of the voting power of an investee, it is necessary to consider the facts andcircumstances such as having representatives on the board of directors or similar authority of the investee,or participating in the process of formulating the financial and operating policies of the investee, or engagingin significant transactions with the investee, or dispatching management personnel to the investee, orproviding key technological information to the investee, etc., and determine that the Group has significantinfluence on the investee.

The investee is a subsidiary of the Group if the investor exercises control over the investee. Long-termequity investments acquired through a business combination under the same control are initially recognizedat cost based on the share of the carrying amount of the net assets of the party being consolidated in theconsolidated statements of the party ultimately in control at the date of consolidation. If the carrying amountof the net assets of the party being consolidated is negative at the date of consolidation, the cost of long-termequity investment is determined as zero.

Long-term equity investments acquired through a business combination not under common control arerecognized at the cost of the combination.

Except for the long-term equity investments acquired through business combination mentioned above,the cost of long-term equity investments acquired by cash payment is based on the actual purchase pricepaid; the cost of long-term equity investments acquired by issuance of equity securities is based on the fairvalue of the equity securities issued; and the cost of long-term equity investments invested by investors isbased on the value agreed in the investment contract or agreement.

The Group's investments in subsidiaries are accounted for using the cost method, and investments injoint ventures and associates are accounted for using the equity method.

The carrying amount of long-term equity investments accounted for under the cost method is increasedby the fair value of additional investment and related transaction costs incurred when additional investmentis made. Cash dividends or profits declared by the investee are recognized as investment income at theamount to which they are attributable.

The carrying amount of long-term equity investments accounted for under the equity method shall beincreased or decreased accordingly to the changes in the ownership interest of the investee. In recognizingthe share of net profit or loss of an investee, the fair value of the identifiable assets of the investee at the timeof investment acquisition is used as the basis for recognizing the net profit of the investee in accordance withthe Group's accounting policies and accounting periods, after offsetting the portion of gains or losses oninternal transactions with associates and joint ventures that are attributable to the investor based on theGroup's proportionate interest in the investor's net assets and liabilities.

On disposal of long-term equity investments, the difference between the carrying amount and the actualacquisition price is recognized as investment income. For long-term equity investments accounted for underthe equity method, other comprehensive income accounted for under the equity method shall be accountedfor on the same basis as the direct disposal of the related assets or liabilities by the investee upon terminationof the equity method, and any changes in the equity of the investee due to changes in the equity of theinvestee other than net profit or loss, other comprehensive income and profit distribution shall be fullytransferred to current investment income upon termination of the equity method. The entire amount shall betransferred to investment income when the equity method of accounting is discontinued.

If an investee loses joint control or significant influence over the investee due to the disposal of a portionof the equity investment, the remaining equity interest after disposal shall be accounted for in accordancewith the relevant provisions of the Guidelines on the Recognition and Measurement of Financial Instruments,and the difference between the fair value of the remaining equity interest and its carrying amount at the dateof the loss of joint control or significant influence shall be recognized as profit or loss for the current period.Other comprehensive income recognized as a result of the adoption of the equity method shall be accountedfor on the same basis as the direct disposal of the related assets or liabilities by the investee and carried

forward on a pro rata basis upon the termination of the adoption of the equity method, and all other changesin equity recognized as a result of changes in the investee's ownership interest other than net profit or loss,other comprehensive income, and distribution of profits shall be transferred to investment income on a prorata basis for the current period.If the investee loses control of a portion of the long-term equity investment due to disposal, and theremaining equity interest after disposal is capable of exercising joint control or significant influence overthe investee, it shall be accounted for under the equity method instead, and the difference between thecarrying amount of the equity interest disposed of and the disposal consideration shall be recognized ininvestment income, and the remaining equity interest shall be adjusted as if it were equity-method accountedfor from the time of acquisition; if the remaining equity interest after disposal is not capable of exercisingjoint control or significant influence over the investee, it shall be accounted for under the equity methodinstead. If the remaining equity interest after disposal cannot exercise joint control or significant influenceover the investee, the accounting shall be conducted in accordance with the relevant provisions of theGuidelines on Recognition and Measurement of Financial Instruments, and the difference between thecarrying amount of the equity interest disposed of and the consideration for disposal shall be recognized asinvestment income, while the difference between the fair value of the remaining equity interest at the dateof the loss of control and its carrying amount shall be recognized as profit or loss for the current period.

20. Investment properties

(1). If the cost measurement model is used:

Depreciation or amortization methodThe Group classifies real estate held to earn rentals or for capital appreciation, or both, as investmentproperty. The Group uses the cost model to measure investment properties. The Group depreciates the costof investment properties, net of estimated net salvage value and accumulated impairment allowances, overtheir useful lives using the average annualized method. For details of the impairment test method and themethod of making provision for impairment, please refer to Section V.11. (6) Impairment of financialinstruments. The useful lives, residual values and annual depreciation rates for each type of investmentproperties were as follows.

No. Category

Depreciable life(years)

Estimatedsalvage value (%)

Annualdepreciation rate(%)1 House buildings 20 5-10 4.5-4.752 Land use rights 36.75 2.72

21 Fixed assets

(1). Recognition conditions

√ Applicable □ N/A

The Group's fixed assets are tangible assets with the following characteristics, i.e., held for use in theproduction of goods, provision of services, leasing or business management, and with a useful life of morethan one year.

Fixed assets are recognized when it is probable that the economic benefits associated with them willflow to the Group and their costs can be measured reliably. The Group's fixed assets include buildings,transportation equipment, office and electronic equipment.

(2). Depreciation method

√ Applicable □ N/A

Category Depreciation method

Depreciable life(years)

Residual value rate

Annualdepreciation rateBuildings Average life method 10-20 5%-10% 4.50%-9.50%Transportationequipment

Average life method 4 5% 23.75%

Office andelectronicequipment

Average age method 3 5% 31.67%The Group depreciates all fixed assets, except for fully depreciated fixed assets that are still in use andland that is separately accounted for.

22. Construction in progress

√ Applicable □ N/A

(1) Construction in progress is categorized and accounted for by standing items.

(2) Criteria and point in time for carrying forward construction in progress to fixed assets

Construction in progress is recognized as a fixed asset on the basis of all expenditures incurred beforethe asset is constructed and brought to its intended state of use. This includes construction costs, the originalcost of machinery and equipment, other necessary expenses incurred to bring the construction in progress toits intended state of use, as well as borrowing costs incurred before the asset reaches its intended state of usefor borrowing specifically for the project, and borrowing costs incurred for general borrowing used for theproject. The Group transfers construction in progress to property, plant and equipment when the project hasbeen installed or constructed to its intended state of use. Fixed assets that have reached the intended state ofuse but for which final accounts have not yet been finalized are transferred to fixed assets from the date theyreach the intended state of use at their estimated value based on the project budget, construction cost oractual cost of the project, and depreciation is provided for in accordance with the Group's policy ondepreciation of fixed assets, and after final accounts have been finalized the original provisional value isadjusted according to the actual cost, but the amount of depreciation provided for is not adjusted. The originalprovisional value will be adjusted according to the actual cost after the completion of the final accounts,without adjusting the depreciation originally provided.

23. Borrowing costs

√ Applicable □ N/A

(1) Recognition principles and capitalization period for capitalization of borrowing costs

Borrowing costs incurred by the Group for the acquisition, construction or production of assets directlyattributable to the assets eligible for capitalization shall be capitalized to the cost of the relevant assets whenthe following conditions are simultaneously met:

① Expenditures on assets have been incurred;

② Borrowing costs have been incurred;

③ The construction or production activities necessary to bring the asset to its intended state of use have

begun.

Other borrowing interests, discounts or premiums and exchange differences are recognized in profit orloss in the period in which they are incurred.

The capitalization of borrowing costs is suspended when there is an abnormal interruption in theconstruction or production of assets eligible for capitalization for more than three consecutive months.

The capitalization of borrowing costs ceases when the assets eligible for capitalization have reachedtheir intended use or saleable condition; any subsequent borrowing costs are recognized as expenses in theperiod in which they are incurred.

(2) Calculation of the capitalization rate and amount of capitalized borrowing costs

If a special loan is borrowed for the purpose of purchasing, constructing or producing an asset eligiblefor capitalization, the capitalized amount of interest expense on the special loan shall be determined by theactual interest expense incurred on the special loan during the period less the interest income from depositingthe unused borrowed funds in a bank or the investment income from making a temporary investment.

If general borrowings are used for the acquisition, construction or production of assets eligible forcapitalization, the amount of interest to be capitalized on general borrowings shall be calculated bymultiplying the weighted average amount of cumulative asset expenditures in excess of the portion ofspecial-purpose borrowings by the capitalization rate of the general borrowings used to calculate the amountof interest to be capitalized on general borrowings. The capitalization rate is based on the weighted averageinterest rate of general borrowings.

24. Biological assets

□ Applicable √ N/A

25. Oil and gas assets

□ Applicable √ N/A

26. Intangible assets

(1). Useful life, basis for determining useful life, estimation, amortization method or review

procedure

√ Applicable □ N/A

Intangible assets, including land use rights and software, are measured at cost and amortized equallyover their estimated useful lives.

(1) Land use rights

Land use rights are amortized equally over their useful lives of 50 years. If it is difficult to allocate thepurchase price of land and buildings between land use rights and buildings, all of them are recognized asfixed assets.

(2) Computer software

Acquired computer software is capitalized on the basis of the costs incurred to acquire and put into usethe specific software. The related costs are amortized on a straight-line basis over the estimated useful livesof 2 to 10 years. Costs related to the maintenance of computer software programs are recognized as expensesas they are incurred.

(3) Periodic review of useful lives and amortization methods

The estimated useful lives and amortization methods of intangible assets with finite useful lives arereviewed and appropriately adjusted at the end of each year. The Group considers intangible assets for whichthe duration of future economic benefits is not foreseeable as intangible assets with indefinite useful livesand does not amortize such intangible assets. As at the end of the reporting period, the Group had nointangible assets with indefinite useful lives. Expenditures on the Group's internal research and developmentprojects are recognized in profit or loss as incurred.

(4) Impairment of intangible assets

When the recoverable amount of an intangible asset is less than its carrying amount, the carrying amountis written down to the recoverable amount.

(2). Scope of attribution of R&D expenditures and related accounting treatment

□ Applicable √ N/A

27. Impairment of long-lived assets

√ Applicable □ N/A

The Group examines items such as long-term equity investments, property and equipment, constructionin progress, right-of-use assets and intangible assets with finite useful lives at each balance sheet date, andperforms impairment tests when there are indications of impairment. Goodwill and intangible assets withindefinite useful lives are tested for impairment at the end of each year, regardless of whether there is anyindication of impairment.

The recoverable amount is determined as the higher of the asset's fair value less costs of disposal andthe present value of the asset's estimated future cash flows. The Group estimates the recoverable amount ofan asset on an individual basis; if it is difficult to estimate the recoverable amount of an individual asset, therecoverable amount of an asset group is determined on the basis of the asset group to which the asset belongs.An asset group is identified on the basis of whether the major cash inflows from the asset group areindependent of those from other assets or groups of assets.

When the recoverable amount of an asset or an asset group is less than its carrying amount, the Groupwrites down its carrying amount to its recoverable amount, and the amount of the write-down is recognizedin profit or loss and a corresponding provision for asset impairment is made.

For the purpose of impairment testing of goodwill, the carrying amount of goodwill arising from abusiness combination is allocated to the relevant asset group on a reasonable basis from the date of purchase;if it is difficult to be allocated to the relevant asset group, the carrying amount is allocated to a portfolio of

the relevant asset groups. The relevant asset group or portfolio of asset groups is one that can benefit fromthe synergies of the business combination and is not larger than the Group's reportable segments.

When testing for impairment of the relevant asset group or portfolio of asset groups containing goodwill,if there is any indication of impairment for the asset group or portfolio of asset groups related to goodwill,the asset group or portfolio of asset groups that does not contain goodwill is first tested for impairment, therecoverable amount is calculated, and the corresponding impairment loss is recognized. If the recoverableamount is lower than the carrying amount, the amount of the impairment loss shall first be offset against thecarrying amount of the goodwill allocated to the asset group or portfolio of assets, and then against thecarrying amount of the other assets proportionally according to the proportion of the carrying amount of theother assets excluded from the asset group or portfolio of assets.If the carrying amount of an asset exceeds its recoverable amount after an impairment test, the differenceis recognized as an impairment loss, which is not reversed in subsequent periods.

28. Long-term amortized expenses

√ Applicable □ N/A

Long-term amortized expenses are expenses incurred by the Group but shall be borne by the Group inthe current and future periods with an amortization period of more than one year.Long-term amortizationexpenses These expenses are amortized equally over the period of benefit. If a long-term amortized expenseitem does not benefit a future accounting period, the amortized value of the item that has not been amortizedis transferred to profit or loss for the current period.

29. Contract liabilities

√ Applicable □ N/A

Contract liabilities reflect the Group's obligations to transfer goods to clients for consideration receivedor receivable from clients. If the client has paid the contractual consideration or the Group has obtained theunconditional right to receive the contractual consideration before the Group transfers the goods to the client,contract liabilities are recognized for the amount received or receivable at the earlier of the actual paymentmade by the client and the amount due.

30. Employee remuneration

(1). Accounting treatment of short-term remuneration

√ Applicable □ N/A

The Group's employee remuneration includes short-term remuneration, post-employment benefits andtermination benefits.

Short-term remuneration mainly includes employees' salaries, welfare fees and housing fund. Short-term remuneration actually incurred during the accounting period in which the employees render services isrecognized as a liability and charged to current profit or loss or the cost of the relevant assets according tothe beneficiary.

(2). Accounting treatment of post-employment benefits

√ Applicable □ N/A

Post-employment benefits mainly include basic pension insurance premiums, unemployment insurance,etc., which are categorized as defined contribution plans in accordance with the risks and obligationsassumed by the Company. Contributions to a defined contribution plan are recognized as a liability at thebalance sheet date on the basis of contributions made to a separate entity in exchange for services renderedby employees during the accounting period, and are recognized in profit or loss or at the cost of the relatedassets, depending on the beneficiary.

(3). Accounting treatment of termination benefits

□ Applicable √ N/A

(4). Accounting treatment of other long-term employee benefits

□ Applicable √ N/A

31. Projected liabilities

√ Applicable □ N/A

The Group recognizes a projected liability when the obligation relating to the contingency is a presentobligation incurred by the Group, it is probable that the performance of the obligation will result in an outflowof economic benefits to the Group, and the amount can be measured reliably. A projected liability is initiallymeasured at the best estimate of the expenditure required to settle the present obligation. Where the effect ofthe time value of money is material, the projected liability is determined on the basis of the discountedamount of the expected future cash flows. In determining the best estimate, the Group considers a portfolioof factors such as the risks and uncertainties associated with the contingency and the time value of money.Where there is a continuous range of required expenditures and the likelihood of each outcome within thatrange is equal, the best estimate is determined at the midpoint of the range; in other cases, the best estimateis treated as follows:

- Where the contingency relates to a single item, it is determined on the basis of the most probableamount to be incurred.

- Where a contingency relates to more than one item, it is determined on the basis of various possibleoutcomes and related probabilities.

The Group reviews the carrying amount of the estimated liability at the balance sheet date and adjuststhe carrying amount to the current best estimate.

32. Share-based payment

√ Applicable □ N/A

(1) Types of share-based payment and accounting treatment

Share-based payment is a transaction in which a company grants an equity instrument or assumes aliability determined on the basis of an equity instrument in order to obtain services from employees. Share-based payment is categorized into equity-settled share-based payment and cash-settled share-based payment.

1) Equity-settled share-based payment

Stock option plans are equity-settled share-based payments in exchange for services rendered byemployees and are measured at the fair value of the equity instruments granted to employees at the grantdate. Options may be exercised only upon completion of services or fulfillment of specified performanceconditions during the waiting period. During the waiting period, based on the best estimate of the number ofequity instruments that can be exercised, the services acquired during the period are recognized in the relatedcosts or expenses at the fair value of the equity instruments on the grant date, and the capital surplus isincreased accordingly.

2) Cash-settled share-based payment

The stock appreciation rights plan is a cash-settled share-based payment, which is measured at the fairvalue of the liability assumed by the Company based on the number of shares of the Company. The cash-settled share-based payment is subject to the completion of services or the fulfillment of performanceconditions during the waiting period. At each balance sheet date during the waiting period, based on the bestestimate of the feasibility of the rights, the services acquired during the period are recognized as a cost orexpense at the amount of the fair value of the liabilities assumed by the Company, and the liabilities areincreased accordingly. The fair value of the liability is remeasured at each balance sheet date until theliability is settled and at the date of settlement, with the change recognized in profit or loss.

(2) Method of determining the fair value of equity instruments

The fair value of shares granted to employees is measured at the market price of the Company's shares,adjusted to take into account the terms and conditions under which the shares were granted (excluding theconditions for exercising the rights other than market conditions).

For stock options granted to employees, the fair value of the options granted is estimated using an optionpricing model.

(3) Basis for recognizing the best estimate of feasible equity instruments

At each balance sheet date during the waiting period, the number of equity instruments expected tobecome exercisable is revised by making a best estimate based on the latest available subsequent information,such as changes in the number of employees with exercisable rights.

(4) Handling of modification and termination of the share-based payment plan

If the modification of a share-based payment plan increases the fair value of the equity instrumentsgranted, the increase in services received shall be recognized accordingly to the increase in the fair value ofthe equity instruments.

If a modification of a share-based payment plan increases the number of equity instruments granted,the increase in the fair value of the equity instruments shall be recognized as an increase in services receivedaccordingly.

If the conditions for exercising rights are modified in a way that is favorable to the employee, such asshortening the waiting period or changing or eliminating performance conditions (instead of marketconditions), the company takes the modified conditions into account when dealing with the conditions forexercising rights.

If the terms and conditions are modified in a manner that reduces the total fair value of the share-basedpayment or is otherwise unfavorable to the employee, the services received continue to be accounted for asif the change had never occurred, unless some or all of the equity instruments granted are canceled.

If the granted equity instruments are canceled during the waiting period, the canceled equity instrumentsare treated as accelerated exercise, and the remaining amount to be recognized during the waiting period isimmediately recognized in profit or loss, and capital surplus is recognized. If the employees or other partiescan choose to meet the non-optional conditions but fail to do so within the waiting period, the cancellationis treated as a cancellation of the granted equity instruments.

33. Preferred stock, perpetual bonds and other financial instruments

□ Applicable √ N/A

34. Revenues

(1). Disclosure of accounting policies adopted for revenue recognition and measurement by type of

business

√ Applicable □ N/A

The Ministry of Finance ("MOF") issued ASBE No. 14 - Revenue (Revised) ("New Revenue Standard")in 2017. The New Revenue Standard replaces "ASBE No. 14 - Revenue" and "ASBE No. 15 - ConstructionContracts" ("Previous Revenue Standard") issued in 2006. From January 1, 2020, the Group hasimplemented the new revenue standards. Revenue is the total inflow of economic benefits arising from theGroup's ordinary activities that results in an increase in shareholders' equity and does not relate to thecontribution of capital by shareholders.

The Group recognizes revenue when it has fulfilled its performance obligations under a contract, i.e.when the client obtains control of the related goods or services.

If a contract contains two or more performance obligations, the Group allocates the transaction price toeach individual performance obligation on the basis of the relative proportion of the individual selling priceof the goods or services promised under each individual performance obligation at the inception date of thecontract, and measures revenue on the basis of the transaction price allocated to each individual performanceobligation. For contracts with quality assurance clauses, the Group analyzes the nature of the warrantyprovided and treats the warranty as a separate performance obligation if the warranty provides a separateservice from guaranteeing to the client that the goods sold meet the established standards. Otherwise, theGroup accounts for them in accordance with the provisions of "ASBE No. 13 - Contingencies".

The transaction price is the amount of consideration that the Group expects to be entitled to receive forthe transfer of goods or services to the client, excluding amounts received on behalf of third parties. TheGroup recognizes a transaction price that does not exceed the amount by which it is more likely than not thata material reversal of the cumulative revenue recognized will not occur when the related uncertainty isremoved. Amounts expected to be returned to clients are recognized as a liability for returns and are notincluded in the transaction price.

The Group has a performance obligation at a point in time when one of the following conditions is met;otherwise, the Group has a performance obligation at a point in time:

- The client acquires and consumes the economic benefits arising from the Group's performance at thesame time as the Group's performance;

- The client is able to control the goods under construction in the course of the Group's performance;

- The goods produced in the course of the Group's performance have a non-substitutable use and theGroup is entitled to receive payment for the cumulative portion of performance completed to date throughoutthe term of the contract.

The Group recognizes revenue on the basis of the progress of performance over a period of time forperformance obligations that are to be fulfilled within that period. When the progress of performance is notreasonably determinable, the Group recognizes revenue on the basis of the amount of costs incurred untilthe progress of performance is reasonably determinable, provided that the costs incurred by the Group areexpected to be reimbursed.

For performance obligations fulfilled at a certain point in time, the Group recognizes revenue at thepoint in time when the client obtains control of the related goods or services. In determining whether a clienthas obtained control of goods or services, the Group considers the following indications:

- The Group has a present right to receive payment for the good or service;

- The Group has physically transferred the good to the client;

- The Group has transferred legal title or the principal risks and rewards of ownership of the good to theclient;

- The client has accepted the goods or services, etc.

The Group accounts for changes in the scope or price of a contract that have been approved by theparties to the contract separately under the following circumstances:

- If a contract change adds clearly distinguishable goods and contract prices, and the new contract pricereflects the separate selling price of the new goods, the changed part of the contract is accounted for as aseparate contract;

- If a contract change does not fall into the above category, and if the goods transferred or servicesprovided are clearly distinguishable from those not transferred or provided at the date of the contract change,the original contract is deemed to be terminated, and the unperformed portion of the original contract andthe changed portion of the contract are combined and accounted for as part of a new contract;

- If a contract change does not fall under the above circumstances, i.e., if there is no clear distinctionbetween goods transferred or services provided and goods not transferred or services not provided at the dateof the contract change, the changed portion of the contract is accounted for as an integral part of the originalcontract, and the resulting impact on the recognized revenue is adjusted to current revenue at the date of thecontract change.

The right to receive consideration for goods or services that the Group has transferred to a client (andwhich is dependent on factors other than the passage of time) is recognized as a contract asset, which isimpaired on the basis of expected credit losses. The Group's unconditional right to receive considerationfrom clients, which is dependent only on the passage of time, is presented as receivables. The Group'sobligations to transfer goods or services to clients for which the Group has received or shall receiveconsideration from the clients are presented as contractual liabilities.

1) Revenue from sales of goods

Revenue is recognized when the Group transfers control of goods to the client upon delivery to thepurchaser and obtains a signed receipt, or when the goods are shipped on board a vessel.

2) Revenue from construction

The client controls the merchandise during the construction of the project. Under this type of contract,the relevant goods are constructed in accordance with the client's specifications, and if the client terminatesthe contract, the Group is entitled to receive an amount that compensates it for the costs incurred and areasonable profit for the portion of the performance that has been performed to date. Accordingly, the Grouprecognizes revenues and costs associated with the construction of the works over time. The Group determinesthe progress of performance based on the proportion of the cumulative actual contract costs incurred to theestimated total contract costs and recognizes revenue in accordance with the progress of performance. Ifrevenue is recognized but not yet billed, the Group recognizes it as a contract asset.

(2). The adoption of different operating models for the same type of business involves different

revenue recognition and measurement methods

□ Applicable √ N/A

35. Contract costs

□ Applicable √ N/A

36. Government subsidies

√ Applicable □ N/A

(1) Recognition of government grants

Government grants are recognized only when the following conditions are simultaneously met:

1) The Group is able to fulfill the conditions attached to the government grants;

2) The Group is able to receive government grants.

(2) Measurement of government grants

If government grants are monetary assets, they are measured at the amount received or receivable. Ifthe government grants are non-monetary assets, they are measured at fair value; if the fair value cannot bereliably obtained, they are measured at a nominal amount of RMB 1.

(3) Accounting treatment of government grants

1) Asset-related government grants

Government grants obtained by the Company for the purpose of purchasing, constructing or otherwiseforming long-term assets are classified as asset-related government grants. Asset-related government grantsare recognized as deferred income and recognized in profit or loss in a reasonable and systematic mannerover the useful lives of the related assets. Government grants that are measured at nominal amounts arerecognized directly in profit or loss. If an asset is sold, transferred, retired or destroyed before the end of itsuseful life, the unallocated balance of the deferred income is transferred to profit or loss in the period inwhich the asset is disposed of.

2) Government grants related to income

Government grants other than those related to assets are classified as revenue-related government grants.Government grants related to income are accounted for as follows:

Government grants used to compensate the Group for costs or losses incurred in future periods arerecognized as deferred income and recognized in profit or loss in the period in which the costs or losses arerecognized;

For the purpose of compensating the Group for the related costs or losses already incurred, they arerecognized directly in profit or loss for the current period.

Government grants that contain both asset-related and revenue-related components are accounted forseparately; if it is difficult to distinguish between the two, they are categorized as revenue-relatedgovernment grants as a whole.

Government grants related to the Group's daily activities are recognized in other income in accordancewith the substance of the economic operations. Government grants that are not related to the Group's dailyactivities are recognized as non-operating revenue and expenses.

3) Policy-based preferential loan subsidies

If the finance disburses the subsidized interest rate funds to a lending bank, and the lending bankprovides loans to the Group at a preferential interest rate, the actual amount of the loan received shall beregarded as the recorded value of the loan, and the related borrowing costs shall be calculated on the basisof the principal amount of the loan and the preferential interest rate of the policy.

When the subsidized interest rate funds are directly allocated to the Group by the financial authorities,the Group will offset the corresponding subsidized interest rate against the relevant borrowing costs.

4) Return of government grants

When recognized government grants are to be returned, the carrying amount of the assets shall beadjusted if the carrying amount of the assets is reduced upon initial recognition; if there is a balance ofdeferred income, the balance of deferred income shall be reduced, and the excess shall be recognized inprofit or loss for the current period; otherwise, the balance of deferred income shall be recognized in profitor loss for the current period directly.

37. Deferred tax assets/deferred tax liabilities

√ Applicable □ N/A

Deferred tax assets and deferred tax liabilities are recognized for differences between the tax bases ofassets and liabilities and their carrying amounts (temporary differences). At the balance sheet date, deferred

tax assets and liabilities are measured at the tax rates that are expected to apply in the periods when the assetsare realized or the liabilities are settled.

(1) Basis for recognizing deferred tax assets

Deferred tax assets arising from deductible temporary differences are recognized to the extent that it isprobable that taxable income will be available against which the deductible temporary differences can beutilized, and deductible losses and tax credits can be carried forward to future years. However, deferred taxassets arising from the initial recognition of assets or liabilities are not recognized if: 1) the transaction isnot a business combination; and 2) the transaction affects neither the accounting profit nor taxable incomeor deductible losses at the time of the transaction.

Deferred tax assets are recognized for deductible temporary differences associated with investments inassociates if the following conditions are met: it is probable that the temporary differences will reverse inthe foreseeable future and it is probable that taxable income will be available against which the deductibletemporary differences can be utilized in the future.

(2) Basis for recognizing deferred tax liabilities

The Company recognizes deferred tax liabilities for taxable temporary differences between current andprior periods. However, it does not include:

1) Temporary differences arising from the initial recognition of goodwill;

2) Temporary differences arising from transactions or events that are not part of a business combination

and that, at the time of their occurrence, affect neither accounting profit nor taxable income (or deductiblelosses);

3) For taxable temporary differences related to investments in subsidiaries and associates, the timing of

the reversal of the temporary differences can be controlled and it is probable that the temporary differenceswill not be reversed in the foreseeable future.

(3) Deferred tax assets and deferred tax liabilities are stated at the net amount after offsetting when the

following conditions are simultaneously met

1) The enterprise has the legal right to settle current income tax assets and current income tax liabilities

on a net basis;

2) Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority

on the same taxable entity or on different taxable entities, but in each future period in which deferred taxassets and deferred tax liabilities of significance are reversed, the taxable entities involved intend to settlethe current income tax assets and current income tax liabilities on a net basis or to realize the assets at thesame time, The taxable entity intends to settle current income tax assets and current income tax liabilities ona net basis or acquire assets and settle liabilities simultaneously.

38. Leases

√ Applicable □ N/A

At the inception date of a contract, the Group assesses whether the contract is a lease or contains a lease.A contract is a lease or contains a lease if one of the parties to the contract transfers the right to control theuse of one or more identified assets for a period of time in exchange for consideration.

(1) Separation of Lease Contracts

When a contract contains several individual leases, the Group splits the contract and accounts for eachindividual lease separately. When a contract contains both leases and non-leases, the Group splits the leasesand non-leases, and the leases are accounted for in accordance with the leasing standards, while the non-leases are accounted for in accordance with other applicable accounting standards.

(2) Consolidation of lease contracts

Two or more contracts containing leases entered into by the Group with the same counterparty or itsaffiliates at the same or similar times shall be consolidated into one contract for accounting purposes whenone of the following conditions is met.

a. The two or more contracts are entered into for an overall business purpose and constitute a packagetransaction, the overall business purpose of which cannot be understood unless considered as a whole.

b. The amount of consideration for one of the two or more contracts is dependent on the pricing orperformance of the other contracts.

c. The right to use the asset granted by the two or more contracts together constitute a single lease.

Basis of judgment and accounting treatment for simplified treatment of short-term leases and leasesof low-value assets as a lessee

√ Applicable □ N/A

Short-term leases are leases that do not include an option to purchase and have a lease term of less than12 months. Low-value asset leases are leases with a lower value when the individual leased asset is a brandnew asset.The Group does not recognize right-of-use assets and lease liabilities for the following short-term leasesand low-value asset leases, and the related lease payments are charged to the cost of the related assets or tocurrent profit or loss on a straight-line basis over the lease term. The Group recognizes right-of-use assetsand lease liabilities for leases other than short-term leases and leases of low-value assets.Lease classification criteria and accounting treatment as lessor

√ Applicable □ N/A

The Company classifies leases as finance leases and operating leases at the inception date of the lease.A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of theleased asset, which may or may not ultimately be transferred. Operating leases refer to leases other thanfinance leases.

During the reporting period, the Company's leases were all operating leases, and lease payments underoperating leases were recognized as rental income using the straight-line method or other systematic andreasonable methods in each period of the lease term: initial direct costs incurred in connection with theoperating leases were capitalized and apportioned over the lease term on the same basis as the rental income,and were charged to current profit or loss; and variable lease payments relating to operating leases that werenot included in the lease payments were charged to current profit or loss when they were actually incurred.Variable lease payments relating to operating leases that are not recognized as lease receipts are recognizedin profit or loss when they are actually incurred.

39. Other significant accounting policies and accounting estimates

□ Applicable √ N/A

40. Changes in significant accounting policies and accounting estimates

(1). Changes in significant accounting policies

√ Applicable □ N/A

Unit: Yuan Currency: RMBContents of and reasons for thechan

es in accountin

g

olicies

Name of statement itemsmateriall

p

y

affected

Amount of impactOn November 30, 2022, theMinistry of Finance issued ASBEInterpretation No. 16 (C.K.[2022]31, hereinafter referred to as"Interpretation No. 16"),"Accounting for Deferred Taxeson Assets and Liabilities Arisingfrom Individual Transactions forWhich the Initial RecognitionExemption Does Not Apply",which will take effect on January1, 2023, and enterprises areallowed to implement thisinterpretation in advance of theyear of issue;

Deferred tax assets1,135,468.71Deferred tax liabilities1,316,653.59Undistributed profits-177,717.08

Minority interests-3,467.80

Other NotesNone

(2). Changes in significant accounting estimates

□ Applicable √ N/A

(3). Adjustments to the financial statements as of the beginning of the year of first-time

implementation of new accounting standards or interpretations of accounting standards for the first-time implementation of new accounting standards or interpretations of accounting standards from2023 onwards

√ Applicable □ N/A

Explanation of reasons for adjusting the financial statements as of the beginning of the year of initialimplementationFrom January 1, 2023, the Company will implement the provisions of "ASBE Interpretation No. 16"issued by the Ministry of Finance, "Accounting for Deferred Taxes on Assets and Liabilities Arising fromIndividual Transactions for Which the Initial Recognition Exemption Does Not Apply". For lease liabilitiesand right-of-use assets recognized at the beginning of the earliest period for the presentation of financialstatements in which this Interpretation is applied for the first time, as well as projected liabilities related toabandonment obligations and the corresponding related assets, which give rise to taxable temporarydifferences and deductible temporary differences, the enterprise shall adjust the cumulative effect to openingretained earnings and other relevant financial statement items in the earliest period for which the financialstatements are presented in accordance with this Interpretation and "ASBE 18 - Income Taxes".

Consolidated Balance Sheet

Unit: Yuan Currency: RMBItem December 31, 2022 January 1, 2023 AdjustmentsCurrent assetsMonetary funds550,235,202.99 550,235,202.99

Settlement Provision

Counterparty funds

Financial assets held for trading122,119,888.89 122,119,888.89

Derivative financial assets

Bills receivable20,790,441.73 20,790,441.73

Accounts receivable484,443,368.28 484,443,368.28

Receivables financing729,937.36 729,937.36

Prepayments50,995,260.16 50,995,260.16

Premiums receivable

Reinsurance receivables

Reserve for reinsurancecontracts receivable

Other receivables13,057,575.31 13,057,575.31

Of which: Interest receivable

Dividends receivable

Financial assets purchased forresale

Inventories66,824.45 66,824.45

Contract assets389,293,108.13 389,293,108.13

Assets held for sale

Non-current assets due withinone

ea

r

Other current assets58,265,105.32 58,265,105.32

Total current assets1,689,996,712.62 1,689,996,712.62

Non-current assets:

Loans and advances issued

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments2,314,172.96 2,314,172.96

Investments in other equityinstruments

Other non-current financialassets

Investment properties713,065.68 713,065.68

Fixed assets40,095,530.47 40,095,530.47

Construction in progress

Producing biological assets

Oil and gas assets

Utilization rights assets4,672,377.60 4,672,377.60

Intangible assets7,426,847.54 7,426,847.54

Development expenditure

Goodwill

Long-term amortization

Deferred tax assets14,578,928.51 15,714,397.22 1,135,468.71Other non-current assets17,348,658.87 17,348,658.87

Total non-current assets87,149,581.63 88,285,050.34 1,135,468.71Total assets1,777,146,294.25 1,778,281,762.96 1,135,468.71Current liabilities:

Short-term borrowings31,249,307.82 31,249,307.82

Borrowings from the CentralBank

Demand for funds

Financial liabilities for trading

Derivative financial liabilities

Notes payable

Accounts payable589,919,678.26 589,919,678.26

Advance receipts

Contract liabilities74,584,070.11 74,584,070.11

Sale and buyback of financialassets

Deposit-taking and interbankde

osits

Securities trading agency

Underwriting of securities

Employee remuneration payable39,456,513.03 39,456,513.03

Taxes payable7,330,079.22 7,330,079.22

Other payables1,611,097.74 1,611,097.74

Of which: Interest payable

Dividends payable

Fees and commissions payable

Sub-insurance payable

Liabilities held for sale

Non-current liabilities duewithin one

py

ea

r

1,710,381.30 1,710,381.30

Other current liabilities

Total current liabilities745,861,127.48 745,861,127.48

Non-current liabilities:

Reserves for insurance contracts

Long-term borrowings

Bonds payable

Of which: Preferred stock

perpetual bonds

Lease liabilities3,151,902.66 3,151,902.66

Long-term accounts payable

Long-term employeeremuneration

a

y

able

610,379.24 610,379.24

Projected liabilities9,238,016.80 9,238,016.80

Deferred income

Deferred tax liabilities4,892,632.326,209,285.91 1,316,653.59Other non-current liabilities

Total non-current liabilities17,892,931.02 19,209,584.61 1,316,653.59Total liabilities763,754,058.50 765,070,712.09 1,316,653.59Owners' equity (or shareholders' equity):

Paid-in capital (or share capital)80,000,000.00 80,000,000.00

Other equity instruments

Of which: Preferred stock

Perpetual bonds

Capital surplus582,632,775.45 582,632,775.45

Less: Treasury stock

Other comprehensive income3,027,860.88 3,027,860.88

Earmarked reserves45,372,652.93 45,372,652.93

Surplus reserves28,443,197.81 28,443,197.81

Provision for general risks

Undistributed profits269,871,786.54 269,694,069.46 -177,717.08Total owners' equity (orshareholders' equity) attributableto the

arent com

p

an

1,009,348,273.61 1,009,170,556.53 -177,717.08Minority interests4,043,962.14 4,040,494.34 -3,467.80Total owners' equity (orshareholders' e

yq

uit

y)

1,013,392,235.75 1,013,211,050.87 -181,184.88Total liabilities and owners'e

uit

y

or shareholders' e

q

uit

1,777,146,294.25 1,778,281,762.96 1,135,468.71

Parent Company Balance Sheet

Unit: Yuan Currency: RMBItem December 31, 2022 January 1, 2023 AdjustmentsCurrent assets:

Monetary funds426,921,105.55 426,921,105.55

Financial assets for trading122,119,888.89 122,119,888.89

Derivative financial assets

Bills receivable3,741,507.00 3,741,507.00

Accounts receivable389,406,545.69 389,406,545.69

Receivables financing350,000.00 350,000.00

Prepayment30,190,351.40 30,190,351.40

Other receivables39,103,210.81 39,103,210.81

Of which: Interest receivable

Dividends receivable

Inventories62,842.15 62,842.15

Contract assets307,849,835.96 307,849,835.96

Assets held for sale

Non-current assets due withinone

ea

r

Other current assets21,837,642.67 21,837,642.67

Total current assets1,341,582,930.12 1,341,582,930.12

Non-current assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity investments84,542,333.88 84,542,333.88

Investments in other equityinstruments

Other non-current financialassets

Investment properties713,065.68 713,065.68

Fixed assets38,986,702.82 38,986,702.82

Construction in progress

Producing biological assets

Oil and gas assets

Utilization right assets2,760,402.11 2,760,402.11

Intangible assets7,379,278.80 7,379,278.80

Development expenditure

Goodwill

Long-term amortization

Deferred tax assets11,724,393.96 12,482,396.65 758,002.69Other non-current assets3,168,562.17 3,168,562.17

Total non-current assets149,274,739.42 150,032,742.11 758,002.69Total assets1,490,857,669.54 1,491,615,672.23 758,002.69Current liabilities:

Short-term borrowings

Transaction financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable504,944,256.04 504,944,256.04

Receipts in advance

Contract liabilities38,253,734.48 38,253,734.48

Employee remuneration

a

y

able

32,483,986.99 32,483,986.99

Taxes payable3,265,740.36 3,265,740.36

Other accounts payable1,278,644.31 1,278,644.31

Of which: Interest payable

Dividends payable

Liabilities held for sale

Non-current liabilities duewithin one

ea

r

902,393.93 902,393.93

Other current liabilities

Total current liabilities581,128,756.11 581,128,756.11

Non-current liabilities:

Long-term loans

Bonds payable

Of which: Preferred stock

Perpetual bonds

Lease liabilities2,118,253.78 2,118,253.78

Long-term accounts payable

Long-term employeeremuneration

a

y

able

Projected liabilities5,723,958.25 5,723,958.25

Deferred income

Deferred tax liabilities

690,100.53 690,100.53Other non-current liabilities

Total non-current liabilities7,842,212.03 8,532,312.56 690,100.53Total liabilities588,970,968.14 589,661,068.67 690,100.53Owners' equity (or shareholders' equity):

Paid-in capital (or share capital)80,000,000.00 80,000,000.00

Other equity instruments

Of which: Preferred stock

Perpetual bonds

Capital surplus584,223,330.95 584,223,330.95

Less: Treasury stock

Other comprehensive income

Earmarked reserves37,608,529.67 37,608,529.67

Surplus reserves28,443,197.81 28,443,197.81

Undistributed profits171,611,642.97 171,679,545.13 67,902.16Total owner's equity (orshareholders' e

uit

y)

901,886,701.40 901,954,603.56 67,902.16Total liabilities andowners' equity (or shareholders'e

uit

y)

1,490,857,669.54 1,491,615,672.23 758,002.69

41. Others

√ Applicable □ N/A

(1) Earmarked reserves

The Group's production safety fees, which are extracted in accordance with national regulations, arerecognized as the cost of the relevant products or current profit or loss, and at the same time are included inthe earmarked reserve. When the Group utilizes the earmarked reserve, the expenses belonging to expensesare directly deducted from the earmarked reserve. If a fixed asset is formed, it is recognized as a fixed assetwhen the relevant asset reaches its intended useable state, and the cost of forming the fixed asset is deductedfrom the earmarked reserve, and accumulated depreciation of the same amount is recognized. Nodepreciation will be provided for the fixed assets in future periods.

(2) Segment reporting

The Group determines its operating segments based on its internal organizational structure,management requirements and internal reporting system. Two or more operating segments may beconsolidated into one if they have similar economic characteristics and at the same time are identical orsimilar in terms of the nature of the individual products, the nature of the production process, the types ofclients for the products, the manner of selling the products, and the impact of laws and administrativeregulations on the products produced. The Group determines its reportable segments on the basis of operatingsegments, taking into account the principle of materiality.

In preparing segment reports, the Group measures revenue from inter-segment transactions on the basisof actual transaction prices. The accounting policies used in the preparation of segment reports are consistentwith those used in the preparation of the Group's financial statements.

VI. Taxation

1. Major types and rates of tax

Major types of taxes and tax rates

√ Applicable □ N/A

Type of tax Tax basis Tax rate (%)Value-added tax (VAT)

Based on the provision of technical services,sale of goods, etc.

3.00-13.00

Urban maintenance andconstruction tax

Levied on the taxable turnover amount

5.00, 7.00

Education surcharge Levied on the taxable turnover amount

3.00, 2.00

Enterprise income tax Levied on the taxable income amount Varies by taxing entityProperty tax

Property tax is calculated based on the residualvalue of the property after deducting 30% ofthe ori

inal value of the

p

ro

ert

y

.

1.20, 12.00

Disclosure of taxable entities with different corporate income tax rates

√ Applicable □ N/A

Name of taxable entity Income tax rate (%)The Company 15Acter Engineering Technology (Shenzhen) Co., Ltd. 25Shenzhen Dingmao Trading Co., Ltd. 25Acter International Limited 16.5Acter Technology Singapore Pte., Ltd. 17PT. Acter Technology Indonesia 22PT Acter Integration Technology Indonesia 22Acter Technology Malaysia Sdn. Bhd. 24Sheng Huei Engineering Technology Company Limited 20Acter Technology Co., Ltd. 20

2. Tax incentives

√ Applicable □ N/A

On November 6, 2023, the Company obtained the Certificate of High and New Technology Enterprise(Certificate No. GR202332006213, valid for three years from 2023 to 2025) jointly issued by JiangsuProvincial Department of Science and Technology, Jiangsu Provincial Department of Finance and JiangsuProvincial Taxation Bureau of the State Administration of Taxation. During the reporting period, theCompany enjoyed a preferential enterprise income tax rate of 15% for high-tech enterprises.

3. Others

□ Applicable √ N/A

VII. Notes to the Consolidated Financial Statements

1. Currency funds

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceCash on hand1,054,977.35 2,510,187.35Bank deposits708,941,745.68 539,829,910.94Other currency funds12,499,607.35 7,895,104.70Deposits with finance companies

Total722,496,330.38 550,235,202.99Of which: Total amount depositedabroad

75,264,850.68 79,294,798.84Other NotesCash on hand contains RMB 1,044,790.00 in digital form.Of which: Total amount deposited abroadItemBalance at the end of the year

Balance at the beginning

of the

ea

r

Total amount deposited abroad75,264,850.68 79,294,798.84Total75,264,850.68 79,294,798.84Of which: Currency funds whose use is restrictedItemBalance at the end of the year

Balance at the beginning

of the

ea

r

Guarantee deposits12,499,607.35 7,895,104.70Total12,499,607.35 7,895,104.70

2. Trading financial assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balance

Reasons andjustifications fordesi

nationFinancial assets at fair valuethrough profit or loss

122,119,888.89/Of which:

Structured deposits

122,119,888.89/Financial assets at fair valuethrough profit or loss

Of which:

Total

122,119,888.89/Other Notes:

□ Applicable √ N/A

3. Derivative financial assets

□ Applicable √ N/A

4. Bills receivable

(1). Classification of bills receivable

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceBank acceptance bills7,877,956.6620,790,441.73Commercial acceptance36,371,094.45

Less: Provision for bad debts1,091,132.83

Total43,157,918.28 20,790,441.73

(2). Bills receivable pledged by the Company at the end of the period

□ Applicable √ N/A

(3). Bills receivable endorsed or discounted by the Company at the end of the period and not yet due

at the balance sheet date

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Amount derecognized at the end

of the

eriod

Amount not derecognized at the

end of the

p

p

eriodBank acceptance bills35,385,000.00

Commercial acceptances

Total35,385,000.00

(4). Disclosure by bad debt accrual method

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Category

Closing balance Opening balanceBook balance

Provision for baddebts

Carryingamount

Book balance

Provision forbaddebtsCarryingamountAmount

Proportion(%)

Amount

Provision(%)

Amount

Proportion(%)

AmountProvision(%)Provision forbaddebtsbyindividualitem

Of which:

Provision forbad

44,249,0

51.11

100.0

1,091,132.8

2.47

43,157,918.

20,790,441.

100.0

20,790,441.

debtsbyportfolioOf which:

.Portfolio 1

36,371,0

94.45

82.20

1,091,132.8

3.00

35,279,961.

.Portfolio 2

7,877,95

6.66

17.80

7,877,956.6

20,790,441.

100.0

20,790,441.

Total

44,249,0

51.11

100.0

1,091,132.8

2.47

43,157,918.

20,790,441.

100.0

20,790,441.

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Provision for bad debts by portfolio:

√ Applicable □ N/A

Items provided for by portfolio: Commercial acceptances

Unit: Yuan Currency: RMBName

Closing balanceBills receivable Provision for bad debts Provision ratio (%)Within 1 year 36,371,094.451,091,132.83 3.00Total 36,371,094.451,091,132.83 3.00Explanation of provision for bad debts by portfolio

□ Applicable √ N/A

Provision for bad debts is made on a portfolio basis:

√ Applicable □ N/A

Items provided for by portfolio: Bank acceptance bills

Unit: Yuan Currency: RMBName

Closing balanceBills receivable Provision for bad debts Provision ratio (%)Within 1 year 7,877,956.66Total 7,877,956.66Explanation of provision for bad debts by portfolio

□ Applicable √ N/A

Provision for bad debts based on the general model of expected credit losses

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Provision for bad debts

Phase I Phase II Phase III

TotalExpected creditlosses for thenext 12 months

Expected creditlosses for theentire duration(no creditimpairment)

Expected creditlosses for theentire duration(creditimpairmentincurred

Balance at January 1, 2023

Balance at January 1, 2023 inthe current

)p

eriod

--Reversed to Phase II

--Reversed to Phase III

--Reversed to Phase II

--Reversed to Phase I

Provision during the period

1,091,132.83

1,091,132.83Reversal during the period

Write-offs during the period

Cancellations during the

eriod

Other changes

Balance at December 31,2023

1,091,132.83

1,091,132.83

The basis for the classification of each stage and the percentage of provision for bad debts are shown inthis section V.12. Bills receivableExplanation of significant changes in the book balance of bills receivable for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(5). Provision for bad debts

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Category

Openingbalance

Change during the period

Closing

balanceProvision

Recovery orreversal

Write-offs orcancellations

Otherchan

pg

esCommercialacceptances

1,091,132.83

1,091,132.83Total

1,091,132.83

1,091,132.83Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(6). Actual write-off of bills receivable during the period

□ Applicable √ N/A

Write-off bills receivable of which significant:

□ Applicable √ N/A

Description of bills receivable written off:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

5. Accounts receivable

(1). Disclosure by ageing

√ Applicable □ N/A

Unit: Yuan Currency: RMBAgeing Closing book balance Opening book balanceWithin 1 yearOf which: Within 1 year1-6 months (including 6months

338,478,217.57 451,698,928.456 months to 1 year (including 1

)y

ear

)

34,754,229.34 19,393,631.72Subtotal within 1 year373,232,446.91 471,092,560.171 to 2 years13,065,254.41 12,552,067.192 to 3 years21,927,201.89 21,111,026.573 to 4 years14,496,556.70 11,730,732.714 to 5 years8,927,092.98

More than 5 years650,753.62 650,753.62Total432,299,306.51 517,137,140.26

(2). Disclosure by bad debt accrual method

√ Applicable □ N/A

Unit: Yuan Currency: RMBCategory

Closing balance Opening balanceBook balance

Provision for

bad debts

Carryingamount

Book balance

Provision forbad debts

Carryingamount

Amount

Proportion(%)

Amount

Provision(%)

Amount

Proportion(%)

Amount

Provision(%)Provision forbaddebtsbyindividualitem

10,994,16

7.99

2.54

10,994,1

67.99

100.0

11,576,69

2.27

2.24

11,576,6

92.27

100.0

Of which:

Provisionforbaddebts

byportfo

lio

421,305,1

38.52

97.46

24,415,8

66.26

5.80

396,889,2

72.26

505,560,4

47.99

97.76

21,117,0

79.71

4.18

484,443,3

68.28

Of which:

Total

432,299,3

06.51

100.00

35,410,0

34.25

/

396,889,2

72.26

517,137,1

40.26

100.00

32,693,7

71.98

/

484,443,3

68.28

Individual provision for bad-debt reserves:

√ Applicable □ N/A

Unit: Yuan Currency: RMBName

Closing balanceCarryingamount

Provision for

bad debts

Provision (%)

Reason for

provisionQinghua Group Xinjiang CoalChemical Industry Co., Ltd.

6,570,214.37 6,570,214.37 100.00

Debtor's financialdifficulties

Suzhou Mingqiao MunicipalEngineering Co., Ltd.

2,158,200.00 2,158,200.00 100.00 Debtor bankruptcyFujian Fuchen Technology Co.,Ltd.

1,615,000.00 1,615,000.00 100.00

Debtor's financialdifficultiesSuzhou Hyperion GeocrystalCo., Ltd.

650,753.62 650,753.62 100.00

Debtor'sbankruptcy,payment isexpected to bedifficult to recoverTotal 10,994,167.99 10,994,167.99 100.00 /Explanation of bad debt provision by individual item:

□ Applicable √ N/A

Provision for bad debts by portfolio:

√ Applicable □ N/A

Items provided for by portfolio: Ageing portfolio

Unit: Yuan Currency: RMBName

Closing balanceAccounts receivable Provision for bad debts Provision ratio (%)1-6 months (including 6months

338,478,217.57 10,154,346.63 3.006 months to 1 year (including

)y

ear

)

34,754,229.34 1,737,711.47 5.001-2 years (including 2 years)13,065,254.41 1,306,525.44 10.002-3 years (including 3 years)21,927,201.89 4,385,440.38 20.003-4 years (including 4 years)12,107,819.70 6,053,909.85 50.004-5 years (including 5 years)972,415.61 777,932.49 80.00Total421,305,138.52 24,415,866.26

Explanation of provision for bad debts by portfolio:

□ Applicable √ N/A

Provision for bad debts based on the general model of expected credit losses

□ Applicable √ N/A

The basis for the classification of each stage and the percentage of provision for bad debts are shown inthis section V. 13. Accounts receivableExplanation of significant changes in the book balance of accounts receivable for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(3). Provision for bad debts

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Category

Opening balance

Change during the period

Closing balanceProvision

Recovered

orreversed

Write-offs

orcancellatio

ns

Otherchanges

Provision for

ad debts

32,693,771.98 2,711,649.69

4,612.58 35,410,034.25Total32,693,771.98 2,711,649.69

4,612.58 35,410,034.25Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(4). Accounts receivable actually written off during the period

□ Applicable √ N/A

Significant accounts receivable written off among them

□ Applicable √ N/A

Description of accounts receivable written off:

□ Applicable √ N/A

(5). Accounts receivable and contract assets with top five closing balances summarized by party

owed to the Company

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Unit Name

Closing balance ofaccounts receivable

Closing balance ofcontract assets

Closing balance ofaccountsreceivable andcontract assets

Percentageofcombinedaccountsreceivableandcontractassetsclosingbalance(%)

Closing balanceof provision forbad debts

Client 1 35,204,113.72 55,230,371.74 90,434,485.46 10.51 1,332,275.27Client 2 64,025,641.40 7,614,263.45 71,639,904.85 8.33 3,520,635.64Client 3 60,617,976.68 10,161,956.75 70,779,933.43 8.23 1,987,558.51Client 4 69,801,621.75 69,801,621.75 8.11 355,720.96Client 5 3,732,285.60 62,663,590.03 66,395,875.63 7.72 752,682.98Total 163,580,017.40 205,471,803.72 369,051,821.12 42.90 7,948,873.36

Other NotesNoneOther Notes:

□ Applicable √ N/A

6. Contract assets

(1). Status of contract assets

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Closing balance Opening balanceBookbalance

Provisionfor baddebts

Carryingamount

Bookbalance

Provisionfor baddebts

CarryingamountUnexpiredwarrantydeposits

17,784,023.33997,257.8216,786,765.5133,157,769.562,953,903.77 30,203,865.79Completedunliquidatedassets arisingfromconstructioncontracts

410,161,246.322,050,806.23408,110,440.09360,893,710.881,804,468.54 359,089,242.34Total427,945,269.653,048,064.05424,897,205.60394,051,480.444,758,372.31 389,293,108.13

(2). Amounts and reasons for significant changes in carrying amount during the reporting period

□ Applicable √ N/A

(3). Disclosure by bad debt accrual method

√ Applicable □ N/A

Unit: Yuan Currency: RMBCategory

Closing balance Opening balanceBook balance

Provision for baddebts

Carryingamount

Book balance

Provision for baddebts

Carryingamount

AmountProportion(%)

Amount

Provision (%)

Amount

Proportio

n(%)

Amount

Provision (%)Provision for

baddebts

byindivid

ualitem

Of which:

Provision for

baddebts

byportfoli

o

427,945,26

9.65

100.0

3,048,0

64.05

0.71 424,897,

205.60

394,051,

480.44

100.

4,758,37

2.31

1.21 389,293

,108.13

Of which:

Outstan

dingwarrant

ydeposit

s

17,784,023

.33

4.16

997,257

.82

5.61

16,786,7

65.51

33,157,7

69.56

8.41

2,953,90

3.77

8.91

30,203,

865.79

Completedunliqui

datedassets

resulting

fromconstruct

ioncontract

s

410,161,246.

95.84

2,050,80

6.23

0.50

408,110,4

40.09

360,893,7

10.88

91.59

1,804,468.

0.50

359,089,

242.34

Total

427,945,269.

100.00

3,048,06

4.05

/424,897,2

05.60

394,051,4

80.44

100.0

4,758,372.

/389,293,

108.13

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Explanation of individual provision for bad-debt reserves:

□ Applicable √ N/A

Provision for bad debts by portfolio:

√ Applicable □ N/A

Items provided for by portfolio: Provision by portfolio

Unit: Yuan Currency: RMBName

Closing balanceContract assets Provision for bad debts Provision ratio (%)Unexpired warranty deposits17,784,023.33 997,257.82 5.61Completed and unliquidatedassets arising fromconstruction contracts

410,161,246.32 2,050,806.23 0.50Total 427,945,269.65 3,048,064.05Explanation of provision for bad debts by portfolio

□ Applicable √ N/A

Provision for bad debts based on the general model of expected credit losses

□ Applicable √ N/A

The basis for the classification of each stage and the percentage of provision for bad debts are shown in thisSection V.17. Contract assetsExplanation of significant changes in the book balance of contract assets for which changes in the provisionfor losses occurred during the period:

□ Applicable √ N/A

(4). Provision for bad debts on contract assets during the period

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Provision for the

current period

Recovered orreversed during

the

eriod

Write-off/cancellationduring the period

ReasonProvision for bad debts-1

		p
,

308.26

Total-1

,

,

308.26

,

/

Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(5). Contract assets actually written off during the period

□ Applicable √ N/A

Significant contract assets written off

□ Applicable √ N/A

Description of contract assets written off:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

7. Receivables financing

(1). Classification of receivables financing

√ Applicable □ N/A

Unit: Yuan Currency: RMBIte

Closin

m

g

balance O

enin

g

balanceBank acce

tance bills3,572,953.18

p

,

937.36

Total3,572,953.18 729,937.36

(2). Receivable financing pledged by the Company at the end of the period

□ Applicable √ N/A

(3). Receivable financing endorsed or discounted by the Company at the end of the period and not

yet due at the balance sheet date

□ Applicable √ N/A

(4). Disclosure by bad debt accrual method

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Category

Closing balance Opening balanceBook balance

Provisionfor baddebts

Carryingamount

Book balance

Provisionfor baddebts

CarryingamountAmount

Proportion(%)AmountProvision(%)

Amount

Proportion(%)

Amount

Provision(%)Provisionfor baddebts byindividualitem

of which:

Provisionfor baddebts bygroup

Of which:

Portfolio 2

3,572,953

.18

3,572,953.18 729,937.36 729,937.36Total

3,572,953.18

/ / 3,572,953.18 729,937.36 / / 729,937.36

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Explanation of provision for bad debts by individual item:

□ Applicable √ N/A

Provision for bad debts by portfolio:

□ Applicable √ N/A

Provision for bad debts based on general model of expected credit losses.

□ Applicable √ N/A

Basis of classification of each stage and percentage of bad debt provisioningNoneDescription of significant changes in the book balance of receivables financing for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(5). Provision for bad debts

□ Applicable √ N/A

Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(6). Receivables financing actually written off during the period

□ Applicable √ N/A

Write-off of receivables financing of which significant amount

□ Applicable √ N/A

Description of write-offs:

□ Applicable √ N/A

(7). Increase/decrease and change in fair value of receivables financing during the period:

□ Applicable √ N/A

(8). Other Notes:

□ Applicable √ N/A

8. Prepayments

(1). Prepayments by ageing

√ Applicable □ N/A

Unit: Yuan Currency: RMBAgeing

Closing balance Opening balanceAmount Proportion (%) Amount Proportion (%)Within 1 year 88,690,301.43 99.62 50,995,260.16 100.001 to 2 years 334,311.90 0.382 to 3 yearsMore than 3 yearsTotal 89,024,613.33 100.00 50,995,260.16 100.00

Explanation of the reasons for the delayed settlement of prepayments aged over 1 year and with significantamount:

None

(2). Prepayments with the top five closing balances grouped by prepayment recipients

√ Applicable □ N/A

Name of organization Closing balance

Percentage of total closingbalance of prepayments (%)Supplier 123,403,311.09 26.29Supplier 28,460,761.10 9.50Supplier 33,400,000.00 3.82Supplier 42,486,153.59 2.79Supplier 52,226,000.00 2.50Total39,976,225.78 44.90Other notesNoneOther notes

□ Applicable √ N/A

9. Other receivables

Item presentation

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceInterest receivable

Dividends receivable

Other receivables13,378,598.48 13,057,575.31Total13,378,598.48 13,057,575.31Other Notes:

□ Applicable √ N/A

Interest receivable

(1). Classification of interest receivable

□ Applicable √ N/A

(2). Significant overdue interest

□ Applicable √ N/A

(3). Disclosure by bad debt provision method

□ Applicable √ N/A

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Explanation of individual provision for bad-debt reserves:

□ Applicable √ N/A

Provision for bad debts by portfolio:

□ Applicable √ N/A

(4). Provision for bad debts based on general model of expected credit losses.

□ Applicable √ N/A

The basis of classification of each stage and the percentage of provision for bad debts are shown in thisSection V. 15. Other receivables

Explanation of significant changes in the book balance of interest receivables for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(5). Provision for bad debts

□ Applicable √ N/A

Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(6). Actual write-off of interest receivable during the period

□ Applicable √ N/A

Write-off of significant interest receivables

□ Applicable √ N/A

Description of write-offs:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

Dividends receivable

(1). Dividends receivable

□ Applicable √ N/A

(2). Significant dividends receivable with an age of more than 1 year

□ Applicable √ N/A

(3). Disclosure by bad debt accrual method

□ Applicable √ N/A

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Explanation of individual provision for bad-debt reserves:

□ Applicable √ N/A

Provision for bad debts by portfolio:

□ Applicable √ N/A

(4). Provision for bad debts based on general model of expected credit losses.

□ Applicable √ N/A

The basis of classification of each stage and the percentage of provision for bad debts are shown in thisSection V. 15. Other receivables

Explanation of significant changes in the book balance of dividend receivables for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(5). Provision for bad debts

□ Applicable √ N/A

Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(6). Dividends receivable actually written off during the period

□ Applicable √ N/A

Write-off of dividends receivable of which the significant ones are

□ Applicable √ N/A

Description of write-offs:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

Other receivables

(1). Disclosure by ageing

√ Applicable □ N/A

Unit: Yuan Currency: RMBAgeing Closing book balance Opening book balanceWithin 1 yearOf which: Within 1 yearWithin 1 year5,788,181.037,908,967.45Subtotal within 1 year5,788,181.03 7,908,967.451 to 2 years3,137,206.61 5,269,487.752 to 3 years4,906,449.40 305,682.15

3 to 4 years275,070.44 178,337.964 to 5 years63,105.92 132,205.22More than 5 years157,762.22 154,776.00Total14,327,775.62 13,949,456.53

(2). Breakdown by nature of payment

√ Applicable □ N/A

Unit: Yuan Currency: RMBNature of payment Closing book balance Opening book balanceGuarantee and deposit11,538,986.51 11,855,149.63Reserve1,489,165.57 1,303,034.72Others1,299,623.54 791,272.18Subtotal14,327,775.62 13,949,456.53Provision for bad debts949,177.14 891,881.22Total13,378,598.48 13,057,575.31

(3). Provision for bad debts

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Bad Debt Provision

Phase I Phase II Phase III

TotalExpected creditlosses for thenext 12 months

Expected creditlosses for the entireduration (no creditimpairment)

Expected credit lossesfor the entire duration(credit impairmentincurred)Balance as of January1, 2023

891,881.22 891,881.22Balance as of January1, 2023

-- Ransferred to PhaseII

--Reversed to PhaseIII

--Reversed to Phase II--Reversed to Phase IProvision during theperiod

57,851.33 57,851.33Reversal during theperiod

Write-offs during theperiod

Cancellations duringthe period

Other changes -555.41 -555.41Balance as ofDecember 31, 2023

949,177.14 949,177.14

The basis of classification of each stage and the percentage of provision for bad debts are shown in thisSection V. Other receivables

Explanation of significant changes in the book balance of other receivables for which changes in provisionfor losses occurred during the period:

□ Applicable √ N/A

The amount of provision for bad debts for the current period and the basis adopted for assessing whetherthere is a significant increase in the credit risk of financial instruments:

□ Applicable √ N/A

(4). Provision for bad debts

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Category

Openingbalance

Change during the period

ClosingbalanceProvision

Recovery orreversal

Write-offsorcancellations

OtherchangesProvision forbad debts

891,881.22 57,851.33 -555.41 949,177.14Total 891,881.22 57,851.33 -555.41 949,177.14Of which the amount of provision for bad debts reversed or recovered during the period is significant:

□ Applicable √ N/A

Other NotesNone

(5). Other receivables actually written off during the period

□ Applicable √ N/A

Significant other receivables written off during the period:

□ Applicable √ N/A

Description of other receivables written off:

□ Applicable √ N/A

(6). Other receivables with the top five closing balances grouped by party owed

√ Applicable □ N/A

Unit: Yuan Currency: RMBUnitName

Closing balance

Percentage of totalclosing balance ofother receivables(%)

Nature ofamount

Ageing

Provision forbad debtsClosing balanceUnit I 5,585,535.63 38.98

Guaranteedeposits

Less than 1year, 1-2 years,

2-3 years

279,276.78Unit II 1,493,000.00 10.42

Guaranteedeposits

Less than 1year, 1-2 years,2-3 years, 3-4

years

74,650.00Unit III 800,000.00 5.58

Guarantee

deposits

Within 1 year 40,000.00Unit IV 432,600.00 3.03

Guaranteedeposits

Within 1 year 21,630.00Unit V 400,000.00 2.79

Guaranteedeposits

1-2 years 20,000.00Unit VI 400,000.00 2.79

Guaranteedeposits

Within 1 year 20,000.00Total 9,111,135.63 63.59 / / 455,556.78Presented in other receivables due to centralized management of funds

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

10. Inventories

(1). Classification of inventories

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Closing balance Opening balanceBookbalance

Provision fordecline in value

ofinventories/impairment ofcontractual

performance

costs

Carryingamount

Bookbalance

Provision fordecline invalue ofinventories/impairment ofcontractualperformancecosts

CarryingamountConstructionmaterials

66,824.45 66,824.45Products inprocess

Inventory goodsTurnovermaterials

Expendablebiological assets

Contractperformance costs

Total 66,824.45 66,824.45

(2). Provision for decline in value of inventories and provision for impairment of contract

performance costs

□ Applicable √ N/A

Reasons for reversal or write-off of provision for decline in value of inventories during the period

□ Applicable √ N/A

Provision for decline in value of inventories by portfolio

□ Applicable √ N/A

Provisioning criteria for provision for inventory valuation by portfolio

□ Applicable √ N/A

(3). Amount of borrowing costs capitalized in the closing balance of inventories, and the criteria and

basis for calculating such capitalized costs

□ Applicable √ N/A

(4). Explanation of the amount of amortization of contract performance costs for the current period

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

11. Assets held for sale

□ Applicable √ N/A

12. Non-current assets due within one year

□ Applicable √ N/A

Debt investments due within one year

□ Applicable √ N/A

Other debt investments maturing within one year

□ Applicable √ N/A

Other non-current assets due within one yearNone

13. Other current assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balancePrepaid VAT and inputs to bededucted

77,101,647.54 49,268,224.68Other taxes paid in advance 16,755,843.81 5,942,658.92Amortized expenses 2,522,667.65 2,458,318.52Others 1,224,007.69 595,903.20Total 97,604,166.69 58,265,105.32

Other notesNone

14. Debt Investments

(1). Debt investments

□ Applicable √ N/A

Changes in provision for impairment of debt investments during the period

□ Applicable √ N/A

(2). Significant debt investments at the end of the period

□ Applicable √ N/A

(3). Provision for impairment

□ Applicable √ N/A

The basis for classification of each stage and the percentage of provision for impairment:

NoneExplanation of significant changes in the book balance of debt investments for which changes in provisionfor losses occurred during the period:

□ Applicable √ N/A

Amount of provision for impairment for the current period and the basis adopted for assessing whetherthere is a significant increase in credit risk of financial instruments: □ Applicable √ Applicable

□ Applicable √ N/A

(4). Actual write-off of debt investments during the period

□ Applicable √ N/A

Write-off of significant debt investments

□ Applicable √ N/A

Description of write-off of debt investments:

□ Applicable √ N/A

Other Notes: □ Applicable √ N/A

□ Applicable √ N/A

15. Other debt investments

(1). Other debt investments

□ Applicable √ N/A

Changes in provision for impairment of other debt investments during the period

□ Applicable √ N/A

(2). Significant other debt investments at the end of the period

□ Applicable √ N/A

(3). Provision for impairment

□ Applicable √ N/A

The basis for classification of each stage and the percentage of provision for impairment:

None

Explanation of significant changes in the book balance of other debt investments for which changes inprovision for losses occurred during the period:

□ Applicable √ N/A

Amount of provision for impairment for the current period and the basis adopted for assessing whetherthere is a significant increase in credit risk of financial instruments: □ Applicable √ Applicable

□ Applicable √ N/A

(4). Other debt investments actually written off during the period

□ Applicable √ N/A

Write-off of significant other debt investments during the period

□ Applicable √ N/A

Write-off description of other debt investments:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

16. Long-term receivables

(1). Long-term receivables

□ Applicable √ N/A

(2). Disclosure by bad debt accrual method

□ Applicable √ N/A

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Explanation of individual provision for bad-debt reserves:

□ Applicable √ N/A

Provision for bad debts by portfolio:

□ Applicable √ N/A

(3). Provision for bad debts based on general model of expected credit losses.

□ Applicable √ N/A

Basis of classification of each stage and percentage of provision for bad debtsNoneExplanation of significant changes in the book balance of long-term receivables for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

Amount of provision for bad debts for the current period and the basis adopted for assessing whether thereis a significant increase in the credit risk of financial instruments: □ Applicable √ Applicable

□ Applicable √ N/A

(4). Provision for bad debts

□ Applicable √ N/A

Of which the amount of bad debt provision recovery or reversal for the current period is significant:

□ Applicable √ N/A

Other Notes:

None

(5). Long-term receivables actually written off during the period

□ Applicable √ N/A

Write-off of significant long-term receivables

□ Applicable √ N/A

Description of long-term receivables written off:

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

17. Long-term equity investments

(1). Long-term equity investments

√ Applicable □ N/A

Unit: Yuan Currency: RMBIncrease/decrease during the period

Invested units

Openingbalance

Additions toinvestments

Decrease ininvestments

Gainsandlossesoninvestmentsrecognizedundertheequitymethod

Othercomprehensiveincomeadjustments

Change inequity

Declaration ofcashdividends orprofits

Provision forimpairment

Others

Closingbalance

Closingbalanceofprovision forimpairmentI. Joint venturesSubtotalII. Associated enterprisesSpaceEngineeringCo.,Ltd.

1,400,6

78.86

-17,876.

25,391.77

1,408,1

94.25

DaejinRoad(Thailand) Co.,Ltd.

455,20

2.28

-6,576.4416,576.61

465,20

2.45

DJR(Thailand) Co.,Ltd.

458,29

1.82

-9,930.4

10,264.29

458,62

5.70

Subtotal

2,314,1

72.96

-34,383.

52,232

.67

2,332,0

22.40

Total

2,314,1

72.96

-34,383.

52,232

.67

2,332,0

22.40

(2). Impairment testing of long-term equity investments

□ Applicable √ N/A

18. Investments in other equity instruments

(1). Investments in other equity instruments

□ Applicable √ N/A

(2). Description of derecognition during the period

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

19. Other non-current financial assets

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

20. Investment properties

Measurement model of investment properties

(1). Investment properties measured at cost

Unit: Yuan Currency: RMBItem

House and

uildin

b

g

s

Land use rights

Constructionin

ro

g

ress

TotalI. Original carrying amount

1. Opening balance

2,100,240.00 727,500.00

2,827,740.00

2. Increase during the period

(1) Purchases

(2) Transfer from

inventories/fixedassets/construction in

ro

g

ress

(3) Increase from business

combination

3. Decrease during the period

(1) Disposals

(2) Other transfers out

4. Closing balance

2,100,240.00 727,500.00

2,827,740.00II. Accumulated depreciation and accumulated amortization

1. Opening balance

1,748,449.80366,224.52

2,114,674.32

2. Increase during the period

94,510.80 19,795.92

114,306.72

(1) Provision or amortization

94,510.80 19,795.92

114,306.72

3. Decrease during the period

(1) Disposals

(2) Other transfers out

4. Closing balance

1,842,960.60386,020.44

2,228,981.04III. Provision for impairment

1. Opening balance

2. Increase during the period

(1) Provision

3. Decrease during the period

(1) Disposals

(2) Other transfers out

4. Closing balance

IV. Carrying amount

1. Closing book balance

257,279.40 341,479.56

598,758.96

2. Opening book balance

351,790.20361,275.48

713,065.68

(2). Status of investment properties for which title certificates have not been completed

□ Applicable √ N/A

(3). Impairment testing of investment properties using the cost measurement model

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

21. Fixed assets

Item presentation

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceFixed assets38,895,511.08 40,095,530.47Fixed assets liquidation

Total38,895,511.08 40,095,530.47Other Notes:

□ Applicable √ N/A

Fixed assets

(1). Status of fixed assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Houses andbuildings

Machinery andequipme

nt

Transportationtools

Office andelectronicequipment

TotalI. Original carrying amount:

1. Opening balance

50,876,894.86

3,933,377.70 3,239,548.25 58,049,820.81

2. Increase during

the period

-481.64

1,731,906.74 946,719.99 2,678,145.09

(1) Acquisitions

1,728,175.61 931,372.74 2,659,548.35

(2) Transfer from

construction in

ro

g

ress

(3) Increase from

businesscombination

(4) Effect of changes

in exchange rates

-481.64

3,731.13 15,347.25 18,596.74

3. Decrease during

the period

470,995.17 131,157.31 602,152.48

(1) Disposal or

retirement

470,995.17 131,157.31 602,152.48

4. Closing balance

50,876,413.22

5,194,289.27 4,055,110.93 60,125,813.42II. Accumulated depreciation

1. Opening balance

13,010,625.62

2,905,711.60 2,037,953.12 17,954,290.34

2. Increase during

the period3,110,908.98

355,573.33 382,887.58 3,849,369.89

(1) Provision

3,111,237.37

347,698.94371,622.413,830,558.72

(2) Exchange rate

changes

-328.39

7,874.39 11,265.17 18,811.17

3. Decrease during

the period

447,445.45125,912.44573,357.89

(1) Disposal or

retirement

447,445.45 125,912.44 573,357.89

4. Closing balance

16,121,534.60

2,813,839.48 2,294,928.26 21,230,302.34III. Provision for impairment

1. Opening balance

2. Increase during

the period

(1) Provision

3. Decrease during

the period

(1) Disposal or

retirement

4. Closing balance

IV.Carrying amount

1. Closing carrying

amount34,754,878.62

2,380,449.79 1,760,182.67 38,895,511.08

2. Opening carrying

amount37,866,269.24

1,027,666.10 1,201,595.13 40,095,530.47

(2). Temporarily idle fixed assets

□ Applicable √ N/A

(3). Fixed assets leased out under operating leases

□ Applicable √ N/A

(4). Fixed assets for which title certificates have not been issued

□ Applicable √ N/A

(5). Impairment test of fixed assets

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

Liquidation of fixed assets

□ Applicable √ N/A

22. Construction in progress

Project presentation

√ Applicable □ N/A

Unit: Yuan Currency: RMBProject Closing balance Opening balanceBuilding renovation13,103,863.94

Project materials

Total13,103,863.94

Other Notes:

□ Applicable √ N/A

Construction in progress

(1). Status of construction in progress

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Closing balance Opening balanceBook balance

Impairmentallowance

Carrying amount

Bookbalance

Impairmentallowance

CarryingamountBuildingrenovation

13,103,863.94 13,103,863.94Total 13,103,863.94 13,103,863.94

(2). Changes in significant construction-in-progress items during the period

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Itemname

Budgetedamount

OpeningbalanceIncrease duringthe period

Amounttransferredtofixedassetsduring theperiod

Otherdecreasesduringtheperiod

Closing balance

Cumulativeinvestmentinconstructionas apercentageofbudget(%)

Progressofconstruction

Accumulatedinterestcapitalization

OfwhichAmount ofinterestcapitalizedfortheperiod

Currentinterestcapitalizationrate(%)

SourceoffundsBuildi

ngrenova

tion

13,103,863.94

13,103,863.94

Total

13,103,863.94

13,103,863.94/ /

/ /

(3). Provision for impairment of construction in progress for the current period

□ Applicable √ N/A

(4). Impairment test of construction in progress

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

Construction materials

(1). Construction materials

□ Applicable √ N/A

23. Productive biological assets

(1). Productive biological assets measured at cost

□ Applicable √ N/A

(2). Impairment testing of producing biological assets measured at cost

□ Applicable √ N/A

(3). Adoption of the fair value measurement model for productive biological assets

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

24. Oil and gas assets

(1) Oil and gas assets

□ Applicable √ N/A

(2) Impairment testing of oil and gas assets

□ Applicable √ N/A

Other Notes:

None

25. Right-of-use assets

(1) Right-of-use assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItemLease of buildings

Means oftransportation

TotalI. Original carrying amount

1. Opening balance

3,060,288.15 3,832,970.27 6,893,258.42

2. Increase during the period

689,649.57 766,626.42 1,456,275.99

(1) Leased-in

908,625.63 766,626.42 1,675,252.05

(2) Effect of exchange rate

chan

es

-218,976.06 -218,976.06

3. Decrease during the period

1,048,619.28 332,268.40 1,380,887.68

(1) Disposals

1,048,619.28 332,268.40 1,380,887.68

4. Closing balance

2,701,318.44 4,267,328.29 6,968,646.73II. Accumulated depreciation

1. Opening balance

1,148,312.66 1,072,568.16 2,220,880.82

2. Increase during the period

1,117,792.92 1,050,032.47 2,167,825.39

(1)Provision expenses

1,109,254.39 1,050,032.47 2,159,286.86

(2) Effect of exchange rate

chan

gg

es

8,538.53 8,538.53

3. Decrease during the period

953,568.24 306,723.64 1,260,291.88

(1) Disposal

953,568.24 306,723.64 1,260,291.88

4. Closing balance

1,312,537.34 1,815,876.99 3,128,414.33III. Provision for impairment

1. Opening balance

2. Increase during the period

(1)Provision

3. Decrease during the period

(1)Disposal

4. Closing balance

IV.Carrying amount

1. Closing carrying amount

1,388,781.10 2,451,451.30 3,840,232.40

2. Opening carrying amount

1,911,975.49 2,760,402.11 4,672,377.60

26. Intangible assets

(1). Intangible assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Land use right Patents

Non-patented

technology

ComputerSoftware

TotalI. Original carrying amount

1. Opening balance

8,240,016.48

3,295,603.4911,535,619.97

2. Increase during

the period

232,329.31 232,329.31

(1) Acquisition

232,901.11 232,901.11

(2) Internal R&D

(3) Increase in

businesscombination

(4) Effect of

exchange ratechan

es

-571.80 -571.80

3. Decrease during

the period

420,501.75 420,501.75

(1) Disposal

420,501.75 420,501.75

4. Closing balance

8,240,016.48

3,107,431.05 11,347,447.53II. Accumulated amortization

1. Opening balance

1,977,603.83

2,131,168.60 4,108,772.43

2. Increase during

the period

164,800.32

201,973.94366,774.26

(1) Provision

164,800.32

202,337.39367,137.71

(2) Effect of

exchange ratechan

gg

es

-363.45 -363.45

3. Decrease during

the period Amount

372,575.10 372,575.10

(1) Disposal

372,575.10 372,575.10

4. Closing balance

2,142,404.15

1,960,567.44 4,102,971.59III. Provision for impairment

1. Opening balance

2. Increase during

the period

(1) Provision

3. Decrease during

the period

(1) Disposal

4. Closing balance

IV.Carrying amount

1. Closing carrying

amount

6,097,612.33

1,146,863.61 7,244,475.94

2. Opening carrying

amount

6,262,412.65

1,164,434.897,426,847.54The proportion of intangible assets formed through in-house R&D to the balance of intangible assets at theend of the period was 0

(2). Land use rights for which title certificates have not been issued

□ Applicable √ N/A

(3). Impairment testing of intangible assets

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

27. Goodwill

(1). Original carrying amount of goodwill

□ Applicable √ N/A

(2). Provision for impairment of goodwill

□ Applicable √ N/A

(3). Information about the asset group or portfolio of asset groups in which goodwill is located

□ Applicable √ N/A

Changes in the asset group or portfolio of asset groups

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

(4). Specific method of determining recoverable amount

Recoverable amount is determined as the net fair value less disposal costs.

□ Applicable √ N/A

The recoverable amount is determined by the present value of estimated future cash flows.

□ Applicable √ N/A

Reasons for the differences between the aforementioned information and the information used in theimpairment test in previous years or external information that is obviously inconsistent

□ Applicable √ N/A

Reasons for differences between the information used in the Company's impairment tests in previous yearsand the actual situation in the current year that are clearly inconsistent with each other

□ Applicable √ N/A

(5). Performance commitments and corresponding goodwill impairment

Performance commitments existed at the time of the formation of goodwill and the reporting period or theprevious period of the reporting period was within the performance commitment period.

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

28. Long-term amortized expenses

□ Applicable √ N/A

29. Deferred tax assets/deferred tax liabilities

(1). Deferred tax assets not offset

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Closing balance Opening balanceDeductibletemporarydifferences

Deferred tax

assets

Deductibletemporarydifferences

Deferred taxassetsImpairment of inventoriesand contract assets

3,000,261.88 496,879.59 4,758,372.31 1,175,996.87Provision for bad debts34,632,148.22 5,400,864.80 34,172,067.71 8,495,456.50Temporary estimates

a

y

able

22,714,306.71 3,609,868.30 8,417,815.53 2,005,783.48Projected liabilities9,958,724.77 1,684,113.93 9,238,016.80 2,257,312.81Other7,837,194.08 1,290,890.19 2,688,636.11 1,779,847.56Total78,142,635.66 12,482,616.81 59,274,908.46 15,714,397.22

(2). Deferred tax liabilities without offset

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Closing balance Opening balanceTaxabletemporarydifferences

Deferred taxliabilities

Taxabletemporarydifferences

Deferred taxliabilitiesWithholding tax onavailable-for-distributiondividends from foreignsubsidiaries (10%)

105,783,050.10 10,578,305.01 48,926,323.23 4,892,632.32Impact of right-of-useassets

3,622,303.82 601,888.20 5,266,614.36 1,316,653.59Others16,582,944.76 3,316,588.94

Total125,988,298.68 14,496,782.15 54,192,937.59 6,209,285.91

(3). Deferred tax assets or liabilities presented at net amount after offsetting

□ Applicable √ N/A

(4). Details of unrecognized deferred tax assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceDeductible loss7,336,823.065,528,691.16Provision for bad debts3,964,844.583,126.73Others1,471,221.79

Total12,772,889.435,531,817.89

(5). The deductible losses for which no deferred tax assets have been recognized will expire in the

following years

□ Applicable √ N/A

Other Notes:

√ Applicable □ N/A

Details of unrecognized deferred tax liabilities

Unit: Yuan Currency: RMBItemBalance at the end of the year

Balance at the beginning of

the

ea

r

Effect of right-of-use assets44,373.87

Total44,373.87

30. Other non-current assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Closing balance Opening balanceBook balance

Provisionforimpairment

Carryingamount

Book balance

Provisionforimpairment

CarryingamountWarrantyreceivables

35,990,599.2

1,146,648.5

34,843,950.7

17,938,200.1

589,541.2

17,348,658.8

Total

35,990,599.2

1,146,648.5

34,843,950.7

17,938,200.1

589,541.2

17,348,658.8

Other Notes: None

31. Assets with restricted ownership or right to use

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

End of period Beginning of the periodBook balance Carrying amount

Typeofrestriction

RestrictedBook balance

Carryingamount

TypeofrestrictionRestrictedCurrencyfunds

12,499,607.35 12,499,607.35Other

MarginRestricted

7,895,104.70 7,895,104.70

OthersMarginRestricted

Billsreceivable

Inventories

Fixedassets

Intangibleassets

Total 12,499,607.35 12,499,607.35 / / 7,895,104.70 7,895,104.70 / /

Other Notes: None

32. Short-term loans

(1). Classification of short-term loans

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balancePledged loans

Mortgage loans

Guarantee

Credit loans

31,249,307.82Total

31,249,307.82Note on classification of short-term borrowings:

As at December 31, 2022, the credit borrowings were from the Group's subsidiary, Acter(Thailand), which obtained a loan of RMB 6,042,660.00 from Mega Bank, with a term of December 14,2022 to June 12, 2023, and an interest rate of 3.34%; from the Group's subsidiary, Acter (Hong Kong),which obtained a loan of RMB 11,143,360.00 from Standard Chartered Bank, with a term of December5, 2022 to March 31, 2023, with a borrowing rate of 5.71%; a loan of RMB 13,929,200.00 obtainedfrom Taishin Bank by Acter (Hong Kong), a subsidiary of the Group, with a borrowing period fromNovember 25, 2022 to February 24, 2023, with a borrowing rate of 5.93%; and interest payable on theborrowings of RMB 134,087.82.

(2). Overdue short-term loans

□ Applicable √ N/A

Significant overdue short-term loans are summarized as follows:

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

33. Financial liabilities held for trading

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

34. Derivative financial liabilities

□ Applicable √ N/A

35. Notes payable

(1). Presentation of notes payable

□ Applicable √ N/A

36. Accounts payable

(1). Presentation of accounts payable

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceProject payment363,178,797.70 358,206,456.14Retention money266,678,519.63 231,347,025.54Other

366,196.58Total629,857,317.33 589,919,678.26

(2). Significant accounts payable aged over 1 year or overdue

□ Applicable √ N/A

Other notes

□ Applicable √ N/A

37. Receipts in advance

(1). Presentation of accounts receivable in advance

□ Applicable √ N/A

(2). Significant receipts in advance with an age of more than 1 year

□ Applicable √ N/A

(3). Amounts and reasons for significant changes in carrying amount during the reporting period

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

38. Contract liabilities

(1). Contract liabilities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceSettled uncompleted works73,351,891.04 74,584,070.11Total73,351,891.04 74,584,070.11

(2). Significant contract liabilities aged over 1 year

□ Applicable √ N/A

(3). Amounts and reasons for significant changes in carrying amount during the reporting period

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

39. Remuneration payable to employees

(1). Presentation of remuneration payable to employees

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Openingbalance

Increaseduring the

eriod

Decreaseduring the

p

p

eriod

Exchange rate

change

ClosingbalanceI. Short-termremuneration

39,456,513

.03

130,512,56

8.47

122,546,19

6.01

36,785.38

47,459,670

.87II. Post-employmentbenefits - definedcontribution

lan

7,784,980. 74 7,784,980. 74III. Severance benefits

IV. Other benefits duewithin one year

Total

39,456,513

.03

138,297,54

9.21

130,331,17

6.75

36,785.38

47,459,670

.87

(2). Presentation of short-term remuneration

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Openingbalance

Increaseduring the

eriod

Decreaseduring the

p

p

eriod

Exchangeratechan

e

ClosingbalanceI. Salaries, bonuses,allowances andsubsidies

39,274,134.14 118,821,168.83 110,868,746.33 36,785.38 47,263,342.02II. Employee benefitexpenses

3,945,749.79 3,945,749.79

Social insurancepremiums

3,291,802.84 3,291,802.84

Of which: Medicalinsurance premiums

2,822,875.14 2,822,875.14

Workers'remunerationinsurance

gp

remiums

186,691.33 186,691.33

Maternityinsurance

pp

remiums

282,236.37 282,236.37

IV. Housing providentfund

3,274,142.08 3,274,142.08V. Labor Union Fundsand EmployeeEducation Funds

182,378.89 1,179,704.93 1,165,754.97 196,328.85VI. Short-termcom

pp

ensated absences

VII. Short-term profit-sharing plan

Total

39,456,513.03 130,512,568.47 122,546,196.01 36,785.38 47,459,670.87

(3). Presentation of defined contribution plan

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Opening balance

Increase duringthe

pp

eriod

Decrease during

the

p

p

eriod

Closing balance

1. Basic pension insurance

7,439,902.65 7,439,902.65

2. Unemployment insurance

remiums

345,078.09 345,078.09

3. Contributions to enterprise

annuities

Total

7,784,980.74 7,784,980.74

Other Notes:

□ Applicable √ N/A

40. Taxes payable

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceValue-added tax270,840.93 1,119,487.19Consumption tax

Business tax

Enterprise income tax6,389,822.94 4,562,991.40Individual income tax655,878.76 460,166.81Urban maintenance andconstruction tax

Land use tax and property tax267,327.1588,658.49Stamp duty228,144.04 415,197.13Other168,735.21 683,578.20Total7,980,749.03 7,330,079.22

Other Notes:

None

41. Other payables

(1). Item presentation

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceInterest payable

Dividend payable

Other payables25,427,208.651,611,097.74Total25,427,208.65 1,611,097.74

Other Notes:

□ Applicable √ N/A

(2). Interest payable

Presented by category

□ Applicable √ N/A

Significant overdue interest payable:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

(3). Dividends payable

Classification

□ Applicable √ N/A

(4). Other payables

Other payables by nature

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceCurrent account22,861,444.25

Intermediary service fee1,958,733.39 1,225,440.51Provisions and deposits48,370.56 94,815.84Others558,660.45 290,841.39Total25,427,208.65 1,611,097.74

Significant other payables aged over 1 year or overdue

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

42. Liabilities held for sale

□ Applicable √ N/A

43. Non-current liabilities due within 1 year

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Closing

alance

Opening balanceLong-term loans due within 1 year

Bonds payable due within 1 year

Long-term payables due within 1 year

Lease liabilities due within 1 year1,748,003.79 1,710,381.30Total1,748,003.79 1,710,381.30

Other Notes:

None

44. Other current liabilities

Other current liabilities

□ Applicable √ N/A

Increase or decrease in short-term bonds payable:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

45. Long-term loans

(1). Classification of long-term loans

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

46. Bonds payable

(1). Bonds payable

□ Applicable √ N/A

(2). Details of bonds payable: (excluding other financial instruments such as preferred stock and

perpetual bonds classified as financial liabilities)

□ Applicable √ N/A

(3). Description of convertible corporate bonds

□ Applicable √ N/A

Accounting treatment and judgmental basis for conversion

□ Applicable √ N/A

(4). Description of other financial instruments classified as financial liabilities

Basic information on other financial instruments such as preferred stock and perpetual bonds issued at theend of the period

□ Applicable √ N/A

Statement of changes in preferred stock, perpetual bonds and other financial instruments issued andoutstanding at the end of the period

□ Applicable √ N/A

Explanation of the basis for classifying other financial instruments as financial liabilities:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

47. Lease liabilities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceLease liabilities2,150,631.55 3,151,902.66Total2,150,631.55 3,151,902.66

Other Notes: None

48. Long-term accounts payable

Item presentation

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

Long-term accounts payable

(1). Presentation of long-term payables by nature of payment

□ Applicable √ N/A

Specialized payables

(1). Specialized payables by nature of payment

□ Applicable √ N/A

49. Long-term employee remuneration payable

√ Applicable □ N/A

(1). Table of long-term employee remuneration payable

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceI. Post-employment benefits - net liabilityfor defined benefit plans

632,325.46610,379.24

II. Termination benefits

III. Other long-term benefits

Total632,325.46 610,379.24

(2). Changes in defined benefit plans

Present value of defined benefit plan obligations:

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodI. Opening balance610,379.24 612,161.00II. Defined benefit costs recognized in

rofit or loss for the

p

eriod

1. Current service cost

2. Past service costs

3. Settlement gain (loss expressed as "-")

4. Net interest

Defined benefit cost charged to othercomprehensive income

1. Actuarial gain (loss expressed as "-")

IV. Other changes21,946.22 -1,781.76

1.Consideration paid upon settlement

2.Benefits paid

3.Translation differences on foreign

currenc

statements

21,946.22 -1,781.76V. Closing balance632,325.46 610,379.24Plan assets:

□ Applicable √ N/A

Net liabilities (net assets) of defined benefit plans

□ Applicable √ N/A

Description of the content of the defined benefit plan and the risks associated with it, the impact on thecompany's future cash flows, timing and uncertainty:

□ Applicable √ N/A

Description of significant actuarial assumptions and sensitivity analysis results for defined benefit plans

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

50. Projected liabilities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Opening balance Closing balance ReasonGuarantees provided toexternal

yp

arties

Pending litigation

Product quality guarantee9,067,741.80 11,090,966.30

Provision for quality costsrelated to the possibility ofquality problems duringthe warranty period of theprojectRestructuring obligations

Loss-making contracts

endin

g

execution

170,275.00 201,881.61

Returns payable

Other

Total9,238,016.80 11,292,847.91/

Other notes, including notes on significant assumptions, estimates related to significant projected liabilities:

None

51. Deferred income

Deferred income

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

52. Other non-current liabilities

□ Applicable √ N/A

53. Share capital

√ Applicable □ N/A

Unit: Yuan Currency: RMBOpening balance

Increase/decrease of the current change (+, -)

Closing balanceIssueofnewsharesSentShares

Conversion

Others

SubtotalTotalnumber ofshares

80,000,000.00 20,000,000.00 20,000,000.00 100,000,000.00Other Notes:

Pursuant to the resolution of the 2022 annual general meeting held on April 28, 2023, the Companypaid a cash dividend of RMB 0.8125 per share (inclusive of tax) to all shareholders on the basis of the totalshare capital of 80,000,000.00 shares as at June 14, 2023, and transferred 0.25 shares to all shareholders byway of capital reserve to increase the share capital by a total of 20,000,000.00 shares with par value of RMB1 per share, increasing the share capital by RMB 20,000,000.00 in total.

54. Other equity instruments

(1). Basic information on other financial instruments such as preferred stock and perpetual bonds

issued and outstanding at the end of the period

□ Applicable √ N/A

(2). Statement of changes in preferred stock, perpetual bonds and other financial instruments issued

and outstanding at the end of the period

□ Applicable √ N/A

Changes in other equity instruments during the period, explanation of the reasons for such changes, and thebasis for related accounting treatment:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

55. Capital surplus

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Opening balance

Increase duringthe

eriod

Decrease during

the

p

p

eriod

Closing balanceCapital premium (equitypremium)

550,250,969.12

20,000,000.00 530,250,969.12Other capital surplus32,381,806.33

32,381,806.33Total582,632,775.45

20,000,000.00 562,632,775.45

Other notes, including the increase or decrease of changes during the period and the reasons for the changes:

None

56. Treasury stock

□ Applicable √ N/A

57. Other comprehensive income

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Openingbalance

Amount in the current period

Closing balanceCurrentincome taxincurredbefore

Less:

Transfer toprofit orloss fortheperiodfrompriorperiodto othercomprehensiveincome

Less:

Priorperiodchargeto othercomprehensiveincomeCurrentperiodtransfertoretainedearnings

Less:

Income taxexpense

Attributableto parentcompanyafter tax

Attributabletominorityshareholdersaftertax

I.Othercomprehensiveincome notreclassifiable toprofit or loss

-151,009.79 -151,009.79Of which:

Remeasurementof changes indefined benefitplans

-151,009.79 -151,009.79

Othercomprehensiveincome nottransferable toprofit or lossunder the equitymethod

Changes in fairvalue ofinvestments inother equityinstruments

Changes in fairvalue of theenterprise's owncredit risk

II.Othercomprehensiveincome to bereclassified toprofit or loss

3,178,870.67 290,286.73 290,286.73 3,469,157.40Of which:

Othercomprehensiveincomeavailable fortransfer toprofit or lossunder the equitymethod

Changes in fairvalue of otherdebtinvestments

Amountsreclassifiedfrom financialassets to othercomprehensiveincome

Provision forcreditimpairment ofother debtinvestments

Cash flowhedge reserve

Difference intranslation offoreigncurrencyfinancialstatements

3,178,870.67 290,286.73 290,286.73 3,469,157.40Othercomprehensiveincome

3,027,860.88 290,286.73 290,286.73 3,318,147.61

Other notes, including adjustments to the effective portion of cash flow hedge gains and losses transferredto the initial recognized amount of the hedged item:

None

58. Earmarked reserves

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Opening balance

Increase duringthe

eriod

Decrease during

the

p

p

eriod

Closing balanceSafety productionfee

45,372,652.93

793,803.41 44,578,849.52Total45,372,652.93

793,803.41 44,578,849.52Other notes, including changes during the period and the reasons for such changes:

None

59. Surplus reserves

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Opening

alance

Increase during

the

b

p

eriod

Decrease during

the

eriod

Closing balanceLegal surplus reserves28,443,197.81 11,058,103.57

39,501,301.38Discretionary surplusreserves

Reserve Fund

EnterpriseDevelo

pp

ment Fund

Others

Total28,443,197.81 11,058,103.57

39,501,301.38Explanation of surplus reserves, including the increase or decrease during the period and the reasons for thechange:

None

60. Undistributed profits

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Current period Previous periodUndistributed profit at the end of the previous

pp

eriod before ad

j

ustment

269,871,786.54 185,764,628.31Total undistributed profits at the beginning of theperiod before adjustment (increase +, decrease -)

-177,717.08

Undistributed profit at the beginning of the periodafter ad

ustment

269,694,069.46 185,764,628.31Add: Net profit attributable to owners of the parentcompany for the period

138,590,474.42 122,867,982.79Less: Withdrawal of legal surplus reserves11,058,103.57 8,760,824.56Withdrawal of discretionary surplus reserves

Provision for general risk

Dividends payable on ordinary shares65,000,000.00 30,000,000.00Dividends on ordinary shares transferred to capital

Undistributed profit at the end of the period332,226,440.31 269,871,786.54Adjustment of the breakdown of undistributed profit at the beginning of the period:

1. Due to the retrospective adjustment of the ASBE and its related new regulations, the impact on the

undistributed profit at the beginning of the period was RMB 0.

2. Due to the change of accounting policy, it affected the undistributed profit at the beginning of the period

by RMB 177,717.08.

3. Due to the correction of significant accounting errors, the impact on the undistributed profit at the

beginning of the period was RMB 0.

4. Due to the change of the scope of consolidation caused by the same control, the impact on the undistributed

profit at the beginning of the period is RMB 0.

5. Other adjustments affecting the undistributed profit at the beginning of the period by RMB 0.

61. Operating revenues and operating costs

(1). Operating revenue and operating costs

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Amount in the current period Amount in the prior periodRevenue Cost Revenue CostMain businesses2,006,059,659.501,738,726,934.75 1,625,862,604.38 1,376,414,118.45Other

usinesses

2,865,336.18 114,306.72 2,032,516.11 114,306.72Total2,008,924,995.68 1,738,841,241.47 1,627,895,120.49 1,376,528,425.17

(2). Breakdown information of operating revenues and operating costs

√ Applicable □ N/A

Unit: Yuan Currency: RMBContract classification

The Group TotalOperatingrevenue

Operating costs

Operatingrevenue

Operating costsCommodity TypeClean room engineering 1,718,207,574.41 1,497,267,444.29 1,718,207,574.41 1,497,267,444.29Other mechanical and electricalinstallation works

276,230,223.29 232,095,004.42 276,230,223.29 232,095,004.42Equipment sales 11,621,861.80 9,364,486.04 11,621,861.80 9,364,486.04Other business 2,865,336.18 114,306.72 2,865,336.18 114,306.72By region of operationDomestic 1,573,087,402.75 1,388,054,061.99 1,573,087,402.75 1,388,054,061.99Overseas 435,837,592.93 350,787,179.48 435,837,592.93 350,787,179.48Type of market or clientIC Semiconductor Industry 1,345,947,194.70 1,203,919,098.11 1,345,947,194.70 1,203,919,098.11Precision manufacturingindustry

480,697,188.05 392,693,935.54 480,697,188.05 392,693,935.54Photoelectricity industry 101,391,692.37 80,642,910.19 101,391,692.37 80,642,910.19Other industries 78,023,584.38 61,470,990.91 78,023,584.38 61,470,990.91Other business 2,865,336.18 114,306.72 2,865,336.18 114,306.72Contract typeSale of goods 11,621,861.80 9,370,142.00 11,621,861.80 9,370,142.00Construction contracts 1,994,437,797.70 1,729,356,792.75 1,994,437,797.70 1,729,356,792.75Other business 2,865,336.18 114,306.72 2,865,336.18 114,306.72Classification by timing ofmerchandise transfers

Revenue recognized at a certainpoint in time

11,621,861.80 9,370,142.00 11,621,861.80 9,370,142.00

Revenue recognized at a certainpoint in time

1,997,303,133.88 1,729,471,099.47 1,997,303,133.88 1,729,471,099.47By contract termBy sales channelTotal 2,008,924,995.68 1,738,841,241.47 2,008,924,995.68 1,738,841,241.47Other notes

□ Applicable √ N/A

(3). Explanation of performance obligations

□ Applicable √ N/A

(4). Description of apportionment to remaining performance obligations

□ Applicable √ N/A

(5). Significant contract changes or significant transaction price adjustments

□ Applicable √ N/A

Other Notes:

None

62. Taxes and surcharges

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodConsumption tax

Business tax

City maintenance andconstruction tax

1,644,807.62 1,296,253.31Education surcharge1,199,761.07 933,379.33Property tax659,319.31 581,245.38Land use tax26,056.03 25,967.04Stamp duty816,261.14 915,988.41Other24,334.01 47,217.65Total4,370,539.18 3,800,051.12Other Notes:

None

63. Selling expenses

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodEmployee remuneration6,176,464.47 5,431,574.82Business entertainment expenses784,591.27303,643.60

Depreciation and amortization77,044.96 87,886.96Other916,180.97478,789.04Total7,954,281.67 6,301,894.42

Other Notes: None

64. Administrative expenses

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Amount in the current

eriod

Amount in the prior

p

p

eriodLabor cost36,457,080.17 32,473,068.89Depreciation and amortization5,913,688.95 5,759,046.88Professional service fees4,964,367.06 5,273,900.72Travel expenses2,753,337.272,147,532.00Socialization expenses1,567,248.122,326,758.86Rental expenses903,690.44 645,800.74Office expenses362,790.44 332,943.04Share-based payment

4,697,878.72Others6,270,807.40 6,490,255.13Total59,193,009.85 60,147,184.98

Other Notes:

None

65. Research and development expenses

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Amount in the current

eriod

Amount in the prior

p

p

eriodLabor cost14,071,064.42 10,198,979.02Material costs6,423,694.04 7,788,398.97Rental expenses290,827.94 225,077.63Depreciation and amortization153,397.80 119,197.95Other4,182,225.42 770,005.30Total25,121,209.62 19,101,658.87

Other Notes:

None

66. Finance costs

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Amount in the current

eriod

Amount in the prior

p

p

eriodInterest expenses1,154,128.08 3,508,752.46Interest expense on lease liabilities206,792.88 184,254.10Less: Interest income6,309,355.80 1,787,232.96Add: Exchange loss (Less: gain)-1,151,419.83 3,878,779.32Handling fee569,525.35 316,625.03Total-5,530,329.32 6,101,177.95

Other Notes:

None

67. Other gains

√ Applicable □ N/A

Unit: Yuan Currency: RMBClassification by nature Amount in the current period Amount in the prior periodGovernment grants related toincome

3,731,552.00 3,524,827.14Total3,731,552.00 3,524,827.14

Other Notes:

None

68. Investment income

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodIncome from long-term equityinvestments accounted for by the equitymethod

-334,383.24 -87,072.51Investment income from disposal oflon

-term e

g

q

uit

investments

Investment income during the holding

yp

eriod of financial assets for tradin

g

Dividend income from other equityinstruments durin

the holdin

g

eriod

Interest income earned on debtinvestments durin

pg

the holdin

g

eriod

Interest income earned on other debtinvestments durin

pg

the holdin

g

eriod

Investment income from disposal offinancial assets held for tradin

pg

Investment income from disposal ofother e

gq

uit

y

instruments

Investment income from disposal ofdebt investments

Investment income from disposal ofother debt investments

Gain on debt restructuring

Gain on financial management1,996,177.68 -12,256.43

Total1,661,794.44 -99,328.94

Other Notes:

None

69. Net open hedge gains

□ Applicable √ N/A

70. Gain on fair value changes

√ Applicable □ N/A

Unit: Yuan Currency: RMBSources of gains from changes in fair

value

Amount in the current period Amount in the prior periodFinancial assets held for trading

Of which: Gains from changes in fairvalue of derivative financialinstruments

Financial liabilities for trading

Investment properties at fair value

Financial assets at fair value through

rofit or loss

-119,888.89 119,888.89Investment banking

-14,471.75Total-119,888.89 105,417.14

Other Notes: None

71. Credit impairment loss

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodBad debt loss on bills receivable1,091,132.83

Bad debt loss on accounts receivable2,711,649.69 5,971,203.20Bad debt loss on other receivables57,851.33 -165,726.35Impairment loss on debt investments

Impairment loss on other debtinvestments

Bad debt loss on long-term receivables

Impairment losses related to financial

pg

uarantees

Total3,860,633.85 5,805,476.85

Other Notes:

None

72. Impairment loss on assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodI. Impairment losses on contract assets-1,705,623.60 -4,974,523.57II.Impairment loss on inventories andcontract

erformance cost

III.Impairment loss on long-terme

pq

uit

y

investments

IV.Impairment loss on investment

ro

p

erties

V.Impairment loss on fixed assets

VI.Impairment loss on constructionmaterials

VII.Impairment loss on construction in

ro

g

ress

VIII.Impairment loss on productive

iolo

g

ical assets

IX.Impairment loss on oil and gasassets

X.Impairment loss on intangible assets

XI.Impairment loss on goodwill

XII.Others

Impairment losses on other non-currentassets

557,144.69 -1,004,046.84Total-1,148,478.91 -5,978,570.41

Other Notes:

None

73. Gain on disposal of assets

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodGain on disposal of assets116,542.37 246,990.20Total116,542.37 246,990.20

Other Notes:

None

74. Non-operating revenue

Non-operating revenue

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Amount in the current

period

Amount in the prior

period

Amounts included innon-recurring gains and

losses for the

eriodTotal gain on disposalof non-current assets

Of which: Gain ondisposal of fixedassets

Gain on disposal ofintan

ible assets

Gain on exchange ofnon-monetar

gy

assets

Acceptance ofdonations

Government grants

Other14,361.33 75,601.66 14,361.33Total14,361.33 75,601.66 14,361.33

Other Notes:

□ Applicable √ N/A

75. Non-operating Expenses

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Amount in the current

period

Amount in the prior

period

Amounts included innon-recurring gains andlosses for the

yp

eriodTotal loss ondisposal of non-current assets

63,978.14 9,411.87 63,978.14Of which: Loss ondisposal of fixedassets

63,978.14 9,411.87 63,978.14Loss on disposal ofintan

pg

ible assets

Loss on exchange ofnon-monetar

gy

assets

Foreign donations194,000.00 242,000.00 194,000.00Fines447,813.63 11,845.89 447,813.63Late Payment67,596.9212,705.5567,596.92Worker'sremuneration

458,500.00

Others116,559.94 190,570.16 116,559.94Total889,948.63 925,033.47 889,948.63

Other Notes:

None

76. Income tax expense

(1). Schedule of income tax expense

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodCurrent income tax expense28,873,073.81 36,304,685.61Deferred tax expense11,840,385.09-307,429.70

Total40,713,458.90 35,997,255.91

(2). Process of adjusting accounting profit and income tax expense

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current periodTotal profit180,777,300.89Income tax expense at statutory/applicable rates27,116,595.13Effect of different tax rates applied bysubsidiaries

3,994,328.62Effect of adjustments to prior periods' income tax

Effect of non-taxable income

Effect of non-deductible costs, expenses andlosses

3,533,749.83Effect of deductible losses on utilization ofunreco

nized deferred tax assets in

g

p

rior

eriod

Effect of deductible temporary differences ordeductible losses for which no deferred tax assetswere reco

pg

nized in the current

p

eriod

3,651,581.09Effect of tax rate differences on recognition ofdeferred tax assets and liabilities

4,716,918.45Effect of additional deduction for research anddevelo

ment ex

p

enses

-3,357,544.72Withholding tax on available-for-distributiondividends of the Grou

's overseas subsidiaries

1,057,830.50Income tax expense40,713,458.90

Other Notes:

□ Applicable √ N/A

77. Other comprehensive income

□ Applicable √ N/A

78. Cash flow statement items

(1). Cash related to operating activities

Other cash received relating to operating activities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodInterest income on deposits6,309,355.801,787,232.96Recovery of currency funds withrestricted use

5,087,379.03 22,236,928.63Government subsidies3,731,552.00 3,524,827.14Rental income3,058,218.60 2,156,882.40Guarantee and deposit83,586.99 4,664,854.82Others290,371.68 65,941.17

Total18,560,464.10 34,436,667.12

Description of other cash received related to operating activities:

NoneOther cash paid relating to operating activities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodTransportation expenses, travelexpenses, rental expenses, utilities,labor ex

enses, etc.

p

aid

15,159,502.69 17,098,345.14Transfers to currency funds withrestricted use

9,691,881.68 16,902,922.17Material consumption7,262,832.36 7,928,025.62Intermediary expenses5,801,003.15 5,875,804.33Late payment, fine, remuneration515,410.55 483,051.44Others5,536,582.02 1,355,833.11Total43,967,212.45 49,643,981.81

Description of other cash paid related to operating activities:

None

(2). Cash related to investing activities

Significant cash received related to investing activities

□ Applicable √ N/A

Significant cash paid in connection with investing activities

□ Applicable √ N/A

Other cash received related to investing activities

□ Applicable √ N/A

Other cash paid in relation to investment activities

□ Applicable √ N/A

(3). Cash related to financing activities

Other cash received relating to financing activities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodLoan from Sheng Huei International22,605,625.00

Total22,605,625.00

Description of other cash received related to financing activities:

None

Other cash paid relating to financing activities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in the current period Amount in the prior periodPayment of lease rent for right-of-useassets

2,180,273.09 2,874,865.02Payment of listing fees

19,997,010.06Total2,180,273.09 22,871,875.08

Description of other cash paid related to financing activities:

NoneChanges in liabilities arising from financing activities

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem

Openingbalance

Increase during the period

Decrease during the

eriod

ClosingbalanceCashmovements

Non-cashmovements

Cashmovements

Non-cashmovementsMinorityinterests

4,040,494.34

2,114,535.

1,552,518.98 7,707,548.39Short-termloans

31,249,307.8

6,388,838

.45

198,942.18 37,837,088.45

Leaseliabilities

Otherpayables -loans fromrelatedpartiesoutside theconsolidation

22,605,62

5.00

255,819.25

22,861,444.2

Interest

pp

a

y

able

1,094,012.34 1,094,012.34Otherpayables -Dividenddistribution

65,000,000.00 65,000,000.00Leaseliabilities

4,862,283.96 1,216,624.47 2,180,273.09 3,898,635.34Total40,152,086.12

31,108,99

8.52

69,317,917.22 106,111,373.88

34,467,627.9

(4). Notes to the presentation of cash flows on a net basis

□ Applicable √ N/A

(5). Significant activities and financial effects that do not involve current cash receipts and

disbursements but affect the enterprise's financial position or may affect the enterprise's cashflows in the future

□ Applicable √ N/A

79. Supplementary information on cash flow statement

(1). Supplementary information on cash flow statement

√ Applicable □ N/A

Unit: Yuan Currency: RMBSupplementary information Amount in the current period Amoun in the prior period

1. Reconciliation of net profit to cash flows from operating activities:

Net profit140,063,841.99 123,019,039.36

Add: Provision for impairment of assets-1,148,478.91 -5,978,570.41

Credit impairment loss3,860,633.85 5,805,476.85

Accumulated depreciation of investmentproperties

114,306.72 114,306.72Depreciation of fixed assets, depletion ofoil and gas assets, depreciation ofbiological assets

3,830,558.72 3,330,083.92Amortization of right-of-use assets2,159,286.86 2,330,203.36Amortization of intangible assets367,137.71 393,598.63Amortization of long-term amortizedexpenses

Loss on disposal of property, plant andequipment, intangible assets and otherlong-lived assets (Gain is recognized by "-" sign)

-116,542.37

-246,990.20Loss on retirement of fixed assets (Gain isrecognized by "-" sign)

63,978.14 9,411.87Loss on change in fair value (Gain isrecognized by "-" sign)

119,888.89 -105,417.14Finance costs (Gain is recognized by "-"si

n)

209,501.12 7,346,819.64Loss on investment (Gain is recognized by"-" sign)

-1,661,794.44 99,328.94Decrease in deferred tax assets (Increase isrecognized by " - " sign)

3,231,780.41 -1,196,736.66Increase in deferred tax liabilities(Decrease is recognized by " - " sign)

8,287,496.24 936,591.25Decrease in inventories (Increase isrecognized by " - " sign)

66,824.45 5,099,555.63Decrease in operating receivables(Increase is recognized by " - " sign)

-75,532,714.83 -95,644,227.73

Increase in operating payables (Decreaseis recognized by " - " sign)

50,401,030.09 109,961,371.05

Increase in production safety expenses-793,803.41 -1,359,134.55

Share-based payment7,174,755.27

Other

Net cash flows from operating activities133,522,931.23 161,089,465.80

2. Significant investing and financing activities not involving cash receipts and payments:

Conversion of debt to capital

Convertible corporate bonds due withinone yea

gr

Finance lease to fixed assets

3. Net change in cash and cash equivalents:

Closing balance of cash709,996,723.03 542,340,098.29Less: Opening balance of cash542,340,098.29 141,950,027.30

Add: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents167,656,624.74 400,390,070.99

(2). Net cash paid for acquisition of subsidiaries during the period

□ Applicable √ N/A

(3). Net cash received from disposal of subsidiaries during the period

□ Applicable √ N/A

(4). Composition of cash and cash equivalents

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Closing balance Opening balanceI. Cash709,996,723.03 542,340,098.29Of which: Cash on hand1,054,977.35 2,510,187.35Bank deposits readily available for

a

y

ment

708,941,745.68 539,829,910.94Other currency funds available for

a

y

ment

Amounts on deposit with central

anks available for

p

a

ment

Due from banks

Call loan to banks

II. Cash equivalents

Of which: Investments in bonds duewithin three months

III.Cash and cash equivalents at theend of the

yp

eriod

709,996,723.03 542,340,098.29Of which: Restricted cash and cashequivalents used by the parentcompany or subsidiaries within the

pg

rou

p

12,499,607.35 7,895,104.70

(5). Cash and cash equivalents with restricted scope of use but still presented as cash and cash

equivalents

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount for the periodReasonCurrency funds12,499,607.35

The Group's other monetary fundsrepresent security deposits, which aremainly deposited for the purpose ofthe Group's application to banks forthe issuance of letters of guarantee.

Total12,499,607.35/

(6). Monetary funds not classified as cash and cash equivalents

□App

licable √ N/AOther Notes:

□Applicable √ N/A

80.Notes to the Statement of Changes in Owners' Equity

Items such as the name of the "Other" item and the amount of adjustments made to the closing balance ofthe previous year are explained:

□Applicable √ N/A

81.Monetary items in foreign currency

(1). Monetary items in foreign currencies

√Applicable □ N/A

Unit: YuanItem

Closing balance inforei

n currenc

y

Exchange rate

Closing balance inRMBCurrency Funds- -Of which: Vietnamese Dong133,212,465,684.93 0.000292 38,898,039.98US Dollar3,748,545.73 7.082700 26,549,824.82Indonesian Rupiah8,743,199,002.17 0.000461 4,030,614.74Thai Baht76,517,131.11 0.207361 15,866,668.82Singapore Dollar203,132.53 5.377200 1,092,284.24Malaysian Ringgit2,481,240.08 1.541545 3,824,943.24Accounts Receivable- -Of which: Vietnamese Dong65,794,772,773.97 0.00029219,212,073.65Thai Baht15,281,627.16 0.207361 3,168,813.49Indonesian Rupiah22,101,919,045.55 0.000461 10,188,984.68US Dollar86,277.44 7.082700 611,077.22RM4,624,048.87 1.541545 7,128,179.42Other Receivables- -Of which: Vietnamese Dong1,575,591,873.25 0.000292 460,072.83Thai Baht1,569,680.05 0.207361325,490.42Indonesian Rupiah395,075,731.69 0.000461 182,129.91Malaysian Ringgit43,250.01 1.541545 66,671.83Accounts Payable

Of which: US Dollar2,620,213.69 7.082700 18,558,187.52

Vietnamese Dong109,890,106,665.00

0.000292

32,087,911.15Thai Baht43,079,267.95

0.207361

8,932,960.08Indonesian Rupiah6,562,729,319.00 0.000461 3,025,418.22Malaysian Ringgit125,035.53 1.541545 192,747.90Other payables- -

Of which: Vietnamese Dong1,662,008,804.00 0.000292 485,306.57US Dollar2,520,904.35 7.082700 17,854,809.24Singapore Dollar13,065.05 5.377200 70,253.39Malaysian Ringgit3,270,210.72 1.541545 5,041,176.98Thai Baht170,399.98 0.207361 35,334.31Indonesian Rupiah3,979,000.00 0.000461 1,834.32

Other Notes:

None

(2). Description of overseas operating entities, including, for significant overseas operating entities,

disclosure of the principal place of business outside the country, the local currency of accountand the basis of selection, and disclosure of the reasons for changes in the local currency ofaccount

√ Applicable □ N/A

As at December 31, 2023, the Group's overseas operating entities:

The Group and its domestic subsidiaries maintain their accounts in Chinese Yuan (RMB); ActerInternational Limited is accounted for in United States dollars; Acter Technology Singapore Pte., Ltdis denominated in Singapore dollars; PT. Acter Technology Indonesia and PT Acter IntegrationTechnology Indonesia (the "Indonesian Joint Venture") are denominated in Indonesian Rupiah; ActerTechnology Malaysia Sdn. Bhd is denominated in Malaysian Ringgit; Sheng Huei EngineeringTechnology Company Limited is denominated in Vietnamese Dong; and Acter Technology Co., Ltd.maintains its accounts in Thai Baht. The Group and its subsidiaries selected the local currency ofaccounts on the basis of the currencies in which the major business receipts and expenditures aredenominated and settled. Some subsidiaries of the Group have adopted currencies other than theCompany's local currency as the local currency, and the foreign currency financial statements of thesesubsidiaries have been translated in accordance with "Section V. 9. Translation of Foreign CurrencyOperations and Foreign Currency Statements" of this section in the preparation of these financialstatements.

Name of overseasoperating entities

Principal placeof business

Currency ofaccounts

Basis of selection of local currencyPT.Acter TechnologyIndonesia

Indonesia

IndonesianRupiah

Businesses are mainly denominated

and settled in this currency.PT Acter IntegrationTechnology Indonesia

Indonesia

IndonesianRupiah

Businesses are mainly denominated

and settled in this currency.

Sheng Huei EngineeringTechnology CompanyLimited

Vietnam

Vietnamesedong

Businesses are mainly denominatedand settled in this currency.Acter Technology Co.,Ltd Thailand Thai Baht

Businesses are mainly denominatedand settled in this currency.Acter InternationalLimited

Hong Kong US Dollar

Businesses are mainly denominatedand settled in this currency.Acter Technology MalaysiaSdn.Bhd.

Malaysia

MalaysianRinggit

Businesses are mainly denominatedand settled in this currency.

82. Leasing

(1) As lessee

√ Applicable □ N/A

Variable lease payments not included in the measurement of lease liabilities

□ Applicable √ N/A

Lease expenses for short-term leases or low-value assets with simplified treatment

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item AmountShort-term lease 6,490,670.16Sale and leaseback transactions and basis of judgment

□ Applicable √ N/A

Total cash outflows related to leasing 8,670,943.25 (Unit: Yuan Currency: RMB)

(2) As lessor

Operating leases as lessor

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Lease income

Of which: Income related to variablelease payments not included in lease

receiptsLeasing of buildings 2,865,336.18Total 2,865,336.18Finance lease as lessor

□ Applicable √ N/A

Reconciliation of undiscounted lease receipts to net investment in leases

□ Applicable √ N/A

Undiscounted lease receipts for the next five years

□ Applicable √ N/A

(3) Recognition of gain or loss on sales under finance leases as a manufacturer or distributor

□ Applicable √ N/A

Other NotesNone

83. Others

□ Applicable √ N/A

VIII. Research and development expenditures

(1). Presented by nature of expenses

√ Applicable □ N/A

Unit: Yuan Currency: RMBItem Amount in current period Amount in prior periodLabor cost 14,071,064.42 10,198,979.02Rental expenses 290,827.94 225,077.63Depreciation and amortization 153,397.80 119,197.95Other 10,605,919.46 8,558,404.27Total 25,121,209.62 19,101,658.87Of which: Expensed R&D expenditures 25,121,209.62 19,101,658.87Capitalized R&D expendituresOther Notes:

None

(2). Development expenditures on R&D projects eligible for capitalization

□ Applicable √ N/A

Significant capitalized R&D projects

□ Applicable √ N/A

Provision for impairment of development expenditure

□ Applicable √ N/A

Other NotesNone

(3). Significant outsourced research and development projects

□ Applicable √ N/A

IX. Changes in the scope of consolidation

1. Business combination not under the same control

□ Applicable √ N/A

2. Business combination under the same control

□ Applicable √ N/A

3. Reverse buyback

□ Applicable √ N/A

4. Disposal of subsidiaries

Whether there is any transaction or matter of losing control of subsidiaries during the period

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Name ofsubsidiary

Point ofloss ofcontrol

Disposalprice atthe pointof loss of

control

Disposal

ratio atpoint ofloss ofcontrol(%)

Disposa

lmethodat thepoint ofloss ofcontrol

Basis forjudging thepoint of loss ofcontrol

Differencebetween thedisposal priceand the share ofnet assets of thesubsidiary at thelevel of theconsolidatedfinancialstatementscorresponding tothe disposal ofthe investment

Proportionof remainingequity atdate of lossof control(%)

Carryingamount ofthe remainingequityinterest at thedate of lossof control atthe level oftheconsolidated

financialstatements

Fair value of

theremaining

equityinterest at the

date of lossof control atthe level of

theconsolidated

financialstatements

Gains or losses

arising from

theremeasurement

of theremainingequity at fair

value

Method ofdetermining the

fair value ofthe remainingequity interestat the level of

the

consolidated

financial

statements atthe date of lossof control and

key

assumptions

Amount of

othercomprehensi

ve incomerelated to

equityinvestments

in atomiccompaniestransferred to

investmentprofit or loss

or retained

earningsJiang SuDian ZeConstructi

onEngineering Co.,Ltd.

November

14, 2023

0 100

Cancell

ation

Notification ofcancellation by

theAdministrative

ApprovalAuthority

0 0 0 0 -300,000N/A

Other Notes:

□ Applicable √ N/A

Disposal of investments in subsidiaries through multiple transactions and loss of control during the period?

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

5. Changes in the scope of consolidation due to other reasons

Description of changes in the scope of consolidation due to other reasons (e.g. establishment of new subsidiaries, liquidation of subsidiaries, etc.) and the relatedcircumstances:

√ Applicable □ N/A

In 2023, the Company and PT Candra Bangun Persada jointly established PT Acter Integration Technology Indonesia ("Indonesia Joint Venture"), in which theCompany holds 67.00% of the shares, which is included in the scope of consolidation from the date of establishment. The Company holds 67.00% of the shares of PT ActerIntegration Technology Indonesia.

6. Others

□ Applicable √ N/A

X. Interests in other entities

1. Interests in subsidiaries

(1). Composition of the enterprise group

√ Applicable □ N/A

Unit: Yuan Currency: RMBName of Subsidiary

Principalplace ofbusiness

Registeredcapital

Placeofregistration

Nature ofbusiness

Shareholdingratio

%

)

Acquisition methodDirect

IndirectActer EngineeringTechnology (Shenzhen)Co., Ltd.

Shenzhen35,296,744.20

Shenzhen

Mechanical andElectricalEngineering

100.00

Businesscombination under thesamecontrolShenzhen DingmaoTrading Co., Ltd.

Shenzhen5,000,000.00

Shenzhen

Trade

100.00

EstablishmentActer InternationalLimited

HongKong,China

22,600,257.00

HongKong,China

Investment

100.00

Businesscombination under thesamecontrolActer TechnologySingapore Pte.,Ltd.

Singapore17,263,062.56

Singapore

Investment

100.00

Businesscombination under thesamecontrolPT. Acter TechnologyIndonesia

Indonesia5,277,279.17

Indonesia

Mechanical andElectricalEngineering

100.00

Businesscombination under thesamecontrolActer TechnologyMalaysia Sdn. Bhd.

Malaysia4,767,037.26

Malaysia

Mechanical andElectricalEngineering

100.00

Businesscombination under thesamecontrolSheng Huei EngineeringTechnology CompanyLimited

Vietnam24,074,949.49

Vietnam

Mechanical andElectricalEngineering

100.00

Businesscombination under thesamecontrolActer Technology Co.,Ltd.

Thailand6,519,000.00

Thailand

Mechanical andElectricalEngineering

88.38

Businesscombination not underthe samecontrolPT ACTERINTEGRATIONTECHNOLOGYINDONESIA

Indonesia6,022,059.87

Indonesia

Mechanical andElectricalEngineering

67.00

EstablishmentA statement that the percentage of shareholding in a subsidiary is different from the percentage of votingrights:

None

Basis for holding half or less of the voting rights but still controlling the investee, and holding more thanhalf of the voting rights but not controlling the investee:

NoneFor significant structured subjects included in the scope of consolidation, the basis of control:

None

Basis for determining whether the company is an agent or principal:

NoneOther Notes:

None

(2). Significant non-wholly owned subsidiaries

□ Applicable √ N/A

(3). Key financial information of significant non-wholly owned subsidiaries

□ Applicable √ N/A

(4). Significant restrictions on the use of enterprise group assets and settlement of enterprise group

liabilities

□ Applicable √ N/A

(5). Financial or other support provided to structured subjects included in the scope of the

consolidated financial statements

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiary

is still controlled

□ Applicable √ N/A

3. Interests in joint ventures or associates

□ Applicable √ N/A

4. Significant joint operations

□ Applicable √ N/A

5. Interests in structured entities not included in the scope of the consolidated financial statements

Description of structured entities not included in the scope of the consolidated financial statements:

□ Applicable √ N/A

6. Others

□ Applicable √ N/A

XI. Government grants

1. Government grants recognized at the end of the reporting period based on receivable amounts

□ Applicable √ N/A

Reasons for not receiving the estimated amount of government grants at the expected point in time

□ Applicable √ N/A

2. Liability items related to government grants

□ Applicable √ N/A

3. Government grants recognized as current profit or loss

√ Applicable □ N/A

Unit: Yuan Currency: RMBT

e Amount in the current

yp

p

eriod Amount in the

rior

p

eriodRevenue-related3,731,552.00 3,524,827.14Total3,731,552.00 3,524,827.14Other Notes:

Category

Amount inthe currentyear

Presentationitems

Amountrecognized inprofit or loss

Revenue-related/asset-relatedListing incentives 3,500,000.00 Other gains 3,500,000.00 Revenue-relatedSubsidies for stabilizing jobs 127,432.24 Other gains 127,432.24 Revenue-relatedIncentive for enterprise researchand development expenses

44,790.00 Other gains 44,790.00 Revenue-relatedRefund of withholdingtax/personal tax refund

37,829.76 Other gains 37,829.76 Revenue-relatedSubsidy for Job Expansion 21,500.00 Other gains 21,500.00 Revenue-relatedTotal 3,731,552.00

3,731,552.00

XII. Risks Related to Financial Instruments

1. Risks of financial instruments

√ Applicable □ N/A

The Group's major financial instruments include bills receivable, short-term loans, receivables andpayables, etc. For details of each financial instrument, please refer to the relevant item in Note 6. The risksassociated with these financial instruments and the risk management policies adopted by the Group tominimize these risks are described below. The Group's management manages and monitors these exposuresto ensure that the above risks are controlled within limits.

1. Risk management objectives and policies

The Group engages in risk management with the objective of striking an appropriate balance betweenrisk and return, minimizing the negative impact of risks on the Group's operating results and maximizing theinterests of shareholders and other equity investors. Based on this risk management objective, the basicstrategy of the Group's risk management is to identify and analyze the various risks faced by the Group, toestablish an appropriate risk tolerance threshold and to manage the risks, and to monitor the various risks ina timely and reliable manner in order to control the risks within a limited scope.

(1) Market risk

1) Exchange rate risk

The Group's exposure to exchange rate risk is mainly related to U.S. Dollars, Vietnamese Dong, ThaiBaht, and Indonesian Rupiah. Except for several subsidiaries of the Group that make purchases and sales inU.S. Dollars, the Group's other major business activities are denominated in RMB. As at December 31, 2023,the Group's assets and liabilities were denominated in RMB, except for the U.S. dollars, Vietnamese dong,Thai Baht and Indonesian Rupiah in respect of the assets and liabilities described in the table below. Theexchange rate risk arising from these assets and liabilities in U.S. Dollars, Vietnamese dong, Thai Baht andIndonesian Rupiah balances may have an impact on the Group's results of operations.

ItemsClosing balanceCurrency Funds - U.S. Dollars3,748,545.73Currency Funds - Indonesian Rupiah8,743,199,002.17Currency Funds - Thai Baht76,517,131.11Currency Funds - Singapore Dollar203,132.53Currency Funds - Malaysian Ringgit2,481,240.08Accounts Receivable - Vietnamese Dong65,794,772,773.97Accounts Receivable - Thai Baht15,281,627.16Accounts Receivable - Indonesian Rupiah22,101,919,045.55Accounts Receivable - U.S. Dollars86,277.44Accounts Receivable - Malaysian Ringgit4,624,048.87Other Payables - Vietnamese Dong1,662,008,804.00Other Payables - U.S. Dollars2,520,904.35Other Payables - Singapore Dollars13,065.05Other Payables - Malaysian Ringgit3,270,210.72Other Payables - Thai Baht170,399.98Other Payables - Indonesian Rupiah3,979,000.00Accounts Payable - U.S. Dollars2,620,213.69Accounts Payable - Vietnamese Dong109,890,106,665.00Accounts Payable - Thai Baht43,079,267.95Accounts Payable - Indonesian Rupiah6,562,729,319.00Accounts Payable - Malaysian Ringgit125,035.53Other Receivables - Vietnamese Dong1,575,591,873.25Other Receivables - Thai Baht1,569,680.05Other Receivables - Indonesian Rupiah395,075,731.69Other Receivables - Malaysian Ringgit43,250.01

2) Interest Rate Risk

The Group's interest rate risk arises from interest-bearing debts such as bank borrowings and bondspayable. Financial liabilities with fixed interest rates expose the Group to fair value interest rate risk. TheGroup determines the relative proportion of fixed interest rates based on the prevailing market conditions.The Group's risk of changes in fair value of financial instruments due to changes in interest rates is mainlyrelated to fixed-rate bank borrowings. For fixed rate borrowings, the Group's objective is to maintain itsfloating interest rate. The Group is not highly sensitive to interest rate fluctuations and has no significantinterest rate risk.

(2) Credit risk

Credit risk is the risk that one party to a financial instrument will fail to fulfill its obligations, resultingin a financial loss to the other party. The Group's credit risk mainly arises from currency funds, receivablesand contract assets. The management continuously monitors these credit risk exposures.

The Group's monetary funds other than cash are mainly deposited with creditworthy financialinstitutions, which management believes do not have significant credit risk and are not expected to incurlosses to the Group as a result of default by the counterparties.

The Group's maximum exposure to credit risk is the carrying amount of each financial asset in thebalance sheet. The Group has not provided any other guarantees that may expose the Group to credit risk.

The Group's credit risk from accounts receivable and contract assets is primarily driven by thecharacteristics of each individual client, rather than the industry or country or region in which the client is

located. Consequently, significant concentrations of credit risk arise mainly from the existence of significantaccounts receivable and contract assets of the Group in respect of individual clients. As at December 31,2023, the accounts receivable and contract assets of the Group's top five clients accounted for 42.90% (2022:

46.80%) of the Group's total accounts receivable and contract assets.

In respect of accounts receivable, the Group has formulated a credit policy based on the actual situationand conducts credit assessment on clients to determine the credit amount and credit period. The creditassessment is mainly based on the client's financial position, external ratings and bank credit history (wherepossible). The receivables are generally due within 30 to 120 days from the date of billing. Under normalcircumstances, the Group does not require clients to provide collateral.

(3) Liquidity risk

Liquidity risk is the risk of shortage of funds when the Group fulfills its obligations to settle by deliveryof cash or other financial assets. The Company and its subsidiaries are responsible for their own cashmanagement, including the short-term investment of cash surpluses and the raising of loans to meetanticipated cash requirements (subject to the approval of the Group's Board of Directors if borrowings arein excess of certain pre-determined authorization limits). It is the Group's policy to regularly monitor short-term and long-term liquidity requirements and compliance with borrowing agreements to ensure thatadequate cash reserves are maintained and that commitments are obtained from major financial institutionsto provide sufficient standby funds to meet short-term and longer-term liquidity requirements.

In order to control this risk, the Group regularly monitors the short-term and long-term liquidityrequirements and compliance with the provisions of the borrowing agreements to ensure that sufficient cashreserves are maintained, and has obtained commitments from major financial institutions to providesufficient standby funds to meet short-term and longer-term liquidity requirements.

As at December 31, 2023, the remaining contractual maturity of the Group's financial liabilities as atthe balance sheet date based on the undiscounted contractual cash flows, including interest at contractualinterest rates (or at the prevailing interest rate as at the reporting date in the case of floating interest rates),and the earliest date on which payments will be required are as follows:

2. Sensitivity analysis

The Group employs sensitivity analysis techniques to analyze the impact that reasonable and probablechanges in risk variables may have on current profit or loss or shareholders' equity. Since changes in any ofthe risk variables rarely occur in isolation and the correlation that exists between the variables will play asignificant role in the amount of the eventual impact of a change in one of the risk variables, the followinghas been performed assuming that the changes in each of the variables are independent. The impact on totalprofit and shareholders' equity of the appreciation/depreciation of RMB as a result of the changes in RMBagainst the US Dollar and the Vietnamese dong as at December 31, 2023 is presented in RMB at the spotexchange rate at the balance sheet date. Since the impact on total profit and shareholders' equity of financialinstruments in other currencies in the event of exchange rate changes is not material, the related sensitivityanalysis is omitted here. The Company believes that its exposure to exchange rate risk is generallymanageable.Items Exchange rate changes

FY2023Impact on netprofit

Impact onshareholders' equityDepreciation of RMBagainst USD

Appreciation of 5% againstRMB

-462,604.74 -462,604.74Appreciation of RMBagainst USD

Depreciation of 5% againstRMB

462,604.74 462,604.74Depreciation of RMBagainst Vietnamese Dong

Appreciation of 5% againstRMB

-1,299,848.44 -1,299,848.44Appreciation of RMBagainst Vietnamese Dong

Depreciation of 5% againstRMB

1,299,848.44 1,299,848.44The above sensitivity analysis is based on the re-measurement of financial instruments held by theGroup that are exposed to exchange rate risk at the balance sheet date, assuming that the exchange rate atthe balance sheet date has changed during the reporting period, using the changed exchange rate.

3. Capital management

The main objectives of the Group's capital management are to ensure the Group's ability to continue asa going concern and to maintain healthy capital ratios to support business development and maximizeshareholder value.The Group manages its capital structure and adjusts it in accordance with changes in economicconditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital

structure, the Group may adjust profit distribution to shareholders, return capital to shareholders or issuenew shares. The Group is not subject to external mandatory capital requirements. For the period January-December 2023, there have been no changes in capital management objectives, policies or procedures.The Group monitors its capital through the asset-liability ratio, which is calculated as total liabilitiesdivided by total assets. The asset-liability ratios at December 31, 2023 were as follows:

Item Balance at end of year Balance at beginning of yearTotal liabilities 814,397,427.78 765,070,712.09Total assets 1,904,362,490.44 1,778,281,762.96Asset-liability ratio 42.76% 43.02%

2. Hedging

(1) Hedging business for risk management

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

(2) The Company conducts eligible hedging operations and applies hedge accounting.

□ Applicable √ N/A

Other notes

□ Applicable √ N/A

(3) The Company conducts hedge operations for risk management and expects to achieve the risk

management objectives, but does not apply hedge accounting.

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

3. Transfer of financial assets

(1) Classification of transfer methods

□ Applicable √ N/A

(2) Financial assets derecognized due to transfer

□ Applicable √ N/A

(3) Transferred financial assets that continue to be involved in the financial asset

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

XIII. Fair value disclosure

1. Closing fair value of assets and liabilities measured at fair value

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Fair value at the end of the periodLevel 1 fair valuemeasurement

Level 2 fair value

measurements

Level 3 fair valuemeasurements

TotalI. Ongoing fair valuemeasurements

(I) Financial assets held fortrading

1. Financial assets at fair

value through profit or loss

(1) Investments in debt

instruments

(2) Investments in equity

instruments

(3) Derivative financial

assets

2. Financial assets

designated at fair valuethrough profit or loss

(1) Investments in debt

instruments

(2) Investments in equity

instruments

(II) Other debt investments(III) Investments in otherequity instruments

(IV) Investment properties

1. Land use rights for lease

2. Buildings for lease

3. Land use rights held for

transfer after appreciationin value

(V) Biological assets

1. Expendable biological

assets

2. Productive biological

assets

(VI) Receivables financing 3,572,953.18 3,572,953.18Total assets measured atfair value on an ongoingbasis

3,572,953.18 3,572,953.18(VI) Financial liabilitiesheld for trading

1. Financial liabilities at

fair value through profit orloss

Of which: Trading bondsissued

Derivative financialliabilities

Others

2. Financial liabilities

designated at fair valuethrough profit or loss

Total liabilities at fairvalue on an ongoing basis

II. Discontinued fairvalue measurements

(I) Assets held for saleTotal assets notcontinuously measured atfair value

Total liabilities notcontinuously measured atfair value

2. Basis for determining the market value of continuing and discontinued Level 1 fair value

measurements

□ Applicable √ N/A

3. Qualitative and quantitative information on the valuation techniques and significant parameters

used for the fair value measurement items in the continuous and discontinued Level 2 fair valuehierarchy

√ Applicable □ N/A

The Group has entered into derivative financial instrument contracts with banks for foreign exchangeforward, foreign exchange option, foreign exchange swap and foreign exchange option contracts, which aremeasured using valuation techniques similar to those used for forward pricing as well as the present valueapproach. The models cover a number of market observable inputs, including the maturity period of theoption, the credit quality of the counterparty, spot and forward exchange rates and interest rate curves.

4. Continuing and discontinuing Level 3 fair value measurement items, qualitative and quantitative

information on valuation techniques used and significant parameters

√ Applicable □ N/A

For structured deposits, the Group uses valuation techniques to determine their fair value. The valuationmodel used is mainly a discounted cash flow model. The inputs to the valuation technique are mainly thecontractual expected rate of return.

5. Ongoing Level 3 fair value measurements, reconciliation information between opening and Closing

book balance and sensitivity analysis of unobservable parameters

□ Applicable √ N/A

6. Continuing fair value measurements, if there was a transition between levels during the period, the

reasons for the transition and the policy for determining the point of transition.

□ Applicable √ N/A

7. Changes in valuation techniques during the period and the reasons for such changes

□ Applicable √ N/A

8. Fair value of financial assets and liabilities not measured at fair value

□ Applicable √ N/A

9. Others

□ Applicable √ N/A

XIV. Related parties and related transactions

1. Parent company of the enterprise

√ Applicable □ N/A

Unit: Million/100 Yuan Currency: RMBName of parentcompany

Place ofregistration

Nature ofbusiness

Registeredcapital

Parent company'sshareholdingproportion in theenterprise(%)

Proportion ofvoting rights of theparent company inthe enterprise(%)Sheng HueiInternational Co.,

Ltd.

Samoa

Investmentholdingcompany

3.95 million

dollars

64.997364.9973

Description of the enterprise's parent companyNoneThe ultimate controlling party of the enterprise is Acter (Taiwan)Other Notes:

None

2. Information on subsidiaries of the Enterprise

For details of the subsidiaries of the Company, please refer to the notes

√ Applicable □ N/A

For details of the Group's subsidiaries, please refer to "IX.1. Interests in subsidiaries" in this section.

3. Joint ventures and associates of the Enterprise

Details of significant joint ventures or associates of the Company are set out in the notes.

□ Applicable √ N/A

Other joint ventures or associates with which the Company has entered into related-party transactionsduring the current period or with which the Company has entered into related-party transactions in priorperiods, resulting in balances, are as follows

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

4. Other related parties

√ Applicable □ N/A

Name of other related parties Relationship between other related parties and the enterpriseNOVA Technology Corp.

Enterprises controlled by the same ultimate controllingshareholde

Winmax Technology Corp.

Enterprises controlled by the same ultimate controllingshareholde

rr

Suzhou Winmax Technology Corp.

Enterprises controlled by the same ultimate controllingshareholde

rr

NOVATECH ENGINEERING &CONSTRUCTION PTE. LTD.

Enterprises controlled by the same ultimate controllingshareholder

Other NotesNone

5. Related transactions

(1). Purchase and sale of goods, provision and acceptance of labor related transactions

Purchase of goods/acceptance of services

□ Applicable √ N/A

Sale of goods/provision of services

□ Applicable √ N/A

Purchase and sale of goods, provision and acceptance of services

□ Applicable √ N/A

(2). Affiliated fiduciary management/contracting and entrusted management/contracting out

The Company's fiduciary management/contracting status table:

□ Applicable √ N/A

Explanation of Affiliated Fiduciary Management/Contracting Situation

□ Applicable √ N/A

The Company's entrusted management/contracting

□ Applicable √ N/A

Management/contracting by affiliation

□ Applicable √ N/A

(3). Affiliated leasing

The Company acts as a lessor:

√ Applicable □ N/A

Unit: Yuan Currency: RMBName of Lessee Type of leased

asset

Lease income recognizedin the current period

Lease income recognizedin the

revious

p

eriodWinmax (Suzhou) Housing lease2,590,579.03 1,812,710.39

The Company acted as the lessee:

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Name oflessor

Type of leased

assets

Rental costs for short-term leases and leases of

low-value assets with

simplified treatment (if

applicable)

Variable leasepayments not includedin the measurement of

the lease liability (if

applicable)

Rental payments

Interest expense on

lease liabilities

assumed

Increase in right-of-use

assetsCurrentperiod

Prior period

Currentperiod

Priorperiod

Currentperiod

Currentperiod

Currentperiod

Currentperiod

Currentperiod

Prior periodNovatech(Singapore)

Rental 24,466.69 21,215.64Explanation of related leases

□ Applicable √ N/A

(4). Related guarantees

The Company as a guarantor

□ Applicable √ N/A

The Company as a guaranteed party

□ Applicable √ N/A

Explanation of related guarantees

□ Applicable √ N/A

(5). Borrowing of funds from related parties

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Related party Borrowing amount Starting date Maturity date DescriptionBorrowingSheng HueiInternational

17,820,267.27 2023-11-23 2024-11-22

Sheng HueiInternational

5,041,176.98 2023-10-24 2024-10-23

Lending

(6). Transfer of assets and debt restructuring by related parties

□ Applicable √ N/A

(7). Remuneration of key management personnel

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Amount in the current

eriod

Amount in the prior periodRemuneration of key management personnel5,101,745.67 11,915,721.03Of which: Share-based payment

5,543,272.46

(8). Other related transactions

□ Applicable √ N/A

6. Unsettled receivables and payables from related parties

(1). Items receivable

□ Applicable √ N/A

(2). Items payable

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item Name Related parties Closing book balance Opening book balanceOther payables Singapore42,684.21 38,095.79

Other payables

Sheng HueiInternational

22,861,444.25

Total

22,904,128.4638,095.79

(3). Other items

□ Applicable √ N/A

7. Related party commitments

□ Applicable √ N/A

8. Others

√ Applicable □ N/A

(1) Payments on behalf of related parties

Unit: Yuan Currency: RMB

Related party Content of related transactions

Amount in thecurrent

ea

r

Amount in the

rior

y

ea

Winmax (Suzhou)

Payment of utilities by SuzhouActer on behalf of Winmax

r(

Suzhou

)

710,302.15 569,343.60Total

710,302.15 569,343.60

(2) Acceptance of payment on behalf of related parties

Unit: Yuan Currency: RMB

Related party Content of related transactions

Amount in the

current

ea

r

Amount in the

rior

y

ea

Novatech (Singapore)

Payment of utility bills onbehalf of Sheng Huei(Singapore) by Novatech

r(

Sin

g

a

ore

)

14,169.08 12,286.34Total

14,169.08 12,286.34

XV. Share-based payment

1. Equity instruments

□ Applicable √ N/A

Stock options or other equity instruments issued and outstanding at the end of the period

□ Applicable √ N/A

2. Equity-settled share-based payments

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Method of determining the fair value of equityinstruments at the date of grant

Determined on the basis of the appraised value oron the basis of the fair value calculated by takinginto account the Company's own circumstancesand the

rice-earnin

p

g

s ratio of the same industr

Important parameters of the fair value of equityinstruments at the date of

yg

rant

Basis for determining the number of availableequity instruments

At each balance sheet date during the waiting

gp

eriod, the Com

p

an

makes its best estimate of the

number of vested equity instruments based on thelatest available subsequent information, such aschan

es in the number of vested em

p

lo

ees.Reasons for significant differences between thecurrent period's estimate and the previous period'sestimate

Cumulative amount of equity-settled share-

yb

ased

		b
p

a

ments reco

g

nized in ca

ital sur

p

lus

32,368,025.42

Other NotesNone

3. Cash-settled share-based payments

□ Applicable √ N/A

4. Share-based payment expenses for the period

□ Applicable √ N/A

5. Modification and termination of share-based payment

□ Applicable √ N/A

6. Other

□ Applicable √ N/A

XVI. Commitments and contingencies

1. Important commitments

□ Applicable √ N/A

2. Contingencies

(1). Important contingencies existing at the balance sheet date

√ Applicable □ N/A

Name ofguaranteedentity

Guarantee Matters Currency Amount

Guarantee

startingdate

GuaranteeexpirationdateShenzhenDingmao

Contractual joint andseveral guarantee

RMB 1,570,700.00 2020-8-3 2023-1-31ShenzhenDingmao

Contractual joint andseveral guarantee

RMB 3,394,222.00 2021-1-27 2023-3-14Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 27,245,338.06 2020-6-19 2023-6-17ShenzhenDingmao

Contractual joint andseveral guarantee

RMB 565,000.00 2020-8-3 2023-7-9Suzhou Acter

Contractual joint andseveral guarantee

RMB 19,900,000.00 2020-7-2 2023-10-22Suzhou Acter

Contractual joint andseveral guarantee

RMB 11,300,000.00 2020-7-2 2023-10-22Suzhou Acter

Contractual Jointand SeveralGuarantee

RMB 4,690,000.00 2021-4-12 2023-10-22ShenzhenDingmao

Contractual joint andseveral guarantee

RMB 610,200.00 2021-8-1 2023-12-7

Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 125,897,195.25 2020-9-23 2024-7-10Acter(Shenzhen)

Bank financing RMB 40,000,000.00 2022-9-5 2024-3-31ShenzhenDingmao

Bank financing RMB 45,000,000.00 2022-9-5 2024-3-31Sheng Huei(Vietnam)

Contractual joint and

several guarantee

RMB 21,076,153.89 2022-3-1 2025-6-30Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 17,168,854.83 2022-3-10 2025-6-30

Name ofguaranteedentity

Guarantee matters

Curren

cy

Amount

Guaranteestartingdate

Guaranteeexpiration dateSheng Huei(Vietnam)

Contractual Joint andSeveral Guarantee

RMB 4,473,565.17 2021-5-7 2025-9-1ShenzhenDingmao

Bank financing RMB 20,000,000.00 2023-1-16 2025-11-30Sheng Huei(Vietnam)

Contractual joint and

several guarantee

RMB 14,285,182.90 2023-1-10 2025-7-31Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 99,925,200.63 2023-7-7 2026-3-31Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 721,558.28 2023-11-13 2026-3-31Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 1,532,643.25 2023-11-27 2026-3-31Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 71,446,415.71 2020-12-7 2026-3-31Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB 5,430,176.59 2021-5-7 2026-3-31Sheng Huei(Vietnam)

Contractual joint andseveral guarantee

RMB

159,724,393.2

2023-10-12 2026-7-7Sheng Huei(Vietnam)

Bank financing RMB 14,292,800.00 2022-10-27 2023-10-26Sheng Huei(Malaysia)

Bank financing RMB 14,292,800.00 2022-10-27 2023-10-26Acter(Indonesia)

Bank financing RMB 7,146,400.00 2022-10-27 2023-10-26

(2). The Company has no material contingencies that need to be disclosed, which shall also be stated:

□ Applicable √ N/A

3. Others

□ Applicable √ N/A

XVII. Events after the balance sheet date

1. Important non-adjusting events

□ Applicable √ N/A

2. Profit distribution

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Profit or dividend to be distributed80,000,000.00Profits or dividends declared afterconsideration and a

roval

80,000,000.00Pursuant to the resolution of the Twelfth Meeting of the Second Session of the Board of Directors heldon March 29, 2024, the Group's plan for profit distribution for the year 2023 is as follows:

Based on the total share capital of 100 million shares as at the record date for dividend distribution, theCompany will distribute a cash dividend of RMB 8.00 (including tax) for every 10 shares, totaling RMB 80million (including tax);The profit distribution plan has yet to be approved by the shareholders’ meeting.

3. Sales return

□ Applicable √ N/A

4. Description of other post-balance sheet events

□ Applicable √ N/A

XVIII. Other Important Matters

1. Correction of prior period accounting errors

(1). Retrospective restatement

□ Applicable √ N/A

(2). Future application method

□ Applicable √ N/A

2. Significant debt restructuring

□ Applicable √ N/A

3. Asset replacement

(1). Non-monetary asset exchange

□ Applicable √ N/A

(2). Other asset replacement

□ Applicable √ N/A

4. Annuity plan

□ Applicable √ N/A

5. Discontinued operations

□ Applicable √ N/A

6. Segment Information

(1). Basis for determining reportable segments and accounting policies

√ Applicable □ N/A

The Group operates as a whole and has a unified internal organizational structure, managementevaluation system and internal reporting system. The management conducts resource allocation andperformance evaluation by regularly reviewing financial information at the corporate level. The Group didnot have any separately managed operating segment during the reporting period, and therefore the Grouphas only one operating segment.

(1) Geographical information

Information on the Group's revenue from external transactions by region is set out in the table below.Revenue from external transactions is classified according to the location of the clients who constructed theprojects or purchased the products.

Location of clients FY 2023 FY2022Chinese mainland 1,573,087,402.75 1,345,403,207.90Southeast Asia 435,837,592.93 282,491,912.59

Location of clients FY2023 FY2022Other countries and regionsTotal 2,008,924,995.68 1,627,895,120.49

The Group's non-current assets (excluding deferred tax assets) are mainly located in Mainland China,based on the physical location of the assets (for fixed assets) and the location of the related operations (forintangible assets).

(2). Financial information of reportable segments

□ Applicable √ N/A

(3). If the Company does not have any reportable segments, or cannot disclose the total assets and

total liabilities of each reportable segment, the reasons shall be explained

□ Applicable √ N/A

(4). Other Notes

□ Applicable √ N/A

7. Other important transactions and matters affecting investors' decisions

□ Applicable √ N/A

8. Others

□ Applicable √ N/A

XIX. Notes to the Parent Company's Financial Statements

1. Accounts receivable

(1). Disclosure by ageing

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Ageing of accounts

Closing book

balance

Opening bookbalanceWithin 1 yearOf which: Within 1 year

1-6 months (including 6 months) 275,587,971.19 366,977,828.816 months to 1 year (including 1 year) 22,218,436.60 9,056,844.04Subtotal within 1 year 297,806,407.79 376,034,672.851 to 2 years 12,215,831.57 10,672,297.622 to 3 years 11,833,238.76 20,586,667.943 to 4 years 14,226,750.24 8,125,154.264 to 5 years 7,542,629.98More than 5 years 650,753.62 650,753.62Total 344,275,611.96 416,069,546.29

(2). Disclosure by bad debt accrual method

√ Applicable □ N/A

Unit: Yuan Currency: RMBCategory

Closing balance Opening balanceBook balance

Provision forbad debts

Carryingamount

Book balance

Provision forbad debts

CarryingamountAmount

Proportion(%)Amount

Provision(%)

Amount

Proportion (%)

Amount

Provision(%)Provisionforbaddebtsbyindividualitem

9,379,

167.99

2.72

9,379,1

67.99

100.

9,961,692

.27

2.39

9,961,6

92.27

100.

Of which:

Provisionforbaddebtsbyportfolio

334,896,443.

97.

19,778,

999.61

5.91

315,117,4

44.36

406,107,8

54.02

97.61

16,701,

308.33

4.11

389,406,5

45.69

Of which:

Total

344,275,611.

/

29,158,

167.60

/

315,117,4

44.36

416,069,5

46.29

/

26,663,

000.60

/

389,406,5

45.69

Individual provision for bad-debt reserves:

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Name Closing balance

Book balance

Provision for baddebts

Provision ratio(%)

Reason forprovisionQinghua GroupXinjiang CoalChemical IndustryCo., Ltd.

6,570,214.37 6,570,214.37 100.00

Debtor's financialdifficultiesSuzhou MingqiaoMunicipalEngineering Co., Ltd.

2,158,200.00 2,158,200.00 100.00

Debtor'sbankruptcySuzhou HyperionGeocrystal Co., Ltd.

650,753.62 650,753.62 100.00

Debtor'sbankruptcy, theamount is expectedto be difficult torecoverTotal 9,379,167.99 9,379,167.99 100.00 /TotalExplanation of bad debt provision by individual item:

□ Applicable √ N/A

Provision for bad debts by portfolio:

√ Applicable □ N/A

Items provided for by portfolio: Ageing portfolio

Unit: Yuan Currency: RMB

Name

Closing balanceAccounts receivable Provision for bad debts Provision ratio (%)1-6 months (including 6months)

275,587,971.19 8,267,639.26 3.006 months to 1 year (including1 year)

22,218,436.60 1,110,921.83 5.00Subtotal within 1 year 297,806,407.79 9,378,561.091 to 2 years 12,215,831.57 1,221,583.16 10.002 to 3 years 11,833,238.76 2,366,647.75 20.003 to 4 years 12,068,550.24 6,034,275.12 50.004 to 5 years 972,415.61 777,932.49 80.00More than 5 yearsTotal 334,896,443.97 19,778,999.61

Explanation of provision for bad debts by portfolio:

□ Applicable √ N/A

Provision for bad debts based on the general model of expected credit losses

□ Applicable √ N/A

Basis of classification of each stage and percentage of provision for bad debtsNone

Description of significant changes in the book balance of accounts receivable for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(3). Provision for bad debts

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Category

Opening balance

Change during the period

Closing balanceProvision

Recovery orreversal

Write-offs orcancella

tions

OtherchangesProvisionfor baddebts

26,663,000.60 2,495,167.00 29,158,167.60Total 26,663,000.60 2,495,167.00 29,158,167.60

Of which the amount of provision for bad debts recovered or reversed during the period is significant:

□ Applicable √ N/A

Other NotesNone

(4). Accounts receivable actually written off during the period

□ Applicable √ N/A

Significant accounts receivable written off during the period

□ Applicable √ N/A

Description of accounts receivable written off:

□ Applicable √ N/A

(5). Accounts receivable and contract assets with top five closing balances summarized by party

owed to the Company

√ Applicable □ N/A

Unit: Yuan Currency: RMBUnit Name

Closing balanceof accountsreceivable

Closing balanceof contractassets

Closing balanceof accountsreceivable andcontract assets

Percentage oftotal accountsreceivable andcontract assetsclosingbalance (%)

Closingbalance ofprovision forbad debtsClientI

35,204,113.72 55,230,371.74 90,434,485.46 13.90 1,332,275.27Client II 60,617,976.68 10,161,956.75 70,779,933.43 10.88 1,854,828.60Client III 69,801,621.75 69,801,621.75 10.73 355,720.96Client IV 49,308,641.40 7,107,249.70 56,415,891.10 8.67 1,521,133.18Client V 11,691,023.33 31,917,411.40 43,608,434.73 6.71 587,112.75Total 156,821,755.13 174,218,611.34 331,040,366.47 50.89 5,651,070.76

Other NotesNoneOther Notes:

□ Applicable √ N/A

2. Other receivables

Item presentation

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item Closing balance Opening balanceInterest receivableDividends receivableOther receivables 31,069,788.93 39,103,210.81Total 31,069,788.93 39,103,210.81

Other Notes:

□ Applicable √ N/A

Interest receivable

(1). Classification of interest receivable

□ Applicable √ N/A

(2). Significant overdue interest

□ Applicable √ N/A

(3). Disclosure by bad debt accrual method

□ Applicable √ N/A

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Explanation of individual provision for bad-debt reserves:

□ Applicable √ N/A

Provision for bad debts by portfolio:

□ Applicable √ N/A

(4). Provision for bad debts based on general model of expected credit losses.

□ Applicable √ N/A

Basis of classification of each stage and percentage of bad debt provisioningNone

Explanation of significant changes in the book balance of interest receivables for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(5). Provision for bad debts

□ Applicable √ N/A

Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(6). Interest receivable actually written off during the period

□ Applicable √ N/A

Significant write-off of interest receivable

□ Applicable √ N/A

Description of write-offs:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

Dividends receivable

(1). Dividends receivable

□ Applicable √ N/A

(2). Significant dividends receivable with an age of more than 1 year

□ Applicable √ N/A

(3). Disclosure by bad debt accrual method

□ Applicable √ N/A

Individual provision for bad-debt reserves:

□ Applicable √ N/A

Explanation of individual provision for bad-debt reserves:

□ Applicable √ N/A

Provision for bad debts by portfolio:

□ Applicable √ N/A

(4). Provision for bad debts based on general model of expected credit losses.

□ Applicable √ N/A

Basis of classification of each stage and percentage of provision for bad debtsNone

Explanation of significant changes in the book balance of dividends receivable for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

(5). Provision for bad debts

□ Applicable √ N/A

Of which the amount of bad debt provision recovered or reversed during the period is significant:

□ Applicable √ N/A

Other Notes:

None

(6). Dividends receivable actually written off during the period

□ Applicable √ N/A

Of which significant dividend receivable write-offs

□ Applicable √ N/A

Description of write-offs:

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

Other receivables

(1). Disclosure by ageing

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Ageing

Closing bookbalance

Opening bookbalanceWithin 1 yearOf which: Within 1 yearWithin 1 year (including 1 year) 23,934,949.61 34,273,904.03Subtotal within 1 year 23,934,949.61 34,273,904.031 to 2 years 2,909,712.70 5,154,409.312 to 3 years 4,814,209.43 131,200.003 to 4 years 126,600.00 127,400.004 to 5 years 10,900.00 91,000.00

More than 5 years 59,000.00 74,000.00Total 31,855,371.74 39,851,913.34

(2). Breakdown by nature of payment

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Nature of payment Closing book balance Opening book balanceCurrent account 18,635,795.92 27,055,330.18Guarantee and deposit 11,137,720.63 11,312,752.73Reserve 1,034,400.00 792,900.00Other 1,047,455.19 690,930.43Subtotal 31,855,371.74 39,851,913.34Provision for bad debts 785,582.81 748,702.53Total 31,069,788.93 39,103,210.81

(3). Provision for bad debts

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Provision for bad debts

Phase I Phase II Phase III

TotalExpected creditlosses for the next12 months

Expectedcredit lossesfor the entireduration (nocreditimpairment)

Expectedcreditlosses forthe entireduration(no creditimpairment)Balance at January 1, 2023 748,702.53 748,702.53Balance at January 1, 2023 in thecurrent period

--Reversed to Phase II--Reversed to Phase III--Reversed to Phase II--Reversed to Phase IProvision during the period 36,880.28 36,880.28Reversal during the periodWrite-offs during the periodCancellations during the periodOther changesBalance at December 31, 2023 785,582.81 785,582.81

Basis of classification of phases and percentage of provision for bad debtsNone

Explanation of significant changes in the book balance of other receivables for which changes in theallowance for losses occurred during the period:

□ Applicable √ N/A

The amount of provision for bad debts for the current period and the basis adopted for assessing whetherthere is a significant increase in the credit risk of financial instruments:

□ Applicable √ N/A

(4). Provision for bad debts

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Category

Openingbalance

Change during the period

ClosingbalanceProvision

Recoveredorreversed

Write-offs orcancellations

OtherchangesProvision forbad debts

748,702.53 36,880.28 785,582.81Total 748,702.53 36,880.28 785,582.81

Of which the amount of provision for bad debts reversed or recovered during the period is significant:

□ Applicable √ N/A

Other NotesNone

(5). Other receivables actually written off during the period

□ Applicable √ N/A

Significant other receivables written off during the period:

□ Applicable √ N/A

Description of other receivables written off:

□ Applicable √ N/A

(6). Other receivables with the top five closing balances grouped by party owed

√ Applicable □ N/A

Unit: Yuan Currency: RMB

UnitName

Closing balance

Percentage of totalclosing balance ofother receivables(%)

Nature ofreceivables

Ageing

Closingbalance ofprovision forbad debtsUnit I 14,670,301.47 46.06

Borrowing andlending

Within 1 yearUnit II 5,585,535.63

17.53

Guaranteedeposits

Less than 1 year,

1-2 years, 2-3

years

279,276.78

Unit III 3,077,313.14 9.66

Salaries ofexpatriates

Within 1 yearUnit IV 1,493,000.00

4.69

Guaranteedeposits

Less than 1 year,

1-2 years, 2-3

years, 3-4 years

74,650.00Unit V 800,000.00 2.51

Guaranteedeposits

Within 1 year 40,000.00Total 25,626,150.24 80.45 /Total / 393,926.78

(7). Presented in other receivables due to centralized management of funds

□ Applicable √ N/A

Other Notes:

□ Applicable √ N/A

3. Long-term equity investments

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item Closing balance Opening balanceBook balance

Provisionforimpairment

Carryingamount

Book balance

Provision forimpairment

CarryingamountInvestments insubsidiaries

88,485,289.33 88,485,289.33 84,542,333.88 84,542,333.88Investments inassociates andjoint ventures

Total 88,485,289.33 88,485,289.33 84,542,333.88 84,542,333.88

(1). Investments in subsidiaries

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Invested Unit

Openingbalance

Increaseduring the

period

Decrease

during

theperiod

Closingbalance

Provisio

n forimpairm

ent for

theperiod

Closingbalance ofprovision

forimpairme

ntActer(Shenzhen)

37,527,798.95

37,527,798.9

ShenzhenDingmao

5,000,000.00 5,000,000.00Acter (HongKong)

28,651,120.44

28,651,120.4

Acter(Singapore)

13,363,414.49

13,363,414.4

Indonesia JointVenture

3,942,955.45 3,942,955.45Total 84,542,333.88 3,942,955.45

88,485,289.3

(2). Investments in associates and joint ventures

□ Applicable √ N/A

(3). Impairment testing of long-term equity investments

□ Applicable √ N/A

Other Notes:

None

4. Operating revenues and operating costs

(1). Operating revenues and operating costs

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item

Amount in the current Period Amount in the prior periodRevenue Cost Revenue CostMainbusinesses

1,511,362,826.53 1,337,646,532.15 1,200,221,360.57 1,036,325,910.16Otherbusiness

4,071,314.74 1,320,285.28 5,630,460.36 3,385,164.11Total1,515,434,141.27 1,338,966,817.43 1,205,851,820.93 1,039,711,074.27

(2). Breakdown information of operating revenues and operating costs

√ Applicable □ N/A

Unit: Yuan Currency: RMB

ContractsClassification

Parent Company Total

Operating Revenue Operating Costs Operating Revenue Operating CostsCommodityType

Clean roomengineering

1,464,301,397.12 1,299,051,834.63 1,464,301,397.12 1,299,051,834.63Otherelectromechanical installationworks

47,050,267.61 38,587,119.64 47,050,267.61 38,587,119.64Sales ofequipment

11,161.80 7,577.88 11,161.80 7,577.88Otherbusinesses

4,071,314.74 1,320,285.28 4,071,314.74 1,320,285.28By region ofoperation

Domestic1,515,434,141.27 1,338,966,817.43 1,515,434,141.27 1,338,966,817.43Market orclient Type

ICSemiconductorIndustr

1,277,995,305.19 1,145,012,859.98 1,277,995,305.19 1,145,012,859.98Precisionmanufacturingindustr

yy

95,839,244.09 83,068,202.99 95,839,244.09 83,068,202.99Optoelectronics industry

100,628,804.88 80,152,029.38 100,628,804.88 80,152,029.38Otherindustries

36,899,472.3729,413,439.8036,899,472.3729,413,439.80Otherbusinesses

4,071,314.74 1,320,285.28 4,071,314.74 1,320,285.28Contract type

Sales of goods11,161.807,577.8811,161.807,577.88Provision ofconstructionlabo

yr

1,511,351,664.73 1,337,638,954.27 1,511,351,664.73 1,337,638,954.27Otherbusinesses

4,071,314.74 1,320,285.28 4,071,314.74 1,320,285.28Classificationby contractperiod

Revenuerecognized at apoint in time

11,161.80 7,577.88 11,161.80 7,577.88Revenuerecognized at acertain point intime

1,515,422,979.47 1,338,959,239.55 1,515,422,979.47 1,338,959,239.55Total1,515,434,141.27 1,338,966,817.43 1,515,434,141.27 1,338,966,817.43

Other notes

□ Applicable √ N/A

(3). Explanation of performance obligations

□ Applicable √ N/A

(4). Description of apportionment to remaining performance obligations

□ Applicable √ N/A

(5). Significant contract changes or significant transaction price adjustments

□ Applicable √ N/A

Other Notes:

None

5. Investment income

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item Amount in the current period Amount in the prior periodIncome from long-term equityinvestments accounted for under the costmethod

Income from long-term equityinvestments accounted for under theequity method

Investment income from disposal oflong-term equity investments

-300,000.00Investment income from financial assetsheld for trading

Dividend income from other equityinstruments during the holding period

Interest income from debt investmentsduring the holding period

Interest income from other debtinvestments during the holding period

Investment income from disposal oftrading financial assets

1,894,851.65Investment income from disposal ofother equity instruments

Investment income from disposal ofdebt investments

Investment income from disposal ofother debt investments

Gain on debt restructuringDividend payment 17,000,000.00 9,000,000.00Total 18,594,851.65 9,000,000.00

Other Notes: None

6. Others

□ Applicable √ N/A

XX. Supplementary information

1. Details of non-recurring gains and losses for the period

√ Applicable □ N/A

Unit: Yuan Currency: RMB

Item Amount Description

Gains and losses on disposal of non-current assets, includingwrite-off of provision for asset impairment

52,564.23Government grants recognized as current profit or loss, exceptthose closely related to the Company's normal businessoperations, in compliance with national policies and inaccordance with established criteria, and with a continuingimpact on the Company's profit or loss.

3,731,552.00

Gains and losses from changes in fair value of financial assets andliabilities held by non-financial enterprises and gains and lossesfrom the disposal of financial assets and liabilities, except foreffective hedging business related to the Company's normalbusiness operations.

Funds occupation fees charged to non-financial enterprisesrecognized in profit or loss

Gains and losses on entrusted investment or asset managementGains and losses on entrusted external loansLosses on assets due to force majeure factors, such as naturaldisasters

Reversal of provision for impairment of receivables individuallytested for impairment

Gain arising from the excess of the cost of investments insubsidiaries, associates and joint ventures over the fair value ofthe investee's identifiable net assets at the time of investmentacquisition

Net profit or loss of subsidiaries from the beginning of theperiod to the date of consolidation arising from a businesscombination under the same control

Gain or loss on exchange of non-monetary assetsGains and losses on debt restructuringOne-time costs incurred by the enterprise due to thediscontinuation of the relevant business activities, such asemployee relocation expenses.

One-time impact on profit or loss due to adjustments in tax,accounting and other laws and regulations.

Share-based payment expenses recognized as a result ofcancellation or modification of the share incentive plan.

Gains or losses arising from changes in the fair value of employeeremuneration payable after the feasible date for cash-settledshare-based payments

Gains or losses from changes in the fair value of investmentproperties subsequently measured using the fair value model

Gains or losses from transactions at prices that are not at arm'slength

Gains and losses arising from contingencies unrelated to theCompany's normal business operations

Custodian fee income from entrusted operationsNon-operating revenue and expenses other than those mentionedabove

-811,609.16Other profit and loss items that meet the definition of non-recurring profit and loss

Less: Income tax effect 445,099.41Effect of minority interests (after tax) -1,725.46Total 2,529,133.12

For non-recurring profit and loss items that the company identifies as items not listed in “InterpretativeAnnouncement for Information Disclosure of Companies Issuing Public Securities No. 1 - Non-recurringProfit and Loss” and the amount is significant, as well as items that are defined as recurring profit and lossitems that are listed in “Interpretative Announcement for Information Disclosure of Companies IssuingPublic Securities No. 1 - Non-recurring Profit and Loss”, the reasons shall be explained.

□ Applicable √ N/A

Other Notes

□ Applicable √ N/A

2. Return on net assets and earnings per share

√ Applicable □ N/A

Profit for the reporting period

Weighted average returnon net assets (%)

Earnings per shareBasic earningsper share

Diluted earningsper shareNet profit attributable to ordinaryshareholders of the Company

13.67 1.39 1.39Net profit attributable to ordinaryshareholders of the Company afterextraordinary gains and losses

13.42 1.36 1.36

3. Differences in accounting data under Chinese and foreign accounting standards

□ Applicable √ N/A

4. Others

□ Applicable √ N/A

Chairman: Liang JinliDate of approval for filing by the Board of Directors: March 29, 2024

Revised information

□ Applicable √ N/A