三花智控：2021年半年度报告（英文版）

ZhejiangSanhuaIntelligentControlsCo.,Ltd.

2021Semi-AnnualReport

August2021

SectionIImportantNotes,ContentsandDefinitions

TheBoardofDirectors,BoardofSupervisors,Directors,SupervisorsandSeniorManagementofZhejiangSanhuaIntelligentControlsCo.,Ltd.(hereinafterreferredtoasthe“Company”)herebyguaranteethattheinformationpresentedinthisreportshallbeauthentic,accurate,completeandfreefrommaterialmisstatementwhetherduetofalserecord,misleadingstatementorsignificantomission,andtheywillbearbothindividualandjointlegalliabilities.

ZhangYabo,theCompany'slegalrepresentative,YuYingkui,thepersoninchargeoftheaccountingwork,andShengXiaofeng,thepersoninchargeofaccountingdepartment(AccountingOfficer)herebydeclareandwarrantthatthefinancialstatementsinthisreportareauthentic,accurateandcomplete.

Alldirectorsattendedtheboardmeetingtoreviewthisreport.

TheCompanydescribesindetailconcerningthepossiblerisksandcountermeasuresinSectionX"RisksandCountermeasuresoftheCompany"underSectionIII"Management’sDiscussionandAnalysisofOperations".Pleasepayparticularattentiontorelevantcontents.

TheCompanywillnotdistributecashdividend,distributebonusshares,ordistributesharesfromcapitalreserveduringthecurrentreportingperiod.

CONTENTS

SectionIImportantNotes,ContentsandDefinitions ...... 2

SectionIICorporateProfileandKeyFinancialIndicators ...... 6

SectionIIIManagement’sDiscussionandAnalysisofOperations ...... 10

SectionIVCorporateGovernance ...... 26

SectionVEnvironmentalandSocialResponsibility ...... 29

SectionVISignificantEvents ...... 34

SectionVIIChangesinSharesandInformationaboutShareholders ...... 52

SectionVIIIInformationofPreferredShares ...... 59

SectionIXBonds ...... 60

SectionXFinancialReport ...... 63

ListofDocumentsAvailableforInspection

1.The2021Semi-AnnualReportsignedbythechairmanoftheboard.

2.ThefinancialreportsignedandsealedbytheCompany'slegalrepresentative,chieffinanceofficerandpersoninchargeofaccountingdepartment.

3.OriginalcopyofalltheCompany'sdocumentsandannouncementspublishedonthenewspapersdesignatedbyCSRCwithinthereportingperiod.

4.Otherdocumentsavailableforinspection

Definitions

ItemsReferstoDefinitionTheCompany,CompanyReferstoZhejiangSanhuaIntelligentControlsCo.,Ltd.TheArticlesofAssociationsReferstoArticlesofAssociationsforZhejiangSanhuaIntelligentControlsCo.,Ltd.TheCSRCReferstoChinaSecuritiesRegulatoryCommissionSZSEReferstoShenzhenStockExchangeZhejiangSecuritiesRegulatoryBureau

ReferstoZhejiangSecuritiesRegulatoryBureauofChinaSecuritiesRegulatory

CommissionGeneralMeetingReferstoGeneralMeetingofZhejiangSanhuaIntelligentControlsCo.,Ltd.TheBoardofDirectorsReferstoTheBoardofDirectorsofZhejiangSanhuaIntelligentControlsCo.,Ltd.TheBoardofSupervisorsReferstoTheBoardofSupervisorsofZhejiangSanhuaIntelligentControlsCo.,Ltd.YuanReferstoRMB

SectionIICorporateProfileandKeyFinancialIndicatorsI.CorporateInformation

StockabbreviationSanhuaIntelligentControlsStockcode002050StockExchangewherethesharesoftheCompanyarelisted

ShenzhenStockExchangeNameoftheCompanyinChinese

浙江三花智能控制股份有限公司Abbr.oftheCompanynameinChinese(ifany)

三花智控NameoftheCompanyinEnglish(ifany)

ZHEJIANGSANHUAINTELLIGENTCONTROLSCO.,LTD.Abbr.oftheCompanynameinEnglish(ifany)

SANHUALegalRepresentativeZhangYabo

II.ContactsandContactInformation

BoardSecretarySecuritiesAffairsRepresentativeNameHuKaichengWangYutongAddress

No.12St.,No.289XiashaEconomicDevelopment,Hangzhou,Zhejiang,China.

No.219,WoxiAvenue,Meizhu,Xinchang,Zhejiang,China.Tel.0571-[e-mail]@zjshc.comIII.OtherRelevantInformation

1.Company’scontactinformation

WhetherthereisanychangeintheCompany’sregisteredaddress,officeaddress,zipcode,websiteoremailaddressduringthereportingperiod.

□Applicable√Notapplicable

TherearenochangesintheCompany’sregisteredaddress,officeaddress,zipcode,websiteorCompanyemailaddressduringthereportingperiod.Pleasereferto2020AnnualReportfordetails.

2.Informationdisclosureandplaceofthereport

Whetherthereisanychangeininformationdisclosureandplaceofthereportduringthereportingperiod.

√Applicable□Notapplicable

NewspaperdesignatedbytheCompanyforinformationdisclosure

ChinaSecuritiesJournal,SecuritiesTimesWebsitespecifiedbyCSRCforreleaseoftheSemi-AnnualReport

http://www.cninfo.com.cnPlacewheretheSemi-AnnualReportisavailableforinspection

OfficeoftheBoardofDirectorsNote:ThenewspapersdesignatedbytheCompanywerechangedfromSecuritiesTimesandShanghaiSecuritiesNewstoChinaSecuritiesJournalandSecuritiesTimesonJuly1.

IV.KeyAccountingInformationandFinancialIndicators

WhethertheCompanyperformedaretrospectiveadjustmentorrestatementofpreviousaccountingdata

□Yes√No

Unit:RMBCurrentReportingPeriod

CorrespondingPeriodof

LastYear

YoYChange(%)OperatingRevenue(RMB)7,674,081,761.695,318,178,626.7744.30%NetProfitAttributabletoShareholdersoftheListedCompany(RMB)

823,881,221.70643,481,717.3528.03%NetProfitAttributabletoShareholdersoftheListedCompanyafterDeductingNon-recurringGainsandLosses(RMB)

719,771,655.78582,191,161.6723.63%NetCashFlowGeneratedfromOperationalActivities(RMB)

825,216,623.261,104,651,449.42-25.30%BasicEarningsperShare(RMB/Share)0.230.1827.78%DilutedEarningsperShare(RMB/Share)0.230.1827.78%WeightedAverageROE8.04%6.74%1.30%

AttheEndoftheCurrentReportingPeriod

AttheEndofLastYearYoYChange(%)TotalAssets(RMB)21,007,499,311.9017,032,530,730.1823.34%NetAssetsAttributabletoShareholdersoftheListedCompany(RMB)

10,444,077,103.5910,064,794,519.573.77%

V.DifferencesinAccountingDatabetweenDomesticandOverseasAccountingStandards

1.DifferenceinnetprofitsandnetassetsofthisfinancialreportbetweenInternationalFinancialReportingStandardsandChinaAccountingStandards

□Applicable√Notapplicable

ThereisnodifferenceinnetprofitsandnetassetsofthisfinancialreportbetweenInternationalFinancialReportingStandards(IFRS)andChinaAccountingStandardsinthereportingperiod.

2.DifferenceinnetprofitsandnetassetsofthisfinancialreportbetweenOverseasAccountingStandards

andChinaAccountingStandards

□Applicable√Notapplicable

ThereisnodifferenceinnetprofitsandnetassetsofthisfinancialreportbetweenOverseasAccountingStandardsandChinaAccountingStandardsinthereportingperiod.

VI.ItemsandAmountsofNon-recurringGainsandLosses

√Applicable□Notapplicable

Unit:RMBItemsAmountNoteGainsorLossesfromDisposalofNon-currentAssets(IncludingtheWrite-offfortheAccruedImpairmentofAssets)

-1,623,182.25TheGovernmentSubsidiesIncludedintheCurrentGainsandLosses(ExcludingtheGovernmentSubsidiesCloselyRelatedtoRegularBusinessesoftheCompanyandIssuedintheQuotaorQuantityBasedontheNationalStandards)

64,034,111.05

GainsorLossesAttributedtotheChangesinFairValueforHoldingHeld-for-tradingfinancialassets,DerivativeFinancialAssets,TradingFinancialLiabilities,DerivativeFinancialLiabilitiesandInvestmentIncomefromDisposalofHeld-for-tradingfinancialassets,DerivativeFinancialAssets,TradingFinancialLiabilities,DerivativeFinancialLiabilitiesandOtherDebtInvestment,ExcludingHedgingBusinessesRelatedtotheRegularBusinessOperationoftheCompany

60,752,561.20

Inordertoavoidthepriceriskofrawmaterialsandpreventexchangeraterisk,theCompanyanditssubsidiarieshavecarriedoutderivativesbusiness,includingfuturescontractsandforeignexchangeforwardcontracts.FromJanuarytoJune2021,thefuturesincomewasRMB

19.8287millionandthe

forwardincomewasRMB

40.9239million;fromJanuary

toJune2020,thefuturesincomewasRMB1.0049millionandtheforwardloss

wasRMB24.4147million.Thus,theamountofnon-recurringprofitandlossitemsfluctuatedgreatlyinthefirsthalfofthetwoyears.Meanwhile,theexchangelossfromJanuarytoJune2021wasRMB51.1292million,andtheexchangegainfromJanuarytoJune2020wasRMB45.6796million.AccordingtotheExplanatoryAnnouncementNo.1ofInformationDisclosureofListedCompanies–Non-recurringGainsandLosses,foreignexchangegainsandlossesarerecurringgainsandlosses,whilefuturesandforwardgainsandlossesarenon-recurringgainsandlosses.Non-operatingIncomeandExpendituresOtherThantheAbove891,333.20OtherGainsandLossesItemsthatFitintheDefinitionofNon-recurringGainsandLosses

702,064.60Less:ImpactofIncomeTax20,201,305.62ImpactofMinorityEquity(aftertax)446,016.26Total104,109,565.92--Thereasonsforthenon-recurringgainsandlossesitemsdefinedorlistedintheExplanatoryAnnouncementNo.1ofInformationDisclosureofListedCompanies–Non-recurringGainsandLossesaredefinedasrecurringgainsandlossesitems

□Applicable√Notapplicable

Inthereportingperiod,theCompanydidnotdefineanynon-recurringgainsandlossesitemsdefinedandlistedintheExplanatoryAnnouncementNo.1ofInformationDisclosureofListedCompanies–Non-recurringGainsandLosses,asrecurringgainsandlossesitems.

SectionIIIManagement’sDiscussionandAnalysisofOperations

I.ThePrincipalBusinessoftheCompanyduringtheReportingPeriod

1.Mainbusiness

TheCompanyadherestothe"FocusonLeading,Innovation,Transcendence"businesspath,concentratingontheresearchandapplicationofheatpumptechnologyandthermalmanagementsystemproducts,focusingonthedevelopmentofenvironmentalthermalmanagementsolutionsforheatexchangeandtemperatureintelligentcontrol,andiscommittedtotheprofessionaloperationinthefieldsofbuildingHVAC,electricalequipmentandautomotivethermalmanagement.Accordingtothedifferentstagesandcharacteristicsofstrategicbusinessandtheirdevelopment,theCompany'sbusinessismainlydividedintorefrigerationandairconditioningelectricalcomponentsbusinessandautomotivecomponentsbusiness.ThemainproductsofrefrigerationandA/CelectricalpartsbusinessincludeFour-wayReversingValve,ElectronicExpansionValve,SolenoidValve,MicrochannelHeatExchanger,OmegaPump,etc.,whicharewidelyusedinA/C,refrigerator,coldchainlogistics,dishwasherandotherfields;themainproductsofautomotivecomponentsbusinessincludeThermalExpansionValve,ReceiverDrier,ElectronicExpansionValve,ThermalManagementIntegratedModulefornewenergyvehicle,ElectronicWaterPump,etc.,whicharewidelyusedinbothtraditionalfuelvehiclesandnewenergyvehicle.Duringthereportingperiod,theCompany'smainbusinessanditsbusinessmodelhavenotchanged.

2.Industrydevelopment

（1）RefrigerationandairconditioningelectricalcomponentsindustryChinaisthelargestmanufacturingbaseofA/Candrefrigeratorsintheworld,anditsproductionandsalesvolumeranksfirstglobally.Inlinewiththetrendofenvironmentalprotectionintheworld,energy-savinginverterandintelligenttechnologyhavebecomethetrend,whichputsforwardaseriesofnewrequirementsforthemarketofcontrolcomponents,andalsobringsnewdevelopmentopportunities.Asaleadingenterpriseintherefrigerationcontrolcomponentsindustry,theCompanywillfollowthetrend,firmlyseizethisopportunityanddevelopsteadily.

（2）Automotivecomponentsindustry

Theglobalautomobileindustryhasbeendevelopingrapidly,whichalsodrivesthemarketdemandofautomotiveA/Candthermalmanagementproductstocontinuetogrowsubstantially.Inrecentyears,thedevelopmentofnewenergyvehicleshasbecomeacertaintrend,whichputsforwardhigherandmoreupdatedrequirementsforA/Candthermalmanagementproductsnomatterinhybrid,pureelectricorhydrogenenergyvehicles.Focusingonthein-depthresearchonA/Candthermalmanagementsystemofnewenergyvehicles,theCompanyhasgraduallydevelopedfromcomponentstomoduleandsubsystems,andhasbecomethecooperativepartnerofValeo,Volkswagen,MercedesBenz,BMW,Volvo,Toyota,GM,Geely,BYD,SAIC,NIO,etc.

3.IndustrypositionoftheCompany

TheCompanyistheworld'slargestmanufacturerofrefrigerationcontrolcomponentsandtheworld'sleadingmanufacturerofautomotiveA/Candthermalmanagementsystemcontrolcomponents."Sanhua"refrigerationintelligentcontrolcomponentshavebecomeaworld-famousbrand,andastrategicpartnerofmanyautomobileenterprisesandair-conditioningrefrigerationappliancemanufacturersintheworld.Aftermorethan30yearsofdevelopment,theCompanyhasestablishedaleadingpositionintheglobalmarketofrefrigerationandautomotivethermalmanagement.ThemarketshareoftheCompany'sElectronicExpansionValve,Four-wayReversingValve,SolenoidValve,MicrochannelHeatExchanger,AutomotiveElectronicExpansionValve,ThermalManagementIntegratedModulefornewenergyvehicle,OmegaPumpranksfirstglobally.ThemarketshareoftheCompany'sServiceValve,VehicleThermalExpansionValveandReceiverDrierisintheleadingpositionintheworld.II.CoreCompetitivenessAnalysis

1.Clearstrategiclayout

TheCompanyadherestothe"FocusonLeading,Innovation,Transcendence"businesspath,takestheresearchandapplicationofheatpumptechnologyandthermalmanagementsystemproductsasthecore,firmlygraspsthedevelopmentthemeofenergyconservation,environmentalprotectionandintelligentcontrol,upgradesfrom"mechanicalpartsdevelopment"to"systemcontroltechnologysolutiondevelopmentofelectroniccontrolintegration".TheCompany’sproductseriesareexpandedfromhouseholdA/CandrefrigeratorcomponentstothefieldofcommercialA/Candcommercialrefrigeration,andextendingtothedirectionofinvertercontroltechnologyandsystemintegrationandupgrading.Meanwhile,aftertheinjectionofautomotivebusiness,itgivesfullplaytothesynergeticeffectwiththeoriginalbusiness,continuestodeepentheresearchanddevelopmentofautomobileA/Candnewenergyvehiclethermalmanagementsystemcomponents,andactivelyexploresthedeeperapplicationofthermalmanagementcomponentsandsubsystemsintheautomotivefield,soastoprovideglobalcustomerswithcompetitiveenvironmentalintelligentcontrolsolutions.

2.Technologyleading,customeroriented

Asanationalhigh-techenterprise,theCompanyhasalwaysadheredtothetechnologicalrouteofindependentdevelopmentandinnovation.Fordecades,ithasfocusedonthefieldofintelligentcontrolandvigorouslycultivatedcoretechnologieswithindependentintellectualpropertyrights.Ithasbeenauthorized2,529patentsbothdomesticandabroad,including1,235inventionpatents.ThefirstpriorityoftheCompanyistomeettheneedsofcustomerswithallproducts,servicesandquality.

3.Qualityassurance,scaleeconomyeffect

TheCompany'sproductscoverrefrigerationA/Celectricalcomponentsandautomotivecomponentsindustry.ThemarketshareoftheCompany'sElectronicExpansionValve,Four-wayReversingValve,SolenoidValve,MicrochannelHeatExchanger,AutomotiveElectronicExpansionValve,ThermalManagementIntegratedModulefornewenergyvehicle,OmegaPumpranksfirstglobally.ThemarketshareofServiceValve,VehicleThermalExpansionValveandReceiverDrierisintheleadingpositionintheworld.TheCompanyhasestablishedacompleteandstrictqualityassurancesystem,achievedISO9001,IATF16949,QC080000qualitysystemcertification.TheCompanywontheNationalQualityAward,ZhejiangQualityAward,andwonthehighcommentsfromJCI,Daikin,Carrier,Gree,Midea,Haier,Toyota,Benz,Volkswagen,Valeoandotherwell-known

enterprisesathomeandabroad.

4.AdvantagesofglobalmarketingnetworkandproductionbaseSincethe1990s,theCompanyhasfocusedonopeningupinternationalmarket,andestablishedoverseassubsidiariesinJapan,SouthKorea,Singapore,theUnitedStates,Mexico,Germanyandotherplacestobuildaglobalmarketingnetwork.Atthesametime,itestablishedoverseasproductionbasesintheUnitedStates,Poland,Mexico,Vietnamandotherplaces,andhaspreliminaryabilitytocopewithproductionglobalization.Andinpractice,wehavetrainedanumberofmanagementtalentswhocanmeettherequirementsofbusinessdevelopmentindifferentcountriesandregions.III.MainBusinessAnalysisOverviewInthefirsthalfof2021,theCompanyactivelyrespondedtothechangesandchallenges,andtheoveralloperationoftheCompanywereelevatedevenundertheharshbackgroundofcontinuedimpactfromoverseasepidemic,sharpriseininternationalshippingpricesandrawmaterialprices,appreciationofRMBexchangerateagainstUSdollar.SpecifictotheindustryinwhichtheCompanyoperates,therefrigerationandairconditioningelectricalpartsbusinesshasmaintainedagrowthtrendduetothestablerecoveryofthehomeapplianceindustryandtheupgradingofconsumptionconcept.Theautomotivecomponentsbusinesscontinuestoimproveduetotheprosperityofthenewenergyvehiclemarket,whichdrivestherapidgrowthofrevenue.Duringthereportingperiod,theoperatingrevenueisRMB7.674billion,ayear-on-yearincreaseof44.30%.TheoperatingprofitisRMB1.008billion,ayear-on-yearincreaseof36.29%.ThenetprofitattributabletoshareholdersoflistedcompanyisRMB824million,ayear-on-yearincreaseof28.03%.TheoperatingrevenueofrefrigerationandairconditioningelectricalcomponentsbusinessisRMB5.563billion,ayear-on-yearincreaseof

27.37%.TheoperatingrevenueofautomotivecomponentsbusinessisRMB2.111billion,ayear-on-yearincreaseof122.14%.(I).Activelyimproveefficiency,reducecostsandoptimizethelayoutofglobalization

1.RefrigerationandairconditioningelectricalcomponentsbusinessIntermsoftherefrigerationandairconditioningelectricalcomponentsbusiness,theCompanyimprovesefficiencyandreducescoststhroughautomationtransformation,leanproduction,staffreductionandefficiencyincrease,procurementcostsreduction,technologycostsreductionandothermeasures.AlthoughAWECO'sbusinessisaffectedbytheEuropeanepidemic,ithasrealizedpositivenetprofitmonthlythroughtappingpotentialsofinternalmanagementandsupplychaintransformation.AfterrelocationofthenewplantinVietnamSanhua,ithasbeenrecognizedbymajorcustomersintheUnitedStates,andcostsofsomeproductshavebeenlowerthanthatinChina.Inaddition,theCompanyactivelyexpandskitchenappliancesandotherproducts,soastofurtherbroadentheCompany'snewdevelopmentfields,continuouslyimproveitssustainableprofitabilityandmarketcompetitiveness.

2.Automotivecomponentsbusiness

Theautomotivecomponentsbusinesswillcontinuetosupportitsstrategiccustomers.Inordertosatisfytheincreasingneedofcapacity,theCompanyorderlypromotestheproductionlineconstructionandmassproduction

projectoftheMexicanfactoryandShaoxingBinhaifactory.Onthepremiseofensuringtheprojectsofexistingcustomers,theCompanydevelopscompetitiveproducts,technologies,andactivelyobtainsneworders.Intermsofinternalmanagement,theCompanytakesfirst-classenterprisesasmodels,establishesaglobalqualitymanagementsystem,soastoimprovethequalitymanagementoffactoriesathomeandabroad.Facingthechallengeofthecontinuousriseofrawmaterialpricesandfreightexpenses,theCompanysparesnoefforttopromotethecostsreduction,efficiencyincrease,andlinkageriseofproductpricesthroughactivecommunicationwithdownstreamcustomers.(II).ContinuetopromoteinvestmentprojectsandimprovetheprofitabilityTheCompany'sconvertiblebondswerelistedandtradedinShenzhenStockExchangeonJune30,2021,raisingRMB3billion,whichismainlyusedin"Constructionprojectofcommercialrefrigerationandairconditioningintelligentcontrolcomponentswithacapacityof65millionsetsperyear"and"Technicaltransformationprojectofhigh-efficiencyandenergy-savingcontrolcomponentsforrefrigerationandairconditioningwithacapacityof

50.5millionsetsperyear”.TheimplementationoftheseprojectswillhelppromotethedevelopmentoftheCompany'sproductstowardsamoreefficientandenergy-savingdirection,furtherimprovetheCompany'sbusinessscaleandcompetitiveadvantage,optimizethebusinessstructure,improvetheCompany'ssustainableprofitability,andlayasolidfoundationfortheCompanytoachievemediumandlong-termstrategicdevelopmentgoals.(III).EnhanceproductstrengthandimprovepatentlayoutofstrategicproductsDuringthereportingperiod,theCompanyinvestedRMB352millioninR&D,ayear-on-yearincreaseof46.73%.TheCompanysparesnoeffortinenhancingitsproductstrengthenthroughcontinuousR&Dinvestment.AndtheCompanyparticipatesinmarketcompetitionwithnewproductsandnewtechnologiesthroughcontinuousoptimizationiteration.Intermsofpatentlayout,theCompanywillcontinuetoimplement"High-qualitypatentsandhigh-valuepatents"bypromotingthepatentlayoutofkeyproducts.Bytheendofthereportingperiod,2,529patentshavebeenauthorizedathomeandabroad,including1,235inventionpatents.Changesinkeyfinancialdataoverthecorrespondingperiodoflastyear

Unit:RMBCurrentReportingPeriod

CorrespondingPeriodofLastYear

YoYChange(%)NoteofChangeOperatingRevenue7,674,081,761.695,318,178,626.7744.30%OperatingCost5,601,811,479.623,839,626,004.7045.89%SellingExpenses321,908,769.46257,442,500.5425.04%AdministrativeExpenses374,431,536.21315,350,745.1518.73%FinancialExpenses49,304,431.90-29,893,397.04264.93%

Mainlyduetotheincreaseofforeignexchangelossinthe

currentperiodIncomeTaxExpenses170,607,121.1699,017,348.3772.30%

Mainlyduetotheincreaseoftotalprofitin

thecurrentperiod,anddifferenceresultedfromadjustmentoffinalsettlementofincometax

R&DInvestments352,175,549.62240,012,928.3846.73%

MainlyduetotheincreaseofR&Dpersonnelsalary+investmentinmaterialandpower

NetCashFlowsfromOperatingActivities

825,216,623.261,104,651,449.42-25.30%

Mainlyduetoincreaseinpurchasinggoodsandreceivinglaborservices,decreaseinnetcashinflowfromsales,andincreaseinemployeecompensation

NetCashFlowsfromInvestmentActivities

-313,010,482.60-679,392,344.6653.93%

Mainlyduetotheincreaseinnetredemptionoffinancialproductsandtheincreaseinthepurchaseoffixed,intangibleandotherlong-termassetsNetCashFlowsfromFinancingActivities

2,299,821,228.74310,293,217.58641.18%

Mainlyduetotheissuanceofconvertiblebondsinthecurrent

periodNetIncreaseinCashandCashEquivalents

2,794,780,733.88709,896,200.36293.69%WhetherthereissignificantchangeinCompany’sprofitstructureorprofitsourceduringthereportingperiod

□Applicable√Notapplicable

ThereisnosuchcaseduringthereportingperiodRevenuestructure

Unit:RMB

CurrentReportingPeriodCorrespondingPeriodofLastYear

YoYChange(%)Amount

Proportiontototalrevenue

Amount

ProportiontototalrevenueTotalRevenue7,674,081,761.69100%5,318,178,626.77100%44.30%ClassifiedbyIndustryGeneral7,674,081,761.69100.00%5,318,178,626.77100.00%44.30%

EquipmentManufacturingIndustryClassifiedbyProductsRefrigerationA/CElectricalComponents

5,563,260,796.5772.49%4,367,942,431.6482.13%27.37%AutomotiveComponents

2,110,820,965.1227.51%950,236,195.1317.87%122.14%ClassifiedbyRegionDomestic3,703,718,671.8348.26%2,479,768,382.7246.63%49.36%Overseas3,970,363,089.8651.74%2,838,410,244.0553.37%39.88%Industries,productsorregionsaccountingformorethan10%oftheCompany’soperatingrevenueoroperatingprofit

√Applicable□Notapplicable

Unit:RMBOperating

revenue

OperatingcostGrossmargin

YoYChange(%)

ofoperatingrevenue

YoYChange(%)ofoperatingcost

YoYChange(%)ofgrossmarginClassifiedbyindustryGeneralEquipmentManufacturingIndustry

7,674,081,761.695,601,811,479.6227.00%44.30%45.89%-0.80%ClassifiedbyproductRefrigerationA/CElectricalComponents

5,563,260,796.574,015,609,936.5527.82%27.37%26.91%0.26%AutomotiveComponents

2,110,820,965.121,586,201,543.0724.85%122.14%134.80%-4.06%ClassifiedbyregionDomestic3,703,718,671.832,655,946,262.7528.29%49.36%52.18%-1.33%Overseas3,970,363,089.862,945,865,216.8725.80%39.88%40.66%-0.41%InthecasethattheCompany'smainbusinessdatastatisticsareadjustedduringthereportingperiod,theCompany'smainbusinessdataofthelatestreportingperiodwereadjustedaccordingtothestatisticsattheendofthelastreportingperiod

□Applicable√Notapplicable

Explanationsonrelevantdatachangedformorethan30%onayear-over-yearbase

√Applicable□Notapplicable

Theoperatingrevenueofautomotivecomponentsbusinessisincreasedby122.14%overthesameperiodoflastyear.Itismainlyduetothecontinuousimprovementofnewenergyvehiclemarket.Thus,itdrivesautomotivecomponentsbusinesstogrowrapidlyandoperatingcostsareincreasedcorrespondingly.IV.Non-MainBusinessAnalysis

√Applicable□Notapplicable

Unit:RMBAmount

Proportiontonetprofit

NoteofChangeSustainability

InvestmentIncome

97,400,173.019.67%

Gainsandlossesoffuturescontractsettlement,foreignexchangeforwardcontractsettlement,bankfinancialproduct,etc.

No

GainsandLossesfromChangeofFairValue

-32,695,697.38-3.25%

Floatingincomeoffuturescontracts,foreignexchangeforwardcontracts,bankfinancialproducts,etc.

No

Non-operatingIncome

2,472,160.140.25%

Incomefromnonpayment,compensationandliquidateddamages,gainsfromretirementoffixedassets,etc.

No

Non-operatingExpenditures

3,604,181.700.36%

Lossonretirementoffixedassets,litigationcompensationloss,etc.

NoCreditImpairmentLoss

-48,442,168.40-4.81%Baddebtloss,etc.NoAssetsImpairmentLoss

-18,614,580.55-1.85%

Lossonimpairmentofinventories,etc.

NoGainsonDisposalofProperties

400,172.510.04%

Gainsondisposaloffixedassets

No

OtherGains72,081,481.227.16%Governmentsubsidies,etc.

Thegovernmentgrantsof

VATrefundofcivilwelfare

enterprisesandsoftware

productVATexceedingtax

burdenaresustainable,

whiletherestarenot

sustainableV.AnalysisofAssetsandLiabilities

1.Materialchangesofassets

Unit:RMBAttheEndofCurrent

ReportingPeriod

AttheEndofLastYearYoYChange(%)

NoteofsignificantchangeAmount

Percentageoftotalassets

Amount

PercentageoftotalassetsCashandBank

Balance

6,301,888,182.

30.00%

3,489,687,568.

20.49%9.51%

MainlyduetotheissuanceofconvertiblebondsinthecurrentperiodAccountsReceivable

3,100,856,902.

14.76%

2,355,613,299.

13.83%0.93%

Inventories

2,917,803,847.

13.89%

2,307,761,706.

13.55%0.34%

Investmentproperty

9,398,176.540.04%10,067,588.960.06%-0.02%Long-termEquityInvestment

17,828,507.380.08%15,219,616.680.09%-0.01%FixedAssets

3,965,615,647.

18.88%

3,839,408,059.

22.54%-3.66%

ConstructioninProgress

914,010,795.5

4.35%628,730,529.073.69%0.66%Short-termBorrowings

521,381,193.6

2.48%383,088,296.602.25%0.23%ContractualLiabilities

44,096,560.860.21%42,581,607.670.25%-0.04%Long-termBorrowings

17,425,691.864.37%

1,707,918,994.

10.03%-5.66%

Non-currentliabilitiesduewithinoneyear

1,012,141,338.

4.82%130,553,923.870.77%4.05%BondsPayable

2,588,449,353.

12.32%12.32%

Mainlyduetotheissuanceofconvertiblebondsinthecurrentperiod

2.Mainoverseasassets

√Applicable□Notapplicable

ContentofAssets

Formation

AssetsScale(RMB)

Location

Operation

Mode

Controlmeasurestoensureassetsafety

Income(RMB)

Proportionofoverseasassetsinnetassets

oftheCompany

Whetherthereissignificantimpairment

riskSanhuaInternationalInc.(USA)(Consolidated)

EquityInvestment

1,676,659,

000.33

TheUnitedStates

R&D,Manufacturing,MarketingandInvestmentManagement

Financialsupervisionandexternalaudit

108,267,40

6.20

No

SanhuaInternationalSingaporePTE.Ltd.(Consolidated)

EquityInvestment

3,020,615,

669.89

Singapore

Manufacturing,MarketingandInvestmentManagement

Financialsupervisionandexternalaudit

48,785,981.05

No

3.Assetsandliabilitiesmeasuredatfairvalue

√Applicable□Notapplicable

Unit:RMBItems

Openingbalance

Profitandlossoffairvaluechangeinthecurrentperiod

Cumulativechangesinfairvalueincludedinequity

Impairmentaccruedinthecurrentperiod

Currentpurchaseamount

Currentsaleamount

Otherchanges

ClosingbalanceFinancialAssets1.Held-for-tradingfinancialassets(ExcludingDerivativeFinancialAssets)

752,224,861.7

-613,379.14

562,087,170.

189,524,312.14

2.Derivative

Financial

58,330,486.53

-31,937,779.9

26,392,706.

AssetsSubtotal

810,555,348.3

-32,551,159.0

562,087,170.

215,917,018.76Total

810,555,348.3

-32,551,159.0

562,087,170.

215,917,018

.76FinancialLiabilities

7,939,957.91-213,573.29

7,726,384.6

WhethertherewereanymaterialchangesonthemeasurementattributesofmajorassetsoftheCompanyduringthereportingperiod:

□Yes√No

4.Limitationofassetrightsasoftheendofreportingperiod

ItemsClosingBookvalue(RMB)ReasonsforbeingrestrictedCashandBankBalance106,963,410.23

Margindeposits,margindepositsinfuturesinstitutions,litigationfrozenbankdepositsNotesReceivable1,579,929,231.31PledgeforfinancingTotal1,686,892,641.54--VI.AnalysisofInvestments

1.Overview

√Applicable□Notapplicable

InvestmentduringtheReportingPeriod

(RMB)

InvestmentovertheCorrespondingPeriod

ofLastYear(RMB)

FluctuationRate(%)

1,581,000,000.000.000.00%

2.Significantequityinvestmentduringthereportingperiod

□Applicable√Notapplicable

3.Significantnon-equityinvestmentduringthereportingperiod

□Applicable√Notapplicable

4.Financialassetinvestment

（1）SecuritiesInvestments

□Applicable√Notapplicable

（2）DerivativesInvestments

√Applicable□Notapplicable

Unit:RMBin10thousand

Operationpartyofderivativesinvestment

Whetherrelatedparty

Whetherrelatedtransaction

Typeofderivativesinvestment

Initialinvestmentamountofderivativesinvestment

Initialdate

Terminationdate

Openinginvestmentamount

Purchasedamountduringthereportingperiod

Soldamountduringthereportingperiod

Impairmentprovisions(ifany)

Closinginvestmentamount

ProportionofclosinginvestmentamounttotheCompany’snetassetsattheendofthereportingperiod

Actualgainorlossduringthereportingperiod

FuturesCompany,Bank

NoNo

Futurescontracts,foreignexchangeforwardcontracts,etc.Total----CapitalsourceofderivativesinvestmentCompany’sself-fundProsecution(ifapplicable)NotapplicableAnnouncementdateforapprovalsofderivativesinvestmentfromtheboardofdirectors(ifany)Announcementdateforapprovalsofderivativesinvestmentfromthegeneralmeeting(ifany)Riskanalysisandcontrolmeasures(includingbutnotInordertoavoidthepriceriskofrawmaterialsandexchangeraterisk,theCompanyanditssubsidiarieshavecarriedoutderivative

ZhejiangSanhua

limitedto,marketrisk,liquidityrisk,creditrisk,operationalrisk,legalrisk,etc.)ofholdingderivativesduringthereportingperiod

business,includingfuturescontractsandforeignexchangeforwardcontracts.The

IntelligentCompany

relevantprovisionslistedintheManagementMeasuresforFutureHedgingBusinessa

Companynd

HedgingBusiness.Changeofmarketpriceorfairvalueofinvestedderivativesduringthereportingperiod;specificmethods,relatedassumptionsandparametersettingofthederivatives’fairvalueanalysisshouldbedisclosed

--

Duringthecurrentreportingperiod,whethertherewassignificantchangesofaccountingpoliciesandaccountingprinciplesoftheCompany’sderivativescomparingtothepriorreportingperiod

NotapplicableSpecificopinionsontheCompany’sderivativesinvestmentsandriskcontrolfromindependentdirectors

Notapplicable

VII.DisposalofSignificantAssetsandEquity

1.Disposalofsignificantassets

□Applicable√Notapplicable

Duringthereportingperiod,therewasnodisposalofsignificantassets

2.Saleofsignificantequity

□Applicable√Notapplicable

VIII.AnalysisofMajorSubsidiariesandInvestees

√Applicable□Notapplicable

Informationaboutmajorsubsidiaries,andinvesteesthatcontributeabove10%oftheCompany’snetprofit

Unit：RMBCompany

name

Companytype

Principalbusiness

Registeredcapital

Totalassets

Netassets

Operatingrevenue

Operatingprofit

Netprofit

ZhejiangSanhuaRefrigerationGroupCo.,Ltd.

Subsidiary

RefrigerationandA/Celectricalcomponentsmanufacturingandmarketing

RMB250million

3,637,761,

589.65

3,279,261,

854.94

774,323,41

5.75

111,526,87

9.24

95,553,871

.33

HangzhouSanhuaMicrochannelHeatExchangerCo.,Ltd.

Subsidiary

RefrigerationandA/Celectricalcomponentsmanufacturingandmarketing

RMB360million

1,800,554,

246.62

1,108,549,

765.66

770,019,63

9.79

81,182,913

.69

63,929,318

.98

ZhejiangSanhuaTradingCo.,Ltd.

Subsidiary

RefrigerationandA/Celectricalcomponentsmarketing

RMB50million

2,537,279,

807.18

123,385,28

1.81

1,945,291,

190.28

2,372,959.

843,027.66

ZhejiangSubsidiaryAutomotivRMB1.465,169,808,3,247,619,2,110,820,308,193,12258,125,37

SanhuaAutomotiveComponentsCo.,Ltd

ecomponentsmanufacturingandmarketing

billion588.81222.58965.126.389.09

ZhejiangSanhuaCommercialRefrigerationCo.,Ltd

Subsidiary

RefrigerationandA/Celectricalcomponentsmarketing

RMB

1.64929

billion

1,707,953,

772.71

1,646,698,

303.74

-2,147,004.

-2,147,004.

SanhuaInternationalLimited(USA)(Consolidated)

Subsidiary

RefrigerationandA/Celectricalcomponentsmanufacturingmarketingandinvestmentmanagement

USD37.55million

1,676,659,

000.33

359,644,42

5.37

1,648,045,

127.66

116,132,36

6.44

108,267,40

6.20

SanhuaInternationalSingaporePTE.Ltd.(Consolidated)

Subsidiary

RefrigerationandA/Celectricalcomponentsmanufacturingmarketingandinvestmentmanagement

USD

105.57983

3million

3,020,615,

669.89

627,453,69

3.86

2,727,490,

087.22

62,021,135

.5448,785,981

.05

Informationaboutobtaininganddisposalofsubsidiariesduringthereportingperiod

□Applicable√Notapplicable

IX.StructuralEntitiesControlledbytheCompany

□Applicable√Notapplicable

X.RisksandCountermeasuresoftheCompany

(1)Riskofpricefluctuationofrawmaterials

TherawmaterialsneededbytheCompanyarecopperandaluminum,whichaccountforalargeproportionofthecostcompositionoftheproducts.Therefore,thefluctuationofthemarketpriceofrawmaterialswillbringlargecostpressuretotheCompany.TheCompanywillreducetheadverseimpactofrawmaterialpricefluctuationsthroughtheestablishmentoflinkagepricingmechanism,hedgingoperationofcommodityfutures,andtimelynegotiationwithcustomers.

(2)Theriskofrisinglaborcost

Thelaborcostsarerisingyearbyyear,whichreducestheprofitmarginoftheCompanytoacertainextent.Inthefuture,theCompanywillcontinuetoimprovethelevelofintelligentmanufacturingbycontinuouslypromotingleanproduction,processimprovementandtechnicaltransformation.

(3)Exchangeratefluctuationrisks

TheCompany'sexportvolumeislarge,involvingNorthAmerica,Europe,Japan,SoutheastAsiaandotherregions.Duetothechangesinregionaltradepolicies,theCompany'sdailyoperationwillbeaffected.TheCompanydealswithinterregionaltraderisksthroughtransferringproductioncapacitytoforeigncountries.Inaddition,thefluctuationofexchangeratewillalsohaveacertainimpactontheprofit.Accordingtotheactualsituation,theCompanydealswithandreducesthisriskbymeansofforwardforeignexchangesettlementandestablishingoverseasproductionbasesintheUnitedStates,Poland,Mexico,Indiaandotherplaces.

SectionIVCorporateGovernance

I.AnnualGeneralMeetingandExtraordinaryGeneralMeetingsConvenedDuringthe

ReportingPeriod

1.AnnualGeneralMeetingconvenedduringthecurrentreportingperiodMeetingNature

Proportionofparticipatinginvestors

ConvenedDateDisclosureDateDisclosureIndex

FirstExtraordinaryGeneralMeetingin2021

ExtraordinaryGeneralMeeting

69.04%February25,2021February26,2021

Theannouncementoftheresolutionofthefirstextraordinarygeneralmeetingofshareholdersin2021No.2021-012waspublishedinSecuritiesTimes,ShanghaiSecuritiesNewsandCNINFO

2020AnnualGeneralMeetingofShareholders

AnnualGeneralMeetingofShareholders

69.77%April16,2021April17,2021

Theannouncementontheresolutionoftheannualgeneralmeetingofshareholdersin2020(2021-029)waspublishedinSecuritiesTimes,ShanghaiSecuritiesNewsandCNINFO.

SecondExtraordinaryGeneralMeetingin2021

ExtraordinaryGeneralMeeting

67.29%June24,2021June25,2021

Theannouncementontheresolutionofthesecondextraordinarygeneralmeetingofshareholdersin2021(2021-055)waspublishedinSecuritiesTimes,ShanghaiSecurities

NewsandCNINFO.

2.Extraordinarygeneralmeetingsconvenedattherequestofpreferredshareholderswithresumedvotingrights

□Applicable√Notapplicable

II.Changesofdirectors,supervisorsandseniormanagementpersonnel

√Applicable□Notapplicable

NamePositionTypeDateReasons

PanYalan

IndependentDirector

Appointment

February25,2021

Mr.ZhuHongjun,anindependentdirector,resignedonDecember28,2020andcontinuedtoperformthedutiesofindependentdirectorandtheauditcommitteeoftheboardofdirectors.OnFebruary25,2021,thegeneralmeetingofshareholdersagreedtoappointMs.PanYalanasanindependentdirectoroftheCompany.Ms.PanYalanwilltaketherelevantpositionofMr.ZhuHongjunintheauditcommitteeofthesixthboardofdirectorsoftheCompany.

III.Profitdistributionandconversionofcapitalreservetosharecapitalduringthereporting

period

□Applicable√Notapplicable

TheCompanywillnotdistributecashdividend,distributebonusshares,ordistributesharesfromcapitalreserveduringthecurrentreportingperiod.IV.TheImplementationofanEquityIncentivePlan,EmployeeStockIncentivePlan,or

OtherIncentivePlans

√Applicable□Notapplicable

OnJune8,2021,The18thextraordinarymeetingofthe6thboardofdirectorsandthe16thextraordinarymeetingofthe6thboardofsupervisorsapprovedTheProposalonAdjustingRepurchasePriceofRestrictedStockIncentivePlanin2020,TheProposalonRepurchaseandCancellationofSomeRestrictedStocks,TheProposalontheAchievementofUnlockingConditionsoftheFirstVestingPeriodforthe2020StockIncentivePlan,andTheProposalonAdjustingtheRepurchasePriceoftheRestrictedStockIncentivePlanin2018.Thespecificcontentsoftheannouncementsaredisclosedasfollows:

ImportantissuesDisclosureDateDisclosureIndex

ontheResolutionofthe18thInterimMeetingofthe6thBoardofDirectors

June9,2021http://www.cninfo.com.cn

ontheResolutionofthe16thInterimMeetingofthe6thBoardofSupervisors

June9,2021http://www.cninfo.com.cn

AnnouncementAnnouncement

onAdjustingtheRepurchasePriceoftheRestrictedStockIncentivePlanin2018

June9,2021http://www.cninfo.com.cn

AnnouncementAnnouncement

onadjustingtheexercisepriceofstockappreciationrightincentiveplanin2018

June9,2021http://www.cninfo.com.cn

AnnouncementAnnouncement

onAdjustingRepurchasePriceofRestrictedStockIncentivePlanin2020

June9,2021http://www.cninfo.com.cn

AnnouncementAnnouncement

ontheAchievementofUnlockingConditionsoftheFirstVestingPeriodforthe2020StockIncentivePlan

June9,2021http://www.cninfo.com.cn

AnnouncementAnnouncement

onCancellationofStock

AnnouncementAppreciation

Right

June9,2021http://www.cninfo.com.cn

AppreciationAnnouncement

onRepurchaseandCancellationofSomeRestrictedStocks

June9,2021http://www.cninfo.com.cn

SectionVEnvironmentalandSocialResponsibilityI.Significantenvironmentalissues

WhethertheCompanyoranyofitssubsidiariesshouldbecategorizedasacriticalpollutantenterprisedefinedbyNationalEnvironmentalProtectionDepartment

√Yes□No

NameofCompanyorsubsidiary

Nameofmainpollutantsandcharacteristicpollutants

Emissionmode

Numberofoutlets

Distributionofemission

outlets

Emissionconcentration

Emissionstandards

Totalemissions

Approvedtotalemission

Overstandardemission

ZhejiangSanhuaIntelligentControlsCo.,Ltd

CODNanotube1North≦500mg/L

ThelimitationofCODinGB8978-19

IntegratedWastewaterEmissionStandardis500mg/L

21.53T

61.867T

/year

Notexceedingthestandard

ZhejiangSanhuaIntelligentControlsCo.,Ltd

AmmoniaNitrogen

Nanotube1North≦35mg/L

ThelimitationlistedinDB33/887-2013Indirect

EmissionLimitsofNitrogen

andPhosphorusPollutants

fromIndustrialWastewateris35mg/L

2.153T

6.186T

/year

Notexceedingthestandard

ZhejiangSanhuaIntelligent

SO2

Directemission

1North≦50mg/m3

Thelimitation

listedin

0.402T2.15T/year

Notexceeding

ControlsCo.,Ltd

GB13271-2

EmissionStandardof

Air

Pollutants

forBoilersis50mg/m3

thestandard

ZhejiangSanhuaIntelligentControlsCo.,Ltd

Nitrogen

Oxide

Directemission

1North≦50mg/m3

AccordingtothelowNitrogenemissionrequirementsoflocalgovernment

,thelimitvalueofgas-firedboileris50mg/m3

1.879T

10.06T

/year

Notexceedingthestandard

ZhejiangSanhuaRefrigerationGroupCo.,Ltd

CODNanotube1South≦500mg/l

ThelimitationfromGB8979-1996is500mg/L

2.377T

9.205T

/year

Notexceedingthestandard

ZhejiangSanhuaRefrigerationGroupCo.,Ltd

TotalCopper

Nanotube1South≦

2.0mg/l

ThelimitationfromGB8979-1996is

2.0mg/l

0.079T/

Notexceedingthestandard

ConstructionandoperationofpollutioncontrolfacilitiesAdheringtotheadvancedmanagementconcept,theCompanytakes"developingenergy-savingandlow-carboneconomy,creatingagreenqualityenvironment"asitsownresponsibility,constantlysurpasses,andbecomesanimportantcreatorandcontributorofhumangreenqualitylivingenvironmentwithlimitedresourcesandunlimitedwisdom.

1.Intermsofwastewatertreatment,theCompanyrespondedtotheconstructionof"fivewatertreatment",

"eliminatinginferiorV-typewater"and"zerodirectdischargeofsewage"inthewholeprovince.TheCompanyrenovatedtherainwaterandsewageoutletsinthefactoryarea,implementedtheseparationofrainwaterandsewage,andinstalledcut-offvalvesandvideomonitoringequipmentattheCompany's

rainwaterdischargeoutlets,andcollectedandtreatedtheearlyrainwater.Therearetwowastewatertreatmentstationsinthefactory.Thesewagetreatmentstationshavebeenequippedwithstandardizedsewageoutletsandsetupdischargeoutletsigns.Onlinemonitoringdevice,solenoidvalveflowmeterandcardswipingsewagesystemareinstalledatthedischargeoutlet,whichhasbeenconnectedwiththeenvironmentalprotectiondepartment.ThemonitoringindicatorsincludepH,COD,totalcopper,totalzinc,totalchromium,totalnickelandflow.Wastewatertreatment:TheCompanyhasentrustedathird-partyprofessionaltreatmentunitfortreatment.ThedischargeindicatorsoftheCompany'sinternalcontrolwastewaterarestricterthantheenvironmentaldischargestandard.ThefinaltreatedwastewaterisdischargedintothesewagecollectionpipenetworkoftheindustrialzoneandsenttoShengxinsewagetreatmentplantforretreatment.

2.Wastegastreatment:TheCompanyhasacidpickling,electroplatingwastegas,weldingdust,ultrasonic

cleaningandotherwastegas.Allkindsofwastegasdischargecylindersareequippedwithcorrespondingwastegastreatmentdevices.Theacidpicklingandelectroplatingwastegasabsorptionandtreatmenttowerisinstalledwithautomaticdosingsystem,andthewastegasisdischargedtoairaftertreatment.Atthesametime,inordertowintheblue-skydefenseactivity,theCompanycarriedoutlowNitrogenemissiontransformationoftheCompany'sgasboilersinaccordancewiththerequirementsofrelevantofficialdepartmentsin2019.In2021,thetransformationandupgradingofVOCstreatmentfacilitiesinindustrialenterprisesarebeingimplemented.Atthesametime,inordertoreducegenerationofVOCs,aqueouscleaningisusedtoreplaceorganicsolventcleaning.

3.Solidwasteandsoil(groundwater)treatment:allkindsofhazardouswasteoftheCompanyareentrustedtothethirdqualifiedpartyfordisposal,thegeneralsolidwastewithutilizationvalueisrecycled,thedomesticwasteisclearedandtransportedbytheenvironmentalsanitationstation,andtheconstructionwasteiscleanedandtransportedbytheconstructionunit.TheCompanyalsoteststhesoilandgroundwatereveryyearandpublishesthemonthecorrespondingwebsiteInMarch2020,SanhuaRefrigerationGroupcarriedoutaspecialsiteinvestigationonsoilandgroundwaterinXialiquanplantarea,andpreparedaninvestigationreport.Nopollutionwasfound.InJuly2020,theCompanybecameoneofthefirst"wastefreefactories"inShaoxingCity.

4.Noisecontrol:TheCompany'sexistingmainnoiseisworkshopproductionnoise,aircompressorroom,waste

gasandwastewatertreatmentequipmentnoise.Equipmentlayoutisreasonable,andtreesareplantedaroundtheworkshop.Noiseatfactorymeetsthestandard.

5.The"threewastes"pollutioncontrolfacilitiesoftheCompanyareinnormalandstableoperation,the

pollutantsaredischargedbasedonthestandard,andthereisnoenvironmentalpollutionevent.EnvironmentalImpactAssessment(EIA)ofconstructionprojectsandotheradministrativepermitsforenvironmentalprotection

1.Since2010,theCompanyhasinvestedintheconstructionofMeizhuSanhuaIndustrialEstateinXinchangCounty,andhasobtained25EIAreplies.Alltheprojectshavepassed.InAugust2020,theCompanyobtainedthenationalemissionpermit.

2.ZhejiangSanhuaRefrigerationGroupCo.,Ltd.hasinvestedinXialiquanofXinchangCountysince2013,and

hasobtained6EIAreplies.Alltheprojectshavepassed.EmergencyResponsePlan

1.TheCompanyre-writeEmergencyResponsePlaninApril2021,andfiledwithXinchangEnvironmentalProtectionBureauonJune10,2021(RecordNo.330624-2021-06-M).

2.Inordertomanageenvironmentalemergenciesandreducetheenvironmentalhazardscausedbysuddenenvironmentalpollutionaccidents,ZhejiangSanhuaRefrigerationGroupCo.,Ltd.re-compiledEmergencyResponsePlanforEnvironmentalPollutionAccidentsofZhejiangSanhuaRefrigerationGroupCo.,Ltd.(simplifiedversion)inOctober2018,whichwasfiledwithXinchangCountyEnvironmentalProtectionBureauonOctober29,2018(RecordNo.3306242018013).Environmentalself-monitoringprogramTheCompanyformulatedSelf-monitoringSchemeofZhejiangSanhuaIntelligentControlCo.,Ltd.accordingtotherequirementsofthesuperiorenvironmentalprotectiondepartment,combinedwiththeactualproductionsituationandtheactualneedsofenvironmentalmanagementoftheCompany.ThesewagestationoftheCompanyisequippedwithalaboratory,andthedetectionisconductedbyaspeciallyassignedperson.OnlineautomaticmonitoringequipmentsuchaspH,COD,TOC,totalcopper,totalzinc,totalchromium,totalnickel,flowrateetc.areinstalledattheCompany'stotalwastewaterdischargeoutlet,soastoachievethecombinationofautomaticmonitoringandmanualtesting.Forthepollutionfactorssuchassuspendedmatters,totalPhosphorus,AmmoniaNitrogen,totalIronandPetroleum,theCompanyentrustsathird-partytestingagencytocarryoutregularmonitoring.Themonitoringresultsarepublishedregularlyontheenterpriseself-monitoringinformationdisclosureplatformofZhejiangProvince.ZhejiangSanhuaRefrigerationGroupCo.,Ltd.hasgoodpollutantemissionmonitoringandmanagementability,andcantimelyinformtheenvironmentalprotectionadministrativedepartmentandthepublicofthemonitoringinformation.Accordingtotheactualproductionsituationandtheactualneedsofenvironmentalmanagement,theenvironmentalprotectionlaboratoryofwastewatertreatmentstationissetup,andthedetectioniscarriedoutbyspeciallyassignedpersondaily.OnlineautomaticmonitoringequipmentsuchaspH,COD,TOC,totalcopperandflowrateareinstalledatthetotalwastewaterdischargeoutletoftheCompany.Thecombinationofautomaticmonitoringandmanualtestingeffectivelyensuresthetimelinessandeffectivenessofmonitoring.Atthesametime,athird-partytestingCompanyisentrustedtocarryoutregularmonitoring.Themonitoringresultsarepublishedregularlyontheenterpriseself-monitoringinformationdisclosureplatformofZhejiangProvince.AdministrativepenaltiesforenvironmentalproblemsduringthereportingperiodNotapplicableOtherenvironmentalinformationthatshouldbedisclosedNotapplicableOtherenvironmentalinformationNotapplicable

II.SocialResponsibilityNO

SectionVISignificantEventsI.CompleteandIncompleteCommitmentsoftheCompanyandItsActualController,

Shareholders,Relatedparties,Acquirers,andOtherRelatedPartiesbytheEndoftheReportingPeriod

√Applicable□Notapplicable

Commitments

Giverofcommitments

NatureDetailsofcommitments

Dateofcommitments

Termofcommitments

Performance

Commitmentsofsharereform

ZhangYabo,controllingshareholderSanhuaHoldingGroupCo.,Ltd.

Othercommitment

WhenthenumberofsharessoldthroughlistingandtradinginShenzhenStockExchangereaches1%ofthetotalnumberofsharesoftheCompany,itshallmakeanannouncementwithintwoworkingdaysfromthedateoftheoccurrenceofthefact.

November21,2005

Longterm

Strictperformance

Commitmentsmadeduringassetrestructuring

ZhangDaocai,controllingshareholderSanhuaHoldingGroupCo.,Ltd.

Commitmentonhorizontalcompetition,relatedpartytransactionsandcapitaloccupation

ThecommitmentmadeatthetimeofIPO,itshallnotengageinthesameproduction,operationorbusinessastheCompanyinthefuture.InordertoavoidbusinesscompetitionwiththeCompanyandclarifythenon-competitionobligations,SanhuaHoldingGroup,onbehalfofitselfanditssubsidiarieswithmorethan50%equity,makesacommitmenttoSanhuaintelligentcontrolstoavoidpossiblehorizontalcompetition.

June7,2005Longterm

Strictperformance

ZhangDaocai,controllingshareholderSanhua

Commitmentonhorizo

ZhangDaocaiandSanhuaholdinggroup,thecontrollingshareholderoftheCompany,promisethattherewillnotbe

January5,2009

Longterm

Strictperformance

HoldingGroupCo.,Ltd.

ntalcompetition,relatedpartytransactionsandcapitaloccupation

anycompetitionwithSanhuaintelligentcontrolsinthebusinessscopebeingoralreadycarriedoutinthefuture.

ZhangDaocai,controllingshareholderSanhuaHoldingGroupCo.,Ltd.

Commitmentonhorizontalcompetition,relatedpartytransactionsandcapitaloccupation

SanhuaHoldingGrouppromises:afterthecompletionofthistransaction,SanhuaHoldingGroupandSanhuaintelligentcontrolswillsignanagreementaccordingtolaw,performlegalprocedures,fulfilltheobligationofinformationdisclosureandhandlesignificantmattersforapprovalinaccordancewithrelevantlaws,regulations,articlesofassociationofSanhuaintelligentcontrols.Intheprocessofimplementationofrelatedpartytransactions,wewillfollowtheprincipleoflegalityandreasonableness,ensurethefairnessofpricesandprocedures,andmakecertainthatthelegitimateinterestsofSanhuaintelligentcontrolsandothershareholderswillnotbedamagedthroughrelatedpartytransactions.

January5,2009

Longterm

Strictperformance

ZhangDaocai,ZhangYabo,ZhangShaobo,controllingshareholderSanhuaHolding

Commitmentonhorizontalcompetition,related

InordertoavoidhorizontalcompetitionwithSanhuaintelligentcontrols,ZhangDaocai,ZhangYabo,ZhangShaobo,SanhuaHoldingGroupthecontrollingshareholderoftheCompany,andSanhuaLvnengIndustry,thetrading

July24,2015Longterm

Strictperformance

GroupCo.,Ltd.,ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd.

partytransactionsandcapitaloccupation

partnermadethefollowingcommitments:

1.I(ortheCompany)willnot

directlyorindirectlyengageinorparticipateinthebusinessthatconstitutespotentialdirectorindirectcompetitionwithSanhuaIntelligentControlsanditssubordinateenterprises;guaranteethatlegalandeffectivemeasuresshallbetakentourgeotherenterprisescontrolledbyme(ortheCompany)nottoengageinorparticipateinanybusinesscompetingwithSanhuaIntelligentControlsanditssubordinateenterprises.

2.IfSanhuaIntelligentControls

furtherexpandsitsbusinessscope,I(ortheCompany)andothercontrolledenterpriseswillnotcompetewithSanhuaIntelligentControls'expandedbusiness;ifitispossibletocompetewithSanhuaIntelligentControls'businessafterexpansion,I(ortheCompany)andothercontrolledenterpriseswillwithdrawfromSanhuaIntelligentControlsinthefollowingwaysofcompetition:

A.StopthebusinessesthatcompeteormaycompetewithSanhuaIntelligentControls;B.InjectthecompetitivebusinessintoSanhuaIntelligentControls;C.Transferthecompetitivebusinesstoanunrelatedthirdparty.

3.IfI(ortheCompany)and

otherenterprisescontrolledbyme(ortheCompany)haveanybusinessopportunitiesto

engageinandparticipateinanyactivitiesthatmaycompetewithSanhuaIntelligentControls'businessoperation,theyshallimmediatelyinformSanhuaIntelligentControlsoftheabovebusinessopportunities.IfSanhuaIntelligentControlsmakesanaffirmativereplytotakeadvantageofthebusinessopportunitywithinareasonableperiodspecifiedinthenotice,itshalldoitsbesttogivethebusinessopportunitytoSanhuaIntelligentControls.

4.Incaseofbreachofthe

abovecommitment,I(ortheCompany)iswillingtobearallresponsibilitiesarisingtherefromandfullycompensatealldirectorindirectlossescausedtoSanhuaIntelligentControls.

ZhangDaocai,ZhangYabo,ZhangShaobo,controllingshareholderSanhuaHoldingGroupCo.,Ltd.,ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd.

Commitmentonhorizontalcompetition,relatedpartytransactionsandcapitaloccupation

InordertostandardizetherelatedpartytransactionswithSanhuaIntelligentControls,ZhangDaocai,ZhangYabo,ZhangShaobo,SanhuaHoldingGroupthecontrollingshareholderoftheCompanyandSanhuaLvnengIndustrialthetradingpartnermadethefollowingcommitments:

1.I(ortheCompany)andthe

controlledenterpriseswillreducetherelatedpartytransactionswithSanhuaintelligentcontrolsasfaraspossible,andwillnotusetheirownstatusasshareholdersofSanhuaintelligentcontrolstoseekforsuperiorrightsintermsofbusinesscooperationand

July24,2015Longterm

Strictperformance

otheraspectscomparedwithotherthirdparties;

2.I(ortheCompany)willnot

takeadvantageoftherighttoenterintoatransactionwithSanhuaintellectualcontrolsusingthepositionasashareholder.

3.Iftherearenecessaryand

unavoidablerelatedpartytransactions,I(ortheCompany)andthecontrolledenterpriseswillsignagreementswithSanhuaintelligentcontrolsinaccordancewiththeprinciplesoffairness,followlegalprocedures,andperformtheinformationdisclosureobligationsinaccordancewiththerequirementsofrelevantlaws,regulatorydocumentsandthearticlesofassociation.Itshallalsoperformrelevantinternaldecision-makingandapprovalprocedurestoensurethatitwillnotconducttransactionswithSanhuaintelligentcontrolsontermsthatareobviouslyunfaircomparedwiththemarketprice,andwillnotusesuchtransactionstoengageinanybehaviorthatdamagesthelegitimaterightsandinterestsofSanhuaintelligentcontrolsandothershareholders.ZhangDaocai,ZhangYabo,ZhangShaobo,controllingshareholderSanhuaHolding

OtherCommitment

ZhangDaocai,ZhangYabo,ZhangShaoboandSanhuaholdingGroup,thecontrollingshareholderoftheCompany,madethefollowingcommitments:afterthecompletionofthetransaction,Sanhuaintelligentcontrolswill

July24,2015Longterm

Strictperformance

GroupCo.,Ltd.

continuetoimprovethecorporategovernancestructureandindependentoperationoftheCompanymanagementsysteminaccordancewiththerequirementsofrelevantlawsandregulationsandthearticlesofAssociation,andcontinuetomaintaintheindependenceofSanhuaintelligentcontrolsinbusiness,assets,finance,institutions,personnel,etc.toprotecttheinterestsofallshareholders.

ZhangDaocai,ZhangYabo,ZhangShaobo,controllingshareholderSanhuaHoldingGroupCo.,Ltd.,ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd.

Commitmentonhorizontalcompetition,relatedpartytransactionsandcapitaloccupation

1.I(ortheCompany)andthe

controlledenterpriseswillreducetherelatedpartytransactionswithSanhuaintelligentcontrolsasfaraspossible,andwillnotusethepositionasashareholderofSanhuaintellectualcontrolstoseekthesuperiorrightsforbusinesscooperationwithSanhuaintelligentcontrolscomparedwithotherthirdparties;

2.I(ortheCompany)willnot

usemypositionasashareholderofSanhuaintellectualcontrolstoseekforthepriorityrighttocooperatewithSanhuaintellectualcontrols;

3.Iftherearenecessaryand

unavoidablerelatedpartytransactions,I(ortheCompany)andthecontrolledenterpriseswillsignagreementswithSanhuaintelligentcontrolsinaccordancewiththeprinciplesoffairness,followlegalprocedures,andperformtheinformationdisclosure

September18,2017

Longterm

Strictperformance

obligationsinaccordancewiththerequirementsofrelevantlaws,regulatorydocumentsandthearticlesofassociation.Itshallalsoperformrelevantinternaldecision-makingandapprovalprocedurestoensurethatitwillnotconducttransactionswithSanhuaintelligentcontrolsontermsthatareobviouslyunfaircomparedwiththemarketprice,andwillnotusesuchtransactionstoengageinanybehaviorthatdamagesthelegitimaterightsandinterestsofSanhuaintelligentcontrolsandothershareholders.

ZhangDaocai,ZhangYabo,ZhangShaobo,controllingshareholderSanhuaHoldingGroupCo.,Ltd.,ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd.

Commitmentonhorizontalcompetition,relatedpartytransactionsandcapitaloccupation

1.I(ortheCompany)willnot

directlyorindirectlyengageinorparticipateinanybusinessthatmayconstitutepotentialdirectorindirectcompetitionwithSanhuaintelligentcontrolsanditssubordinateenterprises;guaranteedthatlegalandeffectivemeasureswillbetakentourgeotherenterprisescontrolledbyme(ortheCompany)nottoengageinorparticipateinanybusinessthatiscompetitivewithSanhuaintelligentcontrolsanditssubordinateenterprisesbusiness.

2.IfSanhuaintelligentcontrols

furtherexpandsitsbusinessscope,I(ortheCompany)andotherenterprisescontrolledbyme(ortheCompany)willnotcompetewithSanhuaintelligentcontrols'expandedbusiness;ifitispossibletocompetewithSanhuaintelligentcontrols'

September18,2017

Longterm

Strictperformance

businessafterexpansion,I(ortheCompany)andotherenterprisescontrolledbyme(ortheCompany)willwithdrawfromSanhuaintelligentcontrolsinthefollowingwaysofcompetition:A.stopthebusinessesthatcompeteormaycompetewithSanhuaintelligentcontrols;B.injectthecompetitivebusinessintoSanhuaintelligentcontrols;C.transferthecompetitivebusinesstoanunrelatedthirdparty.

3.IfI(ortheCompany)and

otherenterprisescontrolledbyme(ortheCompany)haveanybusinessopportunitiestoengageinandparticipateinanyactivitiesthatmaycompetewithSanhuaintelligentcontrols'businessoperation,theyshallimmediatelyinformSanhuaintelligentcontrolsoftheabovebusinessopportunities.IfSanhuaintelligentcontrolsmakesanaffirmativereplytotakeadvantageofthebusinessopportunitywithinareasonableperiodspecifiedinthenotice,itshalldoitsbesttogivethebusinessopportunitytoSanhuaintelligentcontrols.

4.Incaseofbreachofthe

abovecommitment,I(ortheCompany)iswillingtobearallresponsibilitiesarisingtherefromandfullycompensatealldirectorindirectlossescausedtoSanhuaintelligentcontrols.ZhangDaocai,ZhangYabo,

Othercomm

Afterthecompletionofthetransaction,thelistedCompany

September18,2017

Longterm

Strictperformance

ZhangShaobo,controllingshareholderSanhuaHoldingGroupCo.,Ltd.,ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd.

itmentwillcontinuetoimprovethe

corporategovernancestructureandindependentoperationoftheCompanymanagementsysteminaccordancewiththerequirementsofrelevantlawsandregulationsandthearticlesofassociation,continuetomaintaintheindependenceofthelistedCompanyinbusiness,assets,finance,institutions,personnelandotheraspects,andeffectivelyprotecttheinterestsofallshareholders.Arethecommitmentsfulfilledontime

Yes

II.TheCompany’sfundsusedbythecontrollingshareholderoritsrelatedpartiesfor

non-operatingpurposes.

□Applicable√Notapplicable

Nosuchcaseduringthereportingperiod.

III.Illegalprovisionofguaranteesforexternalparties

□Applicable√Notapplicable

Nosuchcaseduringthereportingperiod.

IV.EngagementanddisengagementoftheCPAfirmWhetherthisfinancialreportwasaudited

□Yes√No

Thisreportwasnotaudited.V.ExplanationGivenbytheBoardofDirectorsandSupervisoryCommitteeRegardingthe

“Non-standardAuditor’sReport”IssuedbytheCPAFirmfortheReportingPeriod

□Applicable√Notapplicable

VI.ExplanationGivenbytheBoardofDirectorsRegardingthe“Non-standardAuditor’s

Report”IssuedbytheCPAFirmforthePriorYear

□Applicable√Notapplicable

VII.BankruptcyandRestructuring

□Applicable√Notapplicable

Nosuchcaseduringthereportingperiod.

VIII.MaterialLitigationandArbitrationMaterialLitigationandArbitration

□Applicable√Notapplicable

Nosuchcaseduringthereportingperiod.Otherlitigations

□Applicable√Notapplicable

IX.PunishmentsandRectifications

□Applicable√Notapplicable

Nosuchcaseduringthereportingperiod.

X.IntegrityoftheCompanyandItsControllingShareholdersandActualControllers

□Applicable√Notapplicable

XI.SignificantRelated-partyTransaction

1.Significantrelated-partytransactionsarisingfromroutineoperation

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

2.Related-partytransactionsregardingpurchaseanddisposalofassetsorequity

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

3.Significantrelated-partytransactionsarisingfromjointinvestmentsonexternalparties

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

4.Relatedcreditanddebttransactions

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

5.TransactionswithrelatedfinancialcompaniesandfinancialcompaniescontrolledbytheCompany

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

6.Othersignificantrelatedpartytransactions

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

XII.SignificantContractsandTheirExecution

1.Mattersontrusteeship,contracting,andleasing

（1）Trusteeship

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

（2）Contracting

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

（3）Leasing

√Applicable□Notapplicable

IllustrationofleaseAwecoPolskasAppliancesp.z.o.osp.k,awholly-ownedsubsidiaryoftheCompany,acquired2buildingsthroughcapitallease.Itemswithprofitandlossexceeding10%ofthetotalprofitoftheCompanyinthereportperiod

□Applicable√Notapplicable

Duringthereportingperiod,thereisnoleasingprojectwithprofitandlossofmorethan10%ofthetotalprofitoftheCompany.

2.Significantguarantees

√Applicable□Notapplicable

(1)Guarantees

Unit:RMBin10thousandExternalGuaranteesfromtheCompanyanditsSubsidiaries(ExcludingGuaranteestotheSubsidiaries)

Guaranteed

Party

Disclosure

dateofannouncementoftheguaranteecap

Guarantee

Cap

ActualOccurrence

Date

ActualGuaranteeAmount

TypeofGuarantee

Collateral

(ifany)

Counterguarant

ee(ifany)

TermofGuarantee

DueorNot

GuaranteeforRelatedPartiesorNotCompany'sGuaranteestoSubsidiaries

GuaranteedParty

Disclosuredateofannouncementoftheguaranteecap

GuaranteeCap

ActualOccurrenceDate

ActualGuaranteeAmount

TypeofGuarantee

Collateral(ifany)

Counterguarantee(ifany)

TermofGuarantee

DueorNot

GuaranteeforRelatedPartiesorNotSANHUAINTERNATIONALSINGAPOREPTE.LTD.

April3,2019

132,000

July5,2019

11,529.3

Jointliabilityguarantee

2019.07.05-2022.06.20

NoYes

SANHUAINTERNATIONAL,INC.

April3,2019

30,000December9,2019

20,026.31

Jointliabilityguarantee

2019.12.09-2022.12.09

NoYesSANHUAINTERNATIONAL,INC.

April29,2020

50,000

June24,2020

9,690.15

Jointliabilityguarantee

2020.06.24-2021.06.23

YesYesSANHUAINTERNATIONALSINGAPOREPTE.LTD.

April29,2020

150,000

September14,2020

7,686.2

Jointliabilityguarantee

2020.09.14-2021.09.13

NoYes

SANHUAINTERNATIONALSINGAPO

April29,2020

150,000

November2,2020

7,686.2

Jointliabilityguarantee

2020.11.02-2021.11.01

NoYes

REPTE.LTD.SANHUAINTERNATIONALSINGAPOREPTE.LTD.

April29,2020

150,000

June12,2020

7,500

Jointliabilityguarantee

2020.06.12-2022.12.25

NoYes

SANHUAINTERNATIONALSINGAPOREPTE.LTD.

April3,2019

132,000

February10,2020

9,992.06

Jointliabilityguarantee

2020.02.10-2021.02.09

YesYes

SANHUAINTERNATIONAL,INC.

March27,2021

50,000June23,2021

9,690.15

Jointliabilityguarantee

2021.06.23-2022.06.16

NoYesSANHUAINTERNATIONALSINGAPOREPTE.LTD.

March27,2021

180,000

February10,2021

9,992.06

Jointliabilityguarantee

2021.02.10-2021.08.06

NoYes

SANHUAINTERNATIONALSINGAPOREPTE.LTD.

March27,2021

180,000

June8,2021

1,537.24

Jointliabilityguarantee

2021.06.08-2021.12.08

NoYes

TotalAmountofGuaranteestoSubsidiariesApprovedduringtheReportingPeriod(B1)

280,000

TotalAmountofGuaranteestoSubsidiariesActuallyOccurredduringtheReportingPeriod(B2)

21,219.45

TotalAmountofGuaranteestoSubsidiariesApprovedbytheEndoftheReportingPeriod(B3)

334,428.01

TotalBalanceofGuaranteesActuallyPaidtoSubsidiariesattheEndoftheReportingPeriod(B4)

75,647.46

Subsidiaries'GuaranteestoSubsidiariesGuaranteedDisclosureGuaranteeActualActualTypeofCollateralCounterTermofDueorGuarante

Partydateof

announcem

entoftheguarantee

cap

Cap

Occurrence

Date

Guarantee

Amount

Guarantee(ifany)guarant

ee(ifany)

GuaranteeNotefor

RelatedPartiesor

NotThetotalamountoftheCompany'sguarantees(thetotaloftheabovethreeitems)TotalAmountofGuaranteesApprovedduringtheReportingPeriod(A1+B1+C1)

280,000

TotalAmountofGuaranteesActuallyOccurredduringtheReportingPeriod(A2+B2+C2)

21,219.45

TotalAmountofGuaranteesApprovedbytheEndoftheReportingPeriod(A3+B3+C3)

334,428.01

TotalBalanceofGuaranteesActuallyPaidattheEndoftheReportingPeriod(A4+B4+C4)

75,647.46

TotalAmountofActualGuarantees(A4+B4+C4)asaPercentageoftheCompany'sNetAssets

7.24%

Ofwhich：

BalanceofDebtGuaranteesDirectlyorIndirectlyOfferedtoGuaranteedObjectswithAsset-liabilityRatioExceeding70%(E)

29,716.46TotalAmountoftheAboveThreeGuarantees(D+E+F)

29,716.46

3.Entrustedwealthmanagement

√Applicable□Notapplicable

Unit:RMBin10thousandSpecifictypesCapitalsourceAmount

Balancebeforematurity

Overdueuncollectedamount

AccruedimpairmentamountofoverdueunrecoveredfinancialproductBankfinancialproducts

TheCompany’sownedfunds,raisedfunds

75,048.518,839.78Total75,048.518,839.78Specificsituationofhigh-riskentrustedfinancialmanagementwithlargesingleamountorlowsecurity,poorliquidityandwithoutguaranteeofprincipal

√Applicable□Notapplicable

Unit:RMBin10thousand

Nameof

trustee

Type

oftrustee

Product

type

Amoun

t

Capitalsource

Startdate

Terminationdate

Capitalinvestm

ent

Determi

nationofreturn

Referenceannualizedrateofreturn

Expectedreturn(ifany)

Actualprofitandlossinthereportingperiod

Actualrecoveryofprofitandlossinthereportingperiod

Amountofprovisionforimpairment(ifany)

Throughlegalprocedu

resor

not

Futureentrustedfinancialmanagementplanornot

Eventoverviewandrelevantindex(ifany)IndustrialandCommercialBankofChinaXinchangsubbranch

Bank

"Tianlibao"Networthfinancialproductforcorporate

20,000

Self-funds

December30,2020

January4,2021

Bankfinancialproducts

Floatingincomewithoutguaranteeofprincipal

2.62%7.197.19Yes-

IndustrialandCommercialBankofChinaXinchangsubbranch

Bank

"E-Lingtong"networthfinancialproductsforcorporatewithoutfixedterm

5,000

Self-funds

December31,2020

January4,2021

Bankfinancialproducts

Floatingincomewithoutguaranteeofprincipal

3.03%1.661.66Yes-

BankofBankBankof10,000Self-funFebruarMay10,BankFloating

3.50%80.5180.51Yes-

ZhejiangSanhua

CommunicationsCo.,Ltd.ShaoxingXinchangsubbranch

Communi

cationsYuntongwealthfixstructureddepositfor89days(linkedexchangeratebullish)

dsy10,

2021

2021financia

lproduct

s

incomewithguaranteeofprincipa

l

BNPParibasShanghaiBranch

Bank

Structureddepositslinkedwithforeignexchange

rateofEuroandUSdollar

10,000

Self-funds

June29,2021

December13,2021

Bankfinancialproducts

Floatingincome

withguaranteeofprincipal

3.80%0

Intelligent

GuangzhouDevelopmentBankHangzhouXiaoshansubbranch

Bank

XinjiaxinNo.16structureddeposit

9,500

Self-funds

October22,2020

January22,2021

Bankfinancialproducts

Floatingincomewithguaranteeofprincipal

3.30%73.74

73.74

ZhejiangSanhua

HengSengBankHangzhouBranch

Bank

Hengliyin

g

5,000

Self-funds

October23,2020

January

22,2021

Bankfinancia

lproduct

s

Floatingincome

withguaranteeofprincipa

l

3.35%39.94

Intelligent

39.94

ChinaCITICBankHangzhouBranch

Bank

Structured

deposit

5,000

Self-fun

ds

Decemb

er31,2020

Februar

y1,2021

Bankfinancia

lproduct

s

Fixincome

withguarant

eeofprincipa

l

3.55%15.14

39.94

15.14

Total

64,500

【

】

------------0218.18

15.14

--

Note:[1]TheabovementionedarethedetailsoftheCompany'ssinglesignificantfinancialmanagement(singleamountis

--more

Entrustedfinancialmanagementisexpectedtobeunabletorecovertheprincipalorthereareothersituationsthatmaylead

moreto

□Applicable√Notapplicable

4.Significantcontractsfordailyoperation

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

5.Othersignificantcontracts

□Applicable√Notapplicable

Nosuchcaseinthereportingperiod.

XIII.Othersignificantevents

√Applicable□Notapplicable

TheCompanycompletedtheissuanceandlistingofRMB3billionconvertiblebonds.AccordingtoChinaSecuritiesRegulatoryCommissionReplyonApprovingPublicOfferingofConvertibleCorporateBondsbyZhejiangSanhuaIntelligentControlsCo.,Ltd(ZJXK[2021]NO.168),theCompanyissued30millionconvertiblecorporatebondswithafacevalueofRMB100onJune1,2021.ItwaslistedandtradedonShenzhenStockExchangeonJune30,2021(thebondisreferredtoas"Sanhuaconvertiblebond"andthebondcodeis"127036").SeeSectionIX"Bonds"ofthe2021Semi-Annualreportformoredetails.XIV.SignificanteventsoftheCompany’ssubsidiaries

□Applicable√Notapplicable

SectionVIIChangesinSharesandInformationaboutShareholdersI.ChangesinShares

1.Changesinshares

Unit:ShareBeforethechangeChangesintheperiod(+,-)AfterthechangeSharesRatio

NewSharesIssued

Bonusshare

Sharetransferred

from

capital

reserve

OthersSub-totalSharesRatio

1.Sharessubjectto

conditionalrestriction(s)

61,268,30

1.71%-4,426,340-4,426,340

56,841,96

1.58%

3)Otherdomesticshares

61,268,30

1.71%-4,426,340-4,426,340

56,841,96

1.58%

Ofwhich:SharesheldbydomesticlegalpersonSharesheldbydomestic

naturalperson

61,268,30

1.71%-4,426,340-4,426,340

56,841,96

1.58%

2.Shareswithout

restriction

3,530,333,

98.29%4,426,3404,426,340

3,534,759,503

98.42%

1)RMBordinaryshares

3,530,333,

98.29%4,426,3404,426,340

3,534,759,503

98.42%

3.Total

3,591,601,

100.00%00

3,591,601,468

100.00%

Reasonforthechangesinsharecapital

√Applicable□Notapplicable

1.Atthebeginningofeachyear,thenumberoflockedsharesheldbyseniorexecutivesoftheCompanyshallberecalculatedaccordingto75%ofthetotalsharesheldbyseniorexecutives.

2.OnJune18,2021,thefirstvestingperiodofthe2020restrictedstockincentiveplanmatured,and4,596,150restrictedsharesof883incentiveobjectswhomeettheunlockingconditionswereunlocked.Accordingtotherelevantprovisionsofsharesmanagementforseniorexecutives,4,426,340shareswereactuallyunlockedandlistedforcirculation.Approvalforchangesinsharecapital

√Applicable□Notapplicable

OnJune8,2021,the18thinterimmeetingofthesixthboardofdirectorsandthe16thinterimmeetingofthesixthboardofsupervisorsdeliberatedandapprovedTheProposalontheAchievementofUnlockingConditionsoftheFirstVestingPeriodforthe2020StockIncentivePlan.Therewere883incentiveobjectswhomeettheconditionsforunlocking,andthenumberofunlockedshareswas4,596,150Transferofshares

□Applicable√Notapplicable

Informationabouttheimplementationofsharerepurchase

□Applicable√Notapplicable

Theprogressonreductionofre-purchasesharesbymeansofcentralizedbidding

□Applicable√Notapplicable

Effectsofchangesinsharecapitalonthebasicearningspershare("EPS"),dilutedEPS,netassetspershareattributabletocommonshareholdersoftheCompany,andotherfinancialindexesoverthelastyearandlastperiod

√Applicable□Notapplicable

Pleaserefertothefinancialreportfordetails.OthercontentsthattheCompanyconsidersnecessaryorrequiredbythesecuritiesregulatoryauthoritiestodisclose

□Applicable√Notapplicable

2.Changesinrestrictedshares

√Applicable□Notapplicable

Unit:ShareNameofshareholder

Openingbalanceofrestrictedshares

Vestedincurrentperiod

Increasedincurrentperiod

Closingbalanceofrestrictedshares

Noteforrestrictedshares

Dateofunlocking

ZhangYabo39,023,4000039,023,400

Restrictedsharesforseniorexecutives

Accordingtotherelevantprovisionsofsharesmanagementforseniorexecutives

WangDayong197,60039,00033,962192,562

OnJune18,2021,39,000restrictedshareswereunlocked+restrictedsharesforseniorexecutives

Accordingtotherelevantprovisionsofsharesmanagementforseniorexecutives+equityincentiveNiXiaoming197,60039,00033,962192,562

OnJune18,2021,39,000

Accordingtotherelevant

restrictedshareswereunlocked+restrictedsharesforseniorexecutives

provisionsofsharesmanagementforseniorexecutives+equityincentive

ChenYuzhong197,60039,00033,962192,562

OnJune18,2021,39,000restrictedshareswereunlocked+restrictedsharesforseniorexecutives

Accordingtotherelevantprovisionsofsharesmanagementforseniorexecutives+equityincentive

HuKaicheng197,60039,00033,962192,562

OnJune18,2021,39,000restrictedshareswereunlocked+restrictedsharesforseniorexecutives

Accordingtotherelevantprovisionsofsharesmanagementforseniorexecutives+equityincentive

YuYingkui221,08039,00033,962216,042

OnJune18,2021,39,000restrictedshareswereunlocked+restrictedsharesforseniorexecutives

Accordingtotherelevantprovisionsofsharesmanagementforseniorexecutives+equityincentive

ChenXiaoming8,325008,325

Restrictedsharesforseniorexecutives

AccordingtotherelevantprovisionsofsharesmanagementforseniorexecutivesOtherincentiveobjects

21,225,1004,401,15016,823,950

OnJune18,2021,4,401,150restrictedshareswereunlocked+equityincentive

AccordingtotherelevantprovisionsofsharesmanagementforequityincentiveTotal61,268,3054,596,150169,81056,841,965----II.IssuanceandListingofSecurities

□Applicable√Notapplicable

III.TotalNumberofShareholdersandTheirShareholdings

Unit:ShareTotalNumberofCommonShareholdersattheEndoftheReportingPeriod

77,721

TotalNumberofPreferredShareholders(IfAny)(RefertoNote8)WhoseVotingRightsHaveBeenRecoveredattheEndoftheReportingPeriod

Particularsaboutsharesheldbyshareholderswithashareholdingpercentageover5%ortheTop10ofthem

Nameofshareholder

Natureofshareholder

Share-holdingpercentage(%)

Totalsharesheldattheendofthereportingperiod

Increase/decreaseduringthereportingperiod

Thenumberofcommonsharesheldwithtradingrestrictions

Thenumberofsharesheldwithouttradingrestrictions

Pledgedorfrozen

StatusAmount

SanhuaHoldingGroupCo.,Ltd.

Domesticnon-state-ownedcorporation

29.44%

1,057,245,749

-12,291,8

1,057,245,749Pledged228,128,169ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd

Domesticnon-state-ownedcorporation

20.68%

742,747,954

742,747,9

HongKongCentralClearingLimited

Overseascorporation

16.50%

592,539,322307,366,2

592,539,3

ZhangYabo

DomesticIndividual

1.45%

52,031,

39,023,

13,007,80

ChinaConstructionBankCorporation-Huaxiaenergyinnovationstock

Others1.01%

36,405,

36,405,56

36,405,56

securitiesinvestmentfundBankofChinaLimited-Efundstrategicemergingindustryequitysecuritiesinvestmentfund

Others0.92%

33,182,

33,182,09

33,182,09

AbuDhabiInvestmentAuthority

Overseascorporation

0.75%

26,879,

26,879,72

26,879,72

AgriculturalBankofChinaLimited–Guotaiintelligentautomobilestocksecuritiesinvestmentfund

Others0.67%

24,221,

24,221,78

24,221,78

NationalSocialSecurityFund-111

Others0.66%

23,692,

34,765

23,692,94

ChinaMerchantsBankCo.,Ltd.-Efundinnovativegrowthhybridsecuritiesinvestmentfund

Others0.65%

23,290,

-2,235,77

23,290,91

InformationaboutStrategicNo

Investors’orGeneralLegalPersons’BecomingTopTenCommonShareholdersforPlacementofNewShares(IfAny)(RefertoNote3)ExplanationonAssociatedRelationshiporConcertedActionsamongtheAbove-MentionedShareholders

Amongtheaboveshareholders,SanhuaHoldingGroupCo.,Ltd.,ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd.andZhangYaboarethepersonsactinginconcert.TheCompanydoesnotknowwhetherthereisanyrelatedrelationshipbetweenothershareholders,orwhethertheybelongtothepersonsactinginconcertstipulatedintheAdministrativeMeasuresfortheAcquisitionofListedCompanies.ParticularsaboutSharesHeldbyTopTenCommonShareholdersHoldingSharesThatAreNotSubjecttoTradingRestrictionsNameofShareholder

NumberofCommonSharesHeldwithoutRestrictionsattheEndoftheReportingPeriod

TypeofsharesTypeAmountSanhuaHoldingGroupCo.,Ltd.1,057,245,749

RMBcommonstock

1,057,245,749ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd

742,747,954

RMBcommonstock

742,747,954HongKongCentralClearingLimited

592,539,322

RMBcommonstock

592,539,322ChinaConstructionBankCorporation-Huaxiaenergyinnovationstocksecuritiesinvestmentfund

36,405,561

RMBcommonstock

36,405,561BankofChinaLimited-Efundstrategicemergingindustryequitysecuritiesinvestmentfund

33,182,090

RMBcommonstock

33,182,090AbuDhabiInvestmentAuthority26,879,720

RMBcommonstock

26,879,720AgriculturalBankofChinaLimited–Guotaiintelligentautomobilestocksecuritiesinvestmentfund

24,221,783

RMBcommonstock

24,221,783NationalSocialSecurityFund-111

23,692,945

RMBcommonstock

23,692,945ChinaMerchantsBankCo.,Ltd.-Efundinnovativegrowthhybridsecuritiesinvestmentfund

23,290,913

RMBcommonstock

23,290,913ChinaConstructionBankCorporation-BOCOMSchroderalphacorehybridsecuritiesinvestmentfund

22,714,690

RMBcommonstock

22,714,690

ExplanationofAssociatedRelationshiporConcertedActionsamongTopTenCommonShareholderswithoutTradingRestrictions,andamongTopTenCommonShareholderswithoutTradingRestrictionsandTopTenCommonShareholders

Amongtheaboveshareholders,SanhuaHoldingGroupCo.,Ltd.,ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd.arethepersonsactinginconcert.TheCompanydoesnotknowwhetherthereisanyrelatedrelationshipbetweenothershareholders,orwhethertheybelongtothepersonsactinginconcertstipulatedintheAdministrativeMeasuresfortheAcquisitionofListedCompanies.ExplanationofTopTenCommonShareholders’ParticipationinSecuritiesMarginTrading(IfAny)(RefertoNote4)

NoAnyoftheCompany’stop10commonshareholdersortop10non-restrictedcommonshareholdersconductedanyagreedbuy-backinthereportingperiod?

□Applicable√Notapplicable

Nosuchcasesduringthecurrentreportingperiod.

IV.Shareholdingchangesofdirectors,supervisors,seniormanagementpersonnel

□Applicable√Notapplicable

V.ChangesinControllingShareholdersorActualControllers

Changeofthecontrollingshareholderduringthecurrentreportingperiod

□Applicable√Notapplicable

Nosuchcasesinthereportingperiod.Changeoftheactualcontrollerduringthereportingperiod

□Applicable√Notapplicable

Nosuchcasesinthecurrentreportingperiod.

SectionVIIIInformationofPreferredShares

□Applicable√Notapplicable

NoexistedpreferredsharesfortheCompanyduringthecurrentreportingperiod.

SectionIXBonds

√Applicable□Notapplicable

I.Enterprisebond(hereinafterreferredtoasthebondissuedbydomesticstate-owned

entity)

□Applicable√Notapplicable

II.Corporatebond

□Applicable√Notapplicable

III.Debtfinancinginstrumentsofnon-financialenterprises

□Applicable√Notapplicable

IV.Convertiblebond

√Applicable□Notapplicable

1.PreviousAdjustmentsofStockConversionPrice

□Applicable√Notapplicable

2.ShareConversions(Accumulative)

□Applicable√Notapplicable

3.Top10HoldersoftheConvertibleBond

Unit:share

Nameofconvertiblebondholder

Natureofconvertiblebondholders

Numberofconvertiblebondsheldattheendofthereportingperiod(share)

Amountofconvertiblebondsheldattheendofthereportingperiod(yuan)

Proportionofconvertiblebondsheldattheendofthereportingperiod1SanhuaHoldingGroupCo.,Ltd.

Domesticnon-state-ownedcorporation

8,854,432885,443,200.0029.51%

ZhejiangSanhuaLvnengIndustrialGroupCo.,Ltd

Domesticnon-state-ownedcorporation

6,220,514622,051,400.0020.74%3ZhangYabo

DomesticIndividual

435,76043,576,000.001.45%

BankofChinaLimited-EfundOthers263,03526,303,500.000.88%

strategicemergingindustryequitysecuritiesinvestmentfund

ChinaConstructionBankCorporation-Huaxiaenergyinnovationstocksecuritiesinvestmentfund

Others219,10121,910,100.000.73%

ChinaMerchantsBankCo.,Ltd.-Efundinnovativegrowthhybridsecuritiesinvestmentfund

Others213,78621,378,600.000.71%

ChinaConstructionBankCorporation-BOCOMSchroderalphacorehybridsecuritiesinvestmentfund

Others211,15721,115,700.000.70%

AgriculturalBankofChinaLimited–Guotaiintelligentautomobilestocksecuritiesinvestmentfund

Others206,81720,681,700.000.69%

9BohaiSecuritiesCo.,Ltd

Domesticstate-ownedcorporation

200,31520,031,500.000.67%

IndustrialandCommercialBankofChinaLimited-BOCOMSchroeder'sadvantageousindustriesflexiblyallocatehybridsecuritiesinvestmentfunds

Others193,31719,331,700.000.64%

4.TheProfitability,AssetandCreditStatusoftheGuarantorHaveChangedSignificantly

□Applicable√Notapplicable

V.Thelosswithinthescopeofconsolidatedstatementsinthereportingperiodexceeded

10%ofthenetassetsattheendofthepreviousyear

□Applicable√Notapplicable

VI.MainaccountingdataandfinancialindicatorsoftheCompanyinrecenttwoyearsbythe

endofthereportingperiod

Unit:RMBin10thousandItem

Attheendofthereporting

period

AttheendoflastyearYoYChange(%)

Currentratio228.79%245.04%-16.25%Assetliabilityratio49.81%40.39%9.42%Quickratio183.95%196.22%-12.27%

CurrentReportingPeriod

CorrespondingPeriodofLast

Year

YoYChange(%)Netprofitafterdeductingnon-recurringprofitandloss

71,977.1758,219.1223.63%EBITDAtotaldebtratio18.39%27.11%-8.72%Timeinterestearnedratio26.0523.729.82%Cashinterestguaranteetimes33.0136.41-9.34%EBITDATimeinterestearnedratio

31.9329.926.72%Repaymentofdebt(%)100.00%100.00%Paymentofinterest(%)100.00%100.00%

SectionXFinancialReport

I.AuditorReportWhetheraudithasbeenperformedonthisinterimfinancialreport□Yes√NoTheCompany’s2021HalfYearReporthasnotbeenaudited

II.FinancialStatementsUnitsoffinancialreportsinthenotes:RMB

1.ConsolidatedBalanceSheet

Preparedby:ZhejiangSanhuaIntelligentControlsCo.,Ltd.

June30,2021

Unit:RMBItemsJune30,2021December31,2020Currentasset：

CashandBankBalances6,301,888,182.653,489,687,568.14SettlementfundsLoanstootherbanksHeld-for-tradingfinancialassets189,524,312.14752,224,861.78Derivativefinancialassets26,392,706.6258,330,486.53Notesreceivable2,019,431,592.732,323,934,781.53Accountsreceivable3,100,856,902.632,355,613,299.57ReceivablefinancingAdvancespaid101,251,054.0869,404,326.45PremiumreceivableReinsuranceaccountsreceivableReinsurancereservesreceivableOtherreceivables98,155,207.5176,935,495.05Including:Interestreceivable

DividendsreceivableRepurchasingoffinancialassetsInventories2,917,803,847.902,307,761,706.46

ContractassetsAssetsheldforsalesNon-currentassetsduewithinoneyearOthercurrentassets131,694,347.04150,460,488.01Totalcurrentassets14,886,998,153.3011,584,353,013.52Non-currentassets:

LoansandadvancespaidDebtinvestmentsOtherdebtinvestmentsLong-termreceivable2,295,085.002,074,750.00Long-termequityinvestments17,828,507.3815,219,616.68Otherequityinstrumentinvestments

Othernon-currentfinancialassetsInvestmentproperty9,398,176.5410,067,588.96Fixedassets3,965,615,647.933,839,408,059.45Constructioninprogress914,010,795.59628,730,529.07ProductivebiologicalassetsOil&gasassetsRight-of-useassetsIntangibleassets643,300,116.81507,693,672.93DevelopmentexpendituresGoodwill31,959,091.6031,959,091.60Long-termprepayments26,140,183.6823,706,401.61Deferredtaxassets144,257,327.85137,808,879.28Othernon-currentassets365,696,226.22251,509,127.08Totalnon-currentassets6,120,501,158.605,448,177,716.66Totalassets21,007,499,311.9017,032,530,730.18Currentliabilities:

Short-termborrowings521,381,193.64383,088,296.60CentralbankloansLoansfromotherbanksHeld-for-tradingfinancialliabilities

Derivativefinancialliabilities7,726,384.627,939,957.91Notespayable1,856,484,983.841,238,574,463.73Accountspayable2,491,675,800.212,279,661,755.97Advancesreceived10,000,000.0010,000,000.00Contractliabilities44,096,560.8642,581,607.67SellingofrepurchasedfinancialassetsAbsorbingdepositandinterbankdepositDepositforagencysecuritytransactionDepositforagencysecurityunderwriting

Employeebenefitspayable219,968,593.89289,305,913.99Taxesandratespayable113,721,224.4675,008,142.06Otherpayables229,547,075.23270,888,400.58Including:InterestPayable

DividendsPayable1,200,000.00Handlingfeeandcommissionpayable

ReinsuranceaccountspayableLiabilitiesclassifiedasheldforsaleNon-currentliabilitiesduewithinoneyear

1,012,141,338.04130,553,923.87OthercurrentliabilitiesTotalcurrentliabilities6,506,743,154.794,727,602,462.38Non-currentliabilities:

InsurancepolicyreserveLong-termborrowings917,425,691.861,707,918,994.87Bondspayable2,588,449,353.66Including:Preferredshares

PerpetualbondsLeaseliabilitiesLong-termpayables84,940,677.9190,336,083.27Long-termemployeebenefits

payableProvisions2,638,000.00Deferredincome134,799,813.94140,105,336.43Deferredtaxliabilities151,508,468.13130,778,184.48Othernon-currentliabilities79,000,938.7480,398,897.72Totalnon-currentliabilities3,956,124,944.242,152,175,496.77Totalliabilities10,462,868,099.036,879,777,959.15Equity:

Sharecapital3,591,601,468.003,591,601,468.00Otherequityinstruments409,766,556.24Including:Preferredshares

PerpetualbondsCapitalreserve335,514,496.32315,417,434.22Less:Treasuryshares243,244,768.84281,483,741.34

Othercomprehensiveincome-106,871,598.13-89,624,962.61SpecialreserveSurplusreserve637,967,613.47637,967,613.47GeneralriskreserveUndistributedprofit5,819,343,336.535,890,916,707.83TotalequityattributabletotheparentCompany

10,444,077,103.5910,064,794,519.57Non-controllinginterest100,554,109.2887,958,251.46Totalequity10,544,631,212.8710,152,752,771.03Totalliabilities&equity21,007,499,311.9017,032,530,730.18Legalrepresentative：ZhangYaboOfficerinchargeofaccounting：YuYingkuiHeadofaccountingdepartment：ShengXiaofeng

2.ParentCompanyBalanceSheet

Unit:RMBItemsJune30,2021December31,2020Currentassets:

Cashandbankbalances2,959,776,349.701,848,930,095.07Held-for-tradingfinancialassets100,000,000.00323,000,000.00Derivativefinancialassets7,353,623.488,856,174.56Notesreceivable888,134,401.64773,393,944.74

Accountsreceivable510,046,587.17729,906,676.91ReceivablesfinancingAdvancespaid5,250,160.026,803,910.27Otherreceivables396,489,965.06348,897,078.11Including:InterestReceivable

DividendsReceivable1,800,000.00Inventories530,323,536.73553,388,303.73ContractassetsAssetsclassifiedasheldforsaleNon-currentassetsduewithinoneyearOthercurrentassets36,417,031.9946,083,837.26Totalcurrentassets5,433,791,655.794,639,260,020.65Non-currentassets:

DebtinvestmentsOtherdebtinvestmentsLong-termreceivableLong-termequityinvestments6,129,331,347.104,528,546,229.37OtherequityinstrumentinvestmentsOthernon-currentfinancialassetsInvestmentpropertyFixedassets1,548,514,876.611,565,826,802.57Constructioninprogress42,341,929.7871,862,243.72ProductivebiologicalassetsOil&gasassetsRight-of-useassetsIntangibleassets153,679,564.23156,335,743.52DevelopmentexpendituresGoodwillLong-termprepaymentsDeferredtaxassets7,419,451.657,336,345.87Othernon-currentassets49,684,556.6336,566,524.79Totalnon-currentassets7,930,971,726.006,366,473,889.84Totalassets13,364,763,381.7911,005,733,910.49Currentliabilities:

Short-termborrowings20,012,527.78Held-for-tradingfinancialliabilitiesDerivativefinancialliabilities2,395,550.00Notespayable499,079,955.18381,631,833.96Accountspayable1,568,983,343.651,566,994,944.07AdvancesreceivedContractliabilities261,929.111,155,759.09Employeebenefitspayable54,314,740.5993,150,785.46Taxesandratespayable8,234,550.3610,811,341.50Otherpayables1,173,975,858.951,355,955,388.81

Including:interestpayable

DividendsPayableLiabilitiesclassifiedasheldforsaleNon-currentliabilitiesduewithinoneyear770,756,434.72OthercurrentliabilitiesTotalcurrentliabilities4,078,002,362.563,429,712,580.67Non-currentliabilities:

Long-termborrowings660,582,222.221,381,428,522.65Bondspayable2,588,449,353.66

Including:Preferredshares

PerpetualbondsLeaseliabilitiesLong-termpayablesLong-termemployeebenefitspayableProvisions2,638,000.00Deferredincome31,801,319.5635,908,399.54Deferredtaxliabilities45,003,642.0448,177,657.42Othernon-currentliabilitiesTotalnon-currentliabilities3,325,836,537.481,468,152,579.61Totalliabilities7,403,838,900.044,897,865,160.28Equity:

Sharecapital3,591,601,468.003,591,601,468.00Otherequityinstruments409,766,556.24

Including:Preferredshares

PerpetualbondsCapitalreserve1,224,991,751.621,198,721,706.52Less:treasuryshares243,244,768.84281,483,741.34OthercomprehensiveincomeSpecialreserveSurplusreserve509,280,441.15509,280,441.15Undistributedprofit468,529,033.581,089,748,875.88Totalequity5,960,924,481.756,107,868,750.21Totalliabilities&equity13,364,763,381.7911,005,733,910.49

3.ConsolidatedIncomestatement

Unit:RMBItems2021Interim2020InterimI.Totaloperatingrevenue7,674,081,761.695,318,178,626.77

Including:Operatingrevenue7,674,081,761.695,318,178,626.77

InterestincomePremiumearnedRevenuefromhandlingchargesandcommissionII.Totaloperatingcost6,735,994,919.864,658,848,422.13

Including:Operatingcost5,601,811,479.623,839,626,004.70InterestexpensesHandlingchargesandcommissionexpenditures

SurrendervalueNetpaymentofinsuranceclaimsNetprovisionofinsurancepolicyreservePremiumbonusexpendituresReinsuranceexpensesTaxesandsurcharges36,363,153.0536,309,640.40Sellingexpenses321,908,769.46257,442,500.54Administrativeexpenses374,431,536.21315,350,745.15R&Dexpenses352,175,549.62240,012,928.38Financialexpenses49,304,431.90-29,893,397.04

Including:Interestexpenses40,208,255.7532,558,310.10

Interestincome43,640,017.3119,167,271.27Add:Otherincome72,081,481.22101,528,141.23Investmentincome(or“-”:losses)97,400,173.01-8,109,921.96Including:Investmentincomefromassociatesandjointventures

4,108,890.701,826,673.64Gainsfromderecognitionoffinancialassetsatamortizedcost

-3,707,072.41-114,807.17Gainsonforeignexchange(or“-”:

losses)Gainsonnetexposuretohedgingrisk(or“-”:losses)

Gainsonchangesinfairvalue(or“-”:losses)

-32,695,697.386,520,045.96

Creditimpairmentloss(or“-”:

losses)

-48,442,168.40-12,874,290.80

Assetsimpairmentloss(or“-”:

losses)

-18,614,580.55-6,302,857.17

Gainsonassetdisposal(or“-”:

losses)

400,172.51-319,355.00III.Operatingprofit(or“-”:losses)1,008,216,222.24739,771,966.90Add:Non-operatingrevenue2,472,160.141,466,984.81Less:Non-operatingexpenditures3,604,181.701,354,079.15IV.Profitbeforetax(or“-”:losses)1,007,084,200.68739,884,872.56Less:Incometaxexpense170,607,121.1699,017,348.37V.Netprofit(or“-”:losses)836,477,079.52640,867,524.19(I)Categorizedbythecontinuityofoperations

1.Netprofitfromcontinuing

operations(or“-”:losses)

836,477,079.52640,867,524.19

2.Netprofitfromdiscontinued

operations(or“-”:losses)(II)Categorizedbytheportionofequityownership

1.Netprofitattributabletoowners

ofparentCompany

823,881,221.70643,481,717.35

2.Netprofitattributableto

12,595,857.82-2,614,193.16

non-controllingshareholdersVI.Othercomprehensiveincomeaftertax

-17,246,635.52-26,456,121.98ItemsattributabletotheownersoftheparentCompany

-17,246,635.52-26,456,121.98(I)Nottobereclassifiedsubsequentlytoprofitorloss

1.Changesinremeasurementon

thenetdefinedbenefitplan

2.Itemsunderequitymethodthat

willnotbereclassifiedtoprofitorloss

3.Changesinfairvalueofother

equityinstrumentinvestments

4.Changesinfairvalueofown

creditrisk

5.Others

(II)Tobereclassifiedsubsequentlytoprofitorloss

-17,246,635.52-26,456,121.98

1.Itemsunderequitymethodthat

maybereclassifiedtoprofitorloss

2.Changesinfairvalueofother

debtinvestments

3.Profitorlossfrom

reclassificationoffinancialassetsintoothercomprehensiveincome

4.Provisionforcreditimpairment

ofotherdebtinvestments

5.Cashflowhedgingreserve

6.Translationreserve-17,246,635.52-26,456,121.98

7.Others

Itemsattributabletonon-controllingshareholdersVII.Totalcomprehensiveincome819,230,444.00614,411,402.21

ItemsattributabletotheownersoftheparentCompany

806,634,586.18617,025,595.37

Itemsattributabletonon-controllingshareholders

12,595,857.82-2,614,193.16VIII.Earningspershare(EPS):

(I)BasicEPS0.230.18(II)DilutedEPS0.230.18Legalrepresentative：ZhangYaboOfficerinchargeofaccounting：YuYingkuiHeadofaccountingdepartment：ShengXiaofeng

4.IncomestatementoftheParentCompany

Unit:RMBItems2021Interim2020InterimI.Operatingrevenue2,657,932,583.462,117,212,102.62Less:Operatingcost2,099,047,503.771,616,751,481.77

Taxesandsurcharges14,087,430.3814,883,710.72Sellingexpenses18,489,336.9515,130,538.49Administrativeexpenses88,329,399.3772,140,520.61R&Dexpenses130,378,747.7288,292,793.63Financialexpenses28,429,967.538,904,811.12Including:Interestexpenses38,011,175.5134,495,598.61

Interestincome21,728,593.7510,398,609.20Add:Otherincome26,148,191.5752,824,654.27Investmentincome(or“-”:losses)32,124,589.3610,995,316.73Including:Investmentincomefromassociatesandjointventures

3,703,896.301,922,776.38Gainsfromderecognitionoffinancialassetsatamortizedcost(or“-”:losses)Gainsonnetexposuretohedging(or“-”:losses)Gainsonchangesinfairvalue(or“-”:losses)

-3,898,101.0812,520,875.00Creditimpairmentloss(or“-”:

losses)

-2,333,077.791,810,314.30Assetsimpairmentloss(or“-”:

losses)Gainsonassetdisposal(or“-”:

losses)

31,965.0860,000.75II.Operatingprofit(or“-”:losses)331,243,764.88379,319,407.33Add:Non-operatingrevenue703,532.10472,666.13

Less:Non-operatingexpenditures553,058.35137,009.04III.Profitbeforetax(or“-”:losses)331,394,238.63379,655,064.42Less:Incometaxexpense57,159,487.9342,344,717.35IV.Netprofit(or“-”:losses)274,234,750.70337,310,347.07

(I)Netprofitfromcontinuingoperations(or“-”:losses)

274,234,750.70337,310,347.07

(II)Netprofitfromdiscontinuedoperations(or“-”:losses)V.Othercomprehensiveincomeaftertax

(I)Nottobereclassifiedsubsequentlytoprofitorloss

1.Changesinremeasurementon

thenetdefinedbenefitplan

2.Itemsunderequitymethodthat

willnotbereclassifiedtoprofitorloss

3.Changesinfairvalueofother

equityinstrumentinvestments

4.Changesinfairvalueofown

creditrisk

5.Others

(II)Tobereclassifiedsubsequentlytoprofitorloss

1.Itemsunderequitymethodthat

maybereclassifiedtoprofitorloss

2.Changesinfairvalueofother

debtinvestments

3.Profitorlossfrom

reclassificationoffinancialassetsintoothercomprehensiveincome

4.Provisionforcreditimpairment

ofotherdebtinvestments

5.Cashflowhedgingreserve

6.Translationreserve

7.Others

VI.Totalcomprehensiveincome274,234,750.70337,310,347.07

5.ConsolidatedCashFlowStatement

Unit:RMBItems2021Interim2020InterimI.Cashflowsfromoperatingactivities:

Cashreceiptsfromsaleofgoodsorrenderingofservices

7,791,922,676.435,669,226,956.30

Netincreaseofclientdepositandinterbankdeposit

Netincreaseofcentralbankloans

Netincreaseofloansfromotherfinancialinstitutions

Cashreceiptsfromoriginalinsurancecontractpremium

Netcashreceiptsfromreinsurance

Netincreaseofpolicy-holderdepositandinvestment

Cashreceiptsfrominterest,handlingchargesandcommission

Netincreaseofloansfromothers

Netincreaseofrepurchase

Netcashreceiptsfromagencysecuritytransaction

Receiptsoftaxrefund292,769,667.23135,301,637.22

Othercashreceiptsrelatedtooperatingactivities

112,704,898.93138,981,847.05Subtotalofcashinflowsfromoperatingactivities

8,197,397,242.595,943,510,440.57Cashpaymentsforgoodspurchasedandservicesreceived

5,594,083,556.183,476,000,876.09NetincreaseofloansandadvancestoclientsNetincreaseofcentralbankdepositandinterbankdepositCashpaymentsforinsuranceindemnitiesoforiginalinsurancecontractsNetincreaseofloanstoothers

Cashpaymentsforinterest,handlingchargesandcommissionCashpaymentsforpolicybonusCashpaidtoandonbehalfofemployees

1,043,695,672.97783,884,263.51

Cashpaymentsfortaxesandrates212,797,119.37205,682,821.70

Othercashpaymentsrelatedtooperatingactivities

521,604,270.81373,291,029.85Subtotalofcashoutflowsfromoperatingactivities

7,372,180,619.334,838,858,991.15Netcashflowsfromoperatingactivities825,216,623.261,104,651,449.42II.Cashflowsfrominvestingactivities:

CashreceiptsfromwithdrawalofinvestmentsCashreceiptsfrominvestmentincome

5,663,475.2923,348,369.16

Netcashreceiptsfromthedisposaloffixedassets,intangibleassetsandotherlong-termassets

508,246.832,066,447.61

Netcashreceiptsfromthedisposalofsubsidiaries&otherbusinessunits

Othercashreceiptsrelatedtoinvestingactivities

671,922,049.93277,649,043.00Subtotalofcashinflowsfrominvestingactivities

678,093,772.05303,063,859.77Cashpaymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-termassets

955,954,243.67442,252,824.96CashpaymentsforinvestmentsNetincreaseofpledgedborrowingsNetcashpaymentsfortheacquisitionofsubsidiaries&otherbusinessunitsOthercashpaymentsrelatedtoinvestingactivities

35,150,010.98540,203,379.47Subtotalofcashoutflowsfrominvestingactivities

991,104,254.65982,456,204.43Netcashflowsfrominvestingactivities-313,010,482.60-679,392,344.66III.Cashflowsfromfinancing

activities:

Cashreceiptsfromabsorbinginvestments

118,643,250.00

Including:Cashreceivedbysubsidiariesfromnon-controllingshareholdersasinvestments

Cashreceiptsfromborrowings283,678,800.001,379,378,896.06

Othercashreceiptsrelatedtofinancingactivities

2,987,977,500.0026,080,652.17Subtotalofcashinflowsfromfinancingactivities

3,271,656,300.001,524,102,798.23Cashpaymentsfortherepaymentofborrowings

38,237,578.82758,969,786.13Cashpaymentsfordistributionofdividendsorprofitsandforinterestexpenses

924,187,677.93451,059,488.63Including:Cashpaidbysubsidiariestonon-controllingshareholdersasdividendorprofit

2,680,000.00Othercashpaymentsrelatedtofinancingactivities

9,409,814.513,780,305.89Subtotalofcashoutflowsfromfinancingactivities

971,835,071.261,213,809,580.65Netcashflowsfromfinancingactivities2,299,821,228.74310,293,217.58IV.Effectofforeignexchangeratechangesoncash&cashequivalents

-17,246,635.52-25,656,121.98V.Netincreaseincashandcashequivalents

2,794,780,733.88709,896,200.36Add:Openingbalanceofcashandcashequivalents

3,400,144,038.542,553,783,015.01VI.Closingbalanceofcashandcashequivalents

6,194,924,772.423,263,679,215.37

6.CashFlowStatementoftheParentCompany

Unit:RMBItems2021Interim2020InterimI.Cashflowsfromoperatingactivities:

Cashreceiptsfromsaleofgoodsandrenderingofservices

2,501,766,645.731,582,936,545.48

Receiptsoftaxrefund69,595,321.1545,688,483.71

Othercashreceiptsrelatedtooperatingactivities

44,634,342.3259,466,164.51Subtotalofcashinflowsfromoperatingactivities

2,615,996,309.201,688,091,193.70Cashpaymentsforgoodspurchasedandservicesreceived

1,584,525,056.92822,533,884.63Cashpaidtoandonbehalfofemployees

259,052,505.85193,396,299.54Cashpaymentsfortaxesandrates67,230,440.0851,272,174.14Othercashpaymentsrelatedtooperatingactivities

99,950,220.2079,419,321.52Subtotalofcashoutflowsfromoperatingactivities

2,010,758,223.051,146,621,679.83Netcashflowsfromoperatingactivities605,238,086.15541,469,513.87II.Cashflowsfrominvestingactivities:

Cashreceiptsfromwithdrawalofinvestments

3,000,000.00

Cashreceiptsfrominvestmentincome

21,811,801.456,834,184.92

Netcashreceiptsfromthedisposaloffixedassets,intangibleassetsandotherlong-termassets

104,233.67174,800.00

Netcashreceiptsfromthedisposalofsubsidiaries&otherbusinessunits

Othercashreceiptsrelatedtoinvestingactivities

229,811,657.82175,228,503.46Subtotalofcashinflowsfrominvestingactivities

251,727,692.94185,237,488.38Cashpaymentsfortheacquisitionoffixedassets,intangibleassetsandotherlong-termassets

89,501,487.52102,274,729.91Cashpaymentsforinvestments1,581,000,000.00140,874,000.00Netcashpaymentsfortheacquisitionofsubsidiaries&otherbusinessunitsOthercashpaymentsrelatedtoinvestingactivities

88,686,804.01472,363,792.38Subtotalofcashoutflowsfrominvestingactivities

1,759,188,291.53715,512,522.29

Netcashflowsfrominvestingactivities-1,507,460,598.59-530,275,033.91III.Cashflowsfromfinancingactivities:

Cashreceiptsfromabsorbinginvestments

118,643,250.00

Cashreceiptsfromborrowings50,000,000.001,159,811,000.00

Othercashreceiptsrelatedtofinancingactivities

3,139,300,342.01161,770,652.17Subtotalofcashinflowsfromfinancingactivities

3,189,300,342.011,440,224,902.17Cashpaymentsfortherepaymentofborrowings

20,000,000.00570,000,000.00Cashpaymentsfordistributionofdividendsorprofitsandforinterestexpenses

919,172,149.40437,223,073.41Othercashpaymentsrelatedtofinancingactivities

250,973,534.6112,254,861.11Subtotalofcashoutflowsfromfinancingactivities

1,190,145,684.011,019,477,934.52Netcashflowsfromfinancingactivities1,999,154,658.00420,746,967.65IV.EffectofforeignexchangeratechangesoncashandcashequivalentsV.Netincreaseincashandcashequivalents

1,096,932,145.56431,941,447.61Add:Openingbalanceofcashandcashequivalents

1,803,237,880.51974,923,339.25VI.Closingbalanceofcashandcashequivalents

2,900,170,026.071,406,864,786.86

7.ConsolidatedStatementofChangesinOwners'Equity

Amountofthisperiod

Unit:RMB

Items

2021InterimEquityAttributabletoparentCompany

Non-controllinginterest

TotalequityShareCapital

Otherequityinstruments

Capitalreserve

Less:

treasuryshares

Othercomprehensiveincome

SpecialreserveSurplusreserve

GeneralriskreserveUndistributedprofit

Others

SubtotalPreferredsharesPerpetualbonds

OthersI.Balanceattheendofprioryear

3,591,601,46

8.00

315,417,434

.22281,483,741

.34-89,624,962.

637,967,613

.47

5,890,916,70

7.83

10,064,794,51

9.57

87,958,251.4

10,152,752,77

1.03

Add:

CumulativechangesofaccountingpoliciesErrorcorrectionofpriorperiodBusinesscombinationunder

ZhejiangSanhua

commoncontrolOthersII.Balanceatthebeginningofcurrentyear

3,591,601,46

8.00

315,417,434

.22281,483,741

.34-89,624,962.

637,967,613

.47

5,890,916,70

7.83

III.Currentperiodincrease(or“-”:

decrease)

409,766,556

.2420,097,062.

-38,238,972.

-17,246,635.

-71,573,371.3

(I)Totalcomprehensiveincome

-17,246,635.

823,881,221.

(II)Capitalcontributedorwithdrawnbyowners

409,766,556

.2420,097,062.

-38,238,972.

1.Ordinary

sharescontributedbyowners

2.Capital

contributed

409,766,556

.24

ZhejiangSanhua

byholdersofotherequityinstruments

3.Amount

ofshare-basedpaymentincludedinequity

20,097,062.

-38,238,972.

4.Others

(III)Profitdistribution

-895,454,593.

1.Appropriationofsurplusreserve2.Appropriationofgeneralriskreserve3.Appropriationofprofittoowners

-895,454,593.

4.Others

ZhejiangSanhua

(IV)Internalcarry-overwithinequity

1.Transfer

ofcapitalreservetocapital

2.Transfer

ofsurplusreservetocapital

3.Surplus

reservetocoverlosses

4.Changes

indefinedbenefitplancarriedovertoretainedearnings

5.Other

comprehensiveincomecarriedovertoretainedearnings

ZhejiangSanhua

6.Others

(V)Specialreserve1.Appropriationofcurrentperiod2.Applicationofcurrentperiod(VI)OthersIV.Balanceattheendofcurrentperiod

3,591,601,46

8.00

409,766,556

.24335,514,496

.32243,244,768

.84-106,871,598

.13

637,967,613

.47

5,819,343,33

6.53

AmountofPreviousPeriod

Items

2020InterimEquityAttributabletoparentCompany

ShareCapital

Otherequityinstruments

Capitalreserve

Less:

treasuryshares

Othercomprehensiveincome

SpecialreserveSurplusreserve

GeneralriskreserveUndistributedprofit

IntelligentOther

sPreferredshares

Perpetualbonds

OthersI.Balanceat2,765,657,898.1,090,800,022.363,781,151.-39,332,748.559,896,619.5,278,392,288.

ZhejiangSanhua

theendofprioryear

000634503984Add:

CumulativechangesofaccountingpoliciesErrorcorrectionofpriorperiodBusinesscombinationundercommoncontrolOthersII.Balanceatthebeginningofcurrentyear

2,765,657,898.

1,090,800,022.

363,781,151.

-39,332,748.

559,896,619.

5,278,392,288.

III.Currentperiodincrease(or“-”:

decrease)

826,383,880.0

-847,059,678.

-54,328,425.

-26,456,121.

230,144,177.0

(I)Total-26,456,121.643,481,717.3

ZhejiangSanhua

comprehensiveincome

(II)Capitalcontributedorwithdrawnbyowners

-291,200.00

-20,384,598.0

-54,328,425.

1.Ordinary

sharescontributedbyowners

-49,264,050.0

-49,264,050.

2.Capital

contributedbyholdersofotherequityinstruments

3.Amount

ofshare-basedpaymentincludedinequity

30,463,131.96

4.Others-291,200.00-1,583,680.00

-5,064,375.0

(III)Profitdistribution

-413,337,540.

1.

ZhejiangSanhua

Appropriationofsurplusreserve2.Appropriationofgeneralriskreserve3.Appropriationofprofittoowners

-413,337,540.

4.Others

(IV)Internalcarry-overwithinequity

826,675,080.0

-826,675,080.

1.Transfer

ofcapitalreservetocapital

826,675,080.0

-826,675,080.

2.Transfer

ofsurplusreservetocapital

3.Surplus

reservetocoverlosses

ZhejiangSanhua

4.Changes

indefinedbenefitplancarriedovertoretainedearnings

5.Other

comprehensiveincomecarriedovertoretainedearnings

6.Others

(V)Specialreserve1.Appropriationofcurrentperiod2.Applicationofcurrentperiod(VI)OthersIV.Balanceattheendofcurrentperiod

3,592,041,778.

243,740,344.0

309,452,726.

-65,788,870.

559,896,619.

5,508,536,465.

ZhejiangSanhua

8.StatementofChangesinOwners'EquityoftheParentCompanyAmountofthisperiod

Items

2021InterimShareCapital

Otherequityinstruments

Capitalreserve

Less:treasuryshares

Othercomprehensive

income

Specialreserve

Surplus

Intelligentreserve

Preferredshares

Perpetualbonds

OthersI.Balanceattheendofprioryear

3,591,601,468.001,198,721,706.52281,483,741.34

reserve509,280,441.15

Add:

CumulativechangesofaccountingpoliciesErrorcorrectionofpriorperiodOthersII.Balanceatthebeginningofcurrentyear

3,591,601,468.001,198,721,706.52281,483,741.34

509,280,441.15509,280,441.15

III.Currentperiodincrease(orless:

decrease)

409,766,556.2426,270,045.10-38,238,972.50(I)Totalcomprehensiveincome(II)Capitalcontributedorwithdrawnbyowners

409,766,556.2426,270,045.10-38,238,972.50

1.Ordinaryshares

contributedby

ZhejiangSanhua

owners

2.Capital

contributedbyholdersofotherequityinstruments

409,766,556.24

3.Amountof

share-basedpaymentincludedinequity

26,270,045.10-38,238,972.50

4.Others

(III)Profitdistribution

1.Appropriationof

surplusreserve

2.Appropriationof

profittoowners

3.Others

(IV)Internalcarry-overwithinequity

1.Transferof

capitalreservetocapital

2.Transferof

surplusreservetocapital

3.Surplusreserve

tocoverlosses

4.Changesin

definedbenefitplancarriedovertoretainedearnings

5.Other

comprehensiveincomecarriedovertoretainedearnings

ZhejiangSanhua

6.Others

(V)Specialreserve

1.Appropriationof

currentperiod

2.Applicationof

currentperiod(VI)OthersIV.Balanceattheendofcurrentperiod

3,591,601,468.00409,766,556.241,224,991,751.62243,244,768.84

Intelligent509,280,441.15

AmountofPreviousPeriod

Items

2020InterimShareCapital

Otherequityinstruments

Capitalreserve

Less:treasuryshares

Othercomprehensiveincome

Specialreserve

SurplusreservePreferredshares

Perpetualbonds

OthersI.Balanceattheendofprioryear

2,765,657,898.002,005,303,119.53363,781,151.34431,209,447.07Add:

CumulativechangesofaccountingpoliciesErrorcorrectionofpriorperiodOthersII.Balanceatthebeginningofcurrentyear

2,765,657,898.002,005,303,119.53363,781,151.34431,209,447.07III.Currentperiodincrease(orless:

826,383,880.00-847,059,678.04-54,328,425.00

ZhejiangSanhua

decrease)(I)Totalcomprehensiveincome(II)Capitalcontributedorwithdrawnbyowners

-291,200.00-20,384,598.04-54,328,425.00

1.Ordinaryshares

contributedbyowners

-49,264,050.00-49,264,050.00

2.Capital

contributedbyholdersofotherequityinstruments

3.Amountof

share-basedpaymentincludedinequity

30,463,131.96

4.Others-291,200.00-1,583,680.00-5,064,375.00(III)Profitdistribution

1.Appropriationof

surplusreserve

2.Appropriationof

profittoowners

3.Others

(IV)Internalcarry-overwithinequity

826,675,080.00-826,675,080.00

1.Transferofcapital

reservetocapital

826,675,080.00-826,675,080.00

2.Transferof

surplusreservetocapital

3.Surplusreserveto

coverlosses

ZhejiangSanhua

4.Changesin

definedbenefitplancarriedovertoretainedearnings

5.Other

comprehensiveincomecarriedovertoretainedearnings

6.Others

(V)Specialreserve

1.Appropriationof

currentperiod

2.Applicationof

currentperiod(VI)OthersIV.Balanceattheendofcurrentperiod

3,592,041,778.001,158,243,441.49309,452,726.34431,209,447.07

III.CompanyprofileTheCompanywasestablishedbytheoriginalSanhuaFujiKokiCo.,Ltd.TheCompanycurrentlyholdsabusinesslicensewithaunifiedsocialcreditcodeof913300006096907427registeredandissuedbyZhejiangAdministrationofIndustryandCommerce,withheadquarterinShaoxingCity,ZhejiangProvince.TheregisteredcapitalofRMB3,591,601,468.00，totalshareof3,591,601,468shares(eachwithparvalueofRMB1).TheCompany’sshareswerelistedatShenzhenStockExchange.TheCompanyoperatesinthemachinerymanufacturingindustry.BusinessscopeincludesproductionandmarketingofServiceValve,ElectronicExpansionvalve,DrainagePump,SolenoidValve,One-wayValve,CompressorParts,PressurePipelineComponents,ElectromechanicalHydraulicControlPumpandotherelectromechanicalhydrauliccontrolcomponents,undertakingservicesofinspection,testandanalysisofrefrigerationaccessories,andengaginginimportandexportbusiness.MainproductsincludecontrolcomponentsandpartsofhouseholdappliancesandautomobileA/C.ThefinancialstatementshavebeenapprovedbytheboardofdirectorsoftheCompanyanddisclosedonAugust11th,2021.ZhejiangSanhuaClimateandApplianceControlsGroupCo.,Ltd.andothersubsidiariesareincludedinthescopeofconsolidatedfinancialstatementsinthecurrentperiod.Forfurtherdetails,pleaserefertothechangeofconsolidationscopeinthenotestothefinancialreportandthedescriptionofequityinotherentities.IV.Preparationbasisofthefinancialstatements

1.Preparationbasis

Thefinancialstatementshavebeenpreparedonthebasisofgoingconcern.

2.Goingconcern

TheCompanyhasnoeventsorconditionsthatmaycastsignificantdoubtsupontheCompany’sabilitytocontinueasagoingconcernwithinthe12monthsafterthebalancesheetdate.

V.SignificantaccountingpoliciesandestimatesNotestospecificaccountingpoliciesandaccountingestimates:

1．StatementofcompliancewithChinaAccountingStandardsforBusinessEnterprises

ThefinancialstatementshavebeenpreparedinaccordancewiththerequirementsofChinaAccountingStandardsforBusinessEnterprises(CASBEs),andpresenttrulyandcompletelythefinancialposition,resultsofoperationsandcashflowsoftheCompany.2．Accountingperiod

TheaccountingperiodoftheCompanyisfrom1Januaryto31Decemberofeachcalendaryear.

3．OperatingcycleTheCompanyhasarelativelyshortoperatingcycleforitsbusiness,anassetoraliabilityisclassifiedascurrentifitisexpectedtoberealizedorduewithin12months.4．FunctionalcurrencyTheCompany’sfunctionalcurrencyisRenminbi(RMB)Yuan.5．Accountingtreatmentsofbusinesscombinationunderandnotundercommoncontrol

1.AccountingtreatmentofbusinesscombinationundercommoncontrolAssetsandliabilitiesarisingfrombusinesscombinationaremeasuredatcarryingamountofthecombinedpartyincludedintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyatthecombinationdate.Differencebetweencarryingamountoftheequityofthecombinedpartyincludedintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyandthatofthecombinationconsiderationortotalparvalueofsharesissuedisadjustedtocapitalreserve,ifthebalanceofcapitalreserveisinsufficienttooffset,anyexcessisadjustedtoretainedearnings.

2.AccountingtreatmentofbusinesscombinationnotundercommoncontrolWhencombinationcostisinexcessofthefairvalueofidentifiablenetassetsobtainedfromtheacquireattheacquisitiondate,theexcessisrecognizedasgoodwill;otherwise,thefairvalueofidentifiableassets,liabilitiesandcontingentliabilities,andthemeasurementofthecombinationcostarereviewed,thenthedifferenceisrecognizedinprofitorloss.6．CompilationmethodofconsolidatedfinancialstatementsTheparentcompanybringsallitscontrolledsubsidiariesintotheconsolidationscope.Theconsolidatedfinancialstatementsarecompiledbytheparentcompanyaccordingto“CASBE33–ConsolidatedFinancialStatements”,basedonrelevantinformationandthefinancialstatementsoftheparentcompanyanditssubsidiaries.7．Recognitioncriteriaofcashandcashequivalents

Cashaspresentedincashflowstatementreferstocashonhandanddepositondemandforpayment.Cashequivalentsrefertoshort-term,highlyliquidinvestmentsthatcanbereadilyconvertedtocashandthataresubjecttoaninsignificantriskofchangesinvalue.8．Foreigncurrencytranslation

1.Translationoftransactionsdenominatedinforeigncurrency

TransactionsdenominatedinforeigncurrencyaretranslatedintoRMByuanatthespotexchangerate/thebeginningofthemonthexchangerateatthetransactiondateatinitialrecognition.Atthebalancesheetdate,monetaryitemsdenominatedinforeigncurrencyaretranslatedatthespotexchangerateatthebalancesheetdatewithdifference,exceptforthosearisingfromtheprincipalandinterestofexclusiveborrowingseligibleforcapitalization,includedinprofitorloss;non-cashitemscarriedathistoricalcostsaretranslatedatthespot

exchangerateatthetransactiondate,withitsRMBamountunchanged;non-cashitemscarriedatfairvalueinforeigncurrencyaretranslatedatthespotexchangerateatthedatewhenthefairvaluewasdetermined,withdifferenceincludedinprofitorlossorothercomprehensiveincome.

2.TranslationoffinancialstatementsmeasuredinforeigncurrencyTheassetsandliabilitiesinthebalancesheetaretranslatedintoRMBatthespotrateatthebalancesheetdate;theequityitems,otherthanundistributedprofit,aretranslatedatthespotrateatthetransactiondate;therevenuesandexpensesintheincomestatementaretranslatedintoRMBattheapproximateexchangeratesimilartothesystematicallyandrationallydeterminedspotexchangerateatthetransactiondate.Thedifferencearisingfromforeigncurrencytranslationisincludedinothercomprehensiveincome9．FinancialinstrumentsFinancialinstrumentsrefertocontractsthatformoneparty’sfinancialassetsintootherparties’financialliabilitiesorequityinstruments.

1.Classificationoffinancialassetsandfinancialliabilities

TheCompany'sfinancialassetsfallintotwomaincategories:(1)financialassetsatamortizedcost;(2)financialassetsatfairvaluethroughprofitorloss.Financialliabilitiesareclassifiedintothefollowingtwocategories:(1)financialliabilitiesatamortizedcost;(2)financialliabilitiesatfairvaluethroughprofitorloss.

2.Recognitioncriteria,measurementmethodandderecognitionconditionoffinancialassetsandfinancialliabilities

(1)Recognitioncriteriaandmeasurementmethodoffinancialassetsandfinancialliabilities

WhentheCompanybecomesapartytoafinancialinstrument,itisrecognizedasafinancialassetorfinancialliability.ThefinancialassetsandfinancialliabilitiesinitiallyrecognizedbytheCompanyaremeasuredatfairvalue;forthefinancialassetsandliabilitiesatfairvaluethroughprofitorloss,thetransactionexpensesthereofaredirectlyincludedinprofitorloss;forothercategoriesoffinancialassetsandfinancialliabilities,thetransactionexpensesthereofareincludedintotheinitiallyrecognizedamount.However,atinitialrecognition,foraccountsreceivablethatdonotcontainasignificantfinancingcomponentorcontractsinwhichthefinancingcomponentswithassociatedperiodlessthanoneyeararenotconsidered,theCompanymeasuresattheirtransactionprice.

(2)Subsequentmeasurementoffinancialassets

TheCompanymeasuresitsfinancialassetsattheamortizedcostsusingeffectiveinterestmethod.Gainsorlossesonfinancialassetsthataremeasuredatamortizedcostandarenotpartofhedgingrelationshipsshallbeincludedintoprofitorlosswhenthefinancialassetsarederecognized,reclassified,throughtheamortizationprocessorinordertorecognizeimpairmentgainsorlosses.

TheCompanymeasuresitsfinancialassetsatfairvalue.Gainsorlossesarisingfromchangesinfairvalue(includinginterestsanddividends)shallbeincludedintoprofitorloss,exceptforfinancialassetsthatarepartofhedgingrelationships.

(3)Subsequentmeasurementoffinancialliabilities

TheCompanymeasuresitsfinancialliabilitiesatamortizedcostusingeffectiveinterestmethod.Gainsorlossesonfinancialliabilitiesthataremeasuredatamortizedcostandarenotpartofhedgingrelationshipsshallbeincludedintoprofitorlosswhenthefinancialliabilitiesarederecognizedandthroughtheamortizationprocess.

Financialliabilitiesdesignatedasatfairvaluethroughprofitorloss.TheCompanymeasuressuchkindofliabilitiesatfairvalue.Othergainsorlossesonthosefinancialliabilitiesshallbeincludedintoprofitorloss,exceptforfinancialliabilitiesthatarepartofhedgingrelationships.

(4)Derecognitionoffinancialassetsandfinancialliabilities

1)Financialassetsarederecognizedwhen:

a.thecontractualrightstothecashflowsfromthefinancialassetsexpire;orb.thefinancialassetshavebeentransferredandthetransferqualifiesforderecognitioninaccordancewith“CASBE23–TransferofFinancialAssets”.

2)Onlywhentheunderlyingpresentobligationsofafinancialliabilityarerelievedtotallyorpartlymaythefinancialliabilitybederecognizedaccordingly.

3.Recognitioncriteriaandmeasurementmethodoffinancialassetstransfer

WheretheCompanyhastransferredsubstantiallyalloftherisksandrewardsrelatedtotheownershipofthefinancialasset,itderecognizesthefinancialasset,andanyrightorliabilityarisingfromsuchtransferisrecognizedindependentlyasanassetoraliability.Ifitretainedsubstantiallyalloftherisksandrewardsrelatedtotheownershipofthefinancialasset,itcontinuesrecognizingthefinancialasset.

WheretheCompanydoesnottransferorretainsubstantiallyalloftherisksandrewardsrelatedtotheownershipofafinancialasset,itisdealtwithaccordingtothecircumstancesasfollowsrespectively:(1)iftheCompanydoesnotretainitscontroloverthefinancialasset,itderecognizesthefinancialasset,andanyrightorliabilityarisingfromsuchtransferisrecognizedindependentlyasanassetoraliability;(2)iftheCompanyretainsitscontroloverthefinancialasset,accordingtotheextentofitscontinuinginvolvementinthetransferredfinancialasset,itrecognizestherelatedfinancialassetandrecognizestherelevantliabilityaccordingly.

Ifthetransferofanentirefinancialassetsatisfiestheconditionsforderecognition,thedifferencebetweentheamountsofthefollowingtwoitemsareincludedinprofitorloss:(1)thecarryingamountofthetransferredfinancialassetasofthedateofderecognition;(2)thesumofconsiderationreceivedfromthetransferofthefinancialasset.

4.Fairvaluedeterminationmethodoffinancialassetsandliabilities

TheCompanyusevaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue.

5.Impairmentoffinancialinstruments

(1)Measurementandaccountingtreatment

TheCompany,onthebasisofexpectedcreditloss,recognizeslossallowancesoffinancialassetsatamortizedcost.TheCompanyconsidersreasonableandevidence-basedinformationaboutpastevents,currentconditions,andforecastsoffutureeconomicconditions,andusestheriskofdefaultastheweighttocalculatethedifferencebetweenthecontractualcashflowreceivableandtheexpectedcashflowProbability-weightedamountofthepresentvaluetoconfirmexpectedcreditlosses.TheCompanyseparatelymeasurestheexpectedcreditlossesoffinancialinstrumentsatdifferentstagesonthebalancesheetdate.Thefirststage,ifthecreditriskofafinancialinstrumenthasnotincreasedsignificantlysincetheinitialrecognition,andthelossprovisionismeasuredaccordingtotheexpectedcreditlossinthenext12months.Thesecondstage,ifthecreditriskofafinancialinstrumenthasincreasedsignificantlysinceitsinitialrecognitionbutnocreditimpairmenthasoccurred,andthelossprovisionismeasuredbasedontheexpectedcreditlossfortheentireduration.Thethirdstage,ifafinancialinstrumenthasbeencredit-impairedsinceitsinitialrecognition,andthelossprovisionismeasuredbasedontheexpectedcreditlossfortheentireduration.

Consideringreasonableandsupportableforward-lookinginformation,theCompanycomparestheriskofadefaultoccurringonthefinancialinstrumentasatthebalancesheetdatewiththeriskofadefaultoccurringonthefinancialinstrumentasatthedateofinitialrecognition,soastoassesswhetherthecreditriskonthefinancialinstrumenthasincreasedsignificantlysinceinitialrecognition.

TheCompanymayassumethatthecreditriskonafinancialinstrumenthasnotincreasedsignificantlysince

initialrecognitionifthefinancialinstrumentisdeterminedtohavelowcreditriskonthebalancesheetdate.TheCompanymeasuresthelossprovisionaccordingtotheexpectedcreditlossinthenext12monthsRegardingtheaccountsreceivable(includingbillsreceivableandaccountsreceivable)stipulatedinthe"CASBE14–Revenue",regardlessofwhetheritcontainssignificantfinancingcomponents(includingfinancingincontractsnotexceedingoneyear)Component),theCompanymeasuresthelossprovisionbasedontheexpectedcreditlossfortheentireduration.

Forfinancialinstrumentsinthefirstandsecondstagesandwithlowercreditrisk,theinterestincomeiscalculatedbasedonthebookbalanceandtheeffectiveinterestratewithoutdeductingtheprovisionforimpairment.Forfinancialinstrumentsinthethirdstage,theinterestincomeiscalculatedbasedontheamortizedcostandtheactualinterestrateafterthebookbalanceminustheprovisionforimpairment.Ifthe"creditrisk-relatedinformation"ofasingleinstrumenthasbeenknownorisrelativelyeasilyavailable,theCompanyassessesexpectedcreditriskandmeasuresexpectedcreditlossesonthebasisofasinglefinancialinstrument.Suchfinancialinstrumentsusuallyincludeaccountsreceivablefromrelatedparties,depositdepositsreceivablefromgovernmentunitsorpublicutilityunits,andfinancialinstrumentswithsolidevidencethatcreditimpairmenthasoccurred.Ifsufficientevidenceof“creditrisk-relatedinformation”cannotbeobtainedatareasonablecostatthelevelofindividualinstruments,theCompanyassessesexpectedcreditriskandmeasuresexpectedcreditlossesbasedonacombinationoffinancialinstruments.TheCompanycombinesfinancialinstrumentsbasedonthesameorsimilarcreditriskcharacteristics,includingbutnotlimitedtoagingcombinations.

Iftheavailabilityof"creditrisk-relatedinformation"ofasingletoolchangesfrombeingdifficulttoobtaintobeingavailable,theCompanywillchangefromacombination-basedassessmentmeasurementtoasingletool-basedassessmentmeasurement.

TheCompanyremeasuresexpectedcreditlossesoneachbalancesheetdate,andtheresultingincreaseinlossreservesortheamountofreversalisincludedinthecurrentprofitsandlossesasimpairmentlossesorgains.Forfinancialassetsmeasuredatamortizedcost,thelossallowanceshallbedeductedfromthebookvalueofthefinancialassetslistedinthebalancesheet.

(2)Financialinstrumentswithexpectedcreditriskassessedandexpectedcreditlossesmeasuredonacollectivebasis

Forotherreceivablesthataredifficulttobeevaluatedandmeasuredbyasingletool,theCompanymainlycombinesagingasacreditriskfeature,referstohistoricalcreditlossexperience,combinescurrentconditionsandforecastsoffutureeconomicconditions,andadoptsdefaultriskexposureandTheexpectedcreditlossrateinthenext12monthsortheentiredurationisusedtocalculatetheexpectedcreditloss.

(3)Accountsreceivablewithexpectedcreditlossesmeasuredonacollectivebasis

Regardingtheaccountsreceivablespecifiedinthe"CASBE14–Revenue",regardlessofwhetheritcontainssignificantfinancingcomponents(includingfinancingcomponentsincontractsnotexceedingoneyear),refertohistoricalcreditlossexperienceandcombinecurrentThesituationandtheforecastoffutureeconomicconditions,throughthedefaultriskexposureandtheentiredurationoftheexpectedcreditlossrate,calculatetheexpectedcreditloss.Foraccountsreceivablethataredifficulttobeevaluatedandmeasuredbyasingletool,theCompanydividestheaccountsreceivableintoseveralcombinationsbasedoncreditriskcharacteristics,andcalculatestheexpectedcreditlossonthebasisofthecombination.Thebasisfordeterminingthecombinationandthespecificaccrualmethodareshownbelowtable:

PortfolioName

Basisfordeterminationof

portfolio

Methodformeasuringexpectedcreditloss

Notesreceivable—Bankacceptancebill

Acceptedbyfinancialinstitutions

NoprovisionNotesreceivable—Commercialacceptancebill

Notacceptedbyfinancialinstitutions

5%Accountsreceivable—Agesportfolios

Ages

receivablewithprovisionmadeonacollectivebasisbasedonthecomparisontableofageandexpectedcreditlossrateAccountsreceivable–comparisontableofagesandlifetimeexpectedcreditlossrate

AgesExpectedcreditlossrateWithin1year5%1-2years10%2-3years30%Over3years50%

6.Offsettingfinancialassetsandfinancialliabilities

Financialassetsandfinancialliabilitiesarepresentedseparatelyinthebalancesheetandarenotoffset.However,theCompanyoffsetsafinancialassetandafinancialliabilityandpresentsthenetamountinthebalancesheetwhenthosewhomeetthecorrespondingconditionsatthesametime.10．Inventories

1.Classificationofinventories

Inventoriesincludematerial,workinprocessintheprocessofproductionandfinishedgoodsetc.

2.Accountingmethodfordispatchinginventories

Inventoriesdispatchedfromstorageatactualcostareaccountedwithweightedaveragemethodattheendofeachmonth;Inventoriesdispatchedfromstorageaccordingtotheplan,thecostdifferencewillbecarriedforwardatthesametimeattheendofthemonth.

3.Basisfordeterminingnetrealizablevalue

Atthebalancesheetdate,inventoriesaremeasuredatthelowerofcostornetrealizablevalue;provisionsforinventorywrite-downaremadeontheexcessofitscostoverthenetrealizablevalue.Inventoryuseddirectlyforsale,inthecourseofnormalproductionandoperation,thenetrealizablevalueoftheinventoryshallbedeterminedbytheestimatedsellingpriceminustheestimatedsellingexpensesandrelatedtaxes;Inventoriesthatrequireprocessing,inthecourseofnormalproductionandoperation,thenetrealizablevalueofthefinishedproductshallbedeterminedbytheestimatedsellingpriceofthefinishedproductminustheestimatedcosttobeincurredatthetimeofcompletion,theestimatedsellingexpensesandtherelevanttaxesandfees.Onthebalancesheetdate,whereapartofthesameinventoryhasacontractpriceandotherpartsdonothaveacontractprice,thenetrealizablevaluethereofshallbedeterminedseparately,andcomparewiththecorrespondingcosttodeterminetheamountoftheprovisionforinventorydepreciationortheamountofthereversal.

4.Inventorysystem

Theperpetualinventorysystemisadopted.

5.Revolvingmaterialsareamortizedwithone-offmethod.

11.Contractassets

TheCompanypresentscontractassetsorcontractliabilitiesinthebalancesheetbasedontherelationshipbetweenitsperformanceobligationsandcustomers’payments.Contractassetsandcontractliabilitiesunderthe

samecontractshalloffseteachotherandbepresentedonanetbasis.TheCompanypresentsanunconditionalrighttoconsideration(i.e.,onlythepassageoftimeisrequiredbeforetheconsiderationisdue)asareceivable,andpresentsarighttoconsiderationinexchangeforgoodsthatithastransferredtoacustomer(whichisconditionalonsomethingotherthanthepassageoftime)asacontractasset.12．Long-termequityinvestments

1.Judgmentofjointcontrolandsignificantinfluence

Jointcontrolisthecontractuallyagreedsharingofcontrolofanarrangement,whichexistsonlywhendecisionsabouttherelevantactivitiesrequiretheunanimousconsentofthepartiessharingcontrol.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontrolofthesepolicies.

2.Determinationofinvestmentcost

(1)Forbusinesscombinationundercommoncontrol,iftheconsiderationofthecombiningpartyisthatitmakespaymentincash,transfersnon-cashassets,assumesitsliabilitiesorissuesequitysecurities,onthedateofcombination,itregardstheshareofthecarryingamountoftheequityofthecombinedpartyincludedtheconsolidatedfinancialstatementsoftheultimatecontrollingpartyastheinitialcostoftheinvestment.Thedifferencebetweentheinitialcostofthelong-termequityinvestmentsandthecarryingamountofthecombinationconsiderationpaidortheparvalueofsharesissuedoffsetscapitalreserve;ifthebalanceofcapitalreserveisinsufficienttooffset,anyexcessisadjustedtoretainedearnings.

(2)Forbusinesscombinationnotundercommoncontrol,investmentcostisinitiallyrecognizedattheacquisition-datefairvalueofconsiderationspaid.

(3)Long-termequityinvestmentsobtainedthroughwaysotherthanbusinesscombination:theinitialcostofalong-termequityinvestmentobtainedbymakingpaymentincashisthepurchasecostwhichisactuallypaid.

3.Subsequentmeasurementandrecognitionmethodofprofitorloss

Forlong-termequityinvestmentswithcontrolrelationship,itisaccountedforwithcostmethod;forlong-termequityinvestmentswithjointcontrolorsignificantinfluencerelationship,itisaccountedforwithequitymethod.

13.Investmentproperty

InvestmentpropertymeasurementmodelMeasurementbycostmethodDepreciationoramortizationmethod

1.Investmentpropertyincludeslanduserightofrent-outpropertyandofpropertyheldforcapitalappreciationandbuildingsthathavebeenleasedout.

2.Theinitialmeasurementofinvestmentpropertyisbasedonitscost,andsubsequentmeasurementismadeusingthecostmodel,thedepreciationoramortizationmethodisthesameasthatoffixedassetsandintangibleassets.

14.Fixedassets

（1）Recognitionprinciplesoffixedassets

Fixedassetsaretangibleassetsheldforuseintheproductionofgoodsorrenderingofservices,forrentaltoothers,orforadministrativepurposes,andexpectedtobeusedduringmorethanoneaccountingyear.Fixedassetsarerecognizedif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwiththeassetswillflowtotheCompanyandthecostoftheassetscanbemeasuredreliably.

（2）DepreciationmethodofdifferentcategoriesoffixedassetsCategories

DepreciationmethodUsefullife(years)

Estimatedresidualvalueproportion(%)

Annualdepreciationrate

(%)BuildingsandstructuresStraight-linemethod20-300%,5%3.17%-5%Machineryandequipment

Straight-linemethod5-120%,5%7.92%-20%Measurementanalysisequipment

Straight-linemethod5-105%9.50%-19%VehicleStraight-linemethod5-80%,5%11.88%-20%Officeequipmentandothers

Straight-linemethod5-80%,5%11.88%-20%15．Constructioninprogress

1.Constructioninprogressisrecognizedif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheCompany,andthecostoftheitemcanbemeasuredreliably.Constructioninprogressismeasuredattheactualcostincurredtoreachitsdesignedusableconditions.

2.Constructioninprogressistransferredintofixedassetsatitsactualcostwhenitreachesthedesignedusableconditions.Whentheauditingoftheconstructioninprogresswasnotfinishedwhilereachingthedesignedusableconditions,itistransferredtofixedassetsusingestimatedvaluefirst,andthenadjustedaccordinglywhentheactualcostissettled,buttheaccumulateddepreciationisnottobeadjustedretrospectively.16．Borrowingcosts

WheretheborrowingcostsincurredtotheCompanycanbedirectlyattributabletotheacquisitionandconstructionorproductionofassetseligibleforcapitalization,itiscapitalizedandincludedinthecostsofrelevantassets;otherborrowingcostsarerecognizedasexpensesonthebasisoftheactualamountincurred,andareincludedinprofitorloss.17．Intangibleassets

(1)Valuationmethod,servicelife,impairmenttest

Intangibleassetsincludelanduseright,landownership,applicationsoftware,patentrightandnon-patented

technologyetc.Theinitialmeasurementofintangibleassetsisbasedonitscost.Intangibleassetsareamortizedbythestraight-linemethodwithdetailsasfollows:

CategoriesAmortizationmethodAmortizationperiod(years)LanduserightsStraight-linemethodContractualservicelifeIntellectualPropertyofAirConditioningControllerStraight-linemethod5—10PatentedtechnologyofelectronicexpansionvalvecontrollerofDotech

Straight-linemethod

ApplicationsoftwareStraight-linemethod1—4Intangibleassetswithindefiniteusefullifearenotamortized,buttheirusefullifeisreviewedannually.Theindefinitelandownershipheldbyoverseassubsidiariesabroadisnotamortizedduetouncertainservicelife.

（2）AccountingpolicyforinternalR&Dexpenditure

Expendituresontheresearchphaseofaninternalprojectarerecognizedasprofitorlosswhenitisincurred.AnintangibleassetarisingfromthedevelopmentphaseofaninternalprojectisrecognizediftheCompanycanmeetthecorrespondingconditions.18．Impairmentofpartoflong-termassetsLong-termassets,suchaslong-termequityinvestment,investmentproperties,fixedassets,constructioninprogress,intangibleassetsthatmeasuredatcostaretestedforimpairmentifthereisanyindicationthatanassetmaybeimpairedatthebalancesheetdate.Impairmenttesttogoodwillandtheintangibleassetswhoseusinglifeisnotcertainshallbecarriedoutatleastattheendofeachyear.Goodwillshallbetestedforimpairmentincombinationwithitsrelatedassetgrouporcombinationofassetgroups.Iftherecoverableamountoftheaforementionedlong-termassetsislowerthanitsbookvalue,theassetimpairmentprovisionshallberecognizedaccordingtothedifferenceandincludedinthecurrentprofitandloss.19．Long-termprepayments

Long-termprepaymentsareexpensesthathavebeenrecognizedbutwithamortizationperiodoveroneyear(excludingoneyear).Theyarerecordedwithactualcost,andevenlyamortizedwithinthebeneficiaryperiodorstipulatedperiod.Ifitemsoflong-termprepaymentsfailtobebeneficialtothefollowingaccountingperiods,residualvaluesofsuchitemsareincludedinprofitorloss.20．Employeebenefits

(1)Short-termemployeebenefits

1.Employeebenefitsincludesshort-termemployeebenefits,post-employmentbenefits,terminationbenefitsandotherlong-termemployeebenefits.

2.TheCompanyrecognizes,intheaccountingperiodinwhichanemployeeprovidesservice,short-termemployeebenefitsactuallyincurredasliabilities,withacorrespondingchargetoprofitorlossorthecostofarelevantasset.

(2)Post-employmentbenefits

TheCompanyclassifiespost-employmentbenefitplansaseitherdefinedcontributionplansordefinedbenefitplans.TheCompanyrecognizesintheaccountingperiodinwhichanemployeeprovidesservicethecontributionpayabletoadefinedcontributionplanasaliability,withacorrespondingchargetoprofitorlossorthecostofarelevantasset.

(3)Terminationbenefits

Terminationbenefitsprovidedtoemployeesarerecognizedasanemployeebenefitliabilityforterminationbenefits,withacorrespondingchargetoprofitorlossattheearlierofthefollowingdates:a.whentheCompanycannotunilaterallywithdrawtheofferofterminationbenefitsbecauseofanemploymentterminationplanoracurtailmentproposal;orb.whentheCompanyrecognizescostorexpensesrelatedtoarestructuringthatinvolvesthepaymentofterminationbenefits.

(4)Otherlong-termemployeebenefits

Whenotherlong-termemployeebenefitsprovidedtotheemployeessatisfiedtheconditionsforclassifyingasadefinedcontributionplan,thosebenefitsareaccountedforinaccordancewiththerequirementsrelatingtodefinedcontributionplan,whileotherbenefitsareaccountedforinaccordancewiththerequirementsrelatingtodefinedbenefitplan.Tosimplifytherelevantaccountingtreatment,theCompanyrecognizesthecostofemployeebenefitsarisingfromotherlong-termemployeebenefitsasservicecost.Netinterestonthenetliabilityornetassetsofotherlong-termemployeebenefitsandchangesasaresultofremeasurementofthenetliabilityornetassetsofotherlong-termemployeebenefits.Thenettotaloftheaforesaidamountsisrecognizedinprofitorlossorincludedinthecostofarelevantasset.21．Provisions

1.Provisionsarerecognizedwhenfulfillingthepresentobligationsarisingfromcontingenciessuchasprovidingguaranteeforotherparties,litigation,productsqualityguarantee,onerouscontract,etc.,maycausetheoutflowoftheeconomicbenefitandsuchobligationscanbereliablymeasured.

2.Theinitialmeasurementofprovisionsisbasedonthebestestimatedexpendituresrequiredinfulfillingthepresentobligations,anditscarryingamountisreviewedatthebalancesheetdate.22．Share-basedpayment

1.Typesofshare-basedpayment

Share-basedpaymentconsistsofequity-settledshare-basedpaymentandcash-settledshare-basedpayment.

2.Accountingtreatmentforsettlements,modificationsandcancellationsofshare-basedpaymenttermsandconditions

(1)Equity-settledshare-basedpayment

Forequity-settledshare-basedpaymenttransactionwithemployees,iftheequityinstrumentsgrantedvestimmediately,thefairvalueofthoseequityinstrumentsismeasuredatgrantdateandrecognizedastransactioncostorexpense,withacorrespondingadjustmentincapitalreserve;iftheequityinstrumentsgranteddonotvestuntilthecounterpartycompletesaspecifiedperiodofservice,atthebalancesheetdatewithinthevestingperiod,

thefairvalueofthoseequityinstrumentsmeasuredatgrantdatebasedonthebestestimateofthenumberofequityinstrumentsexpectedtovestisrecognizedastransactioncostorexpense,withacorrespondingadjustmentincapitalreserve.Forequity-settledshare-basedpaymenttransactionwithpartiesotherthanemployees,ifthefairvalueofthegoodsorservicesreceivedcanbemeasuredreliably,thefairvalueismeasuredatthedatetheCompanyobtainsthegoodsorthecounterpartyrendersservice;ifthefairvalueofthegoodsorservicesreceivedcannotbemeasuredreliably,thefairvalueoftheequityinstrumentsgrantedmeasuredatthedatetheCompanyobtainsthegoodsorthecounterpartyrendersserviceisreferredto,andrecognizedastransactioncostorexpense,withacorrespondingincreaseinequity.

(2)Cash-settledshare-basedpayment

Forcash-settledshare-basedpaymenttransactionswithemployees,ifshareappreciationrightsvestimmediately,thefairvalueoftheliabilityincurredastheacquisitionofgoodsorservicesismeasuredatgrantdateandrecognizedastransactioncostorexpense,withacorrespondingincreaseinliabilities;ifshareappreciationrightsdonotvestuntiltheemployeeshavecompletedaspecifiedperiodofservice,theliabilityismeasured,ateachbalancesheetdateuntilsettled,atthefairvalueoftheshareappreciationrightsmeasuredatgrantdatebasedonthebestestimateofthenumberofshareappreciationrightexpectedtovest.

(3)Modificationsandcancellationsofshare-basedpaymenttermsandconditions

Ifthemodificationincreasesthefairvalueoftheequityinstrumentsgranted,measuredimmediatelybeforeandafterthemodification,theCompanyincludestheincrementalfairvaluegrantedinthemeasurementoftheamountrecognizedforservicesreceivedasconsiderationfortheequityinstrumentsgranted;similarly,ifthemodificationincreasesthenumberofequityinstrumentsgranted,theCompanyincludesthefairvalueoftheadditionalequityinstrumentsgranted,measuredatthedateofthemodification,inthemeasurementoftheamountrecognizedforservicesreceivedasconsiderationfortheequityinstrumentsgranted;iftheCompanymodifiesthevestingconditionsinamannerthatisbeneficialtotheemployee,theCompanytakesthemodifiedvestingconditionsintoaccount.

Ifthemodificationreducesthefairvalueoftheequityinstrumentsgranted,measuredimmediatelybeforeandafterthemodification,theCompanydoesnottakeintoaccountthatdecreaseinfairvalueandcontinuetomeasuretheamountrecognizedforservicesreceivedasconsiderationfortheequityinstrumentsbasedonthegrantdatefairvalueoftheequityinstrumentsgranted;ifthemodificationreducesthenumberofequityinstrumentsgrantedtoanemployee,thatreductionisaccountedforasacancellationofthatportionofthegrant;iftheCompanymodifiesthevestingconditionsinamannerthatisnotbeneficialtotheemployee,theCompanydoesnottakethemodifiedvestingconditionsintoaccount.

IftheCompanycancelsorsettlesagrantofequityinstrumentsduringthevestingperiod(otherthanagrantcancelledbyforfeiturewhenthevestingconditionsarenotsatisfied),theCompanyaccountsforthecancellationorsettlementasanaccelerationofvesting,andthereforerecognizesimmediatelytheamountthatotherwisewouldhavebeenrecognizedforservicesreceivedovertheremainderofthevestingperiod.23．RevenueAccountingpoliciesusedinrevenuerecognitionandmeasurement

1.Revenuerecognitionprinciples

Atcontractinception,theCompanyshallassessthecontractsandshallidentifyeachperformanceobligationinthecontracts,anddeterminewhethertheperformanceobligationshouldbesatisfiedovertimeoratapointintime.

TheCompanysatisfiesaperformanceobligationovertimeifoneofthefollowingcriteriaismet,otherwise,theperformanceobligationissatisfiedatapointintime:(1)thecustomersimultaneouslyreceivesandconsumesthebenefitsprovidedbytheCompany’sperformanceastheCompanyperforms;(2)thecustomercancontrolgoodsorservicesastheyarecreatedbytheCompany’sperformance;(3)theCompany’sperformancedoesnotcreategoodsorserviceswithanalternativeusesandtheCompanyhasanenforceablerighttopaymentforperformancecompletedtodate.Foreachperformanceobligationsatisfiedovertime,theCompanyshallrecognizerevenueovertimebymeasuringtheprogresstowardscompletesatisfactionofthatperformanceobligation.Inthecircumstancethattheprogresscannotbemeasuredreasonably,butthecostsincurredinsatisfyingtheperformanceobligationareexpectedtoberecovered,theCompanyshallrecognizerevenueonlytotheextentofthecostsincurreduntilitcanreasonablymeasuretheprogress.Todeterminewhetherthecustomerhasobtainedcontrolofgoods,theCompanyshallconsiderthefollowingindicators:(1)theCompanyhasapresentrighttopaymentforthegoods,i.e.,thecustomerispresentlyobligedtopayforthegoods;(2)theCompanyhastransferredthelegaltitleofthegoodstothecustomer,i.e.,thecustomerhaslegaltitletothegoods;(3)theCompanyhastransferredphysicalpossessionofthegoods,i.e.,thecustomerhasphysicallypossessedthegoods;(4)theCompanyhastransferredsignificantrisksandrewardsofownershipofthegoods,i.e.,thecustomerhasobtainedsignificantrisksandrewardsofownershipofthegoods;(5)thecustomerhasacceptedthegoods;(6)otherindicatorsshowingthecustomerhasobtainedcontroloverthegoods.

2.Revenuemeasurementprinciple

(1)Revenueismeasuredattheamountofthetransactionpricethatisallocatedtoeachperformanceobligation.ThetransactionpriceistheamountofconsiderationtowhichtheCompanyexpectstobeentitledinexchangefortransferringgoodsorservicestoacustomer,excludingamountscollectedonbehalfofthirdpartiesandthoseexpectedtoberefundedtothecustomer.

(2)Iftheconsiderationpromisedinacontractincludesavariableamount,theCompanyshallconfirmthebestestimateofvariableconsiderationatexpectedvalueorthemostlikelyamount.However,thetransactionpricethatincludestheamountofvariableconsiderationonlytotheextentthatitishighprobablethatasignificantreversalintheamountofcumulativerevenuerecognizedwillnotoccurwhentheuncertaintyassociatedwiththevariableconsiderationissubsequentlyresolved.

(3)Inthecircumstancethatthecontractcontainsasignificantfinancingcomponent,theCompanyshalldeterminethetransactionpricebasedonthepricethatacustomerwouldhavepaidforifthecustomerhadpaidcashforobtainingcontroloverthosegoodsorservices.Thedifferencebetweenthetransactionpriceandtheamountofpromisedconsiderationisamortizedundereffectiveinterestmethodovercontractualperiod.

(4)Forcontractscontainingtwoormoreperformanceobligations,theCompanyshalldeterminethestand-alonesellingpriceatcontractinceptionofthedistinctgoodunderlyingeachperformanceobligationandallocatethetransactionpricetoeachperformanceobligationonarelativestand-alonesellingpricebasis.

3.Revenuerecognitionmethod

(1)TheCompanymainlysellscontrolcomponentsandpartsforhouseholdappliancesandautomobileairconditioners.Duetocontinuousbatchsupply,productsalesrevenueisconfirmedafterdeliveryinspectionandreceiptofpaymentreceipts.Exportsalesrevenueisrecognizedaftercustomsdeclarationandexportandobtainingthebilloflading.

(2)Recognitionofincomefromthesaleofscrapmetalafterweighingandtakingdeliveryandobtainingreceipts.Differencesinrevenuerecognitionaccountingpoliciescausedbydifferentbusinessmodelsofsimilarbusinesses

24．Governmentgrants

1.Governmentgrantsshallberecognizedif,andonlyif,thefollowingconditionsareallmet:(1)theCompanywillcomplywiththeconditionsattachingtothegrants;(2)thegrantswillbereceived.Monetarygovernmentgrantsaremeasuredattheamountreceivedorreceivable.Non-monetarygovernmentgrantsaremeasuredatfairvalue,andcanbemeasuredatnominalamountinthecircumstancethatfairvaluecan’tbeassessed.

2.Governmentgrantsrelatedtoassets

GovernmentgrantsrelatedtoassetsaregovernmentgrantswithwhichtheCompanyconstructorotherwiseacquirelong-termassetsunderrequirementsofgovernment.Inthecircumstancesthatthereisnospecificgovernmentrequirement,theCompanyshalldeterminebasedontheprimaryconditiontoacquirethegrantsandgovernmentgrantsrelatedtoassetsaregovernmentgrantswhoseprimaryconditionistoconstructorotherwiseacquirelong-termassets.Theyoffsetcarryingamountofrelevantassetsorrecognizedasdeferredincome.Ifrecognizedasdeferredincome,theyareincludedinprofitorlossonasystematicbasisovertheusefullivesoftherelevantassets.Thosemeasuredatnotionalamountisdirectlyincludedintoprofitorloss.Forassetssold,transferred,disposedordamagedwithintheusefullives,balanceofunamortizeddeferredincomeistransferredintoprofitorlossoftheyearinwhichthedisposaloccurred.

3.Governmentgrantsrelatedtoincome

Governmentgrantsrelatedtoincomearegovernmentgrantsotherthanthoserelatedtoassets.Forgovernmentgrantsthatcontainbothpartsrelatedtoassetsandpartsrelatedtoincome,inwhichthosetwopartsareblurredandthuscollectivelyclassifiedasgovernmentgrantsrelatedtoincome.Forgovernmentgrantsrelatedtoincomeusedforcompensatingtherelatedfuturecost,expensesorlossesoftheCompanyarerecognizedasdeferredincomeandareincludedinprofitorlossoroffsetrelevantcostduringtheperiodinwhichtherelevantcost,expensesorlossesarerecognized;forgovernmentgrantsrelatedtoincomeusedforcompensatingtherelatedcost,expensesorlossesincurredtotheCompany,theyaredirectlyincludedinprofitorlossordirectlyoffsetrelevantcost.

4.Governmentgrantsrelatedtotheordinarycourseofbusinessshallbeincludedintootherincomeoroffsetrelevantcostbasedonbusinessnature,whilethosenotrelatedtotheordinarycourseofbusinessshallbeincludedintonon-operatingrevenueorexpenditures.25．Deferredtaxassets/Deferredtaxliabilities

1.Deferredtaxassetsordeferredtaxliabilitiesarecalculatedandrecognizedbasedonthedifferencebetweenthecarryingamountandtaxbaseofassetsandliabilities(andthedifferenceofthecarryingamountandtaxbaseofitemsnotrecognizedasassetsandliabilitiesbutwiththeirtaxbasebeingabletobedeterminedaccordingtotaxlaws)andinaccordancewiththetaxrateapplicabletotheperiodduringwhichtheassetsareexpectedtoberecoveredortheliabilitiesareexpectedtobesettled.

2.Adeferredtaxassetisrecognizedtotheextentoftheamountofthetaxableincome,whichitismostlikelytoobtainandwhichcanbedeductedfromthedeductibletemporarydifference.Atthebalancesheetdate,ifthereisanyexactevidencethatitisprobablethatfuturetaxableincomewillbeavailableagainstwhichdeductibletemporarydifferencescanbeutilized,thedeferredtaxassetsunrecognizedinpriorperiodsarerecognized.

3.Atthebalancesheetdate,thecarryingamountofdeferredtaxassetsisreviewed.Thecarryingamountofadeferredtaxassetisreducedtotheextentthatitisnolongerprobablethatsufficienttaxableincomewillbeavailabletoallowthebenefitofthedeferredtaxassettobeutilized.Suchreductionissubsequentlyreversedto

theextentthatitbecomesprobablethatsufficienttaxableincomewillbeavailable.

4.Theincometaxanddeferredtaxfortheperiodaretreatedasincometaxexpensesorincomethroughprofitorloss,excludingthosearisingfromthefollowingcircumstances:(a)businesscombination;and(b)thetransactionsoritemsdirectlyrecognizedinequity.26．Leases

1.Identificationofalease

Atinceptionofacontract,theCompanyassesseswhetherthecontractis,orcontains,alease.Acontractis,orcontains,aleaseifthecontractconveystherighttocontroltheuseofanidentifiedassetforaperiodoftimeinexchangeforconsideration.Toassesswhetheracontractconveystherighttocontroltheuseofanidentifiedassetforaperiodoftime,theCompanyassesseswhether,throughouttheperiodofuse,thecustomerhasbothofthefollowing:(a)therighttoobtainsubstantiallyalloftheeconomicbenefitsfromuseoftheidentifiedasset;and(b)therighttodirecttheuseoftheidentifiedasset.

2.Identificationofseparateleases

Foracontractthatcontainsmorethanoneleasecomponent,theCompanyseparatesthecomponentsandaccountsforeachleasecomponentseparately.Therighttouseanunderlyingassetisaseparateleasecomponentifboth:(a)thelesseecanbenefitfromuseoftheunderlyingasseteitheronitsownortogetherwithotherresourcesthatarereadilyavailabletothelessee;and(b)theunderlyingassetisneitherhighlydependenton,norhighlyinterrelatedwith,theotherunderlyingassetsinthecontract.

3.AccountingtreatmentsfortheCompanyaslessee

Atthecommencementdate,theCompanyrecognizesaleasethathasaleasetermof12monthsorlessasashort-termlease,whichshallnotcontainapurchaseoption;theCompanyrecognizesaleaseasaleaseofalow-valueassetiftheunderlyingassetisoflowvaluewhenitisnew.IftheCompanysubleasesanasset,orexpectstosubleaseanasset,theheadleasedoesnotqualifyasaleaseofalow-valueasset.

Forallshort-termleasesandleasesoflow-valueassets,leasepaymentsarerecognizedascostorprofitorlosswithstraight-linemethod/unit-of-productionmethodovertheleaseterm.(Reminder:Forshort-termleases,choosetheaccountingpolicyaccordingtothetypeofleasedasset,andforlow-valueleases,choosetheaccountingpolicyforeachlease.Pleasemodifyitaccordingtotheactualsituation.)

Apartfromtheabove-mentionedshort-termleasesandleasesoflow-valueassetswithsimplifiedapproach,theCompanyrecognizesright-of-useassetsandleaseliabilitiesatthecommencementdate.

Atthecommencementdate,theCompanymeasurestheleaseliabilityatthepresentvalueoftheleasepaymentsthatarenotpaidatthatdate,discountedusingtheinterestrateimplicitinthelease.Ifthatratecannotbereadilydetermined,theCompany’sincrementalborrowingrateshallbeused.Unrecognizedfinancingexpenses,calculatedatthedifferencebetweentheleasepaymentanditspresentvalue,arerecognizedasinterestexpensesovertheleasetermusingthediscountratewhichhasbeenusedtodeterminethepresentvalueofleasepaymentandincludedinprofitorloss.Variableleasepaymentsnotincludedinthemeasurementofleaseliabilitiesareincludedinprofitorlossintheperiodsinwhichtheyareincurred.

Afterthecommencementdate,ifthereisachangeinthefollowingitems:(a)actualfixedpayments;(b)amountsexpectedtobepayableunderresidualvalueguarantees;(c)anindexorarateusedtodetermineleasepayments;(d)assessmentresultorexerciseofpurchaseoption,extensionoptionorterminationoption,theCompanyremeasurestheleaseliabilitybasedonthepresentvalueofleasepaymentsafterchanges.

4.AccountingtreatmentsforleasemodificationsinwhichtheCompanyaslessee

(1)Aleasemodificationasaseparatelease

TheCompanyaccountsforaleasemodificationasaseparateleaseifboth:(a)themodificationincreasesthescopeoftheleasebyaddingtherighttouseoneormoreunderlyingassets;and(b)theconsiderationfortheleaseincreasesbyanamountcommensuratewiththestand-alonepricefortheincreaseinscope.

(2)Aleasemodificationnotasaseparatelease

Attheeffectivedateoftheleasemodification,theCompanyredeterminestheleasetermofthemodifiedleaseandremeasurestheleaseliabilitybydiscountingtherevisedleasepaymentusingareviseddiscountrate.Thereviseddiscountrateisdeterminedastheinterestrateimplicitintheleasefortheremainderoftheleaseterm;iftheinterestrateimplicitintheleasecannotbereadilydetermined,thereviseddiscountrateisdeterminedastheCompany’sincrementalborrowingrateattheeffectivedateofthemodification.

TheCompanyaccountsfortheremeasurementoftheleaseliabilityby:

1)Decreasingthecarryingamountoftheright-of-useassettoreflectthepartialorfullterminationoftheleaseforleasemodificationsthatdecreasethescopeofthelease.TheCompanyrecognizesinprofitorlossanygainorlossrelatingtothepartialorfullterminationofthelease.

2)Makingacorrespondingadjustmenttocarryingamountoftheright-of-useassetforallotherleasemodifications.

5.AccountingtreatmentsfortheCompanyaslessor

Atthecommencementdate,theCompanyclassifiesaleaseasafinanceleaseifittransferssubstantiallyalltherisksandrewardsincidentaltoownershipofanunderlyingasset.Otherwise,itisclassifiedasanoperatinglease.

(1)Operatinglease

Leasereceiptsarerecognizedasleaseincomewithstraight-linemethodovertheleaseterm.Initialdirectcostsincurredshallbecapitalized,amortizedonthesamebasisastherecognitionofleaseincome,andincludedintoprofitorlossbyinstallments.Variableleasepaymentsrelatedtooperatingleasewhicharenotincludedintheleasepaymentarechargedasprofitorlossintheperiodsinwhichtheyareincurred.

(2)Financelease

Atthecommencementdate,theCompanyrecognizesthefinanceleasepaymentreceivablebasedonthenetinvestmentinthelease(sumofthepresentvalueofunguaranteedresidualvalueandleasereceiptsthatarenotreceivedatthecommencementdate,discountedbytheinterestrateimplicitinthelease),andderecognizesassetsheldunderthefinancelease.TheCompanycalculatesandrecognizesinterestincomeusingtheinterestrateimplicitintheleaseovertheleaseterm.

Variableleasepaymentsnotincludedinthemeasurementofthenetinvestmentintheleasearechargedasprofitorlossintheperiodsinwhichtheyareincurred.

6.AccountingtreatmentsforleasemodificationsinwhichtheCompanyaslessor

(1)Operatinglease

TheCompanyaccountsforamodificationtoanoperatingleaseasanewleasefromtheeffectivedateofthemodification,consideringanyprepaidoraccruedleasepaymentsrelatingtotheoriginalleaseaspartoftheleasepaymentsforthenewlease.

(2)Financelease

1)Aleasemodificationasaseparatelease

TheCompanyaccountsforaleasemodificationasaseparateleaseifboth:(a)themodificationincreasesthescopeoftheleasebyaddingtherighttouseoneormoreunderlyingassets;and(b)theconsiderationfortheleaseincreasesbyanamountcommensuratewiththestand-alonepricefortheincreaseinscope.

2)Aleasemodificationnotasaseparatelease

Iftheleasewouldhavebeenclassifiedasanoperatingleasehadthemodificationbeenineffectattheinceptiondate,theCompanyaccountsfortheleasemodificationasanewleasefromtheeffectivedateofthemodification,andmeasuresthecarryingamountoftheunderlyingassetasthenetinvestmentintheleaseimmediatelybeforetheeffectivedateoftheleasemodification.Otherwise,theCompanyappliesregulationsinthe“CASBE22–FinancialInstruments:RecognitionandMeasurement”regardingthemodificationorrenegotiationofcontracts.27．OthersignificantaccountingpoliciesandestimatesSegmentreportingReportablesegmentsareidentifiedbasedonoperatingsegmentswhicharedeterminedbasedonthestructureoftheCompany’sinternalorganization,managementrequirementsandinternalreportingsystem.AnoperatingsegmentisacomponentoftheCompanythat:

1.Engagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses;

2.WhosefinancialperformanceareregularlyreviewedbyManagementtomakedecisionsaboutresourcetobeallocatedtothesegmentandassessitsperformance;and

3.Forwhichfinancialinformationregardingfinancialposition,financialperformanceandcashflowsisavailable.

28.Changesinsignificantaccountingpoliciesandaccountingestimates

(1)Changesinsignificantaccountingpolicies

√Applicable□Notapplicable

TheCompanyhasadopted“CASBE21-Leases”revisedbyMinistryofFinanceofPRCsinceJanuary1,2021.

（2）Since2021,adjustmentstotherelevantitemsoffinancialstatementsatthebeginningoftheyearatthefirstimplementationofleasestandards.ApplicableWhetheritisnecessarytoadjustthebalancesheetaccountsatthebeginningoftheyear

□Yes√No

Ⅵ.Taxes

1.Majorcategoriesoftaxesandtaxrates

TaxTypeTaxationbasisTaxrateVAT

Theoutputtaxcalculatedbasedontherevenuefromsalesofgoodsorrenderingofservicesinaccordancewiththetaxlaw,netoftheinputtaxthatisallowedtobedeductedinthecurrentperiod

13%UrbanmaintenanceandconstructiontaxThesumofturnovertaxpayableandvalue-addedtaxexemption5%,7%

EnterpriseincometaxTaxableincome15%,25%Differententerpriseincometaxratesapplicabletodifferenttaxpayers:

TaxpayersIncometaxrateZhejiangSanhuaIntelligentControlsCo.,Ltd15%ZhejiangSanhuaClimateandApplianceControlsGroupCo.,Ltd15%WuhuSanhuaAuto-controlComponentsCo.,Ltd15%ZhejiangSanhuaAutomotiveComponentsCo.,Ltd.15%Sanhua(hangzhou)MicroChannelHeatExchangerCo.,Ltd15%HangzhouLeaderwayElectronicsCo.Ltd15%ZhuhaiHengtuElectronicsCo.,Ltd.15%WuhuSanhuaRefrigerationFittingsCo.Ltd15%Sanhua(Jiangxi)Self-controlComponentsCo.,Ltd.15%WuhanSanhuaRefrigerationPartsCo.,Ltd15%SanhuaAWECOApplianceSystems(Wuhu)Co.,Ltd.15%Domestictaxpayersotherthantheabove-mentioned25%

2.Taxpreferentialpolicies

1．EnterpriseincometaxBeingcategorizedashigh-techenterprises,theincometaxoftheCompanyandseveralsubsidiariesfor2021aretemporarilycalculatedatapreferentialtaxrateof15%,andthefinalincometaxsettlementshallprevail.2．Value-addedtaxSeveralsubsidiariesarewelfareenterprisesandcanenjoythepreferentialpolicyof"VATrefund".Theexceedingportionoverthe3%VATpayableofthecertifiedsoftwareproductsenjoytheimmediaterefundpolicy.ExportgoodsenjoytheVATexemptionandrefundpolicy.

3.Others

Theoverseassubsidiaryshallbesubjecttothetaxregulationsofitshostcountry.Ⅶ.NotestoItemsintheConsolidatedFinancialStatements

1.Cashandbankbalances

Unit:RMBItemsClosingbalanceOpeningbalanceCashonhand327,111.73232,265.51Cashinbank6,205,720,660.693,411,034,773.03Othercashandbankbalances95,840,410.2378,420,529.60

Total6,301,888,182.653,489,687,568.14Including:Depositedoverseas283,016,150.48370,754,548.72Thetotalamountofthecashandbankbalancesthatarelimitedbymortgage,pledgeorfreeze

106,963,410.2389,543,529.60

2.Held-for-tradingfinancialassets

Unit:RMBItemsClosingbalanceOpeningbalanceFinancialassetsatfairvaluethroughprofitorloss

189,524,312.14752,224,861.78Including:

Bankfinancialproducts189,524,312.14752,224,861.78Including:

Total189,524,312.14752,224,861.78

3.DerivativeFinancialAssets

Unit:RMBItemsClosingbalanceOpeningbalanceForeignexchangetool20,863,496.9649,339,961.11Futurestools5,529,209.668,990,525.42

Total26,392,706.6258,330,486.53

4.Notesreceivable

（1）Categoriesofnotesreceivable

Unit:RMBItemsClosingbalanceOpeningbalanceBankacceptance1,718,559,685.302,190,368,328.70Tradeacceptance300,871,907.43133,566,452.83

Total2,019,431,592.732,323,934,781.53

Unit:RMB

Categories

ClosingbalanceOpeningbalanceBookbalance

Provisionforbaddebt

Carryingamount

BookbalanceProvisionforbaddebt

CarryingamountAmount

ProportionAmount

Provisionproportion

AmountProportio

n

AmountProvision

proportionIncluding:

Notesreceivablewithprovisionforbaddebtmadeonacollectivebasis

2,035,266,956.28

100.00%

15,835,3

63.55

0.78%

2,019,431,592.73

2,330,964,594.83

100.00%

7,029,813.3

0.30%

2,323,934,781.53Including:

Bankacceptance

1,718,559,685.30

84.44%

1,718,559,685.30

2,190,368,328.70

93.97%

2,190,368,328.70Tradeacceptance

316,707,

270.98

15.56%

15,835,3

63.55

5.00%

300,871,9

07.43

140,596,2

66.13

6.03%

7,029,813.3

5.00%

133,566,4

52.83

Total

2,035,266,956.28

100.00%

15,835,3

63.55

0.78%

2,019,431,592.73

2,330,964,594.83

100.00%

7,029,813.3

0.30%

2,323,934,781.53Provisionforbaddebtmadeonacollectivebasis:

Unit:RMBItemsClosingbalance

BookbalanceProvisionforbaddebtProvisionproportion(%)Bankacceptanceportfolio1,718,559,685.30Tradeacceptanceportfolio316,707,270.9815,835,363.555.00%Total2,035,266,956.2815,835,363.55--Iftheprovisionforbaddebtofnotesreceivableisinaccordancewiththegeneralexpectedcreditlossmodel,pleaserefertothedisclosureofthebaddebtprovisionforotherreceivables:

□Applicable√NotApplicable

（2）Provisionforbaddebtaccrued,recoveredorreversedincurrentperiodProvisionforbaddebtaccruedincurrentperiod:

Unit:RMBCategoriesOpeningbalance

Changedamountofthisperiod

ClosingbalanceAccrual

Recoveredor

reversed

WriteoffOthersTradeacceptance7,029,813.308,805,550.2515,835,363.55

Total7,029,813.308,805,550.2515,835,363.55

Includingsignificantprovisionforbaddebtrecoveredorreversedamount:

□Applicable√NotApplicable

（3）Pledgednotesatthebalancesheetdate

Unit:RMBItemsClosingbalanceofpledgednotesBankacceptance1,579,929,231.31Total1,579,929,231.31

（4）Endorsedordiscountedbutunduenotesatthebalancesheetdate

Unit:RMBItemsClosingbalancederecognizedClosingbalancenotyetderecognizedBankacceptance72,862,252.02Tradeacceptance202,271,622.3323,201,547.82Total275,133,874.3523,201,547.82

5.Accountsreceivable

（1）Disclosureofaccountsreceivablebycategories

Unit:RMB

Categories

ClosingbalanceOpeningbalanceBookbalance

Provisionforbad

debt

Carryingamount

Bookbalance

Provisionforbaddebt

CarryingamountAmountProportio

n

AmountAccrued

proportion

AmountProportio

n

AmountAccrued

proportionReceivableswithprovisionmadeonanindividualbasis

57,335.2

0.00%

57,335.2

100.00%0.0057,335.280.00%57,335.28100.00%0.00Including:

Receivableswithprovisionmadeonacollectivebasis

3,264,621,824.66

100.00%

163,764,

922.03

5.02%

3,100,856,902.63

2,481,072,027.67

100.00%

125,458,7

28.10

5.06%

2,355,613,2

99.57

Including:

Total

3,264,679,159.94

100.00%

163,822,

257.31

5.02%

3,100,856,902.63

2,481,129,362.95

100.00%

125,516,0

63.38

5.06%

2,355,613,2

99.57

Provisionmadeonanindividualbasis:

Unit:RMBDebtors

ClosingbalanceBookbalanceProvisionforbaddebtsAccruedproportionReasonsMAHLEBEHRMEXICOS.DER.L.DE.C.V.57,335.2857,335.28100.00%Total57,335.2857,335.28----Provisionmadeonacollectivebasis:aging

Unit:RMBItems

ClosingbalanceBookbalanceProvisionforbaddebtAccruedproportionWithin1year3,261,150,680.57163,057,534.045.00%1to2years2,154,196.08215,419.6110.00%2to3years832,528.12249,758.4330.00%Over3years484,419.89242,209.9550.00%Total3,264,621,824.66163,764,922.03--Iftheprovisionforbaddebtofaccountsreceivableisinaccordancewiththegeneralexpectedcreditlossmodel,pleaserefertothedisclosureofbaddebtprovisionforotherreceivables:

□Applicable√NotApplicable

Disclosurebyaging

Unit:RMBAgingClosingbalanceWithin1year(including1year)3,261,150,680.571to2years2,154,196.082to3years832,528.12Over3years541,755.17Total3,264,679,159.94

（2）Provisionforbaddebtaccrued,recoveredorreversedincurrentperiod

Provisionforbaddebtaccruedincurrentperiod:

Unit:RMBCategoriesOpeningbalance

Changedamountofthecurrentperiod

ClosingbalanceAccrued

Recoveredorreversed

WriteoffOthersReceivableswithprovisionmadeonanindividualbasis

57,335.2857,335.28Receivableswithprovision125,458,728.1039,398,806.271,092,612.34163,764,922.03

madeonacollectivebasisTotal125,516,063.3839,398,806.271,092,612.34163,822,257.31

（3）Actualwrite-offofaccountsreceivableincurrentperiod

Unit:RMBItemsWrite-offamountSmallsporadicaccountsreceivable1,092,612.34

（4）Top5debtorswiththelargestaccountsreceivablebalances

Unit:RMBDebtorsClosingbalance

Proportiontothetotalbalanceof

accountsreceivable

Provisionforbaddebtattheend

oftheperiodTop5debtorswiththelargestbalances

1,171,560,371.6135.89%58,578,018.58Total1,171,560,371.6135.89%

6.Advancespaid

（1）Advancespaidbyaging

Unit:RMBAging

ClosingbalanceOpeningbalanceAmountPercentageAmountPercentageWithin1year97,728,785.4296.52%61,348,884.2088.39%1to2years2,502,832.592.47%6,712,609.399.67%2to3years350,677.150.35%64,117.700.09%Over3years668,758.920.66%1,278,715.161.84%Total101,251,054.08--69,404,326.45--

（2）Top5debtorswiththelargestadvancespaidbalances

Closingbalanceoftop5debtorstotaledRMB24,289,065.18，accountingfor23.99%ofthetotalclosingbalanceofadvancespaid.

7.Otherreceivables

Unit:RMBItemsClosingbalanceOpeningbalanceOtherreceivables98,155,207.5176,935,495.05Total98,155,207.5176,935,495.05

（1）Otherreceivables

1）Otherreceivablescategorizedbynature

Unit:RMBItemsClosingbalanceOpeningbalanceTaxrefundreceivable50,947,804.0236,628,075.87Guaranteedeposits32,226,145.1930,801,053.14Others17,412,718.5611,700,014.42Total100,586,667.7779,129,143.43

2）Provisionofbaddebt

Unit:RMBProvisionforbaddebt

PhaseIPhaseIIPhaseIII

Subtotal12?monthexpected

creditlosses

Lifetimeexpectedcreditlosses(creditnotimpaired)

Lifetimeexpectedcreditlosses(creditimpaired)BalanceonJanuary1,2021

856,410.481,337,237.902,193,648.38ThebalanceasofJanuary1,2021isinthecurrentperiod

————————Provisionmadeinthecurrentperiod

441,538.92441,538.92Provisionrecoveredincurrentperiod

203,727.04203,727.04BalanceonJune30,20211,297,949.401,133,510.862,431,460.26Lossprovisionsforsignificantchangesinbookbalancesincurrentperiod

□Applicable√NotApplicable

Disclosebyaging

Unit:RMBAgingClosingbalance

Within1year(including1year)1,297,949.401to2years126,719.582to3years278,342.70Over3years728,448.58Total2,431,460.26

3）Detailsofthetop5debtorswithlargestbalances

Unit:RMBItemsNatureofreceivablesClosingbalanceAges

Proportiontothetotalbalanceofotherreceivables

ProvisionforbaddebtattheendoftheperiodTaxrefundreceivablesTaxrefund50,947,804.02Within1year50.65%FinanceBureauofXinchangCounty

Performancebond6,971,285.001to4years6.93%ShaoxingBinhaiNewCityManagementCommittee

Performancebondforland

andprojectconstruction

5,410,000.003to4years5.38%XinchangCountyLandReserveDevelopmentCenter

Depositofconstructionprojects

3,774,000.005to8years3.75%WuhuYijiangDistrictFinanceBureau

Depositofconstructionprojects

3,751,000.003to4years3.73%Total--70,854,089.02--70.44%4）OtherreceivablesrelatedtoGovernmentgrants

Unit:RMBItemsGovernmentgrantClosingbalanceAges

Estimatedreceipttime,amountandbasisLocalfinanceandtaxationdepartments

VATrefundofcivilwelfareenterprises

1,735,806.82Within1year

FromJulytoOctober,2021,Taxrefundreturn

8.Inventories

WhethertheCompanyneedstocomplywiththedisclosurerequirementsoftherealestateindustryNo

（1）Categoriesofinventories

Unit:RMBItemsClosingbalanceOpeningbalance

Bookbalance

Provisionfordeclineinvalueofinventoriesorprovisionforimpairmentofcontractperformancecosts

CarryingamountBookbalanceBookbalance

ProvisionfordeclineinvalueofinventoriesorprovisionforimpairmentofcontractperformancecostsRawmaterials798,314,357.0339,409,438.41758,904,918.62530,578,235.3438,591,465.21491,986,770.13Work-in-progress267,306,340.68955,782.93266,350,557.75377,607,984.60661,948.94376,946,035.66Finishedgoods1,931,323,857.3246,652,663.721,884,671,193.601,488,998,382.8155,323,878.131,433,674,504.68Others7,877,177.937,877,177.935,154,395.995,154,395.99Total3,004,821,732.9687,017,885.062,917,803,847.902,402,338,998.7494,577,292.282,307,761,706.46

（2）ProvisionfordeclineinvalueofinventoriesandProvisionforimpairmentofcontractperformancecosts

Unit:RMBItemsOpeningbalance

IncreaseincurrentperiodDecreaseincurrentperiod

ClosingbalanceAccruedOthers

Reversalorwrite

off

OthersRawmaterials38,591,465.214,457,352.233,639,379.0339,409,438.41Work-in-progress661,948.94293,833.99955,782.93Finishedgoods55,323,878.1313,863,394.3322,534,608.7446,652,663.72Total94,577,292.2818,614,580.5526,173,987.7787,017,885.06Thedeterminationofthenetrealizablevalueoftheexcess&obsoleteinventoriesofmetalmaterialsattheendoftheperiodisthescrapmetalrecoveryprice.Thedeterminationofthenetrealizablevalueoftheexcess&obsoleteinventoriesofelectroniccomponentsisRMB0.

9.Othercurrentassets

Unit:RMBItemsClosingbalanceOpeningbalanceDeductibleinputtax67,017,753.97100,377,659.11PrepaidEnterpriseincometax63,363,501.0049,911,203.33Others1,313,092.07171,625.57Total131,694,347.04150,460,488.01

10.Long-termreceivable

（1）Long-termreceivable

Unit:RMBItems

ClosingbalanceOpeningbalance

RangeofdiscountrateBookbalance

Provisionforbaddebt

Carryingamount

Bookbalance

Provisionfor

baddebt

CarryingamountEmployeehomeloan

2,295,085.002,295,085.002,074,750.002,074,750.00Total2,295,085.002,295,085.002,074,750.002,074,750.00--Impairmentofprovisionforbaddebt

Unit:RMBProvisionforbaddebt

PhaseIPhaseIIPhaseIII

Total12?monthexpected

creditlosses

Lifetimeexpectedcreditlosses(creditnotimpaired)

Lifetimeexpectedcreditlosses(creditimpaired)ThebalanceasofJanuary1,2021isinthecurrentperiod

————————Lossprovisionsforsignificantchangesinbookbalancesincurrentperiod

□Applicable√NotApplicable

11.Long-termequityinvestments

Unit:RMB

Investees

Openingbalance(Carryingamount)

Increase/decreaseincurrentperiod

Closingbalance(Carryingamount)

Closingbalance

ofprovision

forimpairme

nt

Investme

ntincreased

Investme

ntdecreased

Investmentincomerecognize

dunderequitymethod

Adjustmentinothercomprehe

nsiveincome

Changesinotherequity

Cashdividendsorprofitdeclared

todistributio

n

Provision

forimpairme

nt

Others

Ⅰ.JointventuresⅡ.AssociatesGuochuangEnergyInternetInnovationCenter

1,525,252

.76

15,260.42

1,540,513

.18

(Guangdong)Co.,Ltd.ChongqingTainuoMachineryCo.,Ltd.

9,396,904

.73

3,344,529

.44

1,500,000

.00

11,241,43

4.17

NanchangSanhuaJinlifengMachineryCo.,Ltd.

1,517,138.95

-1,763.92

1,515,375.03

NingboJinlifengMachineryCo.,Ltd.

1,062,209.18

345,870.3

1,408,079.54QingdaoSanhuaJinlifengMachineryCo.,Ltd.

0.000.00

ZhongshanXuanyiPipeManufacturingCo.,Ltd.

1,718,111.06

404,994.4

2,123,105.46

Xinchangzhejiangenergysanhuacomprehensiveenergyco.

0.000.00

Subtotal

15,219,61

6.68

4,108,890.70

1,500,000

.00

17,828,50

7.38

Total15,219,614,108,8901,500,00017,828,50

6.68.70.007.38Otherremarks:

QingdaoSanhuaJinlifengMachineryCo.,Ltd.hasbeeninsolvent,theequityinvestmenthasbeenreducedtozeroyuan;AsofJune30,2021,theCompanyhasnotpaidcapitalcontributiontoXinchangzhejiangenergysanhuacomprehensiveenergyco.LTD.

12.Investmentproperty

（1）Investmentpropertymeasuredbycostmethod

√Applicable□NotApplicable

Unit:RMBItemsBuildingsandstructures

LanduserightandOverseaslandownership

ConstructioninprogressTotalⅠ.OriginalCarryingamount

1.Openingbalance12,643,427.543,539,025.0016,182,452.54

2.Increaseincurrent

period

-403,290.39-149,410.80-552,701.19

(1)Acquisition

(2)Transferredinfrom

inventory\fixedassets\constructioninprogress

(3)Businesscombination

(4)Converteddifference

inForeignCurrencyStatements

-403,290.39-149,410.80-552,701.19

3.Decreaseincurrent

period

(1)Disposal

(2)Othertransferout

4.Closingbalance12,240,137.153,389,614.2015,629,751.35Ⅱ.Accumulateddepreciationandamortization

1.Openingbalance6,114,863.586,114,863.58

2.Increaseincurrent

period

116,711.23116,711.23

(1)Depreciationor

amortization

380,365.53380,365.53

(2)Converteddifference

inForeignCurrencyStatements

-263,654.30-263,654.30

3.Decreaseincurrent

period

(1)Disposal

(2)Othertransferout

4.Closingbalance6,231,574.816,231,574.81Ⅲ.Provisionforimpairment

1.Openingbalance

2.Increaseincurrent

period

(1)Accrual

3.Decreaseincurrent

period

(1)Disposal

(2)Othertransferout

4.Closingbalance

Ⅳ.Carryingamount

1.Closingbalance6,008,562.343,389,614.209,398,176.54

2.Openingbalance6,528,563.963,539,025.0010,067,588.96

13.Fixedassets

Unit:RMBItemsClosingbalanceOpeningbalanceFixedassets3,965,615,647.933,839,408,059.45Total3,965,615,647.933,839,408,059.45

（1）Fixedassets

Unit:RMB

Items

Buildingsand

structures

Machineryand

equipment

Measurement

analysisequipment

Transportation

vehicles

Officeandotherequipment

TotalⅠ.Originalbookvalue:

1.Opening

balance

2,335,750,475.013,639,249,906.77115,451,585.4240,354,179.00236,938,987.106,367,745,133.30

2.Increasein

currentperiod

-3,329,066.88331,090,911.947,942,035.572,097,563.136,744,983.38344,546,427.14

(1)Acquisition95,281,538.938,411,514.292,351,291.158,262,324.06114,306,668.43

(2)Transferredin

fromconstructioninprogress

5,563,254.51251,194,456.72256,757,711.23

(3)Business

combination

(4)Converted

differenceinForeign

-8,892,321.39-15,385,083.71-469,478.72-253,728.02-1,517,340.68-26,517,952.52

3.Decreasein

currentperiod

13,242,839.12462,910.27956,717.038,098,164.3522,760,630.77

(1)Disposalor

scrap

13,242,839.12462,910.27956,717.038,098,164.3522,760,630.77

4.Closingbalance2,332,421,408.133,957,097,979.59122,930,710.7241,495,025.10235,585,806.136,689,530,929.67Ⅱ.Accumulateddepreciation

1.Opening

balance

611,780,867.811,678,476,511.9040,099,350.8230,404,077.31163,881,935.332,524,642,743.17

2.Increasein

currentperiod

42,520,529.36151,621,285.505,646,196.601,633,711.358,077,616.47209,499,339.28

(1)Accrual44,929,601.97159,841,857.175,700,348.951,753,189.029,021,453.76221,246,450.87

(2)Converted

differenceinForeignCurrencyStatements

-2,409,072.61-8,220,571.67-54,152.35-119,477.67-943,837.29-11,747,111.59

3.Decreasein

currentperiod

9,017,193.54439,764.76954,046.093,510,127.0013,921,131.39

(1)Disposalor

scrap

9,017,193.54439,764.76954,046.093,510,127.0013,921,131.39

4.Closing

balance

654,301,397.171,821,080,603.8645,305,782.6631,083,742.57168,449,424.802,720,220,951.06Ⅲ.Provisionforimpairment

1.Opening

balance

3,694,330.683,694,330.68

2.Increasein

currentperiod

(1)Accrual

3.Decreasein

currentperiod

(1)Disposalor

scrap

4.Closingbalance3,694,330.683,694,330.68Ⅳ.Carryingamount

1.Closing

balance

1,678,120,010.962,132,323,045.0577,624,928.0610,411,282.5367,136,381.333,965,615,647.93

2.Opening

balance

1,723,969,607.201,957,079,064.1975,352,234.609,950,101.6973,057,051.773,839,408,059.45

（2）Fixedassetswithcertificateoftitlesbeingunsettled

Unit:RMBItemsCarryingamountReasonsforunsettlement13#factoryinMeizhuNorthdistrict74,188,222.31

Newassets,thecertificateoftitletobeprocesseduniformlyaftertheoverallcompletionFinishedgoodswarehouseinMeizhuNorthdistrict

20,742,454.16

Newassets,thecertificateoftitletobeprocesseduniformlyaftertheoverallcompletion14#factoryinMeizhuNorthdistrict23,819,727.63

Newassets,thecertificateoftitletobeprocesseduniformlyaftertheoverallcompletion15#factoryinMeizhuNorthdistrict58,312,098.92

Newassets,thecertificateoftitletobeprocesseduniformlyaftertheoverallcompletionShaoxingnewenergyplant(PhaseⅠ)146,061,271.52

Newassets,thecertificateoftitletobeprocesseduniformlyaftertheoverallcompletion

小计323,123,774.54

14.Constructioninprogress

Unit:RMBItemsClosingbalanceOpeningbalanceConstructioninprogress914,010,795.59628,730,529.07Total914,010,795.59628,730,529.07

（1）Detailsofconstructioninprogress

Unit:RMBItems

ClosingbalanceOpeningbalanceBookbalance

Provisionforimpairment

Carryingamount

BookbalanceProvisionfor

impairment

CarryingamountAnnualproductionof7.3millionsetsofnewenergyvehiclethermalmanagementsystemcomponentsproject

138,826,452.14138,826,452.14145,885,533.67145,885,533.67Annualproductionof12.7millionsetsofautomotiveairconditioningcontrolcomponentsproject

13,272,734.9813,272,734.98Annualproductionof11.5millionsetsofnewenergyautopartsproject

78,054,678.4978,054,678.4978,290,263.6078,290,263.60Annualproductionof1.5millionsetsofnewenergythermalmanagementcomponentsproject

168,660,657.79168,660,657.7988,939,186.1888,939,186.18Annualproductionof1millionsetsofnewenergyvehicleair-conditioningthermalsensorsproject

1,038,025.681,038,025.683,772,038.193,772,038.19Annualproductionof11millionsetsofhigh-efficiencyheatexchangercomponentsfornewenergyvehicles

25,437,837.8025,437,837.80Annualproductionof65millionsetsofcommercial

101,456,068.31101,456,068.3125,812,948.2525,812,948.25

refrigerationandairconditioningintelligentcontrolcomponentsconstructionprojectAnnualoutputof50.5millionsetsofhighefficiencyandenergysavingrefrigerationandairconditioningcontrolcomponentstechnologytransformationprojects

15,371,049.0515,371,049.0511,841,050.0011,841,050.00

Annualoutputof27.5milliontubingpartand10,000tonsofstainlesssteelpipeconstructionproject

38,692,424.6138,692,424.6120,961,098.2920,961,098.29Vietnamindustrialplantproject

97,028,569.5997,028,569.5980,569,043.2480,569,043.24Others236,172,297.15236,172,297.15172,659,367.65172,659,367.65Total914,010,795.59914,010,795.59628,730,529.07628,730,529.07

（2）Changesofsignificantconstructioninprogressincurrentperiod

Unit:RMB

ItemsBudget

Openingbalance

Increasedincurrentperiod

Transferred

tofixedassetsinthecurrentperiod

Otheramountsdecreasedincurrentperiod

Closingbalance

Accumulatedinvestmenttobudget(%)

Completio

npercentage(%)

Accumulatedamountofcapitalizedinterest

Including:

capitalizedinterestincurrentperiod

Capitalizatio

nrateforinterestincurrentperiod

FundsourceAnnualproductionof7.3millionsetsofnewenergyvehiclethermalmanagementsystemcomponentsproject

468,600,000.0

145,885,533.67148,210,461.30155,269,542.83138,826,452.14104.28%

RaisedfundsAnnualproductionof12.7millionsetsofautomotiveairconditioningcontrolcomponentsproject

215,000,000.0

13,329,200.1356,465.1513,272,734.9891.12%

RaisedfundsAnnualproductionof11.5millionsetsofnewenergyautopartsproject

528,800,000.0

78,290,263.6049,586,870.5249,822,455.6378,054,678.4987.00%

RaisedfundsAnnualproductionof1.5millionsetsofnewenergythermalmanagementcomponentsproject

500,000,000.0

88,939,186.18102,836,403.9223,114,932.31168,660,657.7938.41%OtherAnnualproductionof1millionsetsofnewenergyvehicleair-conditioningthermalsensorsproject

44,786,000.003,772,038.192,734,012.511,038,025.6845.81%Other

ZhejiangSanhua

Annualproductionof11millionsetsofhigh-efficiencyheatexchangercomponentsfornewenergyvehicles

760,000,000.0

25,437,837.8025,437,837.803.35%

Annualproductionof65millionsetsofcommercialrefrigerationandairconditioningintelligentcontrolcomponentsconstructionproject

1,780,550,000

.0025,812,948.2575,643,120.06101,456,068.317.01%

Annualoutputof50.5millionsetsofhighefficiencyandenergysavingrefrigerationandairconditioningcontrolcomponentstechnologytransformationprojects

785,570,000.0

11,841,050.0020,226,039.0516,696,040.0015,371,049.054.10%

Annualoutputof27.5milliontubingpartand10,000tonsofstainlesssteelpipeconstructionproject

409,420,000.0

20,961,098.2917,731,326.3238,692,424.619.45%

Vietnamindustrialplantproject

180,882,800.0

80,569,043.2416,459,526.3597,028,569.5952.14%Total

5,673,608,800

.00456,071,161.42469,460,785.45247,693,448.43677,838,498.44----

ZhejiangSanhua

15.IntangibleAssets

（1）Detailsofintangibleassets

ItemsLanduserightPatentright

Non-patenttechnology

Overseasland

ownership

Intellectualpropertyright

ofairconditionercontroller

Patent

Intelligenttechnology

electronic

technologyexpansion

expansioncontroller

Ⅰ.Originalbookvalue

1.Openingbalance552,419,787.6128,945,626.5142,150,175.56

controller6,634,364.80

2.Increasedincurrentperiod106,915,159.8335,839,547.38

(1)Acquisition107,284,800.0036,642,563.43

(2)Internalresearchand

development

(3)Businesscombination

(4)Converteddifferencein

Foreign

-369,640.17-803,016.05

3.Decreasedincurrentperiod

(1)Disposal

4.Closingbalance659,334,947.4464,785,173.8942,150,175.56

6,634,364.806,634,364.80

Ⅱ.Accumulatedamortization

1.Openingbalance99,284,584.15314,580.9625,152,312.84

6,634,364.801,216,300.14

2.Increasedincurrentperiod6,408,869.8884,765.911,947,508.82

(1)Accrual6,425,475.4992,303.331,947,508.82

ZhejiangSanhua

(2)Converteddifferencein

Foreign

-16,605.61-7,537.42

3.Decreasedincurrentperiod

(1)Disposal

4.Closingbalance105,693,454.03399,346.8727,099,821.66

Intelligent1,548,018.36

Ⅲ.Provisionforimpairment

1.Openingbalance3,862,456.71

2.Increasedincurrentperiod-38,358.78

(1)Accrual

(2)Converteddifferencein

Foreign

-38,358.78

3.Decreasedincurrentperiod

(1)Disposal

4.Closingbalance3,824,097.93Ⅳ.Carryingamount

1.Closingbalance553,641,493.4160,561,729.0915,050,353.90

1,548,018.365,086,346.44

2.Openingbalance453,135,203.4624,768,588.8416,997,862.72

5,086,346.445,418,064.66

Atthebalancesheetdate,intangibleassetsformedfrominternalR&Daccountfor0.00%oftotalclosingbalanceofintangibleassets.

16.Goodwill

（1）OriginalCarryingamountofgoodwill

Unit:RMBInvesteeoreventsresultingingoodwill

Openingbalance

IncreasedincurrentperiodDecreasedincurrentperiod

ClosingbalanceDuetobusiness

combination

DisposalR-SquaredPuckettInc.

31,959,091.6031,959,091.60Total31,959,091.6031,959,091.60

17.Long-termprepayments

Unit:RMBItemsOpeningbalance

Increasedincurrentperiod

AmortizationOtherdecreasesClosingbalancePlantrenovationexpenditure

23,706,401.617,076,194.304,642,412.2326,140,183.68Total23,706,401.617,076,194.304,642,412.2326,140,183.68

18.Deferredtaxassets/deferredtaxliabilities

（1）Deferredtaxassetsbeforeoffset

Unit:RMBItems

ClosingbalanceOpeningbalanceDeductibletemporary

difference

Deferredtaxassets

Deductibletemporarydifference

DeferredtaxassetsProvisionforbaddebt115,626,649.8223,099,167.2178,915,609.3015,835,440.18Provisionforinventorywrite-down62,933,045.4210,444,607.1867,642,565.6011,282,463.93Unrealizedprofitfrominternaltransactions185,453,037.2522,200,912.62180,209,650.5417,242,885.11Deductiblelosses148,946,529.3629,996,233.85153,097,367.8532,871,988.62Deferredincome:governmentgrants134,799,813.9422,257,469.79140,105,328.4322,782,106.08Provisionforfixedassetsimpairments3,694,330.68554,149.623,694,330.68554,149.61Floatinglossonderivatives3,665,344.50549,801.68300,000.0045,360.00Share-paidremuneration193,768,250.5630,827,179.70209,618,110.5333,059,655.93Provisionalcostestimate28,942,635.184,327,806.2027,565,532.124,134,829.82Total877,829,636.71144,257,327.85861,148,495.05137,808,879.28

（2）Deferredtaxliabilitiesbeforeoffset

Unit:RMBItems

ClosingbalanceOpeningbalanceTaxabletemporary

difference

Deferredtaxliabilities

Taxabletemporary

difference

DeferredtaxliabilitiesDepreciationandamortizationexpense

867,295,201.66149,245,103.66770,755,369.92128,446,514.86Floatinggainonderivatives

13,672,819.752,261,859.3313,804,602.362,070,690.35Floatinggainonfinancialproducts

10,034.261,505.141,739,861.78260,979.27Total880,978,055.67151,508,468.13786,299,834.06130,778,184.48

（3）Deferredtaxassetsorliabilitiesafteroffsetshownonanetoffsettingbasis

Unit:RMBItems

Deferredtaxassetsandliabilitiesoffsetamountattheendofthe

balanceamount

Closingbalanceofdeferredtaxassetsorliabilitiesafteroffset

Deferredtaxassetsandliabilitiesoffsetamountatthebeginningoftheperiod

OpeningbalanceofdeferredtaxassetsorliabilitiesafteroffsetDeferredtaxassets

144,257,327.85137,808,879.28Deferredtaxliabilities

151,508,468.13130,778,184.48

（4）Detailsofunrecognizeddeferredtaxassets

Unit:RMBItemsClosingbalanceOpeningbalanceProvisionforbaddebt66,462,431.3055,823,915.76Provisionforinventorywrite-down24,084,839.6426,934,726.68Deductiblelossesofsubsidiaries26,719,611.8724,790,389.63Provisionforintangibleassetsimpairments3,824,097.933,862,456.71Floatinglossonderivatives4,061,040.127,639,957.91Share-paidremuneration12,106,170.5711,139,485.50Investmentlossesrecognizedbytheequitymethod

6,428,507.384,319,616.68Total143,686,698.81134,510,548.87

（5）Deductiblelossesofunrecognizeddeferredtaxassetswillexpireinthefollowingyears

Unit:RMBMaturityyearsClosingbalanceOpeningbalanceRemarksYear2025445,585.90445,585.90Year20262,147,004.73Year202810,478,078.4210,478,078.42Year20297,488,066.677,488,066.67Year20306,146,831.816,378,658.64Year203114,044.34Total26,719,611.8724,790,389.63--

19.Othernon-currentassets

Unit:RMBItems

ClosingbalanceOpeningbalanceBookbalance

Provisionforimpairment

CarryingamountBookbalance

Provisionforimpairment

CarryingamountAdvancedpaymentforassetspurchasing

365,696,226.22365,696,226.22251,509,127.08251,509,127.08Total365,696,226.22365,696,226.22251,509,127.08251,509,127.08

20.Short-termborrowings

（1）Categoriesofshort-termborrowings

Unit:RMBItemsClosingbalanceOpeningbalanceCreditborrowings20,000,000.00Overseasloanunderdomesticguarantee520,960,900.00362,698,500.00Accruedinterest420,293.64389,796.60Total521,381,193.64383,088,296.60

21.Derivativefinancialliabilities

Unit:RMBItemsClosingbalanceOpeningbalanceForeignexchangetool3,100,848.007,939,957.91

Futurestool4,625,536.62Total7,726,384.627,939,957.91

22.Notespayable

Unit:RMBCategoriesClosingbalanceOpeningbalanceBankacceptancebill1,856,484,983.841,238,574,463.73Total1,856,484,983.841,238,574,463.73Atthebalancesheetdate,balancesduebutunpaidtotaledRMB0.

23.Accountspayable

（1）Detailsofaccountspayable

Unit:RMBItemsClosingbalanceOpeningbalanceWithin1year2,476,690,653.882,184,050,911.511to2years7,670,181.6188,579,882.542to3years2,553,875.301,289,268.11Over3years4,761,089.425,741,693.81Total2,491,675,800.212,279,661,755.97

24.Advancesreceived

（1）Detailsofadvancesreceived

Unit:RMBItemsClosingbalanceOpeningbalanceAdvancecollectionofassetpackagedisposalfunds

10,000,000.0010,000,000.00Total10,000,000.0010,000,000.00

25.Contractliabilities

Unit:RMBItemsClosingbalanceOpeningbalanceAdvancepaymentforgoods44,096,560.8642,581,607.67Total44,096,560.8642,581,607.67

26.Employeebenefitspayable

（1）Detailsofemployeebenefitspayable

Unit:RMBItemsOpeningbalance

Increasedincurrent

period

Decreasedincurrent

period

ClosingbalanceⅠ.Short-termemployeebenefits

282,701,491.43938,462,396.231,008,263,483.03212,900,404.63Ⅱ.Post-employmentbenefits-definedcontributionplan

2,888,141.3533,893,467.6732,910,297.653,871,311.37Ⅲ.Terminationbenefits3,716,281.21519,403.323,196,877.89Total289,305,913.99972,355,863.901,041,693,184.00219,968,593.89

（2）DetailsofShort-termemployeebenefits

Unit:RMBItemsOpeningbalance

Increasedincurrent

period

Decreasedincurrent

period

Closingbalance

1.Wage,bonus,allowancesandsubsidy264,874,751.98793,550,205.74864,919,353.82193,505,603.90

2.Employeewelfarefund27,709,433.1427,709,433.14

3.Socialinsurancepremium10,408,040.8154,208,888.9252,896,580.4011,720,349.33Including：Occupationalinjuriespremium

256,781.03805,218.15827,973.35234,025.83MedicarepremiumandMaternitypremium

2,405,489.0518,967,757.7319,016,455.932,356,790.85Overseassocialsecuritycontributions7,745,770.7334,435,913.0433,052,151.129,129,532.65

4.Housingprovidentfund16,029,179.8116,029,179.81

5.Tradeunionfundandemployeeeducation

fund

1,224,164.063,590,876.433,554,347.131,260,693.36Dispatchingremuneration3,460,279.6443,149,696.7343,154,588.733,455,387.64Cashstockappreciationoption2,734,254.94224,115.462,958,370.40Total282,701,491.43938,462,396.231,008,263,483.03212,900,404.63

（3）Detailsofdefinedcontributionplan

Unit:RMBItemsOpeningbalance

Increasedincurrent

period

Decreasedincurrentperiod

Closingbalance

1.Basicendowment

insurancepremium

2,771,543.3532,894,443.2931,945,151.283,720,835.36

2.Unemployment

insurancepremium

116,598.00999,024.38965,146.37150,476.01Total2,888,141.3533,893,467.6732,910,297.653,871,311.37

27.Taxesandratespayable

Unit:RMBItemsClosingbalanceOpeningbalanceVAT23,370,647.9714,647,359.92Enterpriseincometax66,877,724.4733,105,141.57Individualincometax5,192,919.695,797,449.67Urbanmaintenanceandconstructiontax1,894,588.222,283,772.47Educationsurcharge978,617.021,207,595.10Localeducationsurcharge652,424.69717,275.16Housingpropertytax7,615,056.8914,503,893.38Landusetax6,375,492.822,162,780.06Localfoundationforwaterworks73,179.7660,119.04Others690,572.93522,755.69Total113,721,224.4675,008,142.06

28.Otherpayables

Unit:RMBItemClosingbalanceOpeningbalanceDividendpayable1,200,000.00Otherpayables228,347,075.23270,888,400.58Total229,547,075.23270,888,400.58

（1）Dividendpayable

Unit:RMB

ItemsClosingbalanceOpeningbalanceDividendofcommonstock1,200,000.00Total1,200,000.00

（2）Otherpayables

1）Otherpayableslistedbynature

Unit:RMB

ItemsClosingbalanceOpeningbalanceRestrictedsharesrepoobligations106,824,717.50145,063,690.00Freightandmiscellaneouscharges69,107,949.9972,117,058.15Productwarrantyfee3,030,855.082,757,036.90Guaranteedeposit13,589,517.706,564,169.23Rentandpropertyfee2,044,648.527,877,975.71Compensationforproductqualityloss1,303,380.143,889,429.08Collectionoftalentawards6,013,705.921,320,000.00Others26,432,300.3831,299,041.51Total228,347,075.23270,888,400.58

29.Non-currentliabilitiesduewithinoneyear

Unit:RMB

ItemsClosingbalanceOpeningbalanceGuaranteedborrowings770,000,000.00Overseasloanunderdomesticguarantee241,362,511.00130,498,000.00Accruedinterest778,827.0455,923.87Total1,012,141,338.04130,553,923.87

30.Long-termborrowings

（1）Categoriesoflong-termborrowings

Unit:RMB

ItemsClosingbalanceOpeningbalanceGuaranteedborrowings660,000,000.001,380,000,000.00Overseasloanunderdomesticguarantee256,465,970.00326,142,884.74Accruedinterest959,721.861,776,110.13

Total917,425,691.861,707,918,994.87

31.Bondspayable

（1）Bondspayable

Unit:RMBItemsClosingbalanceOpeningbalanceConvertiblebond2,588,449,353.66Total2,588,449,353.66

（2）Changedamountincurrentperiod（Excludingpreferredshares,perpetualbondsandotherfinancialinstrumentsclassifiedasfinancialliabilities）

Unit:RMB

Bonds

Nominal

value

Issuedate

Bondduration

Issueamount

Openingbalance

Issueincurrentperiod

Accruedinterestatnominalvalue

Premiumordiscountamortization

Repaymentincurrentperiod

ClosingbalanceSanhuaconvertiblebond

100.00

Jun1,2021

6years

3,000,000

,000.00

2,577,764

,452.17

500,000.0

10,184,90

1.49

2,588,449

,353.66Total------

3,000,000

,000.00

2,577,764

,452.17

500,000.0

10,184,90

1.49

2,588,449

,353.66

（3）Conditionforsharesconvertedfromconvertiblebondandthetimeofconversion

AccordingtoZJXK[2021]No.168,thecompanyissuedRMB3billionconvertiblebondsonJune1,2021.TheCompanyissued30millionconvertiblecorporatebondswithanominalvalueofRMB100.Conditionforsharesconvertedfromconvertiblebondandthetimeofconversion:

1)Bondduration:Thetermofconvertiblebondsis6yearsfromthedateofissuance,i.e.fromJune1,2021toMay31,2027

2)Nominalinterestrate:0.2%inthefirstyear,0.4%inthesecondyear,0.6%inthethirdyear,1.5%inthefourthyear,1.8%inthefifthyearand2.0%inthesixthyear.

3)Initialsharesconversionprice:theinitialconversionpriceoftheconvertiblebondsisRMB21.55pershare.Duringthedurationoftheconvertiblebond,whentheclosingpriceoftheCompany'sstockislowerthan85%ofthecurrentconversionpriceforatleast15tradingdaysinany30consecutivetradingdays,theboardofdirectorsoftheCompanyhastherighttoproposeadownwardamendmentfortheconversionpriceandsubmitittothegeneralmeetingofshareholdersoftheCompanyfordeliberationandvoting.

4)Termofconversion:thetermoftheconvertiblebondstartsfromthefirsttradingday(December7,2021),6monthsaftertheendoftheissuanceonJune7,2021(T+4days),tothematuritydateoftheconvertiblebond(May31,2027)

5)Redemptionconditions:

a.RedemptionatmaturityWithinfivetradingdaysafterthematurityofconvertiblebondissuance,theCompanywillredeemtheunconvertedconvertiblebondatapriceof110%ofthebond'snominalvalue(includingthelastinstalmentinterest)b.ConditionalredemptionDuringtheconversionperiod,whenanyofthefollowingsituationsoccurs,theCompanyreservestherighttodecidetoredeemallorpartoftheconvertiblebondsthathavenotbeenconvertedatthenominalvalueofthebondsplustheaccruedinterestforthecurrentperiod.

(1)TheclosingpriceoftheCompany'sstockshallnotbelowerthan130%ofthecurrentconversionpriceforatleast15tradingdaysinany30consecutivetradingdays.

(2)WhentheunconvertedbalanceofconvertiblebondislessthanRMB30million.

6)Puttablebondsprovision

a.Conditionalconvertibleputtablebonds

InthelasttwointerestbearingyearsoftheConditionalConvertiblePuttableBonds(“thePuttableBonds”),ifthecompany'sstockclosingpriceforany30consecutivetradingdaysislowerthan70%ofthecurrentconversionprice,thePuttableBondsholdershavetherighttoresellallorpartofthePuttableBondstotheCompanyatthenominalvalueplusthecurrentaccruedinterest.Iftheconversionpricehasbeenadjustedwithinbytheabove30tradingdays,thetradingdaybeforeadjustmentshouldbecalculatedaccordingtotheconversionpriceandclosingpricebeforeadjustment,andthetradingdayafteradjustmentshallbecalculatedaccordingtotheconversionpriceandclosingpriceafteradjustment.Incaseofdownwardamendmentfortheconversionprice,theabove30consecutivetradingdaysshouldberecalculatedfromthefirsttradingdayafterdownwardamendmentfortheconversionprice.

WithinthelasttwointerestbearingyearsofthePuttableBonds,aftertheconditionsforexerciserightaremetforthefirsttimeeachyear,theholderofthePuttableBondscanexercisetheputtablerightonceinaccordancewiththeaboveagreedconditions.IftheconditionsforbondholderstoexercisetherighttoearlyrepaymentoftheprincipalaremetforthefirsttimeandtheholderofthePuttableBondsfailstonotifytheirintentiontoexerciseitduringtherepurchasedeclarationperiodannouncedbythecompanyatthattime,thebondholderrighttoearlyrepaymentshallnotbeexercisedintheinterestcalculationyear.Eachputtablebondholdercanexercisetheputtablerightonlyonceinaccordancewiththeaboveagreedconditions.

b.Additionalissuanceofputtablebonds

Ifthereisasignificantchangeintheimplementationofthecompany’sinvestmentprojectwiththeproceedsraisedfromtheissuanceofPuttableBondsandthecompany’scommitmentintheprospectus,itwillbedeemedtobeachangeintheuseoftheproceedsaccordingtotherelevantprovisionsoftheChinaSecuritiesRegulatoryCommissionorberecognizedbytheChinaSecuritiesRegulatoryCommissionasifthepurposeoftheraisedfundsischanged,theholdersofthePuttableBondshavetheoptiontoexercisetherightoncetoearlyrepaymentofprincipal.HoldersofPuttableBondshavetherighttosellallorpartoftheirPuttableBondsbacktothecompanyatthebondfacevaluepluscurrentaccruedinterest.Intheeventthatadditionalissuanceofputtablebondsconditionsaremet,theexistingholdercanexerciseitsrightforthebondtoberedeemedduringthereportingperiodafterthecompany'sannouncement;iftherighttoredemptionisnotexercisedduringthereportingperiodbythebondholder,thebondholder’srightshallnotbeexercised.

32.Long-termpayables

Unit:RMBItemsClosingbalanceOpeningbalance

Long-termpayables84,940,677.9190,336,083.27Total84,940,677.9190,336,083.27

（1）Long-termpayableslistedbynature

Unit:RMBItemsClosingbalanceOpeningbalancePayablesforfinancialleasing84,162,723.1589,432,221.08Stockappreciationrightsdeposit777,954.76903,862.19PayablesforfinancialleasingRemainingleaseterm

ClosingbalanceOpeningbalanceWithin1year9,196,945.216,417,433.101to2years

9,840,440.5910,274,197.362to3years

10,019,388.6610,274,197.36Over3years

62,098,461.1570,534,422.75Subtotal

91,155,235.6197,500,250.57Less:Unrecognizedfinancingcharges

6,992,512.468,068,029.49Subtotal

84,162,723.1589,432,221.08

33.AccruedLiability

Unit:RMBItemsClosingbalanceOpeningbalanceReasonPendinglitigation2,638,000.00Total2,638,000.00--

34.Deferredincome

Unit:RMBItemsOpeningbalance

Increasedincurrent

period

Decreasedincurrent

period

ClosingbalanceReasonGovernmentgrants140,105,336.434,700,000.0010,005,522.49134,799,813.94Total140,105,336.434,700,000.0010,005,522.49134,799,813.94--

Projectsrelatedtogovernmentgrants：

Unit:RMB

ItemsOpeningbalance

Increasedincurrentperiod

GrantsincludedintoNon-operating

revenueincurrentperiod

Theamountrecordedasotherincomeincurrentperiod

Offsettingcostandexpensesincurrentperiod

Otherchanges

Closingbalance

Relatedtoassets/relatedto

incomeGrantforprojectofanannualoutputof15millioncommercialrefrigerationandair-conditioningautomaticcontrolcomponents

2,449,000.201,224,499.981,224,500.22

RelatedtoassetsSpecialfundgrantformultistoryfactorybuildingsofsmallandmedium-sizedenterprises

4,995,134.10110,959.984,884,174.12

RelatedtoassetsGrantforinnovationabilityconstructionprojectofNationalEnterpriseTechnologyCenter

3,125,000.16312,499.982,812,500.18

RelatedtoassetsGrantfortechnicaltransformationprojectofnewlyincreased800000setsofheatexchangerperyear

2,274,000.00379,000.001,895,000.00

RelatedtoassetsGrantfortechnicaltransformationprojectofnewannualoutputof2millionairconditioningcomponents

2,208,000.08276,000.001,932,000.08

RelatedtoassetsGrantfortheindustrializationprojectof20millionrefrigerationandairconditioningautomaticcontrolcomponents

278,837.70278,837.70

RelatedtoassetsGrantforcommercialmachinemicro-channelheatexchangertechnicaltransformationproject

1,291,850.00369,100.00922,750.00

RelatedtoassetsGrantfor1millionsetsofair-conditioningthermalsensortechnologytransformationofnewenergyvehicle

5,492,100.16500,000.00457,674.955,534,425.21

Relatedtoassets

ZhejiangSanhua

Grantforanannualoutputof2millionsetsofhigh-efficiencyenergy-savinginvertercontrollers

1,779,470.08257,973.82Grantfortechnicaltransformationprojectofnewlyincreased100000setsofheatexchangerperyear

5,056,860.00421,405.00Grantforconstructionprojectofpublictestanddetectionserviceplatformforrefrigerationcomponents

699,999.64350,000.04Grantfortheconstructionprojectofautomaticcontrolcomponentsforresidentialairconditionerswithanannualoutputof10million

480,000.00240,000.00Grantforpollutionsourcetreatmentproject1,168,491.6789,450.00Grantforconstructionprojectofpublicinspectionandtestingserviceplatformforautomobileairconditioningparts

256,666.87192,499.98Technicaltransformationprojectfortheproductionlineofenergy-savingresidentialair-conditioningcontrolcomponentswithanannualoutputof50millionsets

497,115.5663,461.52Grantforconstructionprojectof25millionsetsofnewenergy-savingandenvironmentalprotectionvariablefrequencyairconditioningexpansionvalve

340,000.2867,999.98Industrialtransferprojectsandsingleequipmentinvestmentgrant

306,364.0671,196.42ComprehensiveinvestmentawardfortechnologicaltransformationofindustrialenterprisesinWuhuCity

2,985,248.00178,944.00Industrialtransformationandupgrading,technological1,412,834.44101,212.44

ZhejiangSanhua

transformationandindustrialinvestmentGrantforcomprehensivetechnicaltransformationprojectofintelligentmanufacturingofrefrigerationcomponents

5,799,850.00414,274.98Grantfortechnicaltransformationprojectof30millionsetsofhighefficiencyenergysavingrefrigerationandairconditioningcontrolcomponents

6,400,000.00400,000.02Grantforprojectofanannualoutputof11.5millionnewenergyautomobileparts

17,663,068.274,200,000.001,488,090.22Four-wayreversingvalveoptimizationproject573,333.4479,999.98PolicygrantforWuhuCity'sstrongindustrialbaseandmanufacturingstrongprovince

705,000.0045,000.00Grantfortechnicaltransformationprojectofannualoutputof7.3millionnewenergyvehiclethermalmanagementsystemcomponents

40,380,000.00Annualproductionof3millionself-circulatingsuperconductingplatestechnologyproject

717,750.0049,500.00IntelligentfactorytechnologicaltransformationprojectbasedonTheInternetofThingstechnology

3,624,999.89250,000.02Grantforintelligentmanufacturingtechnicaltransformationprojectofanannualoutputof6millioncommercialrefrigerationcomponents

2,631,220.00180,000.00Comprehensiveawardandcompensationforinvestmentintechnologicaltransformationofindustrialenterprises

1,942,702.09137,982.12Grantfortechnicaltransformationprojectofannual1,115,724.1756,254.98

ZhejiangSanhua

outputof12millioncommercialrefrigerationcontrolcomponentsGrantforequipmentspromotingnewtypeindustrialtechnologicaltransformation

1,273,707.3265,888.98Producttechnicaltransformationprojectofannualoutputof700000largeheatexchangers

6,025,050.00334,725.00Grantfortechnicaltransformationprojectof30millionsetsofhighefficiencyenergysavingrefrigerationandairconditioningcontrolcomponents

12,015,132.50605,805.00Grantforenergy-savingprojectwithanannualoutputof35millionsetsofL-typefour-wayreversingvalveforairconditioners

2,140,825.75455,285.40Total140,105,336.434,700,000.0010,005,522.49

35.Othernon-currentliabilities

Unit:RMBItemsClosingbalanceOpeningbalanceEngineeringagentconstructionfund28,782,218.0928,782,218.09Long-termemployeerightsprotectionpayment

50,218,720.6551,616,679.63Total79,000,938.7480,398,897.72Otherremarks:

Accordingtolocalinvestmentpromotionpolicies,the"sevenconnectionsandoneleveling"projectoftheconstructionlandoftheWuhucityiscompletedbyWuhuhigh-techIndustrialDevelopmentZoneAdministrationCommittee.Asthestate-ownedassetsmanagementunitofWuhuhigh-techIndustrialDevelopmentZone,WuhuXinmaInvestmentCo.,Ltd.andWuhuHigh-techConstructionDevelopmentCo.,Ltd.entrustedWuhuSanhuaAuto-controlComponentsCo.,LtdandWuhuSanhuaTechnologyCo.,Ltd.tobuildthe"sevenconnectionsandoneleveling"project,andallocatedRMB72.03millionasengineeringfund.AsofJune30,2021,theaccumulatedamountofhedgingandwritten-offofengineeringagentconstructionfundandprojectexpensewasRMB

43.2478million,andtheamounttobewritten-offattheendoftheperiodwasRMB28.7822million.

Long-termemployeerightsprotectionpayment:retirementpensionsofMr.HugoSchrott，fatherofMr.HaraldSchrottwhoistheformeractualcontrolleroftheGermanyAwecoresidentialappliancesbusiness.BasedonAustrianlaborlaw,one-timewelfarecompensationforterminationoflaborcontractandone-timewelfarecompensationforretirement,disabilityanddeath.Theamountofsuchliabilitiesisestimatedanddeterminedbyanindependentactuary.

36.Sharecapital

Unit:RMBOpeningbalance

Changedamountofcurrentperiod（+/-）

ClosingbalanceIssueofnewshares

Bonusshares

Reservetransferredtoshares

OthersSubtotalTotalshares3,591,601,468.003,591,601,468.00

37.Otherequityinstruments

（1）Changesinpreferredshares,perpetualbondsandotherfinancialinstrumentsissuedattheendoftheperiod

Unit:RMBFinancialinstruments

issued

OpeningbalanceIncreasedincurrentperiodDecreasedincurrentperiodOpeningbalanceQuantityBookvalueQuantityBookvalueQuantityBookvalueQuantityBookvalue

Convertiblebond

409,766,556.

409,766,556.

Total

409,766,556.

409,766,556.

Changesofotherequityinstrumentsinthecurrentperiod,explanationofchangereasons,andbasisofrelevantaccountingtreatment:

Withtheapprovalof[2021]No.168documentofChinaSecuritiesRegulatoryCommission,thecompanypubliclyissued30millionconvertiblebondsonJune1,2021,withanominalvalueofRMB100pershare,atotalissuanceamountofRMB3billionandatermof6years.ThetotalamountoffundsraisedfromtheissuanceofconvertiblebondsisRMB3billion,afterdeductingtheissuanceexpensesofRMB12,468,991.59(excludingtax),theactualnetamountoffundsraisedisRMB2,987,531,008.41.

WithreferencetothecreditbondinterestratesofsimilarenterpriseswithAA+creditratingandsimilarmaturitiesinthemarket,andafterdeductingthebondissuanceexpenses,thevalueoftheconvertiblebonddebtinstrumentisRMB2,577,764,452.17andthevalueoftheequityinstrumentisRMB409,766,556.24.

38.Capitalreserve

Unit:RMBItemsOpeningbalance

Increasedincurrent

period

Decreasedincurrent

period

ClosingbalanceCapitalpremium（Sharepremium）

99,640,721.5141,153,220.00140,793,941.51Othercapitalreserve215,776,712.7126,270,045.1047,326,203.00194,720,554.81Total315,417,434.2267,423,265.1047,326,203.00335,514,496.32Otherremarks,includingchangedamountofthecurrentperiodandmovementreason:

Reasonsforchangesinthecurrentperiod：①Incurrentperiod,thecompanyhaveunlocked4,596,150equityincentiverestrictedshares,correspondingtoshare-basedpaymentremunerationofRMB41,153,220.00,transferthesameamountfromcapitalreservetosharepremium,andreduceothercapitalreservesanddeferredincometaxassetsRMB6,172,983.00；②OthercapitalreserveincreasedRMB26,270,045.10duetotheconfirmationofshare-basedpaymentremuneration.

39.Treasuryshares

Unit:RMBItemsOpeningbalance

Increasedincurrent

period

Decreasedincurrent

period

ClosingbalanceRestrictedshares145,063,690.0038,238,972.50106,824,717.50Reposhares136,420,051.34136,420,051.34Total281,483,741.3438,238,972.50243,244,768.84Otherremarks,includingchangedamountofthecurrentperiodandmovementreason:

①InApril2021,thecompanyimplementedthe2020equitydistributionwithadividendofRMB5,553,275.00forequityincentiverestrictedshares，andthetreasurysharesandrepoobligationspayablewerereducedbythesameamount；②Incurrentperiod,thecompanyhaveunlocked4,596,150equityincentiverestrictedshares,thegrantpricewasRMB9.85pershare，afterex-rightsdividendadjustment,thepriceapproximatelyequaltoRMB7.1115pershare（(9.85-0.15)/(1+0.3)-0.1-0.25），unlocked

amountisRMB32,685,697.50,andthetreasurysharesandrepoobligationspayablewerereducedbythesameamount.

40.Othercomprehensiveincome(OCI)

Unit:RMB

Items

Openingbalance

Changedamountofthecurrentperiod

ClosingbalanceCurrentperiodcumulativebeforeincometax

Less:OCIcarriedforwardtransferredtoprofitorloss

Less:OCIcarriedforwardtransferred

toundistributedprofit

Less:

incometaxexpense

Attributabl

etotheparentCompany

after

tax

Attributabl

etoNon-controllinginterestaftertaxItemstobereclassifiedsubsequentlytoprofitorloss

-89,624,962.

-17,246,63

5.52

-17,246,63

5.52

-106,871,598.13ConverteddifferenceinForeign

-89,624,962.

-17,246,63

5.52

-17,246,63

5.52

-106,871,598.13TotalOCI

-89,624,962.

-17,246,63

5.52

-17,246,63

5.52

-106,871,598.13

41.Surplusreserve

Unit:RMBItemsOpeningbalance

Increasedincurrentperiod

Decreasedincurrentperiod

ClosingbalanceStatutorysurplusreserve611,472,556.89611,472,556.89Discretionarysurplusreserve8,681,137.208,681,137.20Reservefund17,813,919.3817,813,919.38Total637,967,613.47637,967,613.47

42.Undistributedprofit

Unit:RMBItemsCurrentperiodPreviousperiodBalancebeforeadjustmentattheendofthepreviousperiod

5,890,916,707.835,278,392,288.84Openingbalanceafteradjustment5,890,916,707.835,278,392,288.84Add:Netprofitattributabletoshareholdersofthe823,881,221.70643,481,717.35

parentcompanyforcurrentyearLess:Payabledividendsonordinaryshares895,454,593.00413,337,540.30Closingbalanceofundistributedprofit5,819,343,336.535,508,536,465.89

43.OperatingrevenueandOperatingcost

Unit:RMBItems

CurrentperiodcumulativePrecedingperiodcomparativeRevenueCostRevenueCostMainoperations7,359,458,785.545,303,220,897.985,154,036,483.163,687,894,611.98Otheroperations314,622,976.15298,590,581.64164,142,143.61151,731,392.72Total7,674,081,761.695,601,811,479.625,318,178,626.773,839,626,004.70

44.Taxesandsurcharges

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeUrbanmaintenanceandconstructiontax10,179,080.4111,285,362.07Educationsurcharge5,228,681.605,862,443.58Housingpropertytax7,902,829.607,739,313.64Landusetax4,561,087.173,936,973.44Stampduty2,905,152.171,718,299.51Localeducationsurcharge3,485,801.103,917,789.39Localfoundationforwaterworks480,439.56317,066.13Others1,620,081.441,532,392.64Total36,363,153.0536,309,640.40

45.Sellingexpenses

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeLaborcost107,494,444.6089,959,268.53Warehousing,freightandmiscellaneouscharges

170,380,255.46107,209,661.24

Entertainmentexpense15,792,822.5311,184,991.26Travelexpense6,797,345.197,216,150.87Marketmaintenancefee7,048,733.8321,127,233.51Advertisingexpense1,899,365.323,565,221.92Others12,495,802.5317,179,973.21Total321,908,769.46257,442,500.54

46.Administrativeexpenses

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeLaborcost221,584,740.82180,394,958.75Share-basedpaymentremuneration26,494,160.5631,363,797.18Officeexpense43,677,277.4537,525,515.30Entertainmentexpense7,220,376.684,931,757.55Depreciationandamortizationexpense34,793,775.7333,079,843.36Intermediaryservicefee15,889,432.1715,638,721.85Vehicleexpense5,647,121.793,554,310.73Others19,124,651.018,861,840.43Total374,431,536.21315,350,745.15

47.R&Dexpenses

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeLaborcost186,897,454.69133,441,569.36Materialandpowerexpense110,747,519.7370,421,777.52Depreciationandamortizationexpense17,325,821.9416,095,750.47Moldmanufacturingfee22,006,077.529,274,489.97Travelexpense1,375,884.501,444,769.03Royalties2,136,353.461,278,190.44OutsourcingR&Dexpense150,000.00734,967.97Others11,536,437.787,321,413.62Total352,175,549.62240,012,928.38

48.Financialexpenses

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeInterestexpense40,208,255.7532,558,310.10Interestincome-43,640,017.31-19,167,271.27Bankfinancingfee802,376.051,399,332.23Cashdiscount-1,978,825.66-1,126,936.47Exchangegainsorlosses51,129,161.17-45,679,616.29Others2,783,481.902,122,784.66Total49,304,431.90-29,893,397.04

49.Otherincome

Unit:RMBSourceoftheotherincomeCurrentperiodcumulativePrecedingperiodcomparativeGovernmentgrants71,379,416.62100,414,953.91Including:VATrefundofcivilwelfareenterprises

4,370,400.005,134,826.02VATrefundonsoftwareproductsinexcessoftaxburden

2,974,905.571,689,841.68Handlingfeesforwithholdingindividualincometax

702,064.601,113,187.32Total72,081,481.22101,528,141.23

50.Investmentincome

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeInvestmentincomefromlong-termequityinvestmentsunderequitymethod

4,108,890.701,826,673.64Investmentincomeofbankfinancingproducts4,163,475.2820,408,132.79Gainsandlossesonsettlementoffuturescontracts31,449,091.11-17,407,734.45Gainsandlossesonsettlementofforeignexchangecontract61,385,788.33-12,822,186.77Billdiscountinterest-3,707,072.41-114,807.17

Total97,400,173.01-8,109,921.96

51.Gainsorlossesonchangesinfairvalue

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeFloatingincomeofbankfinancingproducts-613,379.14-300,099.30Floatingincomeoffuturescontracts-11,620,437.0218,412,630.80Floatingincomeofforeignexchangecontract-20,461,881.22-11,592,485.54Total-32,695,697.386,520,045.96

52.Creditimpairmentloss

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeProvisionforbaddebt-48,442,168.40-12,874,290.80Total-48,442,168.40-12,874,290.80

53.Assetsimpairmentloss

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeInventorywrite-downlossandcontractperformancecostimpairmentloss

-18,614,580.55-6,302,857.17Total-18,614,580.55-6,302,857.17

54.Gainsonassetdisposal

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeGainsondisposaloffixedassets400,172.51-319,355.00

55.Non-operatingrevenue

Unit:RMB

ItemsCurrentperiodcumulativePrecedingperiodcomparative

Amountincludedinnon-recurringprofitorlossExemptedpayment1,062,439.33637,810.131,062,439.33Compensationandpenaltyincome

1,182,168.21471,406.191,182,168.21Gainsfromretirementoffixedassets

74,165.9426,006.6874,165.94Others153,386.66331,761.81153,386.66Total2,472,160.141,466,984.812,472,160.14

56.Non-operatingexpenditures

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparative

Amountincludedinnon-recurringprofitorlossDonationexpenditures160,000.0052,072.82160,000.00Lossesonretirementoffixedassets

2,097,520.701,109,947.202,097,520.70Compensationandliquidateddamagesexpenses

942,720.28942,720.28Others403,940.72192,059.13403,940.72Total3,604,181.701,354,079.153,604,181.70

57.Incometaxexpenses

（1）Incometaxexpenses

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeCurrentperiodincometaxexpenses162,540,094.7190,079,636.80Deferredincometaxexpenses8,067,026.458,937,711.57Total170,607,121.1699,017,348.37

（2）Reconciliationofaccountingprofittoincometaxexpenses

Unit:RMBItemsCurrentperiodcumulative

Profitbeforetax1,007,084,200.68Incometaxexpensebasedonstatutory/applicabletaxrate171,418,116.18Effectofpriorincometaxreconciliation9,019,203.13Effectofdeducibletemporarydifferencesordeductiblelossesnotrecognized

416,537.08Adjustmentofpermanentdifferences-10,246,735.23Incometaxexpenses170,607,121.16

58.Othercomprehensiveincome

Pleaserefertothenotesofothercomprehensiveincomeofbalancesheetitemsfordetails.

59.Notestoitemsoftheconsolidatedcashflowstatement

（1）Othercashreceiptsrelatedtooperatingactivities

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeGovernmentgrants44,281,463.7288,442,413.04Netchangeinrestrictedfunds730,130.35Interestincome43,640,017.3119,167,271.27Rentalincome4,188,087.325,168,725.74Guaranteedeposit,etc.19,865,200.2326,203,437.00Total112,704,898.93138,981,847.05

（2）Othercashpaymentsrelatedtooperatingactivities

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeNetchangeinrestrictedfunds56,390,427.84Guaranteedeposit939,945.51901,638.78Expensepaymentsfortheperiod520,664,325.30315,998,963.23Total521,604,270.81373,291,029.85

（3）Othercashreceiptsrelatedtoinvestingactivities

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeRedemptionofbankfinancingproducts579,087,170.50276,799,043.00Netchangeinrestrictedfunds850,000.00Incomefromsettlementofforeignexchangeinstruments

61,385,788.32Incomeofsettlementoffuturesinstruments

31,449,091.11Total671,922,049.93277,649,043.00

（4）Othercashpaymentsrelatedtoinvestingactivities

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativePaymentsforpurchasingbankfinancingproducts

17,000,000.00505,000,000.00Netchangeinrestrictedfunds18,150,010.988,965,073.04Lossfromsettlementofforeignexchangeinstruments

12,129,251.67Lossofsettlementoffuturesinstruments14,109,054.76Total35,150,010.98540,203,379.47

（5）Othercashreceiptsrelatedtofinancingactivities

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeNetchangeinrestrictedfunds26,080,652.17Issuanceofconvertiblebond2,987,977,500.00Total2,987,977,500.0026,080,652.17

（6）Othercashpaymentsrelatedtofinancingactivities

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparative

Repaymentoffinancialleaseandinterest6,345,014.962,380,973.66Bankfinancingfee802,376.051,399,332.23Reposharesexpenses（includingrestrictedshares）

2,262,423.50Total9,409,814.513,780,305.89

60.Supplementinformationtothecashflowstatement

（1）Supplementinformationtothecashflowstatement

Unit:RMBSupplementinformationCurrentperiodcumulativePrecedingperiodcomparative

1.Reconciliationofnetprofittocashflowfromoperating

activities:

----Netprofit836,477,079.52640,867,524.19Add:Provisionforassetsimpairmentloss67,056,748.9519,177,147.97

Depreciationoffixedassets,oilandgasassets,productivebiologicalassets

221,626,816.40188,283,241.38

Depreciationofrightofuseassets

Amortizationofintangibleassets10,184,699.569,406,201.41

AmortizationofLong-termprepayments4,642,412.234,013,736.74

Lossondisposaloffixedassets,intangibleassetsandotherlong-termassets(or“-”:gains)

-400,172.51319,355.00

Lossonretirementoffixedassets(or“-”:gains)2,023,354.761,083,940.52

Lossesonchangesinfairvalue(or“-”:gains)32,695,697.38-6,520,045.96

Financialexpenses(or“-”:income)41,010,631.8033,957,642.33

Investmentloss(or“-”:income)-101,107,245.428,109,921.96

Decreaseofdeferredtaxassets(or“-”:increase)-12,621,431.574,667,823.78

Increaseofdeferredtaxliabilities(or“-”:decrease)20,730,283.654,269,887.79

Decreaseininventories(or“-”:increase)-629,050,587.52271,639,352.73

Decreaseinoperatingreceivables(or“-”:increase)-522,973,086.43112,901,508.32

Increaseofoperatingpayables(or“-”:decrease)828,651,377.36-218,889,585.92

Others26,270,045.1031,363,797.18Netcashflowfromoperatingactivities825,216,623.261,104,651,449.42

2.Significantinvestingandfinancingactivitiesnotrelatedto

cashreceiptsandpayments:

----

TheconversionofadebtintocapitalConvertiblebondsduewithinoneyearFixedassetsacquiredunderfinanceleases

3.Netchangesincashandcashequivalents:----

Closingbalanceofcash6,194,924,772.423,263,679,215.37Less:Openingbalanceofcash3,400,144,038.542,553,783,015.01Add：ClosingbalanceofcashequivalentsLess：OpeningbalanceofcashequivalentsNetincreaseofcashandcashequivalents2,794,780,733.88709,896,200.36

（2）Compositionofcashandcashequivalents

Unit:RMBItemsClosingbalanceOpeningbalanceI.Cash6,194,924,772.423,400,144,038.54Including:Cashonhand327,111.73232,265.51

Cashinbankthatcanbereadilydrawnondemand

6,194,597,660.693,399,911,773.03II.Cashandcashequivalentsatendofyear6,194,924,772.423,400,144,038.54

61.Assetswithrestrictiononownershiporuserights

Unit:RMBItemsCarryingamountattheendoftheperiodCauseofrestrictionCashandbankbalance106,963,410.23

Guaranteedeposit,Guaranteedepositedinfuturesinstitutions,BankdepositsfrozenbylitigationNotesreceivable1,579,929,231.31PledgefinancingTotal1,686,892,641.54--

62.Monetaryitemsinforeigncurrencies

（1）Monetaryitemsinforeigncurrencies

Unit:RMBItemsClosingbalanceinforeignExchangerateRMBequivalent

currenciesCashandbankbalances----Including:USD

EURHKDAccountsreceivable----Including:USD

EURHKDLong-termreceivable----Including:USD

EURHKDMonetaryfundIncluding:USD46,015,091.676.4601297,262,093.70

EUR36,202,791.977.6862278,261,899.64Othercurrencies57,851,656.41Subtotal633,375,649.75DerivativefinancialassetsIncluding:USD1,576,886.766.460110,186,846.16

EUR600.007.68624,611.72Othercurrencies749,740.85Subtotal10,941,198.73AccountsreceivableIncluding:USD174,645,579.626.46011,128,227,908.90

EUR42,997,722.057.6862330,489,091.22Othercurrencies93,305,368.12Subtotal1,552,022,368.24OtherreceivablesIncluding:USD2,688,153.596.460117,365,741.01

EUR38,069.027.6862292,606.10Othercurrencies15,943,987.01

Subtotal33,602,334.12Short-termborrowingsIncluding:USD39,065,059.936.4601252,364,193.64

EUR35,000,000.007.6862269,017,000.00Subtotal521,381,193.64DerivativefinancialliabilitiesIncluding:USD628,634.256.46014,061,040.12Subtotal4,061,040.12AccountspayableIncluding:USD12,222,531.596.460178,958,776.32

EUR10,293,975.907.686279,121,557.56

Othercurrencies33,500,760.60Subtotal191,581,094.48OtherpayablesIncluding:USD955,519.336.46016,172,750.42

EUR1,766,403.537.686213,576,930.81

Othercurrencies17,361,384.04Subtotal37,111,065.27Non-currentliabilitiesduewithinoneyearIncluding:USD20,113,466.256.4601129,935,003.32

EUR14,500,000.007.6862111,449,900.00Subtotal241,384,903.32Long-termborrowingsIncluding:USD39,758,435.576.4601256,843,469.64

EUR7.6862Subtotal256,843,469.64Long-termpayablesIncluding:USD32,288.006.4601208,583.67

EUR11,015,552.197.686284,667,737.24

Othercurrencies64,357.00Subtotal84,940,677.91

（2）Notesonoverseasoperatingentities,includingforthesignificantoverseasoperatingentities,itsmainoperatinglocations,reportingcurrencyandthebasisforselectionshouldbedisclosed,andthereasonforchangesinreportingcurrencyshouldalsobedisclosed

√Applicable□NotApplicable

TheCompanyhasseveraloverseassubsidiaries,locateintheUnitedStates,Europe,Japan,Poland,Mexicoandothercountries,whereUSdollars,Japaneseyen,Polishzloty,Mexicanpesos,etc.areusedasthestandardreportingcurrency.

63.Governmentgrants

（1）Refundofgovernmentgrants

□Applicable√NotApplicable

Otherremarks：

Governmentgrants

（1）Details

1）GovernmentgrantsrelatedtoassetsFordetails,pleaserefertoexplanationofdeferredincomeinthenotesoftheconsolidatedfinancialstatements.2）Governmentgrantsrelatedtoincomeandusedtocompensaterelevantcost,expensesorlosses.

Items

Currentperiod

cumulative

FinancialReport

ItemsOverseassubsidyofCOVID-19

15,149,189.44

Otherincome

AwardofenterpriseR&Dinvestment

11,115,100.00

Otherincome

Talentintroductionandjobstabilizationsubsidies

6,748,889.22

OtherincomeVATrefundofcivilwelfareenterprises

4,370,400.00

Otherincome

Subsidyandawardofinnovativedevelopment

4,366,000.00

Otherincome

Enterprisepatentsubsidy

4,238,800.00

OtherincomeSubsidiesandrewardsforscientificandtechnologicalinnovationandentrepreneurship3,900,000.00

OtherincomeSpecialfundsforforeigntradeandeconomicdevelopment

3,710,600.00

OtherincomeVATrefundonsoftwareproductsinexcessoftaxburden

2,974,905.57

OtherincomeReturnofemploymentpromotionunemploymentinsurance

2,042,500.00

OtherincomeIndustrialsupportfundbonus

1,480,367.00

Otherincome

Others

1,979,207.50

Otherincome

Subtotal

62,075,958.73

（2）TheamountofgovernmentgrantsincludedintheprofitorlossstatementinthecurrentperiodisRMB72,081,481.22

Ⅷ.Interestinotherentities

1.Interestinsubsidiaries

（1）Compositionofenterprisegroup

Subsidyname

Mainoperatingplace

Placeofregistration

Businessnature

Holdingproportion

AcquisitionmethodDirectIndirectZhejiangSanhuaTradingCo.,LtdZhejiangZhejiangCommerce100.00%EstablishmentZhejiangSanhuaClimate&ApplianceControlsGroupCo.,Ltd

ZhejiangZhejiangManufacture74.00%26.00%

BusinesscombinationundercommoncontrolZhejiangSanhuaAutomotiveComponentsCo.,Ltd

ZhejiangZhejiangManufacture100.00%

BusinesscombinationundercommoncontrolSanhua(hangzhou)MicroChannelHeatExchangerCo.,Ltd

ZhejiangZhejiangManufacture100.00%

BusinesscombinationundercommoncontrolZhejiangSanhuaCommercialRefrigerationControlsCo.,Ltd

ZhejiangZhejiangManufacture100.00%EstablishmentSanhuaInternationalSingaporePte.Ltd

SingaporeSingaporeCommerce100.00%

BusinesscombinationundercommoncontrolSanhuaInternationalInc

theUnited

States

theUnitedStates

Commerce100.00%

BusinesscombinationundercommoncontrolOtherremarks:

TheabovesubsidiariesaresignificantsubsidiariesoftheCompany.Ⅸ.RisksRelatingtoFinancialInstrumentsTheCompany’soperatingactivitieshaveexposuretovariousfinancialrisks,whichmainlyinclude:creditrisk,liquidityrisk,andmarketrisk.TheCompany'soverallriskmanagementstrategyisaimedattheunpredictabilityofthefinancialmarketandstrivestoreducethepotentialadverseeffectsontheCompany'sfinancialperformance.(I)Creditrisk

Creditriskistheriskthatonepartytoafinancialinstrumentwillcauseafinanciallossfortheotherpartybyfailingtodischargeanobligation.

1.Creditriskmanagementpractice

(1)Evaluationmethodofcreditrisk

Ateachreportingdate,theCompanyassesseswhetherthecreditriskonafinancialinstrumenthasincreasedsignificantlysinceinitialrecognition.Duringtheevaluation,theCompanyconsidersthatitcanobtainreasonableandsupportableinformationwithoutadditionalcostoreffort,includingqualitativeandquantitativeanalysisbasedonhistoricaldata,externalcreditriskrating,andforward-lookinginformation.Basedonasinglefinancialinstrumentoracombinationoffinancialinstrumentswithsimilarcreditriskcharacteristics,theCompanydeterminesthechangesindefaultriskoffinancialinstrumentsduringtheestimatedlifetimethroughcomparisonofthedefaultriskatthebalancesheetdateandtheinitialrecognitiondate.

TheCompanyconsidersthecreditriskonafinancialinstrumenthasincreasedsignificantlywhenoneormoreofthefollowingqualitativeandquantitativestandardsaremet.Quantitativestandardmainlyrelatestothescenarioinwhich,onthebalancesheetdate,theprobabilityofdefaultintheremaininglifetimehasrisenbymorethanacertainpercentagecomparedwiththeinitialrecognition.Qualitativestandardmainlyrelatestosignificantadversechangesinthedebtor’soperationorfinancialposition,presentorexpectedchangesintechnology,market,economyorlegalenvironmentthatwillhavesignificantadverseimpactonthedebtor’srepaymentability.

(2)Definitionofdefaultandcredit-impairedasset

Afinancialassetiscredit-impairedwhenoneormorefollowingeventshaveoccurred.Thestandardisconsistentwiththedefinitionofcreditimpairment,whichinclude:thedebtorhassignificantfinancialdifficulty,thedebtorbreachedthebindingclauseofthecontractonthedebtor,thedebtorislikelytogobankruptorotherfinancialreorganization,foreconomicorcontractualreasonsrelatingtothedebtor’sfinancialdifficulty,thecreditorhavinggrantedtothedebtoraconcessionthatthecreditorwouldnototherwiseconsider.

2.Measurementofexpectedcreditlosses

Thekeyfactorsinthemeasurementofexpectedcreditlossincludetheprobabilityofdefault,lossrateofdefault,andexposuretodefaultrisk.heCompanydevelopsamodeloftheprobabilityofdefault,lossrateofdefault,andexposuretodefaultriskonthebasisofquantitativeanalysisofhistoricaldata(e.g.counterpartyrating,guaranteemeasuresandcollateraltype,paymentmethod,etc.)andforward-lookinginformation.

3.Pleasereferto“Notesreceivable”,“Accountsreceivable”,“Otherreceivable”fordetailsonthereconciliationtableofopeningbalanceandclosingbalanceofprovisionforlossesoffinancialinstrument.

4.Exposuretocreditriskandconcentrationofcreditrisk

TheCompany’screditriskisprimarilyattributabletocashandbankbalances,bankfinancialinvestmentsnotesreceivableandaccountreceivable.

TheCompanydepositsinfinancialinstitutionswithrelativelyhighcreditlevels.SomebankacceptancebillsheldbytheCompanyareacceptedandpaidbysmallandmediumfinancialinstitutions.Inaddition,inordertoimprovetheefficiencyofcapitaluse,theCompanyentrustsidlefundstobanksforfinancialinvestment.ThemanagementoftheCompanybelievesthat,basedonthecurrentoperatingstatusofdomesticbanks,cashandbankbalances,notesreceivableandbankfinancialinvestmentsarenotcurrentlyfacingseriouscreditrisks.Ifthereisaseriousunfavorabledifferentiationinthebank'screditsysteminthefuture,theCompanywillmakeadjustmentsinduecourse.

TheCompanyperformscreditassessmentoncustomerswhousescreditsettlementonacontinuousbasis.Basedonthecustomer'sfinancialstatus,pastcredithistoryandotherfactors,assessthecustomer'screditrating,andmonitorthebalanceofaccountsreceivabletocontrolcreditriskexposure.Forcustomerswithbadcreditrecords,theCompanywillusewrittenreminders,shortenorcancelcreditperiods,andreducecredittransaction

amountstoensurethatthereisnomajorriskofbaddebts.TheCompanyconductstransactionswithrecognizedandcreditworthycustomers,andthecreditriskiscentralizedandmanagedonthebasisofcustomers.AsofJune30,2021,theCompanyhasacertainconcentrationofcreditrisk,and35.89%ofaccountsreceivablewasduefromthefivelargestcustomersoftheCompany.TheCompanyheldnocollateralorothercreditenhancementonbalanceofreceivables.ThemaximumamountofexposuretocreditriskoftheCompanyisthecarryingamountofeachfinancialassetonthebalancesheet.(II)LiquidityriskTheCompanycontinuestomonitorshort-termandlong-termfundingneedstoensurethatsufficientcashreservesaremaintained.Atthesametime,theCompanycontinuouslymonitorscompliancewiththeloanagreementtoensurethatthecreditlineobtainedfromcommercialbankscanmeetshort-termorlong-termfundingneeds.Whennecessary,theCompanycanimplementequityfinancing.

AsofJune30,2021,theundiscountedcontractualcashflowsoftheCompany’sfinancialliabilitieslistedbymaturitydateareshowninthefollowingtable(Unit:RMB):

Financialliabilitiesclassifiedbasedonremainingtimeperiodtillmaturity

Items

ClosingbalanceWithin1year1-3yearsOver3yearsTotalShort-termborrowings(Includeinterest)523,812,457.25523,812,457.25Notespayable1,856,484,983.841,856,484,983.84Accountspayable2,491,675,800.212,491,675,800.21Otherpayables228,347,075.23228,347,075.23Non-currentliabilitiesduewithinoneyear（Includeinterest）

1,034,381,809.451,034,381,809.45Long-termborrowings（Includeinterest）949,241,904.65949,241,904.65Long-termpayables（Includeinterest）9,196,945.2119,859,829.2562,098,461.1591,155,235.61Subtotal6,143,899,071.19969,101,733.9062,098,461.157,175,099,266.24(Continued)

ItemsOpeningbalance

Within1year1-3yearsOver3yearsTotalShort-termborrowings(Includeinterest)384,529,024.72384,529,024.72Notespayable1,238,574,463.731,238,574,463.73Accountspayable2,279,661,755.972,279,661,755.97Otherpayables270,888,400.58270,888,400.58Non-currentliabilitiesduewithinoneyear（Includeinterest）

132,518,381.28132,518,381.28Long-termborrowings（Includeinterest）1,781,690,487.831,781,690,487.83Long-termpayables（Includeinterest）6,417,433.1020,548,394.7270,534,422.7597,500,250.57

Subtotal4,312,589,459.381,802,238,882.5570,534,422.756,185,362,764.68(III)MarketRisk

1.InterestRateRisk

TheCompany’sinterestriskrelatesmainlytobankborrowings.TheCompany’scashflowinterestrisksarisefromfloatinginterestoffinancialliabilities,andfairvalueinterestrisksarisefromfixed-rateoffinancial

liabilities.TheCompanydeterminestheproportionoffixed-ratefinancialliabilitiesandfloatinginterestratefinancialliabilitiesbasedonthemarketenvironment.AsofJune30,2021,theCompany'sinterest-bearingdebtaccountedforasmallproportion,andtheinterestrateriskitfacedwaswithinacontrollablerange.TheCompanycontinuestomonitorthelevelofinterestrates.TheCompanycontinuestomonitorthelevelofinterestrates.

2.Foreigncurrencyrisk

TheCompany'sproductionbasesandsalesmarketsaredistributedindevelopedanddevelopingcountries,includingtheUnitedStates,theEuropeanUnion,Japan,India,Mexico,etc.ThebusinessvolumesettledinEurosandU.S.dollarshasacertainproportion,andtheexchangerateriskisrelativelyhigh.Basedoninternalriskcontrolpolicies,theCompany'smanagementhastakenseveralmeasurestodealwithexchangeraterisks:a.pre-judgmentbasedonthetrendofexchangeratechanges,timelysettlementofforeignexchangereceiptsordelayedsettlementofforeignexchange;b.Carryoutoverseasfinancingthroughdomesticguaranteesandoverseasloanstohedgeforeigncurrencymonetaryassetsandcontrolnetriskexposure;c.Carryoutforwardexchangesettlementandforeigncurrencyswapbusinesstolockinexchangerates.AsofJune30,2021,pleasereferto“monetaryitemsinforeigncurrencies”ofnotestofinancialstatementsfordetailsinforeigncurrencyfinancialassetsandliabilities.X.DisclosureofFairValues

1.Fairvaluesoftheassetsandliabilitiesmeasuredatfairvalueattheendoftheperiod

Unit:RMBItems

FairvalueasofthebalancesheetdateLevel1Level2Level3TotalI.Recurringfairvaluemeasurement--------(I)Held-for-tradingfinancialassets5,529,209.66110,387,809.10100,000,000.00215,917,018.76Financialassetsmeasuredatfairvaluethroughprofitorloss

5,529,209.66110,387,809.10100,000,000.00215,917,018.76

(1)Debtinstrumentinvestments89,524,312.14100,000,000.00189,524,312.14

(2)Derivativefinancialassets5,529,209.6620,863,496.9626,392,706.62Totalamountofassetsconstantlymeasuredattheirfairvalues

5,529,209.66110,387,809.10100,000,000.00215,917,018.76(II)Held-for-tradingliabilities4,625,536.623,100,848.007,726,384.62Derivativefinancialliabilities4,625,536.623,100,848.007,726,384.62Totalamountofliabilitiesconstantlymeasuredattheirfairvalues

4,625,536.623,100,848.007,726,384.62II.Non-constantmeasurementatfairvalues--------

2.Basisfordeterminingthemarketpriceofitemsunderfirstlevelconstantlyandnon-constantlymeasurementatfairvalue.Thefairvalueoffuturescontractsismeasuredattheexchange'sopenmarketquotes.

3.Itemsundersecondlevelconstantlyandnon-constantlymeasurementatfairvalue,valuationtechniqueadopted,andqualitativeandquantitativeinformationofimportantparametersThefairvalueofforwardforeignexchangecontractsandbankfinancingproductsismeasuredbasedonthevaluationamountofthehostbankortheforwardforeignexchangerateannouncedbytheBankofChina.Bankfinancingproductsaremeasuredbasedonthevaluationamountoftheissuerormanager.

4.Itemsunderthirdlevelconstantlyandnon-constantlymeasurementatfairvalue,valuationtechniqueadopted,andqualitativeandquantitativeinformationofimportantparametersIfthefairvalueinformationisinsufficient,thebankfinancingproductsaremeasuredatcostonbehalfofthefairvalue.XI.Relatedpartyrelationshipsandtransactions

1.ParentCompany

ParentCompany

Placeofregistration

BusinessnatureRegisteredcapital

HoldingproportionovertheCompany

Votingrightproportion

overtheCompanySanhuaHoldingGroupCo.,Ltd

ZhejiangIndustrialInvestment660millionyuan50.12%50.12%Remarksontheparentcompany:

AsofJune30,2021,SanhuaHoldingGroupCo.,Ltd.directlyholds29.78%oftheCompany'sshares,andindirectlyholds20.68%ofthesharesthroughitssubsidiaries,foratotalof50.46%oftheshares.ThefinalcontrollersoftheCompanyareMrZhangDaocai,MrZhangYaboandZhangShaobo.

2.InformationabouttheCompany'ssubsidiaries

Pleaserefertonotesoffinancialstatementsaboutinterestonotherentities.

3.JointventuresandassociatesoftheCompany

PleaserefertonotestofinancialstatementsfordetailsontheCompany’ssignificantjointventuresandassociates.DetailsofotherjointventuresorassociatescarryingoutrelatedpartytransactionswiththeCompanyincurrentperiodorinprecedingperiodbutwithbalanceincurrentperiodareasfollows:

JointventuresorassociatesRelationshipswiththeCompanyQingdaoSanhuajinlifengMachineryCo.,LtdAssociatesZhongshanXuanyiPipeManufacturingCo.,Ltd.Associates

Otherremarks

JointventuresorassociatesAbbreviationofassociateQingdaoSanhuaJinlifengMachineryCo.,LtdQSJMZhongshanXuanyiPipeManufacturingCo.,Ltd.ZXPM

4.OtherrelatedpartiesoftheCompany

OtherrelatedpartiesRelationshipswiththeCompanyZhejiangSanhuaLvnengIndustryGroupCo.,LtdShareholdersandunderthesamecontroloftheparentCompanyHangzhouTongchanMachineryCo.,Ltd.underthesamecontroloftheparentCompanyHangzhouSanhuaResearchInstituteCo.,Ltd.underthesamecontroloftheparentCompanyZhejiangSanhuaZhichengRealEstateDevelopmentCo.,Ltd.underthesamecontroloftheparentCompanyZhejiangHaoyuanTechnologyCo.,Ltd.underthesamecontroloftheparentCompanyNingboFuldaIntelligentTechnologyCo.,LtdunderthesamecontroloftheparentCompanyWuhuAldaTechnologyCo.,Ltd.SubsidiaryofaCompanywithsharesheldbytheCompanyHangzhouFormostMaterialTechnologyCo.,LtdSubsidiaryofaCompanywithsharesheldbytheCompanyOtherremarks

JointventuresorassociatesAbbreviationofassociateSanhuaHoldingGroupCo.,Ltd.SHGZhejiangSanhuaLvnengIndustryGroupCo.,LtdZSGEHangzhouTongchanMachineryCo.,Ltd.HTMHangzhouSanhuaResearchInstituteCo.,Ltd.HSRIZhejiangSanhuaZhichengRealEstateDevelopmentCo.,Ltd.ZSZRZhejiangHaoyuanTechnologyCo.,Ltd.ZHTNingboFuldaIntelligentTechnologyCo.,LtdNFITWuhuAldaTechnologyCo.,Ltd.WATHangzhouFormostMaterialTechnologyCo.,LtdHFMT

5.Relatedpartytransactions

（1）Purchaseandsaleofgoods,renderingandreceivingservicesPurchaseofgoodsandreceivingofservices

Unit:RMBRelatedparties

Contentoftransaction

Currentperiodcumulative

Approvedtransaction

limit

Whetheritexceedsthetransactionlimit

PrecedingperiodcomparativeZXPMMerchandise12,581,552.3435,000,000.00No5,023,870.90

WATMerchandise55,752.213,000,000.00No4,743.36HSRIMerchandise14,303.48QSJMMerchandise1,656,061.81ZHTMerchandise1,063,598.21HTMMerchandise57,168.14Saleofgoodsandrenderingofservices

Unit:RMBRelatedpartiesContentoftransactionCurrentperiodcumulativePrecedingperiodcomparativeSHGMerchandise52,256.96674,800.00QSJMMerchandise203,134.2179,420.08HSRIMerchandise101,089.74182,978.26ZSZRMerchandise9,734.51WATMerchandise1,350.007,230.77

（2）Relatedpartyguarantees

TheCompanyasaguaranteedparty

Unit:RMBGuarantorGuaranteedamountCommencementdateMaturitydateWhethertheguaranteeismatureSHG1,430,000,000.00February27,2020October25,2022NoSHG44,000,000.00December24,2019December23,2021NoRemarksofrelatedpartyguaranteesTheinformationlistedinthetabledoesnotincludetherelatedguaranteewithintheconsolidationscope,nordoesitincludethecompletedrelatedguarantee,inwhichthesecondamountisinUSdollars.

（3）Keymanagement’semoluments

Unit:RMBItemsCurrentperiodcumulativePrecedingperiodcomparativeKeymanagement’semoluments6,196,143.934,127,788.78

（4）Otherrelatedpartytransactions

Unit:RMBRelatedpartiesContentoftransaction

Currentperiod

cumulative

Precedingperiod

comparativeZHTRentalfee,propertymanagement6,034,039.91628,351.19

fee,waterandelectricityfee,servicefeeZSGE2,631,152.031,032,369.03

HSRI397,622.42226,684.14

HTMPurchaseequipment24,450,210.365,112,554.76SHG

Rentalincome,propertymanagementincome,waterandelectricityincome,serviceincome

3,848,329.724,313,221.66HSRI518,602.95717,369.20ZSGE427,216.07720,433.64WAT383,092.22197,707.74HFMT236,607.29966,272.27ZHT62,433.76

HTM22,852.39

6.Relatedpartytransactions

（1）Receivables

Unit:RMBItemsRelatedparties

ClosingbalanceOpeningBalanceBookbalanceProvisionforbaddebtsBookbalanceProvisionforbaddebtsAccountsreceivableSHG68,948.533,447.43180,000.009,000.00AccountsreceivableWAT271,957.5013,597.88376,293.5418,814.68AccountsreceivableHFMT267,366.2313,368.31AccountsreceivableHSRI114,263.135,713.1618,514.60925.73AccountsreceivableQSJM79,541.663,977.0826,973.191,348.66OtherreceivableSHG20,000.001,000.0020,000.001,000.00Othernon-currentassets(equipmentprepayment)

HTM4,175,349.249,122,291.82

（2）Payables

Unit:RMBItemsRelatedpartiesClosingbalanceOpeningBalanceAccountspayableZXPM5,254,603.611,072,110.11AccountspayableHTM1,297,118.103,883,247.79AccountspayableHSRI266,150.00266,150.00AccountspayableZHT256,549.65ContractliabilitiesWAT1,518.94AdvancesreceivedNFIT10,000,000.0010,000,000.00

OtherpayablesHFMT100,000.00100,000.00

XII.Share-basedpayment

1.Overallinformation

√Applicable□Notapplicable

Unit:shareTotalequityinstrumentsgrantedincurrentperiodTotalequityinstrumentsexercisedincurrentperiod4,596,150Totalequityinstrumentsretiredincurrentperiod395,070Therangeofexercisepriceofstockoptionsissuedbythecompanyattheendoftheperiodandtheremainingtermofthecontract

TheadjustedgrantpriceofstockappreciationrightsisRMB4.34,whichwillbeunlockedinbatcheswithin12monthsafter36monthsfromthegrantdate.

Therangeofexercisepricesofotherequityinstrumentsattheendoftheperiodandtheremainingcontractuallife

2018RestrictedStockIncentivePlan:TheadjustedrestrictedstockgrantpriceisRMB4.34,whichwillbeunlockedinbatcheswithin12monthsafter36monthsafterthegrantdate.2020RestrictedStockIncentivePlan:TheadjustedrestrictedstockgrantpriceisRMB7.11,whichwillbeunlockedinbatcheswithin12months,24months,and36monthsfromthegrantdate.Otherremarks

(1)Restrictedstockandstockappreciationrightincentiveplanimplementedin2018InSeptember2018,theCompanyimplementedarestrictedstockandstockappreciationrightincentiveplanforcoreemployees.Thenumberofrestrictedstocksgrantedwas10.33millionshares,thenumberofstockappreciationrightsgrantedwas355,000shares,andthegrantpricepersharewasRMB8.37.ThegrantdatewasSeptember18,2018,anditwillbeunlockedyearbyyearinbatchesataratioof30%:30%:40%.

InMay2019,theCompanyimplementedthe2018equitydistribution.Accordingtothemethodsstipulatedinthe"2018RestrictedStockIncentivePlan"and"2018StockAppreciationRightsIncentivePlan",theexercisepriceandquantityoftheunderlyingstocksinvolvedwereadjustedaccordingly.Aftertheadjustment,thenumberofrestrictedstocksgrantedwas13.429millionshares.Thenumberofstockappreciationrightsgrantedwas461,500shares,andthegrantpricepersharewasRMB6.25.InJune2020,theCompanyimplementedthe2019equitydistribution.InSeptember2020,thecompanyimplementedthe2020semi-annualequitydistribution.Accordingtothemethodsstipulatedinthe"2018RestrictedStockIncentivePlan"and"2018StockAppreciationRightsIncentivePlan",theexercisepriceandquantityoftheunderlyingstocksinvolvedwereadjustedaccordingly.Aftertheadjustment,thenumberofrestrictedstocksgrantedwas17.4577millionshares.Thenumberofstockappreciationrightsgrantedwas599,950shares,andthegrantpricepersharewasRMB4.59.

InApril,2021,theCompanyimplementedthe2020equitydistribution.Accordingtothemethodsstipulatedinthe"2018RestrictedStockIncentivePlan"and"2018StockAppreciationRightsIncentivePlan",theexercisepriceoftheunderlyingstocksinvolvedwereadjustedaccordingly.Aftertheadjustment,thegrantpricepersharewasRMB4.34.

(2)Restrictedstockincentiveplanimplementedin2020

InFebruary2020，theCompanyimplementedarestrictedstockincentiveplanforcoreemployees.Amongthem，thenumberofrestrictedstocksgrantedwas12.045millionshares,andthegrantpricepersharewasRMB9.85，ThegrantdatewasFebruary24,2020,anditwillbeunlockedyearbyyearinbatchesataratioof30%:30%:40%.InJune2020,theCompanyimplementedthe2019equitydistribution.InSeptember2020,thecompanyimplementedthe2020semi-annualequitydistribution.Accordingtothemethodstipulatedinthe"2020RestrictedStockIncentivePlan",theexercisepriceandquantityoftheunderlyingstocksinvolvedwereadjustedaccordingly.Aftertheadjustment,thenumberofrestrictedstocksgrantedwas15.6585millionshares,andthegrantpricepersharewasRMB7.36.InApril2021,theCompanyimplementedthe2020equitydistribution.Accordingtomethodsstipulatedinthe“2020RestrictedStockIncentivePlan”,theexercisepriceoftheunderlyingstocksinvolvedwereadjustedaccordingly.Aftertheadjustment,thegrantpricepersharewasRMB7.11.

2.Equity-settledshare-basedpayment

√Applicable□Notapplicable

Unit:RMBDeterminationmethodforgrant-datefairvalueofequityinstruments

Calculatedbasedontheclosingpriceofthestockonthegrantdateminusthegrantpriceoftherestrictedstock.Determinationmethodforthenumberofequityinstrumentsexpectedtovest

[Note]Reasonsforsignificantdifferencebetweentheestimatesincurrentperiodandprecedingperiod

NotapplicableCapitalreserveaccumulatedduetoequity-settledshare-basedpayment123,513,933.28Totalexpensesarisingfromequity-settledshare-basedpayment26,270,045.10OtherremarksNote:In2018,thecompanyinitiallygranted10.33millionrestrictedstockstoincentiveobject.Later,itwasadjustedto

17.4577millionsharesduetotheannualdistributionofequityin2018andtheannualdistributionofequityin2019.In2020,thecompanyinitiallygranted12.045millionrestrictedstockstoincentiveobject.Later,itwasadjustedto17.4577millionsharesduetotheannualdistributionofequityin2019.Thenumberisthebase，itwillbeunlockedyearbyyearinbatchesataratioof30%:30%:40%.TheCompanyestimatesthenumberofexercisableequityinstrumentsonthefollowingbasis:theCompany'soperatingperformancecanmeetthetarget，thefuturevoluntaryturnoverrateoftheincentiveobjectsis0%，andtheperformanceappraisallevelisaboveC(theunlockingcoefficientis1)

3.Cash-settledshare-basedpayment

√Applicable□Notapplicable

Unit:RMBDeterminationmethodforthefairvalueofliabilityassumedbytheCompanyandtobecalculatedonthebasisofsharesorotherequityinstruments

Calculatedbasedontheclosingpriceofthestockonthebalancesheetdateafterdeductionoftheadjustedstockappreciationrightgrantprice.Accumulatedliabilitiesarisingfromcash-settledshare-basedpaymentin6,556,955.90

liabilitiesTotalexpensesarisingfromcash-settledshare-basedpayment224,115.46

XIII.Commitmentsandcontingencies

1.Significantcommitments

SignificantcommitmentsexistingonthebalancesheetdateNosignificantcommitmentsmatterneedstobedisclosedbytheCompany

2.Contingencies

（1）IfnosignificantcontingentmattertobedisclosedbytheCompany,itshouldalsobenotedaccordinglyNosignificantcontingentmatterneedstobedisclosedbytheCompany.XIV.Othersignificantevents

1.Segmentinformation

（1）Basisforreportablesegmentsandtheaccountingpolicy

ReportablesegmentsareidentifiedbasedonthestructureoftheCompany’sinternalorganization,managementrequirementsandinternalreportingsystem,etc.,andidentifiedthereportablesegmentsbasedonproducts.

（2）Financialinformationofthereportingsegments

Unit:RMBItems

Refrigerationandair-conditioningelectricalpartsbusiness

Autopartsbusiness

Inter-segment

elimination

TotalTotaloperatingrevenue5,563,260,796.572,110,820,965.127,674,081,761.69Totaloperatingcost4,015,609,936.551,586,201,543.075,601,811,479.62Totalassets15,837,690,723.095,169,808,588.8121,007,499,311.90Totalliabilities8,540,678,732.801,922,189,366.2310,462,868,099.03

XV.Notestoitemsofparentcompanyfinancialstatements

1.Accountsreceivable

（1）Disclosureofaccountsreceivablebycategories

Unit:RMB

Category

ClosingbalanceOpeningbalanceBookbalance

Provisionforbaddebt

Carryingamount

Bookbalance

Provisionforbaddebt

CarryingamountAmount

ProportionAmount

Accruedproportion

Amount

Proportion

Amount

AccruedproportionReceivableswithprovisionmadeonanindividualbasis

306,020,

208.90

58.76%

306,020,2

08.90

568,926,1

07.65

77.05%

568,926,10

7.65

Including:

Receivableswithprovisionmadeonacollectivebasis

214,764,

608.71

41.24%

10,738,2

30.44

5.00%

204,026,3

78.27

169,453,2

30.80

22.95%

8,472,661.54

5.00%

160,980,56

9.26

Including:

Total

520,784,

817.61

100.00%

10,738,2

30.44

2.06%

510,046,5

87.17

738,379,3

38.45

100.00%

8,472,661.54

1.15%

729,906,67

6.91

Provisionmadeonanindividualbasis:

Unit:RMBName

ClosingbalanceBookbalanceProvisionforbad

debt

Accruedproportion

AccruedreasonSanhuaInternationalSingaporePte.Ltd115,562,468.94Sanhua(Vietnam)CompanyLimited,etc.68,788,408.36AmericanInvestmentFundILLC33,911,688.82ZhejiangSanhuaCommercialRefrigerationControlsCo.,Ltd

28,141,509.72ZhejiangSanhuaAutomotiveComponentsCo.,Ltd15,601,946.79Othersubsidiaries44,014,186.27Total306,020,208.90----Provisionmadeonacollectivebasis:

Unit:RMB

Name

ClosingbalanceBookbalanceProvisionforbaddebtAccruedproportionWithin1year214,764,608.7110,738,230.445.00%Total214,764,608.7110,738,230.44--IftheProvisionforbaddebtofaccountsreceivableisaccruedinaccordancewiththegeneralexpectedcreditlossmodel,pleaserefertothedisclosureofotherreceivablestodisclosetherelevantinformationabouttheProvisionforbaddebt:

□Applicable√NotApplicable

Disclosurebyaging

Unit:RMBAgingClosingbalanceWithin1year(including1year)520,784,817.61Total520,784,817.61

（2）Provisionforbaddebtaccrued,recoveredorreversedincurrentperiod

Provisionforbaddebtaccruedincurrentperiod:

Unit:RMBCategoryOpeningbalance

Changedamountofthecurrentperiod

ClosingbalanceAccrued

Recoveredorreversed

WriteoffOthersReceivableswithprovisionmadeonacollectivebasis

8,472,661.542,265,568.9010,738,230.44Total8,472,661.542,265,568.9010,738,230.44

（3）Top5debtorswiththelargestaccountsreceivablebalances

Unit:RMBNameClosingbalance

Proportiontothetotalbalanceofaccountsreceivable

ProvisionforbaddebtattheendoftheperiodSanhuaInternationalSingaporePte.Ltd115,562,468.9422.19%Sanhua(Vietnam)CompanyLimited,etc.68,788,408.3613.21%TheThird63,886,602.4012.27%3,194,330.12TheForth58,929,632.2111.32%2,946,481.61AmericanInvestmentFundILLC33,911,688.826.51%Total341,078,800.7365.50%

2.Otherreceivables

Unit:RMBItemsClosingbalanceOpeningbalanceDividendsreceivable1,800,000.00Otherreceivables394,689,965.06348,897,078.11Total396,489,965.06348,897,078.11

（1）Dividendsreceivable

1）Categoriesofdividendsreceivable

Unit:RMBProject(orinvestedentity)ClosingbalanceOpeningbalanceWuhanSanhuaRefrigerationPartsCo.,Ltd1,800,000.00Total1,800,000.00

（2）Otherreceivables

1）Otherreceivablescategorizedbynature

Unit:RMBOtherreceivablescategorizedbynatureClosingbalanceOpeningbalancePrincipalandinterestofcapitalassistancetosubsidiaries379,004,607.58329,063,840.37RefundofVATreceivable1,962,668.328,536,537.99Guaranteedeposit9,827,285.0010,381,285.00Others4,271,529.691,224,031.39Total395,066,090.59349,205,694.752）Provisionforbaddebt

Unit:RMBProvisionforbaddebt

Phase1Phase2Phase3

TotalNext12?monthexpectedcreditlosses

Lifetimeexpectedcreditlosses(creditnotimpaired)

Lifetimeexpectedcreditlosses(creditimpaired)BalanceonJanuary1,202143,389.30265,227.34308,616.64BalanceincurrentperiodonJanuary1,2021

————————Provisionmadeincurrent144,570.13144,570.13

periodReversedincurrentperiod77,061.2477,061.24BalanceonJune30,2021187,959.43188,166.10376,125.53Lossprovisionsforsignificantchangesinbookbalancesincurrentperiod

□Applicable√NotApplicable

Disclosurebyaging

Unit:RMBAgingClosingbalanceWithin1year(including1year)187,959.431to2years9,172.302to3years46,972.80Over3years132,021.00Total376,125.53

3）Top5debtorswiththelargestotherreceivablesbalances

Unit:RMBDebtors

NatureofreceivablesClosingbalanceAging

Proportiontothetotalbalanceofotherreceivables

ProvisionforbaddebtattheendoftheperiodShaoxingShangyuSanliCopperIndustryCo.,Ltd

Financialaid

55,067,200.00Within1year13.94%WuhuSanhuaAuto-controlComponentsCo.,Ltd

Financialaid

46,231,000.00Within1year11.70%Sanhua(Jiangxi)Self-controlComponentsCo.,Ltd.

Financialaid

45,318,000.00

Within1year

11.47%

WuhuSanhuaRefrigerationFittingsCo.Ltd

Financialaid

44,969,167.21

Within1year

11.38%

ZhongshanSanhuaRefrigerationComponentsCo.,Ltd

Financialaid

40,033,000.00

Within1year

10.13%

Total--231,618,367.21--58.62%

3.Long-termequityinvestments

Unit:RMBInvestees

ClosingbalanceOpeningbalanceBookbalance

Provisionforimpairment

CarryingamountBookbalance

Provisionforimpairment

Carryingamount

Investmentsinsubsidiaries

6,113,625,945.186,113,625,945.184,515,044,723.754,515,044,723.75Investmentsinassociatesandjointventures

15,705,401.9215,705,401.9213,501,505.6213,501,505.62Total6,129,331,347.106,129,331,347.104,528,546,229.374,528,546,229.37

（1）Investmentsinsubsidiaries

Unit:RMBInvestees

Openingbalance(Carryingamount)

Changedamountofthecurrentperiod

Closingbalance(Carryingamount)

ClosingbalanceofprovisionforimpairmentInvestmentsincreased

Investmentsdecreased

Provisionforimpairment

OthersZhejiangSanhuaAutomotiveComponentsCo.,Ltd1,994,138,976.825,959,855.742,000,098,832.56Sanhua(Hangzhou)MicroChannelHeatExchangerCo.,Ltd.644,441,139.103,326,620.50647,767,759.60ZhejiangSanhuaClimate&ApplianceControlsGroupCo.,Ltd320,278,269.013,069,749.10323,348,018.11SanhuaInternationalInc.308,285,328.31265,399.02308,550,727.33SanhuaInternationalSingaporePte.Ltd664,644,511.071,221,079.62665,865,590.69WuhuSanhuaAuto-controlComponentsCo.,Ltd151,271,932.66316,125.36151,588,058.02Sanhua(Jiangxi)Self-controlComponentsCo.,Ltd.93,367,388.93186,714.2093,554,103.13XinchangSitongElectricalandMechanicalCo.,Ltd46,645,756.62382,252.1347,028,008.75ZhejiangSanhuaCommercialRefrigerationControlsCo.,Ltd68,290,894.371,581,000,000.001,649,290,894.37ZhejiangSanhuaTradingCo.,Ltd53,745,007.56928,812.7254,673,820.28ChangzhouRancoReversingValveCo.,Ltd62,499,656.1621,183.0062,520,839.16HangzhouLeaderwayElectronicsCo.,Ltd51,017,554.191,109,051.2852,126,605.47ShaoxingShangyuSanliCopperIndustryCo.,Ltd32,527,587.10212,854.2032,740,441.30ZhongshanSanhuaAirconditioningRefrigerationComponentsCo.,Ltd5,082,444.18112,028.645,194,472.82WuhanSanhuaRefrigerationPartsCo.,Ltd4,240,191.30163,152.064,403,343.36ZhongshanSanhuaRefrigerationComponentsCo.,Ltd5,899,010.73207,963.546,106,974.27SuzhouSanhuaAir-ConditionerPartsCo.,Ltd8,669,075.6498,380.328,767,455.96Total4,515,044,723.751,598,581,221.436,113,625,945.18

ZhejiangSanhua

（2）Investmentsinassociatesandjointventures

Investees

Openingbalance(Carryingamount)

ChangedamountofthecurrentperiodInvestments

increased

Investmentsdecreased

Investment

incomerecognizedunderequitymethod

Adjustmentinothercomprehensiveincome

Changesinotherequity

Cashdividend/profitdeclaredfordistribution

IntelligentProvision

Provisionfor

forimpairment

I.JointventuresII.AssociatesGuochuangEnergyInternetInnovationCenter(Guangdong)Co.,Ltd.

1,525,252.7615,260.42ChongqingTainuoMachineryCo.,Ltd.

9,396,904.733,344,529.441,500,000.00NanchangSanhuaJinlifengMachineryCo.,Ltd.

1,517,138.95-1,763.92NingboJinlifengMachineryCo.,Ltd

1,062,209.18345,870.36QingdaoSanhuaJinlifengMachineryCo.,Ltd.

0.00

Xinchangzhejiangenergysanhuacomprehensiveenergyco.Ltd

0.00

Subtotal13,501,505.623,703,896.301,500,000.00Total13,501,505.623,703,896.301,500,000.00

4.OperatingrevenueandOperatingcost

Unit:RMBItems

CurrentperiodcumulativePrecedingperiodcomparativeRevenueCostRevenueCostMainoperations2,466,694,440.921,937,346,462.242,025,861,982.701,525,914,788.36Otheroperations191,238,142.54161,701,041.5391,350,119.9290,836,693.41Total2,657,932,583.462,099,047,503.772,117,212,102.621,616,751,481.77

5.Investmentincome

Unit:RMBItems

Currentperiod

cumulative

PrecedingperiodcomparativeInvestmentincomefromlong-termequityinvestmentsunderequitymethod3,703,896.301,922,776.38Investmentincomefromlong-termequityinvestmentsundercostmethod1,800,000.0016,058,323.76Gainsondisposaloflong-termequityinvestments-13,099,711.84Investmentincomeofbankfinancingproducts1,260,477.523,214,184.92Gainsandlossesonsettlementoffuturescontracts13,415,131.42-5,205,759.36Gainsandlossesonsettlementofforeignexchangecontract5,575,206.59-1,711,629.28Incomeoffundusingfee6,369,877.539,817,132.15Total32,124,589.3610,995,316.73XVI.Supplementaryinformation

1.Non-recurringprofitorlossincurrentperiod

√Applicable□NotApplicable

Unit:RMBItemsAmountRemarksGainsorlossondisposalofnon-currentassets-1,623,182.25Governmentgrantsincludedinprofitorloss(excludingthosecloselyrelatedtooperatingactivitiesoftheCompany,satisfyinggovernmentpoliciesandregulations,andcontinuouslyenjoyedwithcertainquantity/quotabasedoncertainstandards)

64,034,111.05

Gainsonchangesinfairvalueofheld-for-tradingfinancialassets,derivativefinancialassets,

60,752,561.20

Inordertoavoidrawmaterialpricerisksandexchangeraterisks,theCompanyanditssubsidiarieshave

held-for-tradingfinancialliabilitiesandderivativefinancialliabilities,andinvestmentincomefromdisposalofheld-for-tradingfinancialassets,derivativefinancialassets,held-for-tradingfinancialliabilities,derivativefinancialliabilitiesandotherinvestment,excludingthosearisingfromhedgingbusinessrelatedtooperatingactivities

carriedoutderivativesinstrumentsbusiness,includingfuturescontractsandforeignexchangeforwardcontracts.FromJanuarytoJune2021,thefuturescontractsincomeisRMB19.8287million,andforeignexchangeforwardcontractsincomeisRMB40.9239million.AndfromJanuarytoJune2020,thefuturescontractsincomeisRMB1.0049million,andforeignexchangeforwardcontractslossisRMB24.4147million.Therefore,theamountofnon-recurringprofitandlossitemsproducedlargefluctuationsbetweenthefirsthalfofthetwoyears.Meanwhile,theexchangelossfromJanuarytoJune2021isRMB

51.1292million,anditisRMB45.6796millionfrom

JanuarytoJune2020.Accordingto“theNo.1ExplanatoryAnnouncementonInformationDisclosureforCompaniesOfferingTheirSecuritiestoPublic-Non-recurringProfitorLoss”,exchangegainsandlossesarerecurringgainsandlosses,andfuturesandforwardcontractsgainsandlossesarenon-recurringgainsandlosses.Othernon-operatingrevenueorexpendituresexcepttheaboveitems

891,333.20Otherprofitorlosssatisfyingthedefinitionofnon-recurringprofitorloss

702,064.60Less:Enterpriseincometaxaffected20,201,305.62Non-controllinginterestaffected446,016.26Total104,109,565.92--Foritemsdefinedasnon-recurringprofitorlossaccordingto“theNo.1ExplanatoryAnnouncementonInformationDisclosureforCompaniesOfferingTheirSecuritiestoPublic-Non-recurringProfitorLoss”,non-recurringprofitorlossitemslistedinthesaiddocumentdefinedasprojectofrecurringprofitorloss,specifythereason

□Applicable√NotApplicable

2.ROEandEPS

Profitofthereportingperiod

WeightedaverageROE

EPS(RMB/share)BasicEPSDilutedEPSNetprofitattributabletoshareholdersofordinaryshares8.04%0.230.23Netprofitattributabletoshareholdersofordinarysharesafterdeductingnon-recurringprofitorloss

7.02%0.200.20

3.Others

1.CalculationprocessofweightedaverageROE

(1)Weightedaveragenetassets

ChangediteminnetassetsAmount

Weightedby

month

Weightedaveragenet

assetsNetassetsattributabletoshareholdersofordinarysharesatthe

ofperiod

10,064,794,519.576/610,064,794,519.57Netprofitattributabletoshareholdersofordinaryshares823,881,221.703/6411,940,610.85CashdividendannouncedinApril-895,454,593.002/6-298,484,864.33CashdividendannouncedinApril,includingthereduction

beginningof

restrictedsharesrepoobligations

5,553,275.002/61,851,091.67ConverteddifferenceinForeignCurrencyStatements-17,246,635.523/6-8,623,317.76Equity-settledshare-basedpayment(phase1)2,407,500.543/61,203,750.27Equity-settledshare-basedpayment(phase2)23,862,544.563/611,931,272.28Netassetsincreasedfromunlockingofrestrictedstockincentiveon

ofJune

18,2021

26,512,714.500/6-

FairvalueofconvertiblebondequitywhichissuedonJune1,2021409,766,556.241/668,294,426.04Netassetsattributabletoshareholdersofordinarysharesattheend

Juneof

period

10,444,077,103.5910,252,907,488.59

(2)WeightedaverageROE

ItemsSymbol

Currentperiod

cumulativeNetassetsattributabletoshareholdersofordinarysharesoftheparentcompanyA

823,881,221.70Non-recurringprofitorlossattributabletoshareholdersofordinarysharesoftheparentcompany

B

104,109,565.92

Netprofitattributabletoshareholdersofordinarysharesoftheparentcompanyafterdeductingnon-recurringprofitorloss

C=A-B

719,771,655.78

WeightedaveragenetassetsD

10,252,907,488.59

WeightedaverageROEE=A/D8.04%

WeightedaverageROEafterdeductingnon-recurringprofitorlossF=C/D7.02%

2.CalculationprocessofBasicEPSandDilutedEPS

(1)BasicEPS

ItemsSymbol

Currentperiod

cumulativeNetprofitattributabletoshareholdersofordinarysharesoftheparentcompanyA823,881,221.70Non-recurringprofitorlossattributabletoshareholdersofordinarysharesoftheparentcompanyB104,109,565.92Netprofitattributabletoshareholdersofordinarysharesoftheparentcompanyafterdeductingnon-recurringprofitorloss

C=A-B719,771,655.78

TotalsharesatthebeginningofperiodD3,591,601,468

Numberofrestrictedstock（Afterincreasebytransferringandrepo）E

17,616,950

Weightedaveragenumberofordinarysharesoutstanding(excludingrestrictedstock)F=D-E3,573,984,518BasicEPSG=A/F

0.23

BasicEPSafterdeductingnon-recurringprofitorlossH=C/F

0.20

(2)DilutedEPS

ItemsSymbol

CurrentperiodcumulativeNetprofitattributabletoshareholdersofordinarysharesoftheparentcompanyA823,881,221.70EffectofconvertiblebondassumedconversiononnetprofitB9,082,166.27NetprofitattributabletoshareholdersofordinarysharesoftheparentcompanyafterdilutionC=A+B832,963,387.97Non-recurringprofitorlossattributabletoshareholdersofordinarysharesoftheparentcompanyD104,109,565.92Netprofitattributabletoshareholdersofordinarysharesoftheparentcompanyafterdeductingnon-recurringprofitorloss

E=C-D728,853,822.05Weightedaveragenumberofordinarysharesoutstanding(excludingrestrictedstock)F3,573,984,518WeightedaveragenumberofordinarysharesdilutedbyequityincentiverestrictedsharesG10,280,289WeightedaveragenumberofordinarysharesdilutedbyconvertiblebondsH23,201,856WeightedaveragenumberofordinarysharesoutstandingafterdilutionI=F+G+H3,607,466,663DilutedEPSJ=C/I0.23DilutedEPSafterdeductingnon-recurringprofitorlossK=E/I0.20