Shenzhen Topband Co., Ltd.Semi-annual Report 2023
Topband Investor Relations Applet
August 2023
Section I Important Notes, Contents and Definitions
The Board of Directors, the Board of Supervisors and directors, supervisors and seniorexecutives of the Company hereby assure that the content set out in the Semi-annual Report istrue, accurate and complete. It shall be free from false records, misleading statements or majoromissions, and shall bear individual and joint legal liabilities therein.
Wu Yongqiang, the principal of the Company, Luo Muchen, accounting head, and LuoMuchen, accounting department head (the person in charge of accounting department) herebyguarantee the truth, accuracy and completeness of the financial report in this Semi-annual Report.
All directors have attended the Board Meeting at which this Semi-annual Report wasscrutinized.
Forward-looking statements such as future plans and development strategies covered in theReport involve uncertainty, so they do not represent the Company's profit forecasts, nor are theyregarded as the substantive commitment to investors.
The Company is not faced with significant risks affecting its financial position andsustainable profitability, but may be with such risks as a decline in market demand due to thedomestic and international macroeconomic downturn, technology upgrading, intensifiedcompetition in the industry, fluctuations in the prices of raw materials and fluctuations inexchange rates. For more detailed risk information, please see "Risks faced by the Company andcountermeasures" in Section III of the Report. Investors are kindly requested to be alert toinvestment risks.
The Company plans not to pay cash dividend, to issue bonus shares, or to increase the sharecapital by capital reserve.
This report has been prepared in Chinese and translated into English. Should there be anydiscrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Contents
Section I Important Notes, Contents and Definitions ...... 2
Section II Company Profile and Primary Financial Indicators ...... 6
Section III Management Discussion and Analysis ...... 10
Section IV Corporate Governance ...... 37
Section V Environmental and Social Responsibility ...... 43
Section VI Important Matters ...... 45
Section VII Share Change and Shareholders ...... 56
Section VIII Information on Preferred Shares ...... 62
Section IX Relevant Information of Bonds ...... 63
Section X Financial Report ...... 64
Section XI Other Reported Data ...... 208
Directory of documents for future reference
I. Accounting statements containing the signatures and seals of the legal representative, the financechief and the accounting department head.II. The originals of all the company documents publicly disclosed in newspapers designated by theCSRC during the reporting period and the original manuscripts of announcements.III. The original of the Semi-annual Report 2023 bearing the signature of the chairman.All the above documents are ready and complete, and are available for reference at the office of theBoard of Directors of the Company.
Interpretations
| Terms | Refer to | Contents |
| Company, the Company, Topband | Refer to | Shenzhen Topband Co., Ltd. |
| RMB, RMB ten thousand | Refer to | RMB, RMB ten thousand |
| CSRC | Refer to | China Securities Regulatory Commission |
| Exchange | Refer to | Shenzhen Stock Exchange |
| Reporting period | Refer to | January 1, 2023 - June 30, 2023 |
| Articles of Association | Refer to | Articles of Association of Shenzhen Topband Co., Ltd. |
| Huizhou Topband | Refer to | Huizhou Topband Electrical Technology Co., Ltd. |
| YAKO Automation | Refer to | Shenzhen YAKO Automation Technology Co., Ltd. |
| HCD | Refer to | Shenzhen Allied Control System Co., Ltd. |
| Topband Software | Refer to | Shenzhen Topband Software Technology Co., Ltd. |
| ORVIBO | Refer to | Shenzhen ORVIBO Technology Co., Ltd. |
| Ningbo Topband | Refer to | Ningbo Topband Intelligent Control Co., Ltd. |
| Meanstone Intelligent | Refer to | Shenzhen Meanstone Intelligent Technology Co., Ltd. |
| HANSC Intelligent | Refer to | Shenzhen HANSC Intelligent Technology Co., Ltd. |
| Hong Kong Topband | Refer to | Topband (Hong Kong) Co., Ltd. |
| Topband Romania | Refer to | Topband Smart Europe Company Limited |
| Topband Mexico | Refer to | Topband Mexico Company Limited |
| Topband Battery | Refer to | Shenzhen Topband Battery Co., Ltd. |
| Ninghui Lithium Battery | Refer to | Taixing Ninghui Lithium Battery Co., Ltd. |
| HVAC | Refer to | Heating, Ventilation and Air Conditioning |
| IOT | Refer to | Internet of Things |
| AI | Refer to | Artificial Intelligence |
| BLDC Motor | Refer to | Brushless DC Motor |
| BG and BU | Refer to | Business Group and Business Unit |
| IPD | Refer to | Integrated Product Development |
| ISC | Refer to | Integrated Supply Chain |
| PLC | Refer to | Programmable Logic Controller |
| AIGC | Refer to | Artificial Intelligence Generated Content |
| 1C3S | Refer to | Cells, BMS, EMS and PCS |
Section II Company Profile and Primary Financial IndicatorsI. Company profile
| Stock abbreviation | Topband | Stock code | 002139 |
| Listed stock exchange | Shenzhen Stock Exchange | ||
| Chinese name of the Company | Shenzhen Topband Co., Ltd. | ||
| Chinese abbreviation of the Company name (if any) | Topband | ||
| Name of the Company in foreign language (if any) | Shenzhen Topband Co., Ltd. | ||
| Name of the Company in foreign language (if any) | Topband | ||
| Legal representative of the Company | Wu Yongqiang | ||
II. Contact person and contact information
| Secretary of the Board of Directors | Representative of securities affairs | |
| Name | Wen Zhaohui | Zhang Yuhua |
| Address | Topband Industrial Park, Keji Second Road, Shiyan Sub-district, Bao'an District, Shenzhen | Topband Industrial Park, Keji Second Road, Shiyan Sub-district, Bao'an District, Shenzhen |
| Tel | 0755-26957035 | 0755-26957035 |
| Fax | 0755-26957440 | 0755-26957440 |
| wenzh@topband.com.cn | zhangyuhua@topband.com.cn |
III. Miscellaneous
1. Contact information of the Company
Whether the registered address, office address and its postal code, website, e-mail address and other informationof the Company have changed during the reporting period
□ Applicable ? Not applicable
There was no change in the registered address, office address and its postal code, website, e-mail address andother information of the Company during the reporting period. For details, see the Annual Report 2022.
2. Information disclosure and storage place
Whether the information disclosure and storage locations of the Semi-annual Report have changed during thereporting period
□ Applicable ? Not applicable
There was no change in the website of the stock exchange and the name and website of the media for disclosure
of the Company's Semi-annual Report, as well as the location where the Company's Semi-annual Report isavailable during the reporting period. For details, see the Annual Report 2022.
3. Other relevant information
Whether other relevant information of the Company has changed during the reporting period
□ Applicable ? Not applicable
IV. Main accounting data and financial indicators
Whether the Company is required to retroactively adjust or restate the accounting data of previous years? Yes □ NoReasons for retrospective adjustments or restatementsAccounting policy changes
| Reporting period | Same period previous year | Increase or decrease in this reporting period over the same period of last year | ||
| Before adjustment | After adjustment | After adjustment | ||
| Operating income (RMB) | 4,256,121,153.72 | 4,228,003,137.57 | 4,228,003,137.57 | 0.67% |
| Net profit attributable to shareholders of listed companies (RMB) | 258,040,692.16 | 246,508,271.38 | 246,657,151.65 | 4.62% |
| Net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss (RMB) | 254,103,854.80 | 204,656,056.10 | 204,804,936.37 | 24.07% |
| Net cash flow from operating activities (RMB) | 527,842,471.18 | 74,886,255.39 | 74,886,255.39 | 604.86% |
| Basic earnings per share (RMB/share) | 0.20 | 0.20 | 0.20 | 0 |
| Diluted earnings per share (RMB/share) | 0.20 | 0.20 | 0.20 | 0 |
| Weighted return on average equity | 4.37% | 4.77% | 4.77% | -0.40% |
| End of the reporting period | End of the previous year | Change at the end of the current reporting period compared with the end of the previous year | ||
| Before adjustment | After adjustment | After adjustment | ||
| Total assets (RMB) | 10,907,788,528.08 | 10,364,556,848.34 | 10,373,993,325.99 | 5.15% |
| Net assets attributable to shareholders of listed companies (RMB) | 6,072,708,579.15 | 5,728,523,458.33 | 5,729,233,981.14 | 6.00% |
Reasons of the accounting policy change
Changes in the accounting policies adopted by the Company during the reporting period: The Ministry ofFinance released and implemented the Circular on Issuing Interpretation No. 16 of Accounting Standards forBusiness Enterprises (hereinafter referred to as "Interpretation No. 16") on November 30, 2022, in which, therequirement on the "accounting practice for deferred income taxes related to assets and liabilities generated byindividual transactions which shall not be exempted from initial confirmation" shall be implemented fromJanuary 1, 2023.If, at the beginning of the earliest period of the financial statements to which the InterpretationNo. 16 applies for the first time, taxable temporary differences and deductible temporary differences arise fromlease liabilities and right-of-use assets recognized as a result of a single transaction to which the InterpretationNo. 16 applies, as well as from recognized projected liabilities related to abandonment obligations and relatedassets, the Company will adjust the cumulative effects to the opening retained earnings and other relatedfinancial statement items in the earliest period for which the financial statements are presented in accordancewith the provisions of the Interpretation No. 16 and those of the Accounting Standards for Business EnterprisesNo. 18 - Income Taxes.
V. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profit and net assets between financial reports disclosed in accordance withInternational Accounting Standards and those disclosed in accordance with PRC GAAP at the same time
□ Applicable ? Not applicable
There is no difference in net profit and net assets between financial reports disclosed in accordance withInternational Accounting Standards and those disclosed in accordance with PRC GAAP during the reportingperiod.
2. Difference between the net profit and net assets in the financial reports disclosed in accordance withboth foreign accounting standards and Chinese accounting standards at the same time
□ Applicable ? Not applicable
There is no difference in net profit and net assets between financial reports disclosed in accordance withOverseas Accounting Standards and those disclosed in accordance with PRC GAAP during the reporting period.VI. Items and amount of non-recurring profit and loss? Applicable □ Not applicable
Unit: RMB
| Items | Amount | Description |
| Profits and losses on disposal of non-current assets (including the write-off portion of the provision for asset impairment) | -6,219,093.14 | |
| Government subsidies included in current profits and losses (except those that are closely related to the normal business of the Company, conform to national policies and regulations and are continuously enjoyed in a fixed or quantitative manner according to certain standards) | 13,429,284.92 | |
| Profits and losses due to fair value changes arising from the holding of tradable financial assets and liabilities, as well as the investment income from the disposal of tradable financial assets and liabilities and available-for-sale financial assets, except for the effective hedging business related to the normal business of the Company | -5,414,897.34 | |
| Other non-operating income and expenses other than those mentioned above | 3,716,436.80 | |
| Minus: amount affected by income tax | 1,329,800.01 | |
| Amount affected by minority shareholders' equity (after tax) | 245,093.87 | |
| Total | 3,936,837.36 |
Details of other items of profits and losses that conform to the definition of non-recurring profit and loss:
□ Applicable ? Not applicable
None.Explanation of defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit andLoss as recurring profit and loss items
□ Applicable ? Not applicable
There is no such situation of defining the non-recurring profit and loss items listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit and Loss as recurring profit and loss items in the Company
Section III Management Discussion and AnalysisI. Main business engaged by the Company during the reporting period
(I) Primary business and products of the CompanyThe Company's primary business is the R&D, production, and sales of intelligent control system solutions,i.e., with the "electronic control, motor, battery, power source and IoT platform" technology of electric control,motor, battery, power supply, and Internet of Things platform as the core, providing a variety of custom solutionsfor household appliances, tools, new energy, industrial, intelligent solutions, and other industries. The Company isa global leader in intelligent control solutions for the household appliance and tool industries and an innovationleader in the new energy, industrial and intelligent solution sectors.
1. The Company's core technology: "electronic control, motor, battery, power source and IoTplatform"
1.1 Electronic control technology. The electrical control technology is the core of a microelectroniccomputer to achieve intelligent control technology, involving sensing, power electronics, signal processing,communication, interactive, power and energy conversion, electromagnetic compatibility, and many othertechnical fields. The Company has formed hundreds of electronic control technology platforms, which cancompletely cover the needs of products in five major industries.
1.2 Motor technology. Motor technology converts electrical energy into kinetic energy. The Company hasformed dozens of advanced motor technology platforms focusing on such products as coreless motors, brushless
| Intelligent Control Business Applications in "Five Industries" | Home appliances | |
Tools
| Tools | New energy | Industry |
Intelligentsolutions
Intelligentsolutions
Core technologylayout of "electroniccontrol, motor, battery,power source and IoT
Core technologylayout of "electroniccontrol, motor, battery,power source and IoT
platform"
Electronic control
technology
| Motor technology | Battery technology |
Power source
technology
Power source
technology
IoT platform
DC motors (BLDC), stepper motors and servo motors. Among them, the Company is at the leading level in thefield of tool motors and motion control in China. Motion control refers to the real-time control of the position,speed and direction of mechanical moving parts, so that they move following the expected trajectory and thespecified movement parameters. A motion control system generally consists of HMI, controller, drive, motor andother components. It is a core component of intelligent manufacturing equipment, the prerequisite and foundationfor realizing intelligent manufacturing.
1.3 Battery technology. Battery technology is the technology where energy is stored and managed. Its coretechnologies include battery material application, cell design and manufacturing, and battery system integration.Battery material application technologies include positive and negative electrode materials, electrolytes,diaphragms, and other related application technologies; cell design and manufacturing include electrochemicalarchitecture design and manufacturing process technologies such as coating, laminating/winding, and forming;battery system integration consists of a series of technologies such as battery assembly, thermal management,collision and leakage safety, accurate measurement of voltage/current/temperature signals, battery state estimationand cell equalization. The technology spans multiple fields of material science, electrochemistry, electronics, andcontrol engineering. After years of accumulation, the Company has formed a complete design, developmentcustomization, and production technology capability from cell technology (CELL) and battery managementtechnology (BMS) to battery pack (PACK) and EMS (Energy Management System).
1.4 Power source technology. Power technology is an electrical energy conversion technology that safely,efficiently, and intelligently transforms the front-end input into the required output for the load. The Company hasvarious analog power supply, switching power supply, and digital power supply technology platforms withdifferent power levels and types. It can provide charging, inverter, and various customized power supply andcharging pile solutions.
1.5 IoT platform. The IoT platform is a collection of the sensing layer, connection layer, and applicationlayer technologies, mainly including connection management, device management, and applications. TheCompany has formed a complete technical capability from IoT module and intelligent terminal to APP and PaaSIoT cloud platform. It has developed solutions for more than ten business scenarios.
2. The Company's main products: customized system solutions for five major industries, i.e.,household appliances, tools, new energy, industrial, and intelligent solutions.
2.1 Intelligent control of household appliances
The Company provides a range of customized products and services, from product concept, design, anddevelopment to manufacturing and delivery for branded customers in the household appliance industry. Theproducts are mainly involved in controller and motor categories, including home appliance master control,power control, motor drive and control, display control, etc. The products are mainly used in various fields,such as HVAC, kitchen appliances, cleaning appliances, health care, lighting, and intelligent home.
2.2 Intelligent control of tools
The tool industry mainly includes power, garden, and other professional tools. The Company providescustomized products and services, from concept, design, and development to manufacturing and delivery forbranded customers in the tool industry. The Company's lines of business cover electronic control, motor, andbattery, and its products include controller, motor, and BMS, as well as modules and complete units.
2.3 New energy
The new energy business mainly focuses on two major application areas: small and medium-sized energystorage and new energy vehicles. Small and medium-sized energy storage service providers: Provide customerswith components and system solutions with its independent and controllable cells, BMS, PCS and EMS (1C3S)core technology in the field of household energy storage, portable energy storage, communication base stationenergy storage and industrial and commercial energy storage. Core component supplier for new energy vehicles:
Based on the "electronic control, motor, battery, power source and IoT platform" technology, the Companyprovides customized solutions of charging equipment and intelligent controllers for new energy vehicles, otherspecial vehicles, and E-bikes.
2.4 Industrial control
In the industrial sector, the Company's main business covers the R&D, production, and sales of control, drive,motor and other products, provision of PLCs, motion control cards, stepper/servo drives, motors, and other corecomponents for downstream automation equipment customers, as well as provision of motion control solutionsbased on the industry processes.
In the industrial automation sector, stepper and servo drives are widely used in 3C electronics, PV, batteries,medical equipment, semiconductor equipment, and other sub-sectors. We are to helping automation equipmentmanufacturers improve equipment design performance, reduce equipment manufacturing costs, and accelerate thedevelopment of new equipment. In the robotics sector, the Company's coreless motors are used in the electric jawsof industrial robots and other medium- and high-end applications, characterized by high precision and high cost
performance, with a strong overload capacity, high energy conversion efficiency, a lightweight design and otherstrengths. The servo drive system is applied in the industrial robots, such as multi-joint, SCARA robots, with highstability, ease of use, compatibility and other strengths.
2.5 Intelligent solutions
The Company's intelligent solutions take AIoT (Artificial Intelligence Internet of Things) technologyplatform and intelligent product innovation capabilities as the core, and target at "medical, food, housing andtransportation", "industry, catering, hotels, parks", and other sub-segment scenarios. We grasp the newopportunities of intelligent upgrade, data collection and analysis, human-machine interaction and intelligentmanufacturing, and actively integrate into the mainstream IoT ecosystems, including Matter, so as to providecustomers with integrated intelligent solutions of "innovative products + AIoT platform + customized services".(II) The industry in which the Company operates
1. Basic situation of the industry
The intelligent control industry to which the Company belongs is promising from the long run, with trillion-dollar markets. Applications cover all walks of life, mainly in household appliances, smart homes, intelligentbuildings, power tools, robots, industrial automation, automotive electronics, new energy, medical equipment andother sectors. Main intelligent controllers in the industry are high-tech products that take automatic control andcomputer technologies as the core and integrate sensing, microelectronics, power electronics, and many othertechnology categories. They play the role of "nerve center" and "brain" in various kinds of systems.
The future will be intelligent and low-carbon, and being intelligent and low-carbon will be a long-term andsustained reform with wide-ranging and far-reaching impact. It deeply affects the modern life while changing theproduct forms. The industry is full of historic opportunities for intelligent, scenario-based, green and low-carbonproducts. With more application of the intelligent products, the continued integration and development ofintelligent control technology and 5G, IoT, AI and cloud computing, and other new technologies, acceleratediteration of all kinds of products, constantly increased intelligence, and the emergence of new products, new forms,and new modes, more new opportunities will be available to intelligent control products in the medical, food,housing, transportation, enterprises, cities and other intelligent and low-carbon applications, making the intelligentcontroller industry more promising.
2. Position in industry
As a global leading provider of intelligent control solutions, the Company focuses on intelligent control,
upholds the value of "Agile Innovation Partner", and drives its development through technological innovation. Atpresent, we have established the "electronic control, motor, battery, power source and IoT platform"comprehensive technology system, and provide customized intelligent control solutions for downstreamcustomers in the household appliance, tool, new energy, industrial, and intelligent solution industries. With thethree unique capabilities of "platform-based technology innovation capability, partner-based customer servicecapability, and systematic rapid response capability" as the core, the Company has been forging ahead andestablished close partnerships with many leading customers in the industry. The Company is now a leader inintelligent control solutions for the household appliances and tools and an innovation leader in the new energy andindustrial sectors.
II. Analysis of core competitiveness
1. Platform-based technology innovation capability.
The Company takes technology as the gene of enterprise development and considers innovation as the corecompetence of the Company. The Company has the industry-leading platform technology innovation capability,forming a complete technology platform covering various core technology areas of intelligent controlintegration solutions. The Company has the ability of deep understanding of various control mechanisms,independent implementation, and continuous innovation, covering the core technologies of intelligent controlalgorithm, motor control, lithium battery, sodium battery, sensing, human-machine interaction, imagerecognition, digital power supply, embedded software, temperature control, heating, and cooling, etc. Inaddition, the Company has a rich product line that forms many product platforms. Each core product platformhas been verified in mass production to ensure quality and reliability. We can quickly provide customers withhigh-quality, differentiated custom solutions to meet their needs. In addition, the Company has the industry'sunique "controller + motor + battery + power supply" total solution capability, with the ability to continuouslydevelop innovative solutions in new categories, which can help customers innovate in the competition to win. Inaddition, the Company has the industry's unique "controller + motor + battery + power" total solution capability,with the ability to continuously develop innovative new category solutions, which can help customers in thecompetitive innovation to win.
2. Partnership customer service capability.
The Company values long-term development, takes value co-creation and value win-win as thedevelopment concept, and develops long-term partnership with customers. Supported by platform-basedtechnology innovation capability, the Company continues to gain insight into customer needs, creates in-depthco-creations with customers, establishes organizational customer relationships, and builds partner-basedcustomer service capabilities. Based on multi-region layout, the Company has established internationalproduction bases mainly covering Pearl River Delta, Yangtze River Delta, Southeast Asia, North America, andEurope. It also establishes international operation centers to improve its ability to serve nearby throughmanagement capabilities, resource allocation and other aspects. A number of overseas offices have been set upfor close cooperation with customers. The Company has established close partnerships with excellent customersat home and abroad in various business areas. Based on long-term cooperation and mutual development, wehave formed a good image and brand reputation in the industry, widely recognized and generally praised by ourcustomers.
3. Systematic rapid response capability.
As intelligent technology evolves and uncertainty increases, the pace of global innovation iteration isaccelerating, and companies increasingly need to be more agile in their operations to serve their customers.Based on a deep understanding of the intelligent control business, the Company has created a strong platformsystem from the implementation of IPD ideas in the R&D and design process, the core customer ISC changes inthe supply chain system, the laboratory and quality assurance system, and the intelligent manufacturingplatform system to build a customer-centric process-oriented organization, internalizing the Company's superiorcapabilities into agile operational capabilities, and the agile system will further strengthen the Company'sadvantages, and the two form a mutually reinforcing and virtuous development, thus achieving sustainable,high-quality growth.III. Analysis of main businessOverview
In the first half of 2023, the global economy as a whole recovered moderately. In the second quarter, thedomestic economy recovered at a slow pace, but worldwide inflationary pressures, Russia-Ukraine conflict, andthe Fed's interest rate hike still persist, resulting in insufficient economic growth driving forces. After the panicstockpiling in the past few years, some industries are still making efforts to realize de-stocking in the first half
of 2023, and the overall progress of de-stocking becomes slower subject to the slowdown of the economy. TheCompany upholds the business philosophy of "long-term development" and has a deep base of leadingcustomers. In addition, with technological innovation, product strength and enhanced internal operationalcapabilities, the Company consolidates cooperation with leading customers for a higher market share. Duringthe reporting period, the Company increased its investment in international business and enhanced its globaldelivery capability to provide customers with more agile, efficient and secure delivery. The Company's basic,growing business, and innovative businesses together develop steadily and have resilience. The Companyadheres to the innovation-driven strategy, continues to expand the application of "electronic control, motor,battery, power source and IoT platform" core technology and product platform in the industry, and maintains thepromising application of intelligent control in a number of sectors to reduce the cyclical impact of a singledownstream market in the industry.With the upcoming end of the Fed's interest rate hike, and the fall of the U.S. overall and core PCEinflations, the real estate gradually picks up to promote the rise in demand for related consumer durables; inaddition, with the increased income of Chinese residents, moderate push of policies, and the fall of inventories,the economy and end demand began to improve. In the intelligent society, AI will be widely used, andintelligent controllers will have more powerful intelligence and self-learning capabilities, better adapt to userneeds, and provide a more intelligent control experience. Based on data collection, analysis, and utilization, bigdata is expected to drive intelligent decision-making and innovation. With the development of IoT technologyand the rise of smart homes, smart industries and other fields, a variety of devices and systems are connectedthrough the Internet to form a huge network, realizing intelligent interoperability and collaboration betweendevices. All aspects of the production process can be realized through automation and intelligent technology forhigher production efficiency and quality. The intelligent society will bring historic opportunities to theintelligent control industry, so we remain firmly optimistic about the continued growth of the industry.In the efforts of all the staff of Topband, during the reporting period, the Company achieved revenue ofRMB 4.256 billion, up 0.67% YoY, net profit attributable to shareholders of listed companies of RMB 258million, up 4.62% YoY, and net profit attributable to shareholders of listed companies after non-recurring profitand loss of RMB 254 million, up 24.07% YoY. In particular, the revenue and net profit in Q2 improvedsignificantly compared with Q1.Specifically, the revenue in Q2 amounted to RMB 2.261 billion, up 13.34%
compared with Q1, and the net profit attributable to the parent company after non-recurring gains and lossesamounted to RMB 163 million, up 78.28%.
(I) During the reporting period, the revenue amounted to RMB 4.256 billion, up 0.67% YoY. TheCompany's business development in the first half of 2023 is as follows:
1. Tools: according to Frost & Sullivan, the global tool market experienced steady growth from 2018 to2022, with the market size growing from USD 82 billion to USD 103 billion, and a compound annual growthrate (CAGR) of 5.9% from 2018 to 2022. However, due to the overspending and hoarding of tool products in2021, the market demand for tool products slowed down in 2022, and the de-stocking continued in the industryto the first half of 2023.As the Company's basic business segment, tools created sales revenue of RMB 1.62billion in the first half of 2023, up 0.83% YoY.
The Company has been added to the supplier list of a number of leading customers in the tool field. Weprovide a wide range of technology and product platforms, involving power tools, outdoor garden tools andcleaning supplies, and lead the transformation of the industry for electrified and cordless products. We providedownstream customers with one-stop solutions including controllers, motors, battery packs, and complete units.
With the further recovery of the global economy, the supply chains become more stable, and the de-stocking is intensified in supermarkets, with further electrification and cordless reform in the tool industry. Thesize of the global tool market is expected to reach USD 131 billion in 2027, with a CAGR of 4.7% comparedwith 2023. In the mid-and-long term, the tools can be applied in more and more scenarios. There is still muchroom for increasing the penetration rate of our products in the market outside Europe and the United States, andthe growth of the Company's product platforms and leading customers' growth in size will help further increasethe Company's market share in this segment.
2. Household appliance: In the short term, although inflationary pressures, slow recovery of real estatesales, and other factors still persist, China's residents have become more and more willing to consume and themarket confidence has gradually rebounded from the beginning of this year. In the first half of the year, theexport growth rate of household appliances turned positive, and the recovery of demand for householdappliances became a clear trend. The rigid demand for household appliances rose first, and the demand ordifferent categories of household appliances are recovering at different paces.
As the Company's basic business segment, household appliance created sales revenue of RMB 1.5 billionin the first half of 2023, a slight decrease of 0.98% YoY, mainly due to the Company's shift to superior
categories on the basis of the original dispersed categories. In particular, the sales of air conditioner andwashing machine in large appliances are growing faster; superior categories such as smart bathrooms,thermostats, wall-hung stoves, personal care, and other products have achieved rapid growth; new air fryers,electric grills, and other categories are growing faster. Induction cookers, coffee makers, and other traditionalsmall household appliances categories declined slightly.In the mid-and-long term, overseas demand is resilient, with great potential for development in Asia-Pacific, the Middle East, Latin America, and other emerging markets. The trend of domestic consumptionupgrade remains unchanged. Small electrical appliances for kitchens, care, cleaning, and other purposescontinue to be launched, and the domestic sales are expected to achieve faster growth. The Company has beenengaged in the household appliance sector for many years, and the products supplied have been enriched,including the initial controllers to the power modules, screen display control, voice interaction, thermostats andother categories, as well as the new categories such as household appliances, general household appliances,commercial and other fields, with new businesses developed continuously. In recent years, the Company'smarket share in terms of European, American, and Japanese household appliance customers is increasing, andthe original disadvantage of a low share of large customers in the household appliance segment will graduallybe transformed into a business growth advantage. As the Company's basic business segment, householdappliances are expected to maintain a stable growth trend together with growth in the industry in the future.
3. New energy segment. The Company's new energy business is mainly based on the "1C3S" technology,currently focusing on two major areas: energy storage and new energy vehicles. As the Company's growingbusiness, the new energy segment created sales revenue of RMB 914 million in the first half of 2023, up 6.56%YoY, higher than the Company's overall revenue growth.Energy storage is a fast-growing emerging sector. With the advancement of low-carbon society, the marketdemand for renewable energy increases, accompanied by rapid industry development and intensified costcompetition. In the face of changes in supply and demand in the industry, the Company has actively respondedto with many actions. Externally, the Company strengthens cooperation with strategic customers, accelerates theutilization of business opportunities, and expands the international market; internally, it strengthens capabilitybuilding, firmly believes in the direction of business development without being afraid of market fluctuationsand environmental impact, and improves its capabilities in proactive planning of products, including theplanning of products' market competitiveness and of the cost competitiveness. By improving productionefficiency, reducing material costs, and equipment costs, we provide products with more cost advantages; and
by increasing technological innovation, we enhance product competitiveness. New products such as energystorage inverters, sodium-ion batteries, industrial and commercial energy storage solutions, and optical storageand charging machines continued to emerge during the reporting period. In terms of brands and market shares,the Company launches independently controllable component products, independent brand products and all-in-one products in parallel, and actively expands the application of household, industrial and commercial storageproducts in Europe, America, Asia, South Africa, West Africa, and other countries, accommodating thedifferentiated needs of different types of customers, such as machine factories, operators, and governmentagencies.In terms of new energy vehicles, the Company focuses on charging equipment, thermal management, light-duty power exchange solutions and other key directions, and makes full use of its advantages in controltechnology and system solutions. With the rapid development of new energy vehicles, existing charging pilesneed to be updated and more new charging piles are in demand. The new power infrastructure with extra highvoltage and charging piles as the representatives is in the peak of construction, and the industry will start a newround of growth period. In the charging scenario, the Company has expanded from controller products to mode-2 AC charging gun, mode-3 fixed, wall-mounted AC charging pile, integrated DC fast charger and other unitcategories, accommodating the charging demand of new energy vehicles at the domestic and internationalmarkets. The Company also develops TOG (such as traffic investment and urban investment) customers toundertake charging pile and integrated operation projects.
4. Industrial control segment created sales revenue of RMB 137 million in the first half of 2023, up 1.03%YoY. The Company mainly provides downstream automation equipment and industrial robotics customers withPLCs, motion control cards, stepper/servo drives, motors, and other core components, as well as supportingmotion control solutions based on the industry process. These products are widely used in 3C electronics,industrial robots, medical equipment, PV equipment, semiconductor equipment, dispensing, engraving, packagingmachinery and other sectors.
Industrial control sector: General automation embodies more obvious cyclical characteristics. In the pastfew years, impacted by the macro economy, the Fed's interest rate hikes, and the turbulent international situation,the industry has experienced a long downward cycle, and the overall market is still in the recovery stage duringthe report period. With the in-depth promotion of "Made in China 2025" in the future, the scale of the intelligentmanufacturing market will rise rapidly, and industrial manufacturing is expected to usher in a synchronized
recovery with the economy as a whole, pulling the demand of upstream core component enterprises. The domesticindustrial control sector in the med-and-long term will benefit from "industrial upgrading + machine replacement",domestic replacement, digitalization, intelligence, and low-carbon development. In recent years, the attention ofdomestic industrial control customers has shifted from the efficiency to the security of supply. Domesticenterprises are superior in term of security of supply, product cost-effectiveness, fast response from engineers andother aspects. There are greater opportunities in the industry chain security and high-end manufacturing.
During the reporting period, the Company, based on the accumulated processes, product design, continuousimprovement of product reliability, as well as quick response to user needs and feedback, has successfully met theneeds of differentiated applications while enhancing the performance, and helped manufacturers of automationequipment improve the equipment design performance, reduce the cost of equipment manufacturing, and speed upthe development of new equipment, so as to accelerate the degree of automation of the manufacturers. TheCompany is committed to becoming the "leader of efficient and easy-to-use servo and stepping products" in theindustrial control sector. During the reporting period, by focusing on key sectors and key customers, the Companyachieved substantial growth in revenue in 3C, PV, dispensing and other sectors, and rapid YoY growth in the servosystem business thanks to the transformation and upgrading of the manufacturing and the accelerated domesticreplacement pace.
Industrial robotics: As a manufacturing country, China has increasing demand for industrial robots.According to MIR, industrial robot sales grew slightly in the first half of 2023, with growth in Q2 compared withQ1. In particular, the market share of Chinese brands is further enhanced. In the market environment with weakdemand, the Chinese enterprises achieved growth against the trend with their advantages in cost-effectiveness anddifferentiated design in niche areas.
In January 2023, the Ministry of Industry and Information Technology, along with 17 other agencies, createda new action plan called the "Robot + Application", which sets the target of doubling the robot density of themanufacturing in China by 2025 compared with 2020.With the increasing demand for independent control ofhigh-end equipment, there is still great room for increasing the share of domestic brands. At the same time, AI andother new technologies empower the field of robotics, and AI natural language and embodied AI combiningalgorithms will further promote the intelligent and digital transformation of the manufacturing environment. In theindustrial robotics sector, the Company has realized the batch application of servo drive systems and corelessmotors. It also has expanded its business in mobile robot and other areas. Benefited from the domestic
replacement, intelligent upgrading of plants, and low-carbon development, the future will usher in a new round ofboom cycle.
5. Intelligent solutions created sales revenue of RMB 74 million in the first half of 2023, down 11.08% YoY.The Company's intelligent solutions take AIoT (Artificial Intelligence Internet of Things) technology platform andintelligent product innovation capabilities as the core, and target at "medical, food, housing and transportation","industry, catering, hotels, parks", and other sub-segment scenarios. We provide customers with integratedintelligent solutions of "innovative products + AIoT platform + customized services". AI empowers all sectors.The development of the AIGC model will facilitate the Company's technological advancement and application inrobotics and HMI, and bring opportunities for the application of intelligent solutions in other sectors.
(II) During the reporting period, the Company achieved net profit after non-recurring gains andlosses of RMB 254 million, up 24.07% YoY, mainly thanks to the following:
(1) Better profitability. In the first half of 2023, the industry to which the Company belongs is relativelystable in supply. By intensified cost reduction and increased efficiency in legacy business, and increasedcapabilities of new products to enhance the comprehensive profitability through technological innovation, theCompany achieved a combined gross profit margin of 21.57% during the report period, up 2.49 percentagepoints YoY, with higher gross profit margins YoY in several sectors. At the same time, the continueddepreciation of RMB in Q2 was conducive to increasing the profitability of the Company's export business.
2. Three items of period expenses (selling, R&D, and general and administrative): These expensesincreased by about RMB 0.91 billion YoY, mainly for the investment in new businesses and new markets. Inparticular, R&D expenses increased by RMB 32 million YoY, mainly because at a period of rapid development,the Company captured new business and industrial applications with continuous innovation and insight intodownstream demand, and increased R&D investment in inverter control system, energy storage inverter,charging pile, industrial and commercial BMS and other strategic key projects; selling expenses increased byRMB 18 million YoY, mainly including the exhibition expenses and market development costs for theCompany's market development in the first half of the year; general and administrative expenses increased byRMB 41 million YoY, mainly due to the increased investment in Romania, Mexico and other overseas basesunder the Company's development strategy of multiple regions and customer intimacy, which caused theincrease of administrative expenses.
(III) During the reporting period, the Company achieved net profit attributable to the parentcompany of RMB 258 million, up 4.62% YoY, mainly thanks to the following:
In addition to the above factors affecting the net profit after non-recurring gains and losses, gains fromchanges in fair value of overseas investments decreased YoY in the reporting period.
(IV) During the reporting period, the Company realized net cash flow from operating activities ofRMB 528 million, up 604.86% YoY, mainly thanks to the following:
During the reporting period, the Company increased its efforts in payment collection, with the amount ofpayments collected rising significantly YoY. Meanwhile, the upstream supply stabilized, so the Company'sexpenditure on stock preparation decreased, leading to a significant increase in net cash flows from operatingactivities.YoY changes in Major Financial Metrics
Unit: RMB
| Reporting period | Same period previous year | YOY increase or decrease | Reason for change | |
| Operating revenue | 4,256,121,153.72 | 4,228,003,137.57 | 0.67% | No significant changes |
| Minus: operating cost | 3,337,826,833.15 | 3,421,434,029.61 | -2.44% | No significant changes |
| Selling expenses | 143,034,445.61 | 125,180,825.48 | 14.26% | The increase in the employee benefits for personnel engaged in new businesses, as well as the increase in travel expenses and exhibition expenses incurred for the development of overseas markets. |
| Management expenses | 201,474,565.60 | 160,894,026.46 | 25.22% | The increase in employee benefits as a result of the increase in staffing for the construction of overseas bases, and the increase in depreciation and amortization corresponding to the increase in investment in long-term assets at overseas bases. |
| Finance expenses | -50,992,475.24 | -63,616,375.63 | 19.84% | The main reason is that the increase in the exchange rate of the US dollars against the RMB during this period resulted in a less exchange gain compared with the same period last year. |
| Income tax expenses | 6,043,729.44 | 17,614,693.20 | -65.69% | The increase in the deferred tax assets recognized in the reporting period as compared with the same period last year. |
| R&D investment | 388,935,143.32 | 352,138,564.60 | 10.45% | The increased investment in strategic key projects such as inverter control system, energy storage inverter, charging pile, and industrial and commercial BMS. |
| Net cash flow from | 527,842,471.18 | 74,886,255.39 | 604.86% | The Company made more efforts in payment |
| operating activities | collection, conducted de-stocking and controlled the scale of procurement, significantly decreasing the cash paid for goods purchased and realizing a substantial increase in net cash flows from operating activities. | |||
| Net cash flow from investment activities | -468,657,578.93 | -487,956,696.27 | 3.96% | No significant changes |
| Net cash flow from financing activities | 284,893,844.15 | 230,261,666.20 | 23.73% | The net increase in bank borrowings for the reporting period increased YoY due to the increase in funds required for investment in industrial parks. |
| Net increase in cash and cash equivalents | 358,617,037.74 | -162,322,238.96 | 320.93% | The increase in net cash flows from operating activities during the reporting period. |
Significant changes in the Company's composition or source of profit in the reporting period
□ Applicable ? Not applicable
There was no significant change in the Company's composition or source of profit in the reporting period.Composition of operating income
Unit: RMB
| Reporting period | Same period previous year | YOY increase or decrease | |||
| Amount | Proportion in operating income | Amount | Proportion in operating income | ||
| Total operating income | 4,256,121,153.72 | 100% | 4,228,003,137.57 | 100% | 0.67% |
| By industry | |||||
| Intelligent control electronics industry | 4,256,121,153.72 | 100.00% | 4,228,003,137.57 | 100.00% | 0.67% |
| By product | |||||
| Tools | 1,620,045,611.60 | 38.06% | 1,606,784,503.47 | 38.00% | 0.83% |
| Home appliances | 1,500,351,397.24 | 35.25% | 1,515,196,016.05 | 35.84% | -0.98% |
| New energy | 914,360,730.57 | 21.48% | 858,103,466.53 | 20.30% | 6.56% |
| Industry | 136,712,993.99 | 3.21% | 135,322,059.03 | 3.20% | 1.03% |
| Intelligent solutions | 73,910,121.99 | 1.74% | 83,117,293.53 | 1.97% | -11.08% |
| Others | 10,740,298.33 | 0.25% | 29,479,798.96 | 0.70% | -63.57% |
| By region | |||||
| Domestic | 1,634,215,062.54 | 38.40% | 1,568,861,062.41 | 37.11% | 4.17% |
| Export | 2,621,906,091.18 | 61.60% | 2,659,142,075.16 | 62.89% | -1.40% |
The situation of industries, products or regions accounting for more than 10% of the Company's operatingincome or operating profit? Applicable □ Not applicable
Unit: RMB
| Operating revenue | Minus: operating cost | Gross profit rate | Increase or decrease of operating income over the same period of last year | Increase or decrease of operating costs over the same period of last year | Increase or decrease of gross profit rate over the same period of last year |
| By industry | ||||||
| Intelligent control electronics industry | 4,256,121,153.72 | 3,337,826,833.15 | 21.58% | 0.67% | -2.44% | 2.50% |
| By product | ||||||
| Tools | 1,620,045,611.60 | 1,239,424,039.28 | 23.49% | 0.83% | -2.72% | 2.79% |
| Home appliances | 1,500,351,397.24 | 1,196,315,117.24 | 20.26% | -0.98% | -4.84% | 3.23% |
| New energy | 914,360,730.57 | 740,349,504.13 | 19.03% | 6.56% | 3.64% | 2.28% |
| By region | ||||||
| Domestic | 1,634,215,062.54 | 1,328,687,403.28 | 18.70% | 4.17% | 3.73% | 0.34% |
| Export | 2,621,906,091.18 | 2,009,139,429.86 | 23.37% | -1.40% | -6.14% | 3.87% |
The Company's main business data for the last period adjusted according to the caliber at the end of thereporting period when the statistical caliber of the Company's main business data is adjusted in the reportingperiod
□ Applicable ? Not applicable
IV. Analysis of non-main business? Applicable □ Not applicable
Unit: RMB
| Amount | Proportion in total profit | Explanation of reasons | Whether it is sustainable | |
| Investment income | -3,244,186.21 | -1.23% | The gain or loss on long-term equity investments accounted for under the equity method during the reporting period. | No |
| Profit and loss from changes in fair value | -6,041,282.00 | -2.29% | The main reason is the changes in fair value from forward exchange transaction during the reporting period | No |
| Asset impairment loss | -26,043,122.58 | -9.85% | The main reason is the provision for inventory falling price reserves and credit impairment losses | No |
| Operating revenue | 4,591,331.07 | 1.74% | No | |
| Non-operating expenses | 4,250,758.69 | 1.61% | No |
V. Analysis of assets and liabilities
1. Significant changes in asset composition
Unit: RMB
| End of the reporting period | End of the previous year | Increase or decrease of proportion | Explanation of major changes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary capital | 1,761,580,444.38 | 16.15% | 1,403,026,071.34 | 13.52% | 2.63% | No significant changes |
| Accounts receivable | 2,503,593,708.16 | 22.95% | 2,549,734,039.66 | 24.58% | -1.63% | No significant changes |
| Inventory | 1,752,305,670.79 | 16.06% | 1,992,952,212.53 | 19.21% | -3.15% | The reduced stock preparation and de-stocking during the reporting period. |
| Investment property | 104,823,590.34 | 0.96% | 106,242,777.85 | 1.02% | -0.06% | No significant changes |
| Long-term equity investment | 35,680,088.03 | 0.33% | 23,550,658.91 | 0.23% | 0.10% | No significant changes |
| Fixed assets | 1,901,326,770.71 | 17.43% | 1,840,358,093.74 | 17.74% | -0.31% | No significant changes |
| Construction in progress | 360,390,687.64 | 3.30% | 234,775,312.11 | 2.26% | 1.04% | The increase in investment in the construction of Huizhou YAKO Automation Plant and Nantong Industrial Park during the reporting period. |
| Right-of-use assets | 102,676,004.80 | 0.94% | 106,196,901.87 | 1.02% | -0.08% | No significant changes |
| Short-term loans | 460,000,000.00 | 4.22% | 283,351,495.57 | 2.73% | 1.49% | The main reason is that the short-term loan was added during the reporting period. |
| Contractual liabilities | 206,595,293.99 | 1.89% | 138,281,929.17 | 1.33% | 0.56% | No significant changes |
| Long-term loans | 818,120,000.00 | 7.50% | 581,500,000.00 | 5.61% | 1.89% | The increase in borrowings during the reporting period. |
| Lease liabilities | 68,528,422.20 | 0.63% | 73,610,791.09 | 0.71% | -0.08% | No significant changes |
2. Major overseas assets
? Applicable □ Not applicable
Unit: RMB
| Asset details | Reasons of formation | Asset size | Location | Operation mode | Control measures to ensure the safety of assets | Earning position | Proportion of foreign assets to net assets of the Company | Whether there is a significant risk of impairment |
| Operation Center in India | Investment and establishment | 519,471,517.76 | Pune, India | R&D, production and sales | Financial supervision and external audit | 21,135,002.31 | 8.55% | No |
| Vietnam Dong Nai Operation Center | Investment and establishment | 681,828,540.06 | Dong Nai Province, Vietnam | R&D, production and sales | Financial supervision and external audit | 66,399,774.68 | 11.23% | No |
3. Assets and liabilities measured at fair value
? Applicable □ Not applicable
Unit: RMB
| Items | Opening balance | Profits and losses from changes in fair value in the current period | Changes in cumulative fair value included in equity | Impairment accrued in the current period | Purchase amount in the current period | Amount sold in the current period | Other changes | Amount at the end of the year |
| Derivative financial assets | ||||||||
| 1. Tradable financial assets (excluding derivative financial assets) | 342,959,450.31 | 235,561,014.47 | 63,896,335.80 | 40,000,000.00 | 366,855,786.11 | |||
| Subtotal of financial assets | 342,959,450.31 | 235,561,014.47 | 63,896,335.80 | 40,000,000.00 | 366,855,786.11 | |||
| Total of the above | 342,959,450.31 | 235,561,014.47 | 63,896,335.80 | 40,000,000.00 | 366,855,786.11 | |||
| Financial liabilities | 0.00 | 6,041,282.00 | 6,041,282.00 | |||||
Contents of other changesNoneWhether there are significant changes in the measurement attributes of the Company's main assets during thereporting period
□ Yes ? No
4. Restricted asset rights by the end of the reporting period
See Sections X, VII, and (LXXXI) of this report for details.
VI. Investment analysis
1. General situation
? Applicable □ Not applicable
| Investment in the reporting period (RMB) | Investment amount in the same period of last year (RMB) | Range of change |
| 40,000,000.00 | 30,000,000.00 | 33.33% |
2. Major equity investment obtained during the reporting period
□ Applicable ? Not applicable
3. Major non-equity investment obtained during the reporting period
□ Applicable ? Not applicable
4. Investment in financial assets
(1) Securities investment
□ Applicable ? Not applicable
There was no securities investment during the reporting period.
(2) Derivatives investment
? Applicable □ Not applicable
Unit: RMB ten thousand
| Types of derivatives investment | Initial investment amount | Profits and losses from changes in fair value in the current period | Changes in cumulative fair value included in equity | Purchase amount during the reporting period | Amount sold during the reporting period | Ending amount | Proportion of investment amount at the end of the period in net assets of the Company at the end of the reporting period |
| Trading of foreign exchange derivatives | 72,499.62 | -604.13 | 0.00 | 72,499.62 | 8,112.60 | 64,387.02 | 10.60% |
| Total | 72,499.62 | -604.13 | 0.00 | 72,499.62 | 8,112.60 | 64,387.02 | 10.60% |
| Explanation of accounting policies and specific accounting principles for hedging business during the reporting period, as well as whether there have been significant changes compared to the last reporting period | The Company has made corresponding accounting and presentation for foreign-exchange derivative transaction to be done according to Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprises No. 24 - Hedge Accounting, Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments issued by Ministry of Finance, and other regulations and guides. Foreign exchange derivative contracts were initially and subsequently measured using tradable financial assets, which fair value is priced by financial institutions based on open market trading data, and there has been no significant change compared to the last reporting period. | ||||||
| Explanation of actual profits and losses in the reporting period | Amount included in current profit and loss from foreign-exchange derivative transaction conducted during the reporting period was approximately RMB 377,800. | ||||||
| Explanation of hedging effect | The Company conducted forward exchange transaction, effectively reducing the risk of exchange fluctuations through reasonable RMB forward exchange transaction, focusing on future transaction costs and incomes, and achieving asset hedging with the aim of avoiding risks. | ||||||
| Capital sources of derivatives investment | Self-own capitals | ||||||
| Risk analysis and control measures of derivatives positions in the reporting period (including but not limited to market risk, liquidity risk, credit risk, operational risk, legal risk, etc.) | I. Risk analysis of forward exchange transaction The forward exchange transaction business carried out by the Company and its subsidiaries followed the principle of locking in exchange rate risk and not engaging in speculative or arbitrage trading operations. However, there were still certain risks in forward exchange transaction operations: 1. Exchange rate fluctuation risk: In the event of significant fluctuations in exchange rates, if the forward settlement exchange rate stipulated in the confirmation letter for forward exchange transactions was lower than the real-time exchange rate on the settlement day, it will cause exchange losses. 2. Internal control risk: Because forward exchange transactions are highly specialized, risks may arise due to inadequate internal control systems. 3. Customer default risk: If the customer's accounts receivable are overdue and the payment cannot be collected within the predicted payment period, it will cause a delay in forward exchange settlement and result in losses for the Company. 4. Risk of payment collection prediction: In general, the Sales Department of the Company predicts payment collection based on customer orders and expected orders. Nonetheless, during the actual execution process, customers may adjust their own orders and the Company may make an inaccurate payment prediction, leading to the risk of delayed delivery of forward exchange settlement. 5. Legal risk: Changes in relevant laws or violations of relevant legal systems by counterparties may result in contracts being unable to be executed normally and cause losses to the Company. II. Risk control measures 1. The Company has formulated the Internal Control System for Forward Exchange Transactions, which provides clear regulations on the Company's foreign exchange transaction operating principles, approval authority, internal operating procedures, responsible departments and individuals, information isolation measures, and risk management for forward exchange transaction, and can meet the needs of practical operations, and its internal control and risk management measures formulated are practical and effective. 2. The finance center and audit department of the Company, as relevant responsible departments, have clear management positioning and responsibilities, and responsibilities are assigned to their positions. Through this hierarchical management, the risks of single person or individual department operations are fundamentally eliminated, and the speed of risk response is also improved while effectively controlling risks. 3. To prevent delayed delivery of forward exchange transactions, the Company attaches great importance to the management of accounts receivable and actively collects accounts receivable to avoid the phenomenon of overdue accounts receivable. 4 The Company engages in financial derivative transaction business with large commercial banks with legal qualifications, closely monitors relevant laws and regulations in the field, avoiding potential legal risks. 5. The Company's forward exchange transactions must be based on a cautious prediction for foreign currency receipts (payments) of the Company, and the foreign currency amount of the foreign exchange transaction contract must not exceed 90% of the annual planned total amount of foreign currency receipts (payments).The delivery period of forward exchange transactions needs to match the Company's predicted foreign currency collection time. |
| Changes in market price or fair value of products of the invested derivatives during the reporting period, and the disclosure of specific methods used and relevant assumptions and parameters set in the analysis of the fair value of derivatives | Determine changes in fair value based on market quotes from external financial institutions. |
| Litigation (if applicable) | Not applicable |
| Disclosure date of Board of Directors announcement for approval of derivatives investment (if any) | January 14, 2023 |
| Disclosure date of General Meeting of Shareholders announcement for approval of derivatives investment (if any) | - |
| Special opinions of independent directors on derivatives investment | The forward exchange transactions carried out by the Company is to meet the needs of normal production and operation, not solely for profit, and the Company has also formulated the Internal Control System for Forward Exchange Transactions to avoid and prevent exchange rate fluctuation risks |
| and risk control of the Company | and strengthen risk management and control. For details, please refer to the Company's disclosure on Independent Opinions of Independent Directors on Related Matters on CNINFO (http://www.cninfo.com.cn) on January 14, 2023 |
5. Usage of raised capitals
? Applicable □ Not applicable
(1) General use of raised capitals
? Applicable □ Not applicable
Unit: RMB ten thousand
| Year of raising capitals | Ways of raising capitals | Total amount of raised capitals | Total amount of raised capitals used in the current period | Total amount of raised capitals used | Total amount of raised capitals for change of purpose during the reporting period | Cumulative total amount of raised capitals with changed purposes | Cumulative total amount proportion of raised capitals with changed purposes | Total amount of unused raised capitals | Purpose and destination of unused raised capitals | Amount of raised capitals which have been idle for more than two years |
| 2019 | Public offering of convertible bonds | 56,543.65 | 1,725.76 | 46,294.01 | 0 | 0 | 0.00% | 10,249.64 | Temporary replenishment and deposit in the special account for raised capitals | 0 |
| 2021 | Non-public offering of shares | 103,684.71 | 17,663.64 | 58,298.96 | 0 | 61,000 | 58.83% | 45,385.75 | Temporary replenishment and deposit in the special account for raised capitals | 0 |
| Total | -- | 160,228.36 | 19,389.4 | 104,592.97 | 0 | 61,000 | 38.07% | 55,635.39 | -- | 0 |
| General use of raised capitals | ||||||||||
| 1. Actual amount and time of arrival of capitals raised (1) Public offering of convertible corporate bonds to raise funds in 2019 The Company publicly issued 5.73 million convertible corporate bonds on March 7, 2019, each with a par value of RMB 100, with a total amount of RMB 573 million, with the approval in the Reply of China Securities Regulatory Commission on the Approval of Public Offering of Convertible Corporate Bonds by Shenzhen Topband Co., Ltd. (ZJXK [2018] No. 1842).Through priority placement to original shareholders, offering of the balance after priority placement to original shareholders (including the part for which the original shareholders gave up priority placement) to public investors online through the trading system of Shenzhen Stock Exchange, and stand-by underwriting of the part with the subscription amount less than RMB 573 million by lead underwriters. Capitals with a total amount of RMB 573,000,000.00 were raised, and the net capitals raised were RMB 565,436,509.42 after deduction of all the issuance costs amounting to RMB 7,563,490.58. The capitals arrived on March 13, 2019. Ruihua Certified Public Accountants (Special General Partnership) verified the arrival and issued the Capital Verification Report (RHYZ [2019] No. 48270001). | ||||||||||
(2) Non-public offering of shares to raise capitals in 2021
Shenzhen Topband Co., Ltd. issued 92,105,263 RMB common stocks to specific targets in private at the price of RMB 11.40 perstock, with a par value of RMB 1 per stock, with the approval in the Reply of China Securities Regulatory Commission on theApproval of Non-public Offering of Shares by Shenzhen Topband Co., Ltd. (ZJXK [2020] No. 1865). The total amount of fundsraised was RMB 1,049,999,998.20, and the net funds actually available for use were RMB 1,036,847,068.71 after deduction of allthe issuance costs amounting to RMB 13,152,929.49 (tax-exclusive).The funds were transferred to the Company's special account for raising funds on May 10, 2021.Baker Tilly China Certified PublicAccountants (Special General Partnership) verified the arrival and issued the Capital Verification Report (TZYZ [2021] No. 29460)for the capitals.
2. Usage amount and balance of funds raised in 2023
(1) Use of capitals raised by public issuing of convertible bonds in 2019
As of June 30, 2023, the Company has invested RMB 462.9401 million in capital-raising projects. Among them, RMB 436.7053million was directly invested in the capital-raising projects, and RMB 26.2348 million was returned before the raised capitals wereput in place. On June 30, 2023, RMB 100 million idle raised capitals have been used to temporarily supplement the working capital;as of June 30, 2023, the balance of the raised capitals account is RMB 9.1115 million (including interest income).
(2) Non-public offering of shares to raise capitals in 2022
As of June 30, 2023, the Company has invested RMB 462.9401 million in capital-raising projects. In particular, the funds directlyinvested in the fund-raising projects amounted to RMB 480,510,400, the funds invested before the capital raised were returned inplace RMB 45,398,700, and the funds used to pay for the fund-raising projects using bankers' acceptance bills and invested in thefund-raising projects with the capital raised in equal replacement RMB 57,080,500.On June 30, 2023, RMB 360 million of the idlecapital raised was used to temporarily supplement the working capital, and RMB 80 million of the idle capital raised used for cashmanagement; as of June 30, 2023, the balance of the fund-raising account was RMB 14,816,200 (including interest income).
(2) Situation of projects committed when raising capitals
? Applicable □ Not applicable
Unit: RMB ten thousand
| Committed investment projects and investment direction of over raised capitals | Whether the project has been changed (including some changes) | Total committed investment of raised capitals | Total investment after adjustment (1) | Amount invested during the reporting period | Accumulated investment by the end of the period (2) | Investment progress by the end of the period (3)=(2)/(1) | The date when the project is ready for use | Benefits achieved during the reporting period | Whether the expected benefits are achieved | Where there is any significant change in the feasibility of the project |
| Committed investment projects | ||||||||||
| Construction project of Topband East China Operation Center | No | 56,543.65 | 56,543.65 | 1,725.76 | 46,294.01 | 81.87% | Part of the project has been put into use | -1,075.12 | Not applicable | No |
| Topband Huizhou No. 2 Industrial Park Project | Yes | 73,684.71 | 12,684.71 | 0 | 4,539.87 | 35.79% | Not applicable | No | ||
| Topband Nantong Industrial Park Phase - I Stage - 1 Project | Yes | 0 | 61,000 | 17,663.64 | 23,759.09 | 38.95% | Not applicable | No | ||
| Replenish the Company's working capital | No | 30,000 | 30,000 | 0 | 30,000 | 100.00% | Not applicable | No | ||
| Subtotal of committed investment projects | -- | 160,228.36 | 160,228.36 | 19,389.4 | 104,592.97 | -- | -- | -1,075.12 | -- | -- |
| Investment direction of over raised capitals | ||||||||||
| None | ||||||||||
| Subtotal of investment of over-raised funds | -- | -- | -- | 0 | -- | -- | ||||
| Total | -- | 160,228.36 | 160,228.36 | 19,389.4 | 104,592.97 | -- | -- | -1,075.12 | -- | -- |
| Explanation of the situation and reasons of failing to reach the planned progress or expected income (by specific project) (including the reason for selecting "NA" for "whether the expected income has been achieved") | None | |||||||||
| Explanation of major changes in project feasibility | None | |||||||||
| Amount, use and progress of over raised capitals | Not applicable | |||||||||
| Change of implementation location of investment projects with raised capitals | Applicable | |||||||||
| Changes occurred in previous years | ||||||||||
| 1. On January 8, 2022, the Company held the 18th Meeting of the 7th Board of Directors, deliberated and passed the Proposal on Implementation Mode, Subject and Location of Changes in Some Capital-raising Projects, and agreed that the Company should change the implementation subject, location and mode of the lithium battery business in the planned project. Specifically, the implementation place was changed from Huizhou, Guangdong Province to Nantong, Jiangsu Province. 2. On August 18, 2022, the Company held the 27th (Extraordinary) Meeting of the 7th Board of Directors, deliberated and passed the Proposal on Changing Implementation Mode and Location Again in Some Capital-raising Projects, and agreed that the implementation mode and location of "Topband Nantong Industrial Park Phase - I Stage - 1 Project (Lithium Battery)", where the location was changed from "Area A, Nantong Free Trade Zone, Jiangsu" to "Nantong Economic & Technological Development Area, Jiangsu". | ||||||||||
| Adjustment of implementation mode of investment projects with raised capitals | Applicable | |||||||||
| Changes occurred in previous years | ||||||||||
| 1. On January 8, 2022, the Company held the 18th Meeting of the 7th Board of Directors, deliberated and passed the Proposal on Implementation Mode, Subject and Location of Changes in Some Capital-raising Projects, and agreed that the Company should change the implementation subject, location and mode of the lithium battery business in the planned project. Specifically, the implementation mode was changed from the land acquisition for building construction to the direct purchasing of building with infrastructure constructed. 2. On August 18, 2022, the Company held the 27th (Extraordinary) Meeting of the 7th Board of Directors, deliberated and | ||||||||||
| passed the Proposal on Changing Implementation Mode and Location Again in Some Capital-raising Projects, and agreed that the implementation mode and location of "Topband Nantong Industrial Park Phase - I Stage - 1 Project (Lithium Battery)", where the mode was changed from "the direct purchasing of plant with infrastructure constructed" to "the land acquisition for plant construction". | |
| Upfront investment and replacement of investment projects with raised capitals | Applicable |
| 1. The Company invested RMB 26.2348 million in advance in the operation center project of Topband East China with self-raised capitals. Ruihua Certified Public Accountants (special general partnership) conducts a special audit on the above matters, and issues the Authentication Report on the Report of Shenzhen Topband Co., Ltd. on the Investment Projects with Self-raised Capitals in Advance (RHHZ [2019] No. 48250027). On July 25, 2019, the 25th Meeting of the 5th Board of Directors of the Company deliberated and passed the Proposal on Using Raised Capitals to Replace Self-raised Capitals Invested in Advance. The Company had replaced the above pre-invested self-financing funds on August 1, 2019. 2. The Company invested RMB 45.3987 million in Topband Huizhou No. 2 Industrial Park Project with self-raised funds in advance. Baker Tilly China Certified Public Accountants (Special General Partnership) conducted a special audit on the matter above, and issued the Authentication Report of Pre-investment of Shenzhen Topband Co., Ltd. in the Investment Project of Funds Raised with Self-raised Funds (TZYZ [2021] No. 31911). The 10th Meeting of the 7th Board of Directors was held to review and approve the Proposal on Replacement of Pre-invested Self-raised Funds with Funds Raised on June 8, 2021.The Company had replaced the above pre-invested self-financing funds on June 10, 2021. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company all expressed their clear consent on the above matters. | |
| Temporary replenishment of working capital with idle capitals raised | Applicable |
| On December 19, 2022, the Company held the 30th Meeting of the 7th Board of Directors, deliberated and passed the Proposal on Temporarily Replenishing Working Capital with Some Idle Raised Capitals, and agreed that the Company should temporarily replenish working capital with no more than RMB 630 million of idle capitals raised, with a period of not more than 12 months. As of June 30, 2023, RMB 460 million of temporary supplementary current assets have been used. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company all expressed their clear consent on the matter. | |
| Amount and reasons of the balance of raised capitals in project implementation | Not applicable |
| Purpose and whereabouts of unused raised capitals | 1. On December 19, 2022, the Company held the 30th Meeting of the 7th Board of Directors, deliberated and passed the Proposal on Temporarily Replenishing Working Capital with Some Idle Raised Capitals, and agreed that the Company should temporarily replenish working capital with no more than RMB 630 million of idle capitals raised, with a period of not more than 12 months. As of June 30, 2023, RMB 460 million of temporary supplementary current assets have been used. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company all expressed their clear consent on the matter. 2. On March 31, 2023, the Company held the 32nd Meeting of the 7th Board of Directors, deliberated and passed the Proposal on Cash Management with Some Idle Raised Capitals and Self-own Funds, and agreed that the Company should purchase short-term principal-protected bank financial products with no more than RMB 100 million of idle raised capitals and no more than RMB 600 million of self-own funds. The capitals can be used on a rolling basis within the amount above. As of June 30, 2023, the Company had used 80 million of the idle capital raised for cash management. The Board of Supervisors, Independent Directors and Sponsor Institutions of the Company all expressed their clear consent on the matter.3. The remaining unused raised capitals are deposited in the Company's special account for raising funds. |
| Problems or other situations in the usage and disclosure of raised capitals | None |
(3) Change of projects with raised capitals
□ Applicable ? Not applicable
There was no project with changes in the capital raised during the reporting period.VII. Sale of major assets and equity
1. Sale of major assets
□ Applicable ? Not applicable
The Company did not sell any major assets during the reporting period.
2. Sale of major equity
□ Applicable ? Not applicable
VIII. Analysis of major holding and equity participating companies? Applicable □ Not applicableSituation of major subsidiaries and equity participating companies with an impact of 10% or more on net profitof the Company
Unit: RMB
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Huizhou Topband Electrical Technology Co., Ltd. | Subsidiary | R&D, production, sales, import and export of electronic components | 300 million | 4,301,091,394.12 | 1,804,196,804.15 | 2,775,847,022.04 | 162,684,234.43 | 153,255,743.25 |
| TOPBAND SMART DONG NAI (VIETNAM) COMPANY LIMITED | Sub-subsidiaries | R&D, production, sales, import and export of electronic components | USD 33.5 million | 681,828,540.06 | 347,064,393.30 | 329,758,117.85 | 66,398,134.18 | 66,399,774.68 |
Situation of acquisition and disposal of subsidiaries during the reporting period
□ Applicable ? Not applicable
Explanation of major shareholding companiesNone
IX. Situation of structured entity controlled by the Company
□ Applicable ? Not applicable
X. Risks faced by the Company and countermeasures
1. External risks such as the macro environment
Trade frictions and geopolitical tensions will also produce adverse influences on business confidence andinvestment. The Company may continue to face an uncertain external environment, so we will furtherstrengthen risk identification and control for various businesses and regions and adjust strategies timely tominimize external influences.
2. Risks of technology upgrading
The intelligent controller industry technology, as the main business of the Company, is developing rapidlywith fast product upgrading and short life cycle. Although the Company continues to invest in R&D and owns anumber of invention and utility patents, there is still a risk that the technology will not be updated in time tomeet market demand, or lag behind competitors in launching new products, resulting in a decline in the marketshare and profitability of the Company.
3. Exchange rate risk
The Company's revenue from export sales accounts for more than half of total revenue. In order to copewith the risk of exchangerate fluctuation, the Company will reduce and hedge foreign exchange risks byconducting RMB hedging business, international purchase and re-pricing of new product.
4. Other risks
There are many uncertainties in the current macro environment at home and abroad, and there are somefactors that are unfavorable to the operation of the Company. For example, the China-United States trade war,shortage of raw materials, rising price, insufficient labor and customer credit risk will increase the uncertaintyof the Company's operation.
Section IV Corporate GovernanceI. Information on the annual and extraordinary general meetings of shareholders heldduring the reporting period
1. Information on the General Meeting of Shareholders during the reporting period
| Meeting session | Meeting type | Investor participation ratio | Meeting date | Date of disclosure | Meeting resolution |
| 2022 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 25.27% | 2023/4/21 | 2023/4/22 | 1. Deliberated and passed the Proposal on 2022 Annual Report and Abstract; 2. Deliberated and passed the Proposal on 2022 Final Financial Report; 3. Deliberated and passed the Proposal on 2022 Profit Distribution Plan; 4. Deliberated and passed the Proposal on Formulating the Shareholders' Dividend Plan for the Next Three Years (2023-2025) of Shenzhen Topband Co. Ltd.; 5. Deliberated and passed the Proposal on 2022 Work Report of the Board of Directors; 6. Deliberated and passed the Proposal on 2022 Work Report of the Board of Supervisors; 7. Deliberated and passed the Proposal on Remuneration of Company Directors in 2022; 8. Deliberated and passed the Proposal on Remuneration of Company Supervisors in 2022; 9. Deliberated and passed the Proposal on Repurchase and Cancellation of Some Restricted Stocks from Restricted Stock Incentive Plan in 2021; 10. Deliberated and passed the Proposal on Application for Comprehensive Credit Line from Banks by the Company and Its Subsidiaries in 2023; 11. Deliberated and passed the Proposal on Renewing the Employment of Audit Institution in 2023. |
| The 1st Extraordinary General Meeting of Shareholders in 2023 | Extraordinary General Meeting of Shareholders | 24.12% | 2023/6/21 | 2023/6/22 | 1. Deliberated and passed the Proposal on Increasing the Company's Business Scope and Amending the Articles of Associations |
2. The preferred shareholders with restored voting rights request to convene an Extraordinary GeneralMeeting of Shareholders
□ Applicable ? Not applicable
II. Changes in directors, supervisors and senior executives
? Applicable □ Not applicable
| Name | Position | Type | Date | Reason |
| Xiang Wei | Chief financial officer | Outgoing | May 29, 2023 | Resignation |
| Luo Muchen | Chief financial officer | Appointment | May 30, 2023 | Appointment |
III. Profit distribution and conversion of capital accumulation fund to share capital in thereporting period
□ Applicable ? Not applicable
The Company plans not to pay cash dividend, to issue bonus shares, or to increase the share capital by capitalreserve for the first half.IV. Implementation of the Company's equity incentive plan, employee stock ownership planor other employee incentive measures? Applicable □ Not applicable
1. Equity incentive
Implementation of the restricted stock incentive plan in 2021:
(1) On September 20, 2021, the 13th (Extraordinary) Meeting of the 7th Board of Directors deliberated andpassed the Proposal on the Company's Restricted Stock Incentive Plan in 2021, and agreed to grant up to 34million restricted stocks to the incentive object. The shares of this plan come from the shares repurchased by theCompany's special repurchase account and the ordinary A shares issued by the Company to the incentive object.Among them, 14,838,920 shares in the Company's special repurchase securities account will be used as a sourceof some of the shares in the implementation of this plan, while the rest will be issued to the incentive object.The restricted period of the restricted stocks granted this time is 12 months, 24 months and 36 months from thedate of completion of the granting and registration of the restricted stocks, and the restricted stocks will be liftedat a ratio of 30%, 30% and 40%, respectively.
(2) The Company held the 14th Meeting of the 7th Board of Directors and the 11th Meeting of the 7thBoard of Supervisors on October 13, 2021, which deliberated and passed the Proposal on the Company'sRestricted Stock Incentive Plan in 2021 (Draft) and Its Abstract, the Proposal on the Appraisal ManagementMeasures for the Implementation of the Restricted Stock Incentive Plan in 2021, and the Proposal onRequesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Relatedto the Company's Restricted Stock Incentive Plan in 2021 and agreed to grant 34 million restricted stocks to
1,250 incentive objects. The 11th Meeting of the 7th Board of Supervisors of deliberated and passed relevantproposals and verified the list of incentive objects in this incentive plan. Independent directors expressedindependent opinions on this matter, and lawyers issued legal opinions.
(3) On October 15, 2021, the Company publicly announced the names and positions of the incentiveobjects in this incentive plan on the Company's internal OA office system, with a publicity period from October15, 2021 to October 24, 2021.No organization or individual raised any objection to the list of incentive objectsduring the publicity period. On October 26, 2021, the Company disclosed the Audit Opinions of the Board ofSupervisors on the List of Incentive Objects in the Restricted Stock Incentive Plan in 2021 and the Explanationof Publicity. The Board of Supervisors believed that the proposed incentive objects in this incentive plan did nothave the situation that relevant laws and regulations do not allow them to be the incentive objects, and met theparticipation qualifications within the scope of the incentive objects in this incentive plan.
(4) On November 1, 2021, the Company held the 2nd Extraordinary General Meeting of Shareholders,which deliberated and passed the Proposal on the Company's Restricted Stock Incentive Plan in 2021 (Draft)and Its Abstract, the Proposal on the Appraisal Management Measures for the Implementation of the RestrictedStock Incentive Plan in 2021, and the Proposal on Requesting the General Meeting of Shareholders toAuthorize the Board of Directors to Handle Matters Related to the Company's Restricted Stock Incentive Planin 2021 and other relevant proposals related to the Incentive Plan, and authorized the Board of Directors todetermine the grant date under the Incentive Plan, grant restricted stocks to incentive objects when they met theconditions and handle all matters required for the grant of restricted stocks.
(5) On November 2, 2021, the Company held the 16th (Extraordinary) Meeting of the 7th Board ofDirectors and the 13th (Extraordinary) Meeting of the 7th Board of Supervisors, which deliberated and passedthe Proposal on Adjusting the Number of Stock Options Granted under the Restricted Stock Incentive Plan in2021 and List of Incentive Objects and the Proposal on Granting Restricted Stocks to Incentive Objects. In viewof the dimission of the incentive object Ou Li specified in the Incentive Plan and the fact that Wang Cheng,Shen Zhiwen and Tian Conghui et al. voluntarily gave up the subscription of restricted stocks to be granted bythe Company for personal reasons, the Board of Directors of the Company decided to cancel the restrictedstocks to be granted to them. After the cancellation, the number of restricted stocks to be granted under theIncentive Plan was reduced from 34 million to 33.951 million, and the number of incentive objects decreasedfrom 1,250 to 1,246. November 2, 2021 was determined as the grant date, and 33.951 million restricted stocks
were granted to 1,246 eligible incentive objects. The Board of Supervisors of the Company reviewed the list ofincentive objects, and independent directors expressed their independent opinions and lawyers issued legalopinions.
(6) On December 7, 2021, the Company held the 17th (Extraordinary) Meeting of the 7th Board ofDirectors and the 14th (Extraordinary) Meeting of the 7th Board of Supervisors, which deliberated and passedthe Proposal on Adjusting the Number of Stock Options Granted under the Restricted Stock Incentive Plan in2021 and List of Incentive Objects. In view of the fact that 22 incentive objects such as Li Xiang, Yu Dingguoand Lu Yuanshan specified in the Incentive Plan voluntarily gave up their subscription of all the restrictedstocks granted to them for personal reasons and 10 incentive targets such as Liao Xinmeng, Wang Cao and LiuXiaoshi voluntarily gave up their subscription of some of the restricted stocks granted to them for personalreasons in the process of capital payment before share registration after the Board of Directors of the Companyconfirmed November 2, 2021 as the grant date under the Restricted Stock Incentive Plan in 2021, the Board ofDirectors of the Company adjusted the objects and the number of shares granted under the Restricted StockIncentive Plan in 2021 according to the authorization of the 2nd Extraordinary General Meeting of Shareholdersof the Company in 2021.After adjustment, the number of incentive objects under the Restricted Stock IncentivePlan in 2021 decreased from 1,246 to 1,224, and the number of restricted stocks granted decreased from 33.951million to 33.54432 million. The Board of Supervisors of the Company reviewed the list of incentive objects,and independent directors expressed their independent opinions and lawyers issued legal opinions.
(7) On December 16, 2021, upon review and confirmation by the Shenzhen Stock Exchange and ShenzhenBranch of China Securities Depository and Clearing Co., Ltd., the Company completed the granting andregistration of 187,054 million restricted stocks (new shares) and 14,838,920 restricted stocks (repurchasedshares) involved in the restricted stock incentive plan in 2021. The above shares were listed on December 17,2021.
(8) On March 30, 2022, the 23rd (Extraordinary) Meeting of the 7th Board of Directors deliberated andpassed the Proposal on the Proposal on Repurchase and Cancellation of Some Restricted Stocks from RestrictedStock Incentive Plan in 2021, and agreed to repurchase and cancel 201,000 restricted stocks that have beengranted but not yet unlocked of 10 incentive objects, including Wu Song and Luo Qingshan in the restrictedstock incentive plan in 2021, who resigned from the Company due to personal reasons. The above matters hadbeen deliberated and passed by the 2021 Annual General Meeting of Shareholders.
(9) On July 25, 2022, the 26th Meeting of the 7th Board of Directors and the 22nd Meeting of the 7thBoard of Supervisors deliberated and passed the Proposal on Adjusting the Repurchase Price of RestrictedStock Incentive Plan in 2021. The 2021 annual equity distribution plan was implemented, and the repurchaseprice was adjusted from RMB 7.23 per share to RMB 7.18 per share accordingly.
(10) On August 18, 2022, the 27th (Extraordinary) Meeting of the 7th Board of Directors and the 22nd(Extraordinary) Meeting of the 7th Board of Supervisors deliberated and passed the Proposal on the Proposal onRepurchase and Cancellation of Some Restricted Stocks from Restricted Stock Incentive Plan in 2021, andagreed to repurchase and cancel 1.291 million restricted stocks that have been granted but not yet unlocked of66 incentive objects, including Wei Yin and Li Xinwei in the restricted stock incentive plan in 2021, whoresigned from the Company due to personal reasons. The above matters had been deliberated and passed by the2nd Extraordinary General Meeting of Shareholders in 2022.
(11) On November 23, 2022, the 28th (Extraordinary) Meeting of the 7th Board of Directors and the 23rd(Extraordinary) Meeting of the 7th Board of Supervisors deliberated and passed the Proposal on AdjustingCorporate-level Performance Evaluation Indicators of Restricted Stock Incentive Plan in 2021, and agreed toadjust the corporate-level performance evaluation indicators of restricted stock incentive plan in2021.Independent directors expressed independent opinions, the law firm issued legal opinions, and affiliateddirectors recused themselves from voting. The above matters had been deliberated and passed on the ThirdExtraordinary General Meeting of Shareholders in 2022.
(12) On December 27, 2022, given that 76 incentive objects, including Wu Song, Luo Qingshan, Wei Yinand Li Xinwei in the restricted stock incentive plan in 2021, resigned from the Company due to personalreasons and no longer met the conditions of becoming the incentive object, their restricted stocks that have beengranted but not unlocked could not be unlocked and would be canceled after being repurchased by the Company.The above repurchase and cancellation matters were completed on December 27, 2022.After the repurchase andcancellation, the number of incentive objects in the restricted stock incentive plan in 2021 reduced from 1,224to 1,148, and the general capital reduced from 1,271,027,372 shares to 1,269,535,372 shares.
(13) On March 29, 2023, the 32nd Meeting of the 7th Board of Directors and the 27th Meeting of the 7thBoard of Supervisors, deliberated and passed the Proposal on Fulfillment of Restricted Share ReleaseConditions for 2021 Restricted Stock Incentive Plan after the First Restricted Stock Trade Period and Proposalon Repurchase and Cancellation of Some Restricted Stocks from Restricted Stock Incentive Plan in 2021.
9,351,936 shares granted to 1,109 people under the 2021 Incentive Plan can be released after the first restrictedstock trade period. Meanwhile, 39 people, including Li Chaoyi, Wang Caihui and Ding Bo, resigned and left theCompany due to personal reasons, and four of the grantees, including Tang Yingjie and Shi Wenhui, of theincentive plan achieved a "Good" or "OK" level in the performance appraisal, resulted in the release of 80% ofthe restricted stock. It was approved to repurchase and deregister a total of 870,660 restricted shares formerlyowned by the above 43 people that shall not be released. An independent director of the Company given hisindependent opinion for the approval, and the law firm issued the corresponding legal opinion.
(14) On April 25, 2023, the 33rd Meeting of the 7th Board of Directors and the 28th Meeting of the 7thBoard of Supervisors deliberated and passed the Proposal on Adjusting the Repurchase Price of RestrictedStock Option Incentive Plan in 2021.Due to the equity distribution of the Company for the year 2022, therepurchase price of Restricted Stock was adjusted from RMB 7.18 to RMB 7.12 in accordance with (I)Adjustment method of repurchase price in Chapter XVI Principles for Repurchase and Deregistration ofRestricted Stock in the 2021 Restricted Stock Incentive Plan (Draft Amendment).The Board of Supervisorsreviewed the adjustment procedure, an independent director of the Company gave his independent opinion forthe approval, and the law firm issued the corresponding legal opinion.For details of the implementation of the restricted stock incentive plan in 2021, please refer to theCompany's announcements on Securities Times and CNINFO (http://www.cninfo.com.cn) on September 22,2021, October 14, 2021, November 2, 2021, November 3, 2021, December 9, 2021, December 16, 2021,December 20, 2021, March 31, 2022, July 26, 2022, August 19, 2022, September 24, 2022, December 28, 2022,March 31, 2023, and April 26, 2023.
2. Implementation of employee stock ownership plan
□ Applicable ? Not applicable
3. Other employee incentives
□ Applicable ? Not applicable
Section V Environmental and Social ResponsibilityI. Major environmental issuesWhether the listed companies and their subsidiaries were key pollutant discharging organizations announced bythe Environmental Protection Department
□ Yes ? No
Administrative punishment for environmental problems during the reporting period
| Name of the Company or its subsidiaries | Reason for punishment | Description of violation | Punishment | Impacts on production and operation of the Company | Rectification measures of the Company |
| Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable |
Refer to other environmental information disclosed by key pollutant discharge companiesDuring the production of the Company, there are no heavy pollutions. The Company has always paidattention to its social public image, considers environmental protection as an important part of its corporationsocial responsibilities, and makes ensure that industrial solid wastes are effectively disposed of in accordancewith regulations and the discharge of pollutants meets the national environmental protection standards.The Company has passed the ISO14001:2015 environmental management system certification, alsoimplements the HSPMQC080000 hazardous substances process management system, and has established aseries of procedure documents in respect of environmental factor identification and evaluation, environmentalmonitoring and measurement management, environmental communication management, treatment and controlof wastewater/exhaust gas/solid wastes, identification and control of hazardous substances, etc. to specify theenvironmental protection organization and responsibilities under the environmental management system of theCompany. The certification of the system and the establishment of the related supporting systems by theCompany indicate that it has achieved institutionalized and practicable arrangements in environmentalprotection.Measures and effects taken to reduce carbon emissions during the reporting period
□ Applicable ? Not applicable
Reasons for not disclosing other environmental informationNot applicable
II. Social responsibilityNot applicable
Section VI Important Matters
I. Completed commitments in the reporting period and uncompleted commitments withinthe time limit by the end of the reporting period by the Company's actual controller,shareholders, related parties, acquirers, the Company and other committed related parties
? Applicable □ Not applicable
| Reasons for commitments | Commitment Party | Commitment type | Commitment content | Commitment time | Commitment period | Performance |
| Commitments made during the initial public offering or refinancing | Wu Yongqiang | Commitments to horizontal competition | Mr. Wu Yongqiang, the actual controller of the Company, has promised that during the period of being the controlling shareholder and/or actual controller of the Company, he would not directly or indirectly engage in any business which was the same, similar or substantially competitive with the main business of the Company at present and in the future. | 2007/6/12 | Long-term performance | Fulfill the commitment strictly |
| Ji Shuhai | Commitments to horizontal competition | Ji Shuhai, a director of the Company as a shareholder, has promised not to directly or indirectly engage in any business which was the same, similar or substantially competitive with the main business of the Company at present and in the future in any way during his term of office. | 2007/6/12 | Long-term performance | Fulfill the commitment strictly | |
| All directors and senior executives of the Company | Other commitments | 1. I would not deliver benefits to other organizations or individuals free of charge or under unfair conditions and not damage the interests of the Company in other means.2. I fully supported and cooperated with the Company in regulating the duty consumption behavior of directors and senior executives. Any duty consumption behaviors would occur within the scope necessary for fulfilling my duty to the Company. I strictly accepted the supervision and management of the Company to avoid extravagance or excessive consumption.3. I would strictly abide by the relevant laws and regulations, the regulations and rules of the CSRC, the stock exchange and other regulatory institutions as well as the requirements of the Company's rules and regulations on the code of conduct of directors and senior executives. Besides, I would not use the | 2020/4/29 | On-going | Fulfill the commitment strictly |
| Company's assets to engage in investment and consumption activities unrelated to the performance of my duties.4. I would try my best to make the Company implement the compensation demand return measures.5. I would work hard to link the compensation system formulated by the Board of Directors or the Compensation Committee with the implementation of the Company's compensation return measures. At the same time, I would vote in favor of the compensation system proposal when the Board of Directors and the General Meeting of Shareholders of the Company deliberated (if I have vote/voting right). 6. If the Company would implement the employee equity incentive in the future, I would fully support the Company to link the arrangement of exercise conditions of the employee incentive with the implementation of the Company's compensation return measures. At the same time, I would vote in favor of the employee equity incentive proposal when the Board of Directors and the General Meeting of Shareholders of the Company deliberated (if I have vote/voting right).7. If I violate the above commitments, I would make an explanation and apologize publicly at the General Meeting of Shareholders and the designated newspapers and magazines designated by the CSRC. I voluntarily accept the self-discipline supervision measures taken by the stock exchange and China Association for Public Companies. If my breach of the commitment causes losses to the Company or the shareholders, I shall be liable for compensation in accordance with the law. | |||||
| Wu Yongqiang | Other commitments | 1. I would not abuse the position of the controlling shareholder/actual controller to interfere with the operation and management activities of the Company beyond my power and would not infringe the Company's interests under any circumstances.2. I would try my best to make the Company implement the compensation demand return measures.3. I would work hard to link the compensation system formulated by the Board of Directors or the | 2020/4/29 | On-going | Fulfill strictly |
| Compensation Committee with the implementation of the Company's compensation return measures.4. I would work hard to link the exercise conditions (if any) of the corporate equity incentive to be published in the future with the implementation of the Company's compensation return measures.5. I would support the relevant proposals related to the implementation of the Company's compensation return measures and would vote for them (if I have voting right).6. After the issuance of this commitment, if there are other requirements in the relevant provisions of the regulatory institution on the compensation return measures and its commitment and the above commitments could not meet the relevant requirements of the regulatory institution, I promise that I would issue a supplementary commitment in accordance with the relevant provisions at that time.7. If I violate the above commitments, I would make an explanation and apologize publicly at the General Meeting of Shareholders and the designated newspapers and magazines designated by the CSRC. I voluntarily accept the self-discipline supervision measures taken by the stock exchange and China Association for Public Companies. If my breach of the commitment causes losses to the Company or the shareholders, I shall be liable for compensation in accordance with the law. | |||
| Whether the commitment was fulfilled on schedule | Yes | ||
| If the commitment was not fulfilled within the time limit, the specific reasons for the failure and the next work plan shall be explained in detail. | Not applicable | ||
II. Non-operating capital occupation of listed companies by controlling shareholders andtheir related parties
□ Applicable ? Not applicable
There was no non-operating capital occupation of listed companies by controlling shareholders and their relatedparties in the reporting period of the Company.
III. External guarantee in violation of regulations
□ Applicable ? Not applicable
The Company had no external guarantee in violation of regulations during the reporting period.
IV. Appointment and dismissal of accounting firms
Whether the half-year financial statements have been audited
□ Yes ? No
The half-year financial statements of the Company have not been audited.
V. Explanation of the "non-standard audit report" of the Accounting Firm in the reportingperiod by the Board of Directors and the Board of Supervisors
□ Applicable ? Not applicable
VI. Explanation of the Board of Directors on the "non-standard audit report" of theprevious year
□ Applicable ? Not applicable
VII. Matters related to bankruptcy reorganization
□ Applicable ? Not applicable
There were no matter related to bankruptcy reorganization during the reporting period.VIII. Lawsuit
Major litigation and arbitration matters
□ Applicable ? Not applicable
The Company had no major litigation and arbitration matters during the reporting period.Other lawsuits
□ Applicable ? Not applicable
IX. Punishment and rectification
□ Applicable ? Not applicable
X. Integrity condition of the Company, its controlling shareholders and actual controllers
□ Applicable ? Not applicable
XI. Major related transactions
1. Related transactions connected with the daily operation
□ Applicable ? Not applicable
The Company had no related transactions connected with daily operations during the reporting period.
2. Related transactions arising from acquisition and sale of assets or equity
□ Applicable ? Not applicable
The Company had no related transaction of acquisition or sale of assets or equity during the reporting period.
3. Related transactions of joint foreign investment
□ Applicable ? Not applicable
The Company had no related transaction of joint foreign investment during the reporting period.
4. Related creditor's right and debt transaction
□ Applicable ? Not applicable
The Company had no related creditor's right and debt transaction during the reporting period.
5. Transactions with associated financial companies
□ Applicable ? Not applicable
There was no deposit, loan, credit extension or other financial business between the Company and its relatedfinancial companies or between the related parties.
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable ? Not applicable
There was no deposit, loan, credit or other financial business between financial companies controlled by theCompany and related parties.
7. Other major related transactions
□ Applicable ? Not applicable
On January 12, 2023, the 31st Meeting of the 7th Board of Directors deliberated and passed the Proposalfor Conclusion of a Procurement Framework Agreement with Shenzhen Jizhiguang Electronics Co., Ltd.; as ofthe end of the reporting period, the amount or the expected amount of the contracts concluded for the routinerelated party transactions of the Company were below the amount deliberated and passed.Relevant inquires on websites where temporary reports on major related party transactions were disclosed
| Title of temporary notice | Disclosure date of temporary notice | Name of website with temporary notice disclosed |
| Notice on Expected Routine Related Party Transactions in 2023 | January 14, 2023 | CNINFO (http://www.cninfo.com.cn) |
XII. Major contracts and their performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable ? Not applicable
The Company had no trusteeship during the reporting period.
(2) Contracting
□ Applicable ? Not applicable
The Company had no contracting during the reporting period.
(3) Lease
□ Applicable ? Not applicable
The Company had no lease during the reporting period.
2. Material guarantee
? Applicable □ Not applicable
Unit: RMB ten thousand
| External guarantee of the Company and its subsidiaries (excluding guarantee for subsidiaries) | |||||||||||
| Name of guarantee object | Date of disclosure of the relevant announcement of guarantee amount limit | Guarantee amount limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Whether it was completed | Whether the guarantee objects were related parties | |
| Not applicable | |||||||||||
| Total amount of guarantees provided for external parties approved in the reporting period (A1) | 0 | Total incurred amount of actual guarantees provided for external parties in the reporting period (A2) | 0 | ||||||||
| Total amount of external guarantee approved at the end of the reporting period (A3) | 0 | Total actual balance of external guarantee at the end of the reporting period (A4) | 0 | ||||||||
| Guarantee of the Company to its subsidiaries | |||||||||||
| Name of guarantee object | Date of disclosure of the relevant announcement of guarantee amount limit | Guarantee amount limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Whether it was completed | Whether the guarantee objects were related parties | |
| Ningbo Topband | 2019/1/12 | 19,000 | 0 | Joint liability guaranty | The tentative guarantee period shall not exceed 5 years from the date of signing the formal guarantee agreement | No | No | ||||
| Ningbo Topband | 2020/10/20 | 22,000 | 2020/11/5 | 22,000 | Joint liability guaranty | Additional 3 years from effective date of guarantees to date of borrowing or maturity date of debts or date of advances | No 1 | No | |||
| Total amount of guarantee for subsidiaries approved | 0 | Total actual amount of guarantee for | 0 | ||||||||
| during the reporting period (B1) | subsidiaries during the reporting period (B2) | |||||||||
| Total amount of approved guarantee for subsidiaries at the end of the reporting period (B3) | 41,000 | Total actual balance of guarantee for subsidiaries at the end of the reporting period (B4) | 0 | |||||||
| Guarantee of the Company to its subsidiaries | ||||||||||
| Name of guarantee object | Date of disclosure of the relevant announcement of guarantee amount limit | Guarantee amount limit | Actual date of occurrence | Actual guarantee amount 2 | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Whether it was completed | Whether the guarantee objects were related parties |
| Huizhou YAKO Automation | 2023/1/11 | 20,000 | 2023/1/16 | 2,146.20 | Joint liability guaranty | 3 years from maturity date of debts of guaranteed parties | No | No | ||
| Huizhou YAKO Automation | 2023/1/11 | 20,000 | 2023/4/24 | 858.48 | Joint liability guaranty | 3 years from maturity date of debts of guaranteed parties | No | No | ||
| Huizhou YAKO Automation | 2023/1/11 | 20,000 | 2023/6/29 | 1,430.80 | Joint liability guaranty | 3 years from maturity date of debts of guaranteed parties | No | No | ||
| Total amount of guarantee for subsidiaries approved during the reporting period (C1) | 20,000 | Total actual amount of guarantee for subsidiaries during the reporting period (C2) | 4,435.48 | |||||||
| Total amount of approved guarantee for subsidiaries at the end of the reporting period (C3) | 20,000 | Total actual balance of guarantee for subsidiaries at the end of the reporting period (C4) | 4,435.48 | |||||||
| Total amount of the corporate guarantee (i.e. the sum of the first three items) | ||||||||||
| Total amount of guarantees approved in the reporting period (A1+B1+C1) | 20,000 | Total incurred amount of actual guarantees provided in the reporting period (A2+B2+C2) | 4,435.48 | |||||||
| Total amount of guarantee approved at the end of the reporting period (A3+B3+C3) | 61,000 | Total actual balance of guarantee at the end of the reporting period (A4+B4+C4) | 4,435.48 | |||||||
| The proportion of the total actual amount of guarantee (A4+B4+C4) in the Company's net assets | 0.73% | |||||||||
| Including: | ||||||||||
| Balance amount of guarantees provided to shareholders, real controlling parties and their related | 0 | |||||||||
| parties (D) | |
| Balance amount of debt guarantees directly or indirectly provided to guaranteed parties with debt-to-asset ratio above 70% (E) | 0 |
| Amount of guarantees with total amount guaranteed exceeding 50% of net assets (F) | 0 |
| Total amount of above 3 items of guarantees (D+E+F) | 0 |
| Note on liabilities to guarantee or evidence suggested possible joint liabilities for debt settlement in the reporting period incurred from unmatured guarantee contracts (if any) | None |
| Note on guarantees provided to external parties against the specified procedure (if any) | None |
Note: 1. The bank loan involved in the guarantee the Company provided to its subsidiary Ningbo Topbandhas been repaid; however the bank line is still in the valid period, and if a guarantee emerges due to withdrawalsunder the bank credit line later, the Company will perform the related obligations for information disclosure in atimely manner.
2. According to relevant provisions in "3. Significant guarantees under III. Requirements for informationdisclosure in regular reports (V)" of Disclosure of Significant Events in the Self-Discipline and SupervisionGuidance 1 for Companies Listed in Shenzhen Stock Exchange - Transactions, Part IV: 4.1 Issues ConcerningDisclosures in Regular Reports (Revised in 2023), the "Actual amount guaranteed" in the "Subsidiary-to-subsidiary guarantees" shall be filled with the product of the amount a subsidiary guaranteed for the guaranteedsubsidiary multiplied by the share proportion of the listed company in the subsidiary.Explanation of details of complex guaranteeNone
3. Finance management agent
? Applicable □ Not applicable
Unit: RMB ten thousand
| Specific types | Capital source of entrusted financing | Amount of entrusted financial management | Unexpired balance | Overdue amount not recovered | Accrued impairment amount of overdue and unrecovered wealth management |
| Bank financial products | Self-own capitals | 4,389.63 | 568.72 | 0 | 0 |
| Total | 4,389.63 | 568.72 | 0 | 0 | |
Specific situation of high-risk entrusted financial management with the significant single amount or lowsecurity and poor liquidity
□ Applicable ? Not applicable
Entrusted financial management was expected to be unable to recover the principal or there were othersituations that may lead to impairment
□ Applicable ? Not applicable
4. Others major contracts
□ Applicable ? Not applicable
There were no other significant contracts in the reporting period of the Company.XIII. Explanation of other major matters
? Applicable □ Not applicable
1. Circulating of released restricted shares after the first restricted stock trade period of 2021Restricted Stock Incentive Plan
On March 29, 2023, the 32nd Meeting of the 7th Board of Directors and the 27th Meeting of the 7th Boardof Supervisors of the Company deliberated and passed the Proposal on Fulfillment of Restricted Share ReleaseConditions for 2021 Restricted Stock Incentive Plan after the First Restricted Stock Trade Period. 9,351,936shares granted to 1,109 people under the 2021 Incentive Plan can be released after the first restricted stock tradeperiod, and the shares released have been listed and circulated on April 12, 2023.
Refer to the notices the Company disclosed on the Securities Times and http://www.cninfo.com.cn onMarch 31, 2023 and April 7, 2023 respectively for details.XIV. Major matters of subsidiaries of the Company? Applicable □ Not applicable
1. Land use right acquired through competitive auction by Huizhou Topband Electrical TechnologyCo., Ltd., a wholly-owned subsidiary of the Company
In February 2023, Huizhou Topband Electrical Technology Co., Ltd., a wholly-owned subsidiary of the
Company, participated in the competitive auction for the use right of a state-owned construction land organizedvia the on-line land and mining trading system of Huizhou Public Resources Trading Center, successfullyacquired the use right of the land lot concerned, and signed an Acknowledgment of Public Trading Transactionand a Sales Contract for State-owned Construction Land Use Right with Huizhou Bureau of Natural Resourcesfor the land use right of total 19,590 m2 state-owned construction land, amounting to RMB 18.57 million.
Refer to the notice the Company disclosed on the Securities Times and http://www.cninfo.com.cn onFebruary 21, 2023 for details.
2. Land use right acquired through competitive auction by Nantong Topband Youneng TechnologyCo., Ltd., a wholly-owned sub-subsidiary of the Company
In March 2023, Nantong Topband Youneng Technology Co., Ltd., a wholly-owned sub-subsidiary of theCompany, participated in the competitive auction for the use right of a state-owned construction land organizedby Nantong Bureau of Natural Resources and Planning, successfully acquired the use right of the land lotconcerned, signed an Acknowledgment of On-line Transaction of State-owned Construction Land and aNantong Economic and Technological Development Area Investment and Development Supervision Agreementand then entered into a Sales Contract for State-owned Construction Land Use Right with Nantong Bureau ofNatural Resources and Planning within the specified time for the land use right of total 80,017.05 m3 state-owned construction land, amounting to RMB 30.7265 million.
Refer to the notice the Company disclosed on the Securities Times and http://www.cninfo.com.cn on April6, 2023 for details.
Section VII Share Change and Shareholders
I. Share change
1. Share change
Unit: Share
| Before this change | Increase or decrease of change this time (+, -) | After this change | |||||||
| Quantity: | Proportion | Issuance of new shares | Stock dividend | Conversion of accumulation fund into shares | Others | Subtotal | Quantity: | Proportion | |
| I. Shares with non-tradable conditions | 229,172,867 | 18.05% | -9,993,811 | -9,993,811 | 219,179,056 | 17.26% | |||
| 1. Shares held by the state | 0.00% | ||||||||
| 2. Shares held by state-owned legal persons | 0.00% | ||||||||
| 3. Shares held by other domestic capital | 229,061,867 | 18.04% | -9,960,511 | -9,960,511 | 219,101,356 | 17.25% | |||
| Including: shares held by domestic legal persons | 0.00% | ||||||||
| Shares held by domestic natural person | 229,061,867 | 18.04% | -9,960,511 | -9,960,511 | 219,101,356 | 17.25% | |||
| 4. Shares held by foreign investment | 111,000 | 0.01% | -33,300 | -33,300 | 77,700 | 0.01% | |||
| Including: shares held by overseas legal persons | 0.00% | ||||||||
| Shares held by overseas natural persons | 111,000 | 0.01% | -33,300 | -33,300 | 77,700 | 0.01% | |||
| II. Shares with unlimited tradable conditions | 1,040,362,505 | 81.95% | 9,993,811 | 9,993,811 | 1,050,356,316 | 82.74% | |||
| 1. A shares | 1,040,362,505 | 81.95% | 9,993,811 | 9,993,811 | 1,050,356,316 | 82.74% | |||
| 2. Domestic listed foreign shares | 0.00% | ||||||||
| 3. Overseas listed foreign shares | 0.00% | ||||||||
| 4. Others | 0.00% | ||||||||
| III. Total number of shares | 1,269,535,372 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,269,535,372 | 100.00% |
Reasons for share change
□ Applicable ? Not applicable
Approval of share change
□ Applicable ? Not applicable
Transfer of share change
□ Applicable ? Not applicable
Implementation progress of share repurchase? Applicable □ Not applicable
On March 18, 2022, the 21st Meeting of the 7th Board of Directors and the 17th Meeting of the 7th Boardof Supervisors of the Company deliberated and passed the Proposal on Topband Shares Repurchase Plan thatthe Company decided to repurchase its shares at a price no more than RMB 16.00/share (inclusive) throughcentralized bidding with its own fund no less than RMB 40 million and no more than RMB 60 million in total,and the Company disclosed the Stock Repurchase Report on March 22, 2022. Refer to the notice the Companydisclosed on the Securities Times and http://www.cninfo.com.cn for details.On March 17, 2023, the Company accumulatively repurchased 5,181,200 shares through centralizedbidding with RMB 52,434,493.65 in total (excluding the transaction charge), accounting to 0.4081% of thecurrent total stock of the Company, with the highest transaction price at RMB 13.48/share and the lowesttransaction price at RMB 7.93/share. The Repurchase Plan was completed.Progress in the implementation of the reduction of share repurchase through centralized bid
□ Applicable ? Not applicable
The impact of share changes on financial indicators such as basic earnings per share and diluted earnings pershare in the latest year and the latest period, net assets per share attributable to ordinary shareholders of theCompany, etc.
□ Applicable ? Not applicable
Other contents deemed necessary by the Company or required to be disclosed by the securities regulatoryinstitution
□ Applicable ? Not applicable
2. Changes in non-tradable shares
? Applicable □ Not applicable
Unit: Share
| Name of shareholder | Number of non-tradable | Desterilization number of non-tradable | Increase number of non- | Number of non-tradable shares at the | Reasons for non-trading | Date of lifting sales restriction |
| shares at the beginning of the period | shares in the current period | tradable shares in the current period | end of the period | |||
| Wu Yongqiang | 160,336,536 | 1,330,0001 | 0 | 159,006,536 | Executives lock-in shares | Not applicable |
| Ji Shuhai | 20,488,981 | 0 | 0 | 20,488,981 | Executives lock-in shares | Not applicable |
| Ma Wei | 6,713,200 | 184,800 | 184,800 | 6,713,200 | Lock-up shares for executives and incentive restricted stock options | Not applicable |
| Peng Ganquan | 3,852,674 | 120,000 | 120,000 | 3,852,674 | Lock-up shares for executives and incentive restricted stock options | Not applicable |
| Zheng Sibin | 4,752,727 | 159,900 | 159,900 | 4,752,727 | Lock-up shares for executives and incentive restricted stock options | Not applicable |
| Wen Zhaohui | 2,078,345 | 54,900 | 54,900 | 2,078,345 | Lock-up shares for executives and incentive restricted stock options | Not applicable |
| Xiang Wei | 573,375 | 54,900 | 166,025 | 684,500 | Lock-up shares for executives and incentive restricted stock options | Not applicable |
| Luo Muchen | 50,000 | 15,000 | 2,500 | 37,500 | Lock-up shares for executives and incentive restricted stock options | Not applicable |
| Dai Huijuan | 239,709 | 0 | 0 | 239,709 | Executives lock-in shares | Not applicable |
| Incentive objects of restricted stock incentive plan | 30,087,320 | 8,762,436 | 0 | 21,324,884 | Stock-option-incentive restricted stocks | The restricted stock options will be released based on the results of performance appraisal during 2023 and 2025. |
| Total | 229,172,867 | 10,681,936 | 688,125 | 219,179,056 | -- | -- |
Note 1: Mr. Wu Yongqiang's lifted restricted stocks in this period are due to the securitiescompany's system's failure to timely handle the lifting of restrictions on sales during the process oftransferring shares to pledge in 2022, however, these shares are automatically be lifted from restrictionson sales after expiration in the first half of 2023.
II. Issuance and listing of securities
□ Applicable ? Not applicable
III. Number of shareholders and shareholding situation of the Company
Unit: Share
| Total number of ordinary shareholders at the end of the reporting period | 88,351 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (see Note 8) | 0 | |||||
| Shareholding situation of ordinary shareholders holding more than 5% or top 10 ordinary shareholders | ||||||||
| Name of shareholder | Nature of shareholders | Proportion of shareholding | Number of ordinary shares held at the end of the reporting period | Changes in increase or decrease in the reporting period | Number of ordinary shares with limited tradable conditions | Number of ordinary shares with unlimited tradable conditions | Pledge, marking or freezing | |
| Share status | Quantity: | |||||||
| Wu Yongqiang | Domestic natural person | 16.70% | 212,008,715 | 0 | 159,006,536 | 53,002,179 | Pledge | 40,000,000 |
| Hong Kong Securities Clearing Company Ltd. | Overseas legal person | 4.04% | 51,318,356 | 12,382,413 | 0 | 51,318,356 | ||
| Xie Renguo | Domestic natural person | 2.23% | 28,330,788 | 5,352,400 | 0 | 28,330,788 | ||
| Ji Shuhai | Domestic natural person | 2.15% | 27,318,642 | 0 | 20,488,981 | 6,829,661 | ||
| AMCM - self-own funds | Overseas legal person | 1.46% | 18,519,806 | 10,817,380 | 0 | 18,519,806 | ||
| Kuwait Investment Authority | Overseas legal person | 0.98% | 12,464,693 | 8,298,043 | 0 | 12,464,693 | ||
| China International Capital Corporation Limited - China Construction Bank - CICC Emerging Equity Collective Asset Management Plan | Others | 0.92% | 11,714,425 | 146,900 | 0 | 11,714,425 | ||
| Dajia Life Insurance Co., Ltd. - Universal Product | Others | 0.84% | 10,688,700 | -2,239,100 | 0 | 10,688,700 | ||
| Industrial and Commercial Bank of China - Yinhua Xinsheng Mixed Securities Investment Fund with Flexible Configuration (LOF) | Others | 0.71% | 8,964,325 | 8,964,325 | 0 | 8,964,325 | ||
| Ma Wei | Domestic natural person | 0.71% | 8,950,934 | 0 | 6,713,200 | 2,237,734 | ||
| The top 10 ordinary shareholders of strategic investors or general legal persons due to placement of new shares (if any) (see Note 3) | Not applicable | |||||||
| Explanation of the above shareholders' relationship or concerted action | Not applicable | |||
| Explanation of the above shareholders' entrusting/entrusted voting rights and waiver of voting rights | Not applicable | |||
| Special explanations for the existence of special repurchase accounts among the top 10 shareholders (if any) (see Note 11) | Not applicable | |||
| Shareholding of the top 10 ordinary shareholders with unlimited tradable conditions | ||||
| Name of shareholder | Number of ordinary shares held with unlimited tradable conditions at the end of the reporting period | Type of shares | ||
| Type of shares | Quantity: | |||
| Wu Yongqiang | 53,002,179 | A shares | 53,002,179 | |
| Hong Kong Securities Clearing Company Ltd. | 51,318,356 | A shares | 51,318,356 | |
| Xie Renguo | 28,330,788 | A shares | 28,330,788 | |
| AMCM - self-own funds | 18,519,806 | A shares | 18,519,806 | |
| Kuwait Investment Authority | 12,464,693 | A shares | 12,464,693 | |
| China International Capital Corporation Limited - China Construction Bank - CICC Emerging Equity Collective Asset Management Plan | 11,714,425 | A shares | 11,714,425 | |
| Dajia Life Insurance Co., Ltd. - Universal Product | 10,688,700 | A shares | 10,688,700 | |
| Industrial and Commercial Bank of China - Yinhua Xinsheng Mixed Securities Investment Fund with Flexible Configuration (LOF) | 8,964,325 | A shares | 8,964,325 | |
| Agricultural Bank of China - Harvest Emerging Industry Stock Securities Investment Fund | 7,972,765 | A shares | 7,972,765 | |
| Yaokang Private Equity (Hangzhou) Co., Ltd. - Yaokang Zhiyuan Private Securities Investment Fund | 7,876,900 | A shares | 7,876,900 | |
| Explanation of the relationship or concerted action between the top 10 ordinary shareholders with unlimited tradable conditions and between the top 10 ordinary shareholders with unlimited tradable conditions and the top 10 ordinary shareholders | Not applicable | |||
| Explanation of the participation of the top 10 ordinary shareholders in securities margin trading (if any) (see Note 4) | Shareholder Mr. Xie Renguo holds 20,498,503 shares through the credit securities account. | |||
Whether the top 10 ordinary shareholders and the top 10 ordinary shareholders with unlimited sales conditionshave conducted the agreed repurchase transactions during the reporting period
□ Yes ? No
IV. Variations in shareholding of directors, supervisors and senior executives
? Applicable □ Not applicable
| Name | Position | Position status | Number of shares held at the beginning of the period (shares) | Number of additional shares held in the current period (shares) | Number of shares reduced in the current period (shares) | Number of shares held at the end of the period (shares) | Number of restricted stocks granted at the beginning of the period (shares) | Number of restricted stocks granted in the current period (shares) | Number of restricted stocks granted at the end of the period (shares) |
| Wu Yongqiang | Chairman and general manager | Incumbent | 212,008,715 | 0 | 0 | 212,008,715 | 0 | 0 | 0 |
| Ji Shuhai | Director | Incumbent | 27,318,642 | 0 | 0 | 27,318,642 | 0 | 0 | 0 |
| Zheng Sibin | Director and deputy general manager | Incumbent | 6,336,970 | 0 | 0 | 6,336,970 | 533,000 | 0 | 373,100 |
| Ma Wei | Director and deputy general manager | Incumbent | 8,950,934 | 0 | 0 | 8,950,934 | 616,000 | 0 | 431,200 |
| Peng Ganquan | Director and deputy general manager | Incumbent | 5,136,900 | 0 | 0 | 5,136,900 | 400,000 | 0 | 280,000 |
| Wu Hang | Director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Huang Yuegang | Independent director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Hua Xiuping | Independent director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Li Xumeng | Independent director | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Wen Zhaohui | Deputy General Manager and Secretary of the Board of Directors | Incumbent | 2,771,127 | 0 | 0 | 2,771,127 | 183,000 | 0 | 128,100 |
| Xiang Wei | Chief financial officer | Outgoing | 764,500 | 0 | 80,000 | 684,500 | 183,000 | 0 | 128,100 |
| Luo Muchen | Chief financial officer | Incumbent | 50,000 | 0 | 0 | 50,000 | 50,000 | 0 | 35,000 |
| Dai Huijuan | Supervisor | Incumbent | 319,612 | 0 | 0 | 319,612 | 0 | 0 | 0 |
| Kang Weiquan | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Chen Jinzhou | Supervisor | Incumbent | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | -- | 263,657,400 | 0 | 80,000 | 263,577,400 | 1,965,000 | 0 | 1,375,500 |
V. Variations in controlling shareholders or real controlling parties
Change of controlling shareholders during the reporting period
□ Applicable ? Not applicable
The controlling shareholder of the Company did not change during the reporting period.Change of actual controller during the reporting period
□ Applicable ? Not applicable
The actual controller of the Company did not change during the reporting period.
Section VIII Information on Preferred Shares
□ Applicable ? Not applicable
The Company did not have preferred shares during the reporting period.
Section IX Relevant Information of Bonds
□ Applicable ? Not applicable
Section X Financial ReportI. Audit report
Whether the half-year financial statements were audited
□ Yes ? No
The half-year financial statements of the Company have not been audited.
II. Financial StatementsThe unit of statements in the financial notes is: RMB
1. Consolidated Balance Sheet
Prepared by: Shenzhen Topband Co., Ltd.
June 30, 2023
Unit: RMB
| Items | June 30, 2023 | January 1, 2023 |
| Current assets: | ||
| Monetary capital | 1,761,580,444.38 | 1,403,026,071.34 |
| Settlement of provisions | ||
| Lending funds | ||
| Tradable financial assets | 366,855,786.11 | 342,959,450.31 |
| Derivative financial assets | ||
| Notes receivable | 52,662,917.91 | 51,791,758.90 |
| Accounts receivable | 2,503,593,708.16 | 2,549,734,039.66 |
| Receivables financing | 280,349,184.84 | 254,988,202.60 |
| Prepayments | 76,793,226.31 | 53,005,656.95 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 49,547,491.78 | 77,743,150.98 |
| Including: interest receivable | ||
| Dividends receivable | ||
| Repurchase of financial assets for resale | ||
| Inventory | 1,752,305,670.79 | 1,992,952,212.53 |
| Contract assets | ||
| Assets held for sale |
| Non-current assets due within one year | ||
| Other current assets | 201,107,414.42 | 155,126,777.31 |
| Total current assets | 7,044,795,844.70 | 6,881,327,320.58 |
| Non-current assets: | ||
| Loans and advances granted | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term payables | ||
| Long-term equity investment | 35,680,088.03 | 23,550,658.91 |
| Other equity instrument investment | ||
| Other non-current financial assets | ||
| Investment property | 104,823,590.34 | 106,242,777.85 |
| Fixed assets | 1,901,326,770.71 | 1,840,358,093.74 |
| Construction in progress | 360,390,687.64 | 234,775,312.11 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 102,676,004.80 | 106,196,901.87 |
| Intangible assets | 624,159,370.03 | 547,316,314.57 |
| Development expenditure | 98,718,799.74 | 100,947,313.14 |
| Goodwill | 110,732,042.84 | 110,732,042.84 |
| Long-term deferred expenses | 150,857,357.04 | 132,221,565.23 |
| Deferred tax assets | 128,452,075.82 | 117,953,736.35 |
| Other non-current assets | 245,175,896.39 | 172,371,288.80 |
| Total non-current assets | 3,862,992,683.38 | 3,492,666,005.41 |
| Total assets | 10,907,788,528.08 | 10,373,993,325.99 |
| Current liabilities: | ||
| Short-term loans | 460,000,000.00 | 283,351,495.57 |
| Loan from the Central Bank | ||
| Borrowed funds | ||
| Financial liabilities held for trading | 6,041,282.00 | |
| Derivative financial liabilities | ||
| Notes payable | 879,938,591.06 | 1,065,652,340.80 |
| Accounts payable | 1,657,592,848.38 | 1,606,446,204.02 |
| Accounts collected in advance | 1,598,192.95 | 1,130,165.23 |
| Contractual liabilities | 206,595,293.99 | 138,281,929.17 |
| Financial assets sold for repurchase | ||
| Deposit absorption and interbank deposit | ||
| Acting trading securities | ||
| Acting underwriting securities | ||
| Employee compensation payable | 139,529,765.78 | 206,979,773.15 |
| Taxes payable | 89,865,978.40 | 88,405,514.65 |
| Other account payable | 254,008,379.73 | 335,047,520.52 |
| Including: interest payable | ||||
| Dividends payable | ||||
| Service charges and commissions payable | ||||
| Reinsurance accounts payable | ||||
| Liabilities held for sale | ||||
| Non-current liabilities due within one year | 62,287,487.08 | 75,356,303.72 | ||
| Other current liabilities | 29,832,306.17 | 22,476,430.74 | ||
| Total current liabilities | 3,787,290,125.54 | 3,823,127,677.57 | ||
| Non-current liabilities | ||||
| Insurance contract reserve | ||||
| Long-term loans | 818,120,000.00 | 581,500,000.00 | ||
| Bonds payable | ||||
| Including: preferred shares | ||||
| Perpetual capital securities | ||||
| Lease liabilities | 68,528,422.20 | 73,610,791.09 | ||
| Long-term payables | ||||
| Long-term employee compensation payable | ||||
| Estimated liabilities | ||||
| Deferred income | 11,128,331.28 | 13,370,250.14 | ||
| Deferred tax liabilities | 62,856,328.24 | 59,758,414.08 | ||
| Other non-current liabilities | ||||
| Total non-current liabilities | 960,633,081.72 | 728,239,455.31 | ||
| Total liabilities | 4,747,923,207.26 | 4,551,367,132.88 | ||
| Owner's equity: | ||||
| Share capital | 1,269,535,372.00 | 1,269,535,372.00 | ||
| Other equity instruments | ||||
| Including: preferred shares | ||||
| Perpetual capital securities | ||||
| Capital reserves | 2,299,130,218.51 | 2,266,142,198.44 | ||
| Minus: treasury shares | 216,643,357.63 | 284,257,854.91 | ||
| Other comprehensive income | 52,213,016.47 | -8,479,622.35 | ||
| Special reserves | ||||
| Surplus reserves | 214,764,194.14 | 214,764,194.14 | ||
| General risk provision | ||||
| Retained earnings | 2,453,709,135.66 | 2,271,529,693.82 | ||
| Total owner's equity attributable to the parent company | 6,072,708,579.15 | 5,729,233,981.14 | ||
| Minority shareholders' equity | 87,156,741.67 | 93,392,211.97 | ||
| Total owners' equity | 6,159,865,320.82 | 5,822,626,193.11 | ||
| Total liabilities and owners' equity | 10,907,788,528.08 | 10,373,993,325.99 | ||
| Legal representative: Wu Yongqiang | Person in charge of accounting: Luo Muchen | Head of accounting firm: Luo Muchen | ||
2. Balance Sheet of Parent Company
Unit: RMB
| Items | June 30, 2023 | January 1, 2023 |
| Current assets: | ||
| Monetary capital | 692,836,569.20 | 417,402,306.51 |
| Tradable financial assets | 243,989,473.48 | 243,989,473.48 |
| Derivative financial assets | ||
| Notes receivable | 15,194,646.17 | 15,799,157.89 |
| Accounts receivable | 1,553,114,722.75 | 1,746,854,951.82 |
| Receivables financing | 214,782,721.89 | 188,468,485.11 |
| Prepayments | 12,894,230.35 | 40,076,367.47 |
| Other receivables | 723,132,112.18 | 902,544,005.07 |
| Including: interest receivable | ||
| Dividends receivable | ||
| Inventory | 109,450,100.74 | 182,264,664.43 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 3,873,490.73 | 0.00 |
| Total current assets | 3,569,268,067.49 | 3,737,399,411.78 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term payables | ||
| Long-term equity investment | 3,973,121,302.89 | 3,958,403,119.94 |
| Other equity instrument investment | ||
| Other non-current financial assets | ||
| Investment property | ||
| Fixed assets | 140,904,771.69 | 137,310,278.44 |
| Construction in progress | 25,669,496.53 | 22,775,996.65 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 11,742,418.88 | 14,765,367.57 |
| Intangible assets | 176,160,162.92 | 164,654,805.95 |
| Development expenditure | 55,330,496.24 | 53,698,954.16 |
| Goodwill | ||
| Long-term deferred expenses | 14,089,300.07 | 16,270,648.51 |
| Deferred tax assets | 39,241,062.53 | 33,648,975.07 |
| Other non-current assets | 14,372,295.32 | 8,686,283.92 |
| Total non-current assets | 4,450,631,307.07 | 4,410,214,430.21 |
| Total assets | 8,019,899,374.56 | 8,147,613,841.99 |
| Current liabilities: |
| Short-term loans | 230,000,000.00 | 10,000.00 |
| Financial liabilities held for trading | 6,041,282.00 | |
| Derivative financial liabilities | ||
| Notes payable | 1,036,308,580.24 | 968,645,962.43 |
| Accounts payable | 531,922,153.27 | 610,163,494.08 |
| Accounts collected in advance | ||
| Contractual liabilities | 57,707,601.25 | 50,483,032.75 |
| Employee compensation payable | 80,832,665.04 | 107,895,045.76 |
| Taxes payable | 6,114,164.86 | 23,225,286.94 |
| Other account payable | 891,205,139.77 | 1,258,071,297.67 |
| Including: interest payable | ||
| Dividends payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 7,390,707.77 | 6,896,279.13 |
| Other current liabilities | 5,727,869.85 | 5,163,830.86 |
| Total current liabilities | 2,853,250,164.05 | 3,030,554,229.62 |
| Non-current liabilities | ||
| Long-term loans | 300,000,000.00 | 300,000,000.00 |
| Bonds payable | ||
| Including: preferred shares | ||
| Perpetual capital securities | ||
| Lease liabilities | 4,535,341.61 | 7,788,265.09 |
| Long-term payables | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | ||
| Deferred income | 4,669,531.28 | 5,583,950.14 |
| Deferred tax liabilities | 32,268,205.04 | 32,610,663.86 |
| Other non-current liabilities | ||
| Total non-current liabilities | 341,473,077.93 | 345,982,879.09 |
| Total liabilities | 3,194,723,241.98 | 3,376,537,108.71 |
| Owner's equity: | ||
| Share capital | 1,269,535,372.00 | 1,269,535,372.00 |
| Other equity instruments | ||
| Including: preferred shares | ||
| Perpetual capital securities | ||
| Capital reserves | 2,344,714,038.44 | 2,314,366,149.44 |
| Minus: treasury shares | 216,643,357.63 | 284,257,854.91 |
| Other comprehensive income | ||
| Special reserves | ||
| Surplus reserves | 214,735,675.68 | 214,735,675.68 |
| Retained earnings | 1,212,834,404.09 | 1,256,697,391.07 |
| Total owners' equity | 4,825,176,132.58 | 4,771,076,733.28 |
| Total liabilities and owners' equity | 8,019,899,374.56 | 8,147,613,841.99 |
3. Consolidated Income Statement
Unit: RMB
| Items | 2023 Half-year Statements | 2022 Half-year Statements |
| I. Total operating income | 4,256,121,153.72 | 4,228,003,137.57 |
| Including: operating income | 4,256,121,153.72 | 4,228,003,137.57 |
| Interest income | ||
| Premium earned | ||
| Service charge and commission income | ||
| II. Total operating cost | 3,972,666,304.82 | 3,949,799,858.52 |
| Including: operating cost | 3,337,826,833.15 | 3,421,434,029.61 |
| Interest expense | ||
| Service charge and commission payment | ||
| Surrender value | ||
| Net compensation expenditure | ||
| Net reserve amount set aside for insurance liability | ||
| Policy dividend payment | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 24,032,385.59 | 21,060,144.67 |
| Selling expenses | 143,034,445.61 | 125,180,825.48 |
| Management expenses | 201,474,565.60 | 160,894,026.46 |
| R&D expenses | 317,290,550.11 | 284,847,207.92 |
| Finance expenses | -50,992,475.24 | -63,616,375.63 |
| Including: interest expenses | 19,596,648.04 | 14,644,344.03 |
| Interest income | 15,720,869.63 | 6,486,250.66 |
| Plus: other income | 17,194,559.29 | 17,072,867.62 |
| Investment income (loss marked with "-") | -3,244,186.21 | -1,247,660.53 |
| Including: income from investment in associated enterprises and joint ventures | -941,734.97 | -2,142,224.73 |
| Derecognized gains from financial assets measured at amortized cost | ||
| Exchange gains (loss marked with "-") | ||
| Net exposure hedging income (loss marked with "-") | ||
| Income from changes in fair value (loss marked with "-") | -6,041,282.00 | 31,603,205.99 |
| Credit impairment losses (loss marked with "-") | -2,376,908.52 | -10,907,334.70 |
| Asset impairment loss (loss marked with "-") | -23,666,214.06 | -46,406,707.31 |
| Assets disposal revenue (loss marked with "-") | -1,279,902.83 | -284,674.88 |
| III. Operating profits (loss marked with "-") | 264,040,914.57 | 268,032,975.24 |
| Plus: non-operating income | 4,591,331.07 | 1,154,014.66 |
| Minus: non-operating expenses | 4,250,758.69 | 3,118,394.89 |
| IV. Total profit (total loss marked with "-") | 264,381,486.95 | 266,068,595.01 |
| Minus: income tax expense | 6,043,729.44 | 17,614,693.20 |
| V. Net profit (net loss marked with "-") | 258,337,757.51 | 248,453,901.81 |
| (I) Classification according to business continuity |
| 1. Net profit from continuing operations (net loss marked with "-") | 258,337,757.51 | 248,453,901.81 |
| 2. Net profit of discontinued operation (net loss marked with "-") | ||
| (II) Classification according to ownership | ||
| 1. Net profit attribute to shareholders of parent company (net loss marked with "-") | 258,040,692.16 | 246,657,151.65 |
| 2. Profit/loss attributable to minority share-holders (net loss marked with "-") | 297,065.35 | 1,796,750.16 |
| VI. Net after-tax amount of other comprehensive income | 60,692,638.82 | 18,153,909.87 |
| Net after-tax amount of other comprehensive income attributable to the owner of the parent company | 60,692,638.82 | 18,153,909.87 |
| (I) Other comprehensive income that cannot be reclassified into profits or losses | ||
| 1. Re-measurement of changes in the defined benefit plans | ||
| 2. Other comprehensive income not available for transferring to profits or losses under equity method | ||
| 3. Changes in fair value of other equity instrument investment | ||
| 4. Changes in fair value of enterprise's own credit risk | ||
| 5. Others | ||
| II. Other comprehensive income that is reclassified into profits and losses | 60,692,638.82 | 18,153,909.87 |
| 1. Other comprehensive income that can be transferred into profits or losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provisions for credit impairment of other debt investment | ||
| 5. Cash flow hedging reserve | ||
| 6. Difference in translation of foreign currency financial statements | 60,692,638.82 | 18,153,909.87 |
| 7. Others | ||
| Net after-tax amount of other comprehensive income attributed to the minority of shareholders | ||
| VI. Total comprehensive income | 319,030,396.33 | 266,607,811.68 |
| Total consolidated income attributable to the owners of the parent company | 318,733,330.98 | 264,811,061.52 |
| Total consolidated income attributable to minority shareholders | 297,065.35 | 1,796,750.16 |
| VIII. Earnings per share: | ||
| (I) Basic earnings per share | 0.20 | 0.20 |
| (II) Diluted earnings per share | 0.20 | 0.20 |
In case of consolidation under the same control in the current period, the net profit realized by the combinedparty before the consolidation is RMB 0, and the net profit realized by the combined party in the previousperiod is RMB 0.
| Legal representative: Wu Yongqiang | Person in charge of accounting: Luo Muchen | Head of accounting firm: Luo Muchen |
4. Income statement of parent company
Unit: RMB
| Items | 2023 Half-year Statements | 2022 Half-year Statements |
| I. Operating income | 2,251,996,133.85 | 2,459,847,476.95 |
| Minus: operating cost | 1,906,539,875.63 | 2,093,560,411.93 |
| Taxes and surcharges | 5,560,404.09 | 6,995,342.78 |
| Selling expenses | 90,986,205.50 | 83,222,342.05 |
| Management expenses | 97,211,587.17 | 90,353,899.12 |
| R&D expenses | 156,684,225.51 | 160,850,627.57 |
| Finance expenses | -30,562,740.37 | -47,026,844.29 |
| Including: interest expenses | 8,774,186.09 | 7,006,014.82 |
| Interest income | 6,279,923.28 | 3,453,311.38 |
| Plus: other income | 6,469,767.96 | 10,029,658.78 |
| Investment income (loss marked with "-") | 336,904.82 | -31,393.79 |
| Including: income from investment in associated enterprises and joint ventures | -40,895.19 | -31,393.79 |
| Derecognized gains from financial assets measured at amortized cost (loss marked with "-") | ||
| Net exposure hedging income (loss marked with "-") | ||
| Income from changes in fair value (loss marked with "-") | -6,041,282.00 | |
| Credit impairment losses (loss marked with "-") | -1,870,859.80 | -6,841,292.71 |
| Asset impairment loss (loss marked with "-") | -1,949,576.95 | -4,678,021.21 |
| Assets disposal revenue (loss marked with "-") | 104,514.76 | 73,024.55 |
| II. Operating profit (loss marked with "-") | 22,626,045.11 | 70,443,673.41 |
| Plus: non-operating income | 422,626.97 | 493,670.30 |
| Minus: non-operating expenses | 788,989.26 | 1,372,699.03 |
| III. Total profit (total loss marked with "-") | 22,259,682.82 | 69,564,644.68 |
| Minus: income tax expense | -9,738,580.52 | -49,570.62 |
| IV. Net profit (net loss marked with "-") | 31,998,263.34 | 69,614,215.30 |
| (I) Net profit from continuing operation (net loss marked with "-") | 31,998,263.34 | 69,614,215.30 |
| (II) Net profit from termination of operation (net loss marked with "-") | ||
| V. Net after-tax amount of other comprehensive income | ||
| (I) Other comprehensive income that cannot be reclassified into profits or losses | ||
| 1. Re-measurement of changes in the defined benefit plans | ||
| 2. Other comprehensive income not available for transferring to profits or losses under equity method | ||
| 3. Changes in fair value of other equity instrument investment | ||
| 4. Changes in fair value of enterprise's own credit risk | ||
| 5. Others | ||
| II. Other comprehensive income that is reclassified into profits and losses | ||
| 1. Other comprehensive income that can be transferred into profits or losses under the equity method |
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provisions for credit impairment of other debt investment | ||
| 5. Cash flow hedging reserve | ||
| 6. Difference in translation of foreign currency financial statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 31,998,263.34 | 69,614,215.30 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated Cash Flow Statement
Unit: RMB
| Items | 2023 Half-year Statements | 2022 Half-year Statements |
| I. Cash flow from operating activities: | ||
| Cash received from sales of goods or rendering of services | 4,469,184,753.48 | 4,173,711,961.16 |
| Net increase in deposits with other banks | ||
| Net increase in borrowing from the central bank | ||
| Net increase in funds borrowed from other financial institutions | ||
| Cash from receipt of original insurance contract premiums | ||
| Receipt of net cash for reinsurance operations | ||
| Net increase in savings and investment funds of the insured | ||
| Cash from receipt of interest, service charges and commissions | ||
| Net increase in borrowed funds | ||
| Net increase in funds from repurchase operations | ||
| Net cash received for acting trading securities | ||
| Refund of tax and levies | 218,867,332.07 | 220,636,224.87 |
| Other cash received related to operating activities | 67,492,756.77 | 45,888,629.79 |
| Subtotal of cash inflow from operating activities | 4,755,544,842.32 | 4,440,236,815.82 |
| Cash paid for purchasing goods and accepting labor services | 3,128,270,632.34 | 3,383,604,409.36 |
| Net increase in loans and advances of clients | ||
| Net increase in deposits with central banks and interbanks | ||
| Cash in compensation funds paid for the original insurance contract | ||
| Net increase in lending funds | ||
| Cash for payment of interest, service charges and commissions | ||
| Cash for payment of policy dividends | ||
| Cash paid to and for employees | 810,553,360.68 | 776,482,113.10 |
| Tax payments | 113,547,827.98 | 76,036,220.46 |
| Other cash paid in connection with operating activities | 175,330,550.14 | 129,227,817.51 |
| Subtotal of cash outflow from operating activities | 4,227,702,371.14 | 4,365,350,560.43 |
| Net cash flow from operating activities | 527,842,471.18 | 74,886,255.39 |
| II. Cash flow from investing activities: | ||
| Cash received from investment recovery | 41,535,369.30 | 47,000,000.00 |
| Cash received as return on an investment | 465,610.97 | 129,168.71 |
| Net cash recouped from disposal of fixed assets, intangible assets, and other long-term assets | 3,048,022.16 | 273,431.00 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Other cash received relating to investment activities | ||
| Subtotal of cash inflow from investment activities | 45,049,002.43 | 47,402,599.71 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 444,995,875.67 | 453,359,295.98 |
| Cash paid for investment | 68,710,705.69 | 82,000,000.00 |
| Net increase in pledged loans | ||
| Net cash obtained from subsidiaries and other business units | ||
| Other cash paid related to investment activities | ||
| Subtotal of cash outflow from investment activities | 513,706,581.36 | 535,359,295.98 |
| Net cash flow from investment activities | -468,657,578.93 | -487,956,696.27 |
| III. Cash flow from financing activities: | ||
| Cash received from absorbing investment | 49,875,015.00 | |
| Including: cash received by subsidiaries' absorption of minority shareholders' investment | ||
| Cash received from loan | 885,000,000.00 | 435,000,000.00 |
| Other cash received relating to financing activities | 3,101,583.74 | 25,597,956.24 |
| Subtotal of cash inflow from financing activities | 888,101,583.74 | 510,472,971.24 |
| Cash paid for repayments of debts | 481,310,000.00 | 135,712,618.35 |
| Cash paid to distribute dividends, profits or pay interest | 91,887,916.38 | 79,068,993.14 |
| Including: dividends and profits paid by subsidiaries to minority shareholders | ||
| Other cash paid related to financing activities | 30,009,823.21 | 65,429,693.55 |
| Subtotal of cash outflow from financing activities | 603,207,739.59 | 280,211,305.04 |
| Net cash flow from financing activities | 284,893,844.15 | 230,261,666.20 |
| IV. Impact of exchange rate fluctuations on cash and cash equivalents | 14,538,301.34 | 20,486,535.72 |
| V. Net increase in cash and cash equivalents | 358,617,037.74 | -162,322,238.96 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 1,374,281,693.23 | 1,736,104,958.20 |
| VI. Balance of cash and cash equivalents at the end of the period | 1,732,898,730.97 | 1,573,782,719.24 |
6. Cash flow statement of the parent company
Unit: RMB
| Items | 2023 Half-year Statements | 2022 Half-year Statements |
| I. Cash flow from operating activities: | ||
| Cash received from sales of goods or rendering of services | 2,377,904,756.11 | 2,188,764,560.89 |
| Refund of tax and levies | 107,900,631.47 | 133,415,379.85 |
| Other cash received related to operating activities | 912,529,650.38 | 1,933,981,335.43 |
| Subtotal of cash inflow from operating activities | 3,398,335,037.96 | 4,256,161,276.17 |
| Cash paid for purchasing goods and accepting labor services | 1,865,163,048.56 | 1,757,859,328.07 |
| Cash paid to and for employees | 362,203,603.62 | 331,679,465.82 |
| Tax payments | 17,241,561.23 | 11,543,063.13 |
| Other cash paid in connection with operating activities | 947,072,850.31 | 1,510,278,958.46 |
| Subtotal of cash outflow from operating activities | 3,191,681,063.72 | 3,611,360,815.48 |
| Net cash flow from operating activities | 206,653,974.24 | 644,800,460.69 |
| II. Cash flow from investing activities: |
| Cash received from investment recovery | ||
| Cash received as return on an investment | 377,800.00 | |
| Net cash recouped from disposal of fixed assets, intangible assets, and other long-term assets | 320,000.00 | |
| Net cash received from disposal of subsidiaries and other business units | ||
| Other cash received relating to investment activities | ||
| Subtotal of cash inflow from investment activities | 697,800.00 | |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets | 64,993,076.30 | 63,613,623.87 |
| Cash paid for investment | 5,000,000.00 | 874,604,000.00 |
| Net cash obtained from subsidiaries and other business units | ||
| Other cash paid related to investment activities | ||
| Subtotal of cash outflow from investment activities | 69,993,076.30 | 938,217,623.87 |
| Net cash flow from investment activities | -69,295,276.30 | -938,217,623.87 |
| III. Cash flow from financing activities: | ||
| Cash received from absorbing investment | 49,875,015.00 | |
| Cash received from loan | 230,000,000.00 | 120,000,000.00 |
| Other cash received relating to financing activities | 25,597,956.24 | |
| Subtotal of cash inflow from financing activities | 230,000,000.00 | 195,472,971.24 |
| Cash paid for repayments of debts | 10,000.00 | 120,000,000.00 |
| Cash paid to distribute dividends, profits or pay interest | 83,201,916.97 | 70,323,199.71 |
| Other cash paid related to financing activities | 9,876,571.83 | 55,485,215.43 |
| Subtotal of cash outflow from financing activities | 93,088,488.80 | 245,808,415.14 |
| Net cash flow from financing activities | 136,911,511.20 | -50,335,443.90 |
| IV. Impact of exchange rate fluctuations on cash and cash equivalents | 1,042,806.27 | 9,192,396.84 |
| V. Net increase in cash and cash equivalents | 275,313,015.41 | -334,560,210.24 |
| Plus: balance of cash and cash equivalents at the beginning of the period | 394,701,442.83 | 1,085,257,236.62 |
| VI. Balance of cash and cash equivalents at the end of the period | 670,014,458.24 | 750,697,026.38 |
7. Consolidated statement of changes in owner's equity
Amount in the current period
Unit: RMB
| Items | 2023 Half-year Statements | ||||||||||||||
| Owner's equity attributable to the parent company | Minority shareholders' equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk provision | Retained earnings | Others | Subtotal | |||||
| Preferred shares | Perpetual capital securities | Others | |||||||||||||
| I. Ending balance of last year | 1,269,535,372.00 | 2,266,142,198.44 | 284,257,854.91 | -8,479,622.35 | 214,764,194.14 | 2,270,819,171.01 | 5,728,523,458.33 | 93,280,517.08 | 5,821,803,975.41 | ||||||
| Plus: changes in accounting policies | 710,522.81 | 710,522.81 | 111,694.89 | 822,217.70 | |||||||||||
| Early error correction | |||||||||||||||
| Consolidation under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of the current year | 1,269,535,372.00 | 2,266,142,198.44 | 284,257,854.91 | -8,479,622.35 | 214,764,194.14 | 2,271,529,693.82 | 5,729,233,981.14 | 93,392,211.97 | 5,822,626,193.11 | ||||||
| III. Amount of changes in increase or decrease in the current period (decrease marked with "-") | 32,988,020.07 | -67,614,497.28 | 60,692,638.82 | 182,179,441.84 | 343,474,598.01 | -6,235,470.30 | 337,239,127.71 | ||||||||
| (I) Total comprehensive income | 60,692,638.82 | 258,040,692.16 | 318,733,330.98 | 297,065.35 | 319,030,396.33 | ||||||||||
| (II) Capital invested and reduced by owners | 33,143,382.77 | -67,614,497.28 | 100,757,880.05 | 100,757,880.05 | |||||||||||
| 1.Ordinary shares invested by owners | |||||||||||||||
| 2Capital contributed by holders of other equity instruments | |||||||||||||||
| 3.Amount of share-based payment included in owner's | 33,143,382.77 | 33,143,382.77 | 33,143,382.77 | ||||||||||||
| equity | |||||||||||||||
| 4.Others | -67,614,497.28 | 67,614,497.28 | 67,614,497.28 | ||||||||||||
| (III) Profit distribution | -75,861,250.32 | -75,861,250.32 | -75,861,250.32 | ||||||||||||
| 1.Withdraw surplus reserve | |||||||||||||||
| 2Withdrawal of general risk provision | |||||||||||||||
| 3.Distribution to owners (or shareholders) | -75,861,250.32 | -75,861,250.32 | -75,861,250.32 | ||||||||||||
| 4.Others | |||||||||||||||
| (IV) Internal carryover of owner's equity | |||||||||||||||
| 1.Conversion of surplus reserves to additional capital (or share capital) | |||||||||||||||
| 2Conversion of surplus reserves to additional capital (or share capital) | |||||||||||||||
| 3.Surplus public reserve to compensate losses | |||||||||||||||
| 4.Change of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5.Other comprehensive income carried forward into retained earnings | |||||||||||||||
| 6.Others | |||||||||||||||
| Special reserves | |||||||||||||||
| 1.Amount withdrawn in the current period | |||||||||||||||
| 2Amount used in the current period | |||||||||||||||
| (VI) Others | -155,362.70 | -155,362.70 | -6,532,535.65 | -6,687,898.35 | |||||||||||
| IV. Ending balance of the current year | 1,269,535,372.00 | 2,299,130,218.51 | 216,643,357.63 | 52,213,016.47 | 214,764,194.14 | 2,453,709,135.66 | 0.00 | 6,072,708,579.15 | 87,156,741.67 | 6,159,865,320.82 |
Amount of prior year
Unit: RMB
| Items | 2022 Half-year Statements | ||||||||||||||
| Owner's equity attributable to the parent company | Minority shareholders' equity | Total owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General risk provision | Retained earnings | Others | Subtotal | |||||
| Preferred shares | Perpetual capital securities | Others | |||||||||||||
| I. Ending balance of last year | 1,256,978,072.00 | 2,140,053,149.74 | 242,525,433.60 | -91,831,496.88 | 186,397,631.76 | 1,779,243,483.61 | 5,028,315,406.63 | 88,559,929.67 | 5,116,875,336.30 | ||||||
| Plus: changes in accounting policies | 365,494.44 | 365,494.44 | 30,539.27 | 396,033.71 | |||||||||||
| Early error correction | |||||||||||||||
| Consolidation under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of the current year | 1,256,978,072.00 | 2,140,053,149.74 | 242,525,433.60 | -91,831,496.88 | 186,397,631.76 | 1,779,608,978.05 | 5,028,680,901.07 | 88,590,468.94 | 5,117,271,370.01 | ||||||
| III. Amount of changes in increase or decrease in the current period (decrease marked with "-") | 14,049,300.00 | 80,736,853.39 | 39,344,623.76 | 18,153,909.87 | 183,944,143.05 | 257,539,582.55 | 3,353,729.78 | 260,893,312.33 | |||||||
| (I) Total comprehensive income | 18,153,909.87 | 246,657,151.65 | 264,811,061.52 | 1,796,750.16 | 266,607,811.68 | ||||||||||
| (II) Capital invested and reduced by owners | 14,049,300.00 | 82,293,833.01 | 39,344,623.76 | 56,998,509.25 | 56,998,509.25 | ||||||||||
| 1.Ordinary shares invested by owners | 14,049,300.00 | 54,522,812.37 | 68,572,112.37 | 68,572,112.37 | |||||||||||
| 2Capital contributed by holders of other equity instruments | |||||||||||||||
| 3.Amount of share-based payment included in owner's equity | 27,771,020.64 | 27,771,020.64 | 27,771,020.64 | ||||||||||||
| 4.Others | 39,344,623.76 | -39,344,623.76 | -39,344,623.76 | ||||||||||||
| (III) Profit distribution | -62,713,008.60 | -62,713,008.60 | -62,713,008.60 | ||||||||||||
| 1.Withdraw surplus reserve | |||||||||||||||
| 2Withdrawal of general risk provision | |||||||||||||||
| 3.Distribution to owners (or shareholders) | -62,713,008.60 | -62,713,008.60 | -62,713,008.60 | ||||||||||||
| 4.Others | |||||||||||||||
| (IV) Internal carryover of owner's equity | |||||||||||||||
| 1.Conversion of surplus reserves to additional capital (or share capital) | |||||||||||||||
| 2Conversion of surplus reserves to additional capital (or share capital) | |||||||||||||||
| 3.Surplus public reserve to compensate losses | |||||||||||||||
| 4.Change of defined benefit plans carried forward to retained |
| earnings | |||||||||||||||
| 5.Other comprehensive income carried forward into retained earnings | |||||||||||||||
| 6.Others | |||||||||||||||
| Special reserves | |||||||||||||||
| 1.Amount withdrawn in the current period | |||||||||||||||
| 2Amount used in the current period | |||||||||||||||
| (VI) Others | -1,556,979.62 | -1,556,979.62 | 1,556,979.62 | ||||||||||||
| IV. Ending balance of the current year | 1,271,027,372.00 | 2,220,790,003.13 | 281,870,057.36 | -73,677,587.01 | 186,397,631.76 | 1,963,553,121.10 | 5,286,220,483.62 | 91,944,198.72 | 5,378,164,682.34 |
8. Parent company's statement of changes in owner's equity
Amount in the current period
Unit: RMB
| Items | 2023 Half-year Statements | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total owners' equity | |||
| Preferred shares | Perpetual capital securities | Others | ||||||||||
| I. Ending balance of last year | 1,269,535,372.00 | 2,314,366,149.44 | 284,257,854.91 | 214,735,675.68 | 1,256,697,391.07 | 4,771,076,733.28 | ||||||
| Plus: changes in accounting policies | ||||||||||||
| Early error correction | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of the current year | 1,269,535,372.00 | 2,314,366,149.44 | 284,257,854.91 | 214,735,675.68 | 1,256,697,391.07 | 4,771,076,733.28 | ||||||
| III. Amount of changes in increase or decrease in the current period (decrease marked with "-") | 30,347,889.00 | -67,614,497.28 | -43,862,986.98 | 54,099,399.30 | ||||||||
| (I) Total comprehensive income | 31,998,263.34 | 31,998,263.34 | ||||||||||
| (II) Capital invested and reduced by owners | 30,347,889.00 | -67,614,497.28 | 97,962,386.28 | |||||||||
| 1.Ordinary shares invested by owners | ||||||||||||
| 2Capital contributed by holders of other equity instruments | ||||||||||||
| 3.Amount of share-based payment included | 30,347,889.00 | 30,347,889.00 | ||||||||||
| in owner's equity | ||||||||||||
| 4.Others | -67,614,497.28 | 67,614,497.28 | ||||||||||
| (III) Profit distribution | -75,861,250.32 | -75,861,250.32 | ||||||||||
| 1.Withdraw surplus reserve | ||||||||||||
| 2Distribution to owners (or shareholders) | -75,861,250.32 | -75,861,250.32 | ||||||||||
| 3.Others | ||||||||||||
| (IV) Internal carryover of owner's equity | ||||||||||||
| 1.Conversion of surplus reserves to additional capital (or share capital) | ||||||||||||
| 2Conversion of surplus reserves to additional capital (or share capital) | ||||||||||||
| 3.Surplus public reserve to compensate losses | ||||||||||||
| 4.Change of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5.Other comprehensive income carried forward into retained earnings | ||||||||||||
| 6.Others | ||||||||||||
| Special reserves | ||||||||||||
| 1.Amount withdrawn in the current period | ||||||||||||
| 2Amount used in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the current year | 1,269,535,372.00 | 2,344,714,038.44 | 216,643,357.63 | 214,735,675.68 | 1,212,834,404.09 | 4,825,176,132.58 |
Amount of prior year
Unit: RMB
| Items | 2022 Half-year Statements | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Minus: treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total owners' equity | |||
| Preferred shares | Perpetual capital securities | Others | ||||||||||
| I. Ending balance of last year | 1,256,978,072.00 | 2,189,685,216.22 | 242,525,433.60 | 370,109.41 | 186,369,113.30 | 1,064,111,338.27 | 4,454,988,415.60 | |||||
| Plus: changes in accounting policies | ||||||||||||
| Early error correction | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of the current year | 1,256,978,072.00 | 2,189,685,216.22 | 242,525,433.60 | 370,109.41 | 186,369,113.30 | 1,064,111,338.27 | 4,454,988,415.60 | |||||
| III. Amount of changes in increase or decrease in the current period (decrease marked with "-") | 14,049,300.00 | 78,626,637.56 | 39,344,623.76 | 292,266.61 | 6,901,206.70 | 60,524,787.11 | ||||||
| (I) Total comprehensive income | 292,266.61 | 69,614,215.30 | 69,906,481.91 | |||||||||
| (II) Capital invested and reduced by owners | 14,049,300.00 | 78,626,637.56 | 39,344,623.76 | 53,331,313.80 | ||||||||
| 1.Ordinary shares invested by owners | 14,049,300.00 | 54,522,812.37 | 68,572,112.37 | |||||||||
| 2Capital contributed by holders of other equity instruments | ||||||||||||
| 3.Amount of share-based payment included in owner's equity | 24,103,825.19 | 24,103,825.19 | ||||||||||
| 4.Others | 39,344,623.76 | -39,344,623.76 | ||||||||||
| (III) Profit distribution | -62,713,008.60 | -62,713,008.60 | ||||||||||
| 1.Withdraw surplus reserve | ||||||||||||
| 2Distribution to owners (or shareholders) | -62,713,008.60 | -62,713,008.60 | ||||||||||
| 3.Others | ||||||||||||
| (IV) Internal carryover of owner's equity | ||||||||||||
| 1.Conversion of surplus reserves to additional capital (or share capital) | ||||||||||||
| 2Conversion of surplus reserves to additional capital (or share capital) | ||||||||||||
| 3.Surplus public reserve to compensate losses | ||||||||||||
| 4.Change of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5.Other comprehensive income carried forward into retained earnings | ||||||||||||
| 6.Others | ||||||||||||
| Special reserves | ||||||||||||
| 1.Amount withdrawn in the current period | ||||||||||||
| 2Amount used in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the current year | 1,271,027,372.00 | 2,268,311,853.78 | 281,870,057.36 | 662,376.02 | 186,369,113.30 | 1,071,012,544.97 | 4,515,513,202.71 |
III. Basic information of the Company
Registered Chinese name of the Company: 深圳拓邦股份有限公司 (hereinafter referred to as "theCompany")Address: F1, Topband Industrial Park Phase II, Keji Second Road, Tangtou Community, Shiyan Sub-district, Bao'an District, ShenzhenLegal representative: Wu YongqiangRegistered capital: RMB 1,269,535,372Share capital: RMB 1,269,535,372Company type: company limited by shares (listing)Business scope: intelligent control of electrical products, intelligent power supply and control, highefficiency lighting products and its control, high efficiency precision motor and control R&D, production andsales.Business term: sustainable operationShenzhen Topband Co., Ltd. (hereinafter referred to as "the Company") formerly known as ShenzhenTopband Electronic Equipment Co., Ltd., is a limited liability company approved by Shenzhen Administrationfor Industry and Commerce on February 9, 1996. It has obtained the business license of enterprise legal personwith the registration number of 19241377-3 and the registered capital of RMB 2 million.On May 19, 1997, the registered capital of Shenzhen Topband Electronic Equipment Co., Ltd. wasincreased to RMB 3.2 million after the resolution of the General Meeting of Shareholders of Shenzhen TopbandElectronic Equipment Co., Ltd. and approved by Shenzhen Administration for Industry and Commerce.On January 10, 2001, with the resolution of the General Meeting of Shareholders of Shenzhen TopbandElectronic Equipment Co., Ltd. and the approval of Shenzhen Administration for Industry and Commerce(Shenzhen) name change NZ [2001] No. 0154224 Enterprise Name Change Approval Notice, it was agreed tochange the name of Shenzhen Topband Electronic Equipment Co., Ltd. to Shenzhen Topband ElectronicTechnology Co., Ltd.On July 15, 2002, with the approval of SFG (2002) No. 24 issued by Shenzhen Municipal People'sGovernment, it was agreed that Shenzhen Topband Electronic Technology Co., Ltd. would be reorganized intoa joint stock limited company jointly by five shareholders, namely Wu Yongqiang, Ji Shuhai, Zhuhai TsinghuaScience and Technology Park Venture Capital Co., Ltd., Qi Hongwei and Li Xianqian. After the reorganization,
the total share capital of the Company is RMB 21 million. Shenzhen Pengcheng Accounting Firm issued theCapital Verification Report (SPSYZ (2002) No. 67) to verify the share capital of the Company. On August 16,2002, the Company was approved by Shenzhen Administration for Industry and Commerce to register thechange of industry and commerce, in exchange for the business license of enterprise legal person withRegistration No. 4403012049338. The business period is from February 9, 1996 to February 9, 2046.On November 23, 2004, the registered capital of the Company was increased to RMB 22.8 million uponthe resolution of the General Meeting of Shareholders and the document of Shenzhen Municipal People'sGovernment "SFG [2004] No. 38" and approved by Shenzhen Administration for Industry and Commerce.On March 15, 2006, the registered capital of the Company was increased to RMB 31.92 million upon theresolution of the General Meeting of Shareholders of the Company, and change in the industrial andcommercial registration was handled on July 24, 2006.On June 26, 2007, the Company issued RMB 18.08 million ordinary shares (face value of each share isRMB 1) to the public with an increase of registered capital of RMB 18.08 million, and the registered capitalafter the change is RMB 50 million by the approval of "ZJH No. 2007135" Notice on Approving the InitialPublic Offering of Shenzhen Topband Electronic Technology Co., Ltd. by China Securities RegulatoryCommission. The investment business has been verified by Shenzhen Pengcheng Accounting Firm Co., Ltd.and the capital verification report SPSYZ [2007] No. 059 has been issued.On August 29, 2008, according to the resolution of the 2008 Annual General Meeting of Shareholders, theCompany increased the registered capital by RMB 50 million with capital reserve, and the registered capitalafter the change was RMB 100 million. The capital increase has been verified by Shenzhen PengchengAccounting Firm Co., Ltd., and the capital verification report SPSYZ [2008] No. 179 has been issued.The 3rd Board of Directors of the Company deliberated and passed the Plan on the Distribution of Mid-term Profits in 2009 at the 6th meeting in 2009: Based on the total share capital of the Company at the end ofthe reporting period of 100 million shares, 4 shares were added in share capitals per 10 shares for allshareholders regarding the capital reserves, and the total share capital increased by 40 million shares. After theincrease by conversion, the total share capital of the Company increased from 100 million shares to 140 millionshares.On April 7, 2010, the Company held a meeting of the Board of Directors to deliberate and approve theprofit distribution plan for 2009: Based on the total share capital of 140 million shares as of December 31, 2009,
the Company will pay cash dividends of RMB 1.50 (tax included) per 10 shares, and based on the total sharecapital of 140 million shares as of December 31, 2009, 2 shares will be added per 10 shares. After the increaseby conversion, the total share capital of the Company increased from 140 million shares to 168 million shares.The Company held the 2nd Meeting of the 4th Board of Directors in 2012 on March 26, 2012, deliberatedand passed the profit distribution plan for 2011: Based on the total share capital 168 million shares of theCompany on December 31, 2011, 2 shares were additionally given to all shareholders for every 10 shares, andcash dividend of RMB 2 (tax included) was distributed. 1 share was added per 10 shares for all shareholdersregarding the capital reserves. The equity distribution was completed on May 4, 2012. After the increase byconversion, the total share capital of the Company increased from 168 million shares to 218.4 million shares.
According to the resolutions of 1st Extraordinary General Meeting of Shareholders of the Company in2014, after the approval of ZJXK [2014] No. 1425 of China Securities Regulatory Commission, the Company'snon-public offering did not exceed 36.935679 million new shares. On February 5, 2015, the Company privatelyissued 23,521,768 ordinary shares (A shares) in RMB to specific investors at the price of RMB 13.63 per share.After the issuance, the registered capital of the Company was increased to RMB 241,921,768.00.According to the Revised Draft of the Second Option Incentive Plan (Draft) of Shenzhen Topband Co., Ltd.deliberated and passed by the Company in the 2012 Annual General Meeting of Shareholders and the Proposalon the Second Exercise Period of the Second Phase Stock Option Incentive Plan Meeting with the ExerciseConditions and Exercisable Rights, which was deliberated and passed by the 9th Meeting of the 5th Board ofDirectors of the Company, the total exercise was 3,101,700 stock options in 2015, exercise price was RMB 5.72each. After exercise, the registered capital of the Company was increased to RMB 245,023,468.00.According to the Restricted Stock Incentive Plan (Draft) of Shenzhen Topband Co., Ltd. in 2015 approvedby the 2nd Extraordinary General Meeting of Shareholders in 2015 and the Proposal on Adjusting the Numberof Restricted Stock Incentive Plans Granted and List of Incentive Objects in 2015 approved at the 18th Meetingof the 5th Board of Directors, the Company granted 359 incentive objects restricted stocks 17.633 millionshares. The registered capital of the Company was increased to RMB 262,656,468.00 after the issuance.
According to the resolution of the 3rd Extraordinary General Meeting of Shareholders of the Company in2015, and approved by the Reply to the Approval of Non-public Development of Shares of Shenzhen TopbandCo., Ltd. issued by China Securities Regulatory Commission (ZJXK [2016] No. 205), the Company non-publicly issued 35,864,345 ordinary shares (A shares) in RMB to specific investors on March 28, 2016, with the
issuance price of RMB 16.66 per share. The registered capital of the Company was increased to RMB298,520,813.00 after the issuance.
According to the Revised Draft of the Second Phase Stock Option Incentive Plan (Draft) of ShenzhenTopband Co., Ltd. deliberated and passed by the 2012 Annual General Meeting of Shareholders of theCompany and the Proposal on the Third Exercise Period of the Second Phase Stock Option Incentive PlanMeeting Exercise Conditions and Exercisable Rights deliberated and passed by the 23rd Meeting of the 5thBoard of Directors of the Company, a total of 4,594,000 shares were exercised in 2016. After exercise, theregistered capital of the Company was increased to RMB 303,114,813.00.According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated andpassed by the 24th Meeting of the 5th Board of Directors of the Company held on April 26, 2016, as for theincentive object who resigned due to personal reasons and no longer met the conditions of becoming theincentive object, those 72,000 restricted stocks that have not been unlocked held by the incentive object wererepurchased and cancelled. After cancellation, the registered capital of the Company was reduced to RMB303,042,813.00.The Company held the 2015 Annual General Meeting of Shareholders on May 11, 2016 and approved the2015 annual equity distribution plan. Based on the Company's current total share capital of 301,520,013 shares,the Company distributed RMB 1.50 to all shareholders for every 10 shares. At the same time, the Companyincreased 5 shares to all shareholders for every 10 shares with the capital accumulation fund, and the capitalincreased by RMB 150,760,006. After the capital was increased, the Company's registered capital was increasedto RMB 453,802,819.00.According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated andpassed by the 28th Meeting of the 5th Board of Directors of the Company held on October 26, 2016, as for theincentive object who resigned due to personal reasons and no longer met the conditions of becoming theincentive object, those 331,500 shares of restricted stocks that have not been unlocked held by the incentiveobject were repurchased and cancelled. After cancellation, the registered capital of the Company was reduced toRMB 453,471,319.00.The 2016 Annual General Meeting of Shareholders of the Company was held on April 11, 2017, and the2016 annual equity distribution plan was approved. Based on the Company's existing total share capital of453,471,319 shares, the Company distributed RMB 1.50 in cash to all shareholders for every 10 shares. At the
same time, the Company increased 5 shares to all shareholders for every 10 shares with the capital accumulationfund, and the capital increased by RMB 226,735,659. After the capital increased, the registered capital of theCompany was increased to RMB 680,206,978.00.According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated andpassed by the 32nd Meeting of the 5th Board of Directors of the Company held on June 13, 2017, as for theincentive object who resigned due to personal reasons and no longer met the conditions of becoming theincentive object, the 346,500 restricted stocks that have not been unlocked held by the incentive object wererepurchased and cancelled. After cancellation, the registered capital of the Company was reduced to RMB679,860,478.00.The 2017 Annual General Meeting of Shareholders of the Company was held on April 17, 2018, and the2017 annual equity distribution plan was approved. Based on the Company's existing total share capital of679,860,478 shares, the Company distributed RMB 1.0 in cash to all shareholders for every 10 shares. At thesame time, the Company increased 5 shares to all shareholders for every 10 shares with the capital accumulationfund, and the capital increased by RMB 339,930,239.00. After the capital increased, the registered capital of theCompany was increased to RMB 1,019,790,717.00.
According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated andpassed by the 6th Meeting of the 6th Board of Directors of the Company held on July 27, 2018, as for theincentive object who resigned due to personal reasons and no longer met the conditions of becoming theincentive object, the 744,186 restricted stocks that have not been unlocked held by the incentive object wererepurchased and cancelled. After cancellation, the registered capital of the Company was reduced to RMB1,019,046,531.00.According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated andpassed by the 6th Meeting of the 6th Board of Directors of the Company held on July 27, 2018, as for theincentive object who resigned due to personal reasons and no longer met the conditions of becoming theincentive object, the 744,186 restricted stocks that have not been unlocked held by the incentive object wererepurchased and cancelled. After cancellation, the registered capital of the Company was reduced to RMB1,019,046,531.00.According to the Proposal on Repurchase and Cancellation of Some Restricted Stocks deliberated andpassed by the 15th Meeting of the 6th Board of Directors session Company held on July 26, 2019, as for the
incentive object who resigned due to personal reasons and no longer met the conditions of becoming theincentive object, the 310,800 restricted stocks that have not been unlocked held by the incentive object wererepurchased and cancelled. After cancellation, the registered capital of the Company was reduced to RMB1,018,735,692.With the approval of "SZS [2019] No. 164 Document" issued by Shenzhen Stock Exchange, theCompany's RMB 573 million convertible corporate bonds will be listed and traded in Shenzhen Stock Exchangefrom April 8, 2019. Since September 16, 2019, bondholders can exercise the right to transfer shares. As ofDecember 31, 2019, the Company has transferred 2,223.00 shares of bonds and increased the share capital byRMB 40,077.00. After the share transfer, the registered capital of the Company will increase to RMB1,018,775,769.00.The 22nd Meeting of the 6th Board of Directors deliberated and passed the Proposal on the First ExercisePeriod of 2018 Stock Option Incentive Plan Meeting the Exercise Conditions and Exercisable Rights andProposal on Adjustment of the Incentive Objects and the Number of Stock Options of 2018 Stock OptionIncentive Plan: there are 606 incentive objects in the first exercise period of the 2018 stock option incentiveplan in the Company, in total of 12.0147 million stock options, that meet the exercise conditions and can beexercised. The Company plans to adopt the independent exercise mode. As of December 31, 2020, 606incentive objects in the first exercise period had completed the exercise of 12.0147 million stock options,increased the Company's share capital by RMB 12.0147 million, and the share capital increased to RMB1,030,790,469.00 after the exercise of the stock options.According to the "SZS [2019] No. 164 Document" by the Shenzhen Stock Exchange, the Company'sconvertible corporate bonds of RMB 573 million are listed and traded on Shenzhen Stock Exchange from April8, 2019. Since September 16, 2019, the bondholders can exercise the equity transfer. In 2020, a total of5,712,224.00 bonds were converted into shares, increasing the share capital by RMB 104,426,340.00. After theconversion, the registered capital of the Company was increased to RMB 1,135,216,809.00.On August 18, 2020, the China Securities Regulatory Commission issued the Reply on Approving theNon-Public Offering of Shares by Shenzhen Topband Co., Ltd. (ZJXK [2020] No. 1865), and approved theCompany's non-public offering of no more than 309,243,655 new shares, In June 2021, the non-public issuanceof 92,105,263 new shares was listed on the Stock Exchange, with the registered capital increased by RMB92,105,263, and the Company's registered capital increased to RMB 1,238,254,672.00 after the change.
In November 2021, the Company granted 33,544,320 restricted stocks to 1,224 eligible incentive objectson November 2, 2021, the grant date, at a grant price of RMB 7.23 per share. The restricted stocks are set with arestricted period. In the three fiscal years from 2022 to 2024, the performance assessment will be carried out onan annual basis and the restricted stocks will be lifted at a ratio of 30%, 30% and 40%, respectively. The14,838,920 shares granted come from the repurchase shares, and 18,705,400 shares come from privateplacement. By granting the restricted stocks, the registered capital of the Company increases by 18,705,400shares, and the registered capital increase to RMB 1,256,978,072.00 after the change.On March 18, 2022, the 21st Meeting of the 7th Board of Directors and the 17th Meeting of the 7th Boardof Supervisors deliberated and passed the Proposal on the Third Exercise Period of 2018 Stock Option IncentivePlan Meeting the Exercise Conditions and Exercisable Rights and the Proposal on Adjustment of the IncentiveObjects and the Number of Stock Options of 2018 Stock Option Incentive Plan. There were 543 incentiveobjects in the third exercise period to exercise their rights independently and a total of 14.0493 million stockoptions meeting the exercise conditions. The Company's share capital increased by RMB 14.0493 million due tothe exercise of stock options. After the stock options are exercised, the share capital will increase to RMB1,271,027,372.00.The Company held the 23rd (Extraordinary) Meeting of the 7th Board of Directors on March 30, 2022, the27th (Extraordinary) Meeting of the 7th Board of Directors and the 22nd (Extraordinary) Meeting of the 7thBoard of Supervisors on August 18, 2022, deliberated and passed the Proposal on the Proposal on Repurchaseand Cancellation of Some Restricted Stocks from Restricted Stock Incentive Plan in 2021, describing as for theincentive object who resigned due to personal reasons and no longer met the conditions of becoming theincentive object, the 1.492 million restricted stocks that have not been unlocked held were repurchased andcancelled. By repurchasing and cancelling the restricted stocks, the number of restricted stocks of the Companydecreased by 1.492 million shares, and the share capital decreased to RMB 1,269,535,372.00.39 subsidiaries and sub-subsidiaries were included in the consolidated statements of the Company, asdetailed in Section X IX (1) of this report.
IV. Preparation basis of the financial statement
1. Basis of preparation
The financial statements are based on the assumption of continuation of the Company, according to theactual transactions, in accordance with the relevant provisions of the Accounting Standards for BusinessEnterprises, and based on the following important accounting policies and accounting estimates.
2. Continuation
The Company has no major doubt on the ability of continuation and other influencing factors for 12months since the end of the reporting period.
V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates reminders:
None
1. Statement on compliance with Accounting Standards for Business Enterprises
The financial statements prepared on the basis of above compiling foundation give a true and full view ofthe financial position, operating results, cash flow and other relevant information of the Company, conformingto the requirements of the latest Accounting Standards for Business Enterprises and its application guidelines,interpretations as well as other relevant provisions (collectively referred to as "Accounting Standards forBusiness Enterprises") issued by the Ministry of Finance.
Additionally, the presentation and disclosure requirements of the No. 15 Rules for the Preparation andPresentation of Information Disclosure of Companies Offering Securities to the Public - General Provisions onFinancial Reporting (revised in 2014) and the Notice on Matters Related to the Implementation of the NewAccounting Standards for Business Enterprises by Listed Companies (KJBH [2018] No. 453) were taken asreference in these financial reports issued by the CSRC.
2. Accounting period
The fiscal year of the Company adopts the Gregorian calendar year, that is, from January 1 to December 31every year.
The reporting period is from January to June 2023.
3. Operating cycle
The financial year of the Company adopts the Gregorian calendar year, that is, from January 1 toDecember 31 every year.
4. Recording currency
The bookkeeping base currency is RMB for the Company. The Company's overseas subsidiaries maydetermine their own bookkeeping base currencies based on the currencies in the main economic environmentsfor their operation. In preparation of financial statements, the currency used is RMB.
5. Accounting treatment for consolidation under the same control and under different control
1. Accounting treatment for consolidation under the same control
Assets and liabilities obtained by the Company in the consolidation under the same control realizedthrough one transaction or multiple transactions step by step were accounted based on book value of assets andliabilities of the consolidated party in the consolidated financial statements of the final controller onconsolidation date. Capital reserves shall be adjusted according to difference between the book value of netassets obtained by the Company and the payment for the book value of consolidation consideration (or totalnominal value of the issued shares). If the capital reserve is insufficient to be offset, the retained earnings shallbe offset.
2. Accounting treatment for consolidation under different control
The Company, at the date of acquisition, recognizes the difference of the combination cost greater than thefair value share of the Acquiree's net identifiable assets obtained in the combination as goodwill; if thecombination cost is less than the fair value share of the Acquiree's net identifiable assets obtained in thecombination, the Company first re-checks the fair value of the Acquiree's identifiable assets, liabilities andcontingent liabilities as well as the measurement of combination cost. The difference shall be included in thecurrent profits and losses, if the combination cost is still less than the fair value share of the Acquiree's netidentifiable assets obtained in the combination.
The consolidation under different control realized step by step through multiple transactions shall betreated as follows:
(1) Adjusting the initial investment cost of long-term equity investment. If the equity held before theacquisition date is calculated with the equity method, it shall be re-measured as per the fair value of the equityat the date of acquisition, and the difference between the fair value and its book value shall be included in thecurrent investment income; if the equity of the acquiree held before the acquisition date involves changes inother comprehensive income and other equity accounted under the equity method, it shall be transferred to thecurrent income on the acquisition date, excluding other comprehensive income arising from changes in netliabilities or net assets of the defined benefit plan and changes in the fair value of other equity instruments heldre-measured by the investee.
(2) Recognizing goodwill (or amount included in the current profits and losses).The initial investment costof long-term equity investment after the first step adjustment is compared with the fair value share of netidentifiable assets of subsidiaries at the date of acquisition. If the former is greater than the latter, the differenceis recognized as goodwill; otherwise, it is included in the current profits and losses.
The situation of disposing equity step by step through multiple transactions to losing control oversubsidiaries
(1) Judging whether the transactions in the process of disposing equity step by step to losing control oversubsidiaries belong to the principle of "package transaction"
The terms, conditions and economic impact of transactions relating to disposal of equity investment insubsidiaries meet one or more of the following circumstances, which generally indicates that multipletransactions shall be accounted for as a package transaction:
1) Such transactions are concluded at the same time or under the situation of considering the impact oneach other;
2) Only can the unity of such transactions reach an integral commercial result;
3) The occurrence of a transaction is based on the occurrence of at least one of other transactions;
4) A transaction is regarded as uneconomic, but being economic when regarded along with othertransactions.
(2) Accounting treatment for transactions in the process of disposing equity step by step to losing controlover subsidiaries belonging to "package transaction"
If the transactions relating to disposal of equity investment in subsidiaries to losing control oversubsidiaries belong to "package transaction", these shall be treated as a transaction for disposing the subsidiary
and losing control; however, the difference between the price of every disposal and the net assets share held inthe subsidiary corresponding to the disposal of investment before losing control shall be recognized as otherconsolidated income in the consolidated financial statements, which shall be transferred to the current profitsand losses at the time of losing control.In the consolidated financial statements, the remaining equity shall be re-measured according to its fairvalue on the date of losing control. The difference between the sum of consideration obtained from equitydisposal and fair value of remaining equity less the net assets share held in original subsidiary and continuouslycalculated from the date of acquisition as per the original shareholding ratio shall be included in the investmentincome of the current period of loss of control. Other comprehensive income related to the equity investment inoriginal subsidiary shall be transferred to the current investment income or retained earnings at the time oflosing control.
(3) Accounting treatment for transactions in the process of disposing equity step by step to losing controlover subsidiaries not belonging to "package transaction"If no loss of control occurs in the disposal of the investment in the subsidiary, the difference between thedisposal price and the net assets share held in the subsidiary corresponding to the disposal of investment in theconsolidated financial statements shall be included in the capital reserve (capital premium or share premium). Ifthe capital premium is insufficient to offset, the retained earnings shall be adjusted.In case of loss of control of the investment of the subsidiary, in the consolidated financial statements, theremaining equity shall be re-measured according to its fair value on the date of losing control. The differencebetween the sum of consideration obtained from equity disposal and fair value of remaining equity less the netassets share held in original subsidiary and continuously calculated from the date of acquisition as per theoriginal shareholding ratio shall be included in the investment income of the current period of loss of control.Other comprehensive income related to the equity investment in original subsidiary shall be transferred to thecurrent investment income or retained earnings at the time of losing control.
6. Compiling method of consolidated financial statements
The consolidated financial statements, based on the financial statements of the parent company and itssubsidiaries, are prepared by the Company in accordance with the Accounting Standards for BusinessEnterprises No. 33-Consolidated Financial Statements and with reference to other relevant information.
7. Classification of joint venture arrangements and accounting treatment for joint operation
1. Identification and classification of joint venture arrangements
Joint venture arrangement refers to an arrangement under joint control by two or more parties. The jointventure arrangement has the following features: (1) all parties are bound by the arrangement; (2) two or moreparties jointly control the arrangement. No single party can control the arrangement solely, and any party withjoint control over the arrangement can prevent other parties or a combination of party alliance from controllingthe arrangement alone.Joint control refers to the common control of an arrangement in accordance with relevant agreements, andthe activities related to the arrangement must be agreed upon by the parties holding control right before thedecision can be made.
Joint venture arrangement includes joint operation and joint venture. Joint operation is the joint venturearrangement in which the joint venture party holds the relevant assets of the arrangement and assumes therelevant liabilities. Joint venture refers to a joint venture arrangement in which the joint venture party has rightsonly to the net assets of the arrangement.
2. Accounting treatment for joint venture arrangement
Parties in joint operation shall recognize the following items related to their share of interests in jointoperation, and perform accounting treatment in accordance with the relevant provisions of the AccountingStandards for Business Enterprises: (1) recognize the assets held separately and those held jointly as per theirshare; (2) recognize the liabilities assumed separately and those assumed jointly as per their share; (3) recognizethe income generated from the sale of its share of joint operation output; (4) recognize the income from the saleof the output of the joint operation as per its share; (5) recognize the expenses incurred separately and thoseincurred in the joint operation as per its share.
The parties of a joint venture shall make accounting treatment for the investment in the joint venture inaccordance with the Accounting Standards for Business Enterprises No. 2 - Long-Term Equity Investment.
8. Standards for determining cash and cash equivalents
Cash in the cash flow statement refers to cash on hand and deposits that are available for payment at anytime. Cash equivalents refer to investments with short term (generally due within three months from the date ofpurchase), strong liquidity, easy to convert into known amount of cash and low risk of value change.
9. Foreign currency transaction and foreign currency statement translation
1. The translation of foreign currency transactions
When foreign currency transactions are initially recognized, they are converted into RMB at the spotexchange rate on the transaction date. On the balance sheet date, foreign currency monetary items are translatedat the spot exchange rate on the balance sheet date. The exchange difference arising from different exchangerates shall be included in the current profits and losses, except for the exchange difference of the principal andinterest of foreign currency special borrowings related to the acquisition and construction of assets that meet thecapitalization conditions; foreign currency non-monetary items measured at historical cost shall be translated atthe spot exchange rate on the transaction date, with the amount in RMB maintaining unchanged; foreigncurrency non-monetary items measured at fair value shall be translated at the spot exchange rate on the date ofdetermining fair value, with the difference included in the current profits and losses or other comprehensiveincome.
2. Translation of foreign currency financial statements
The assets and liabilities in balance sheet shall be translated at the spot exchange rate on the balance sheetdate; except for the "retained earnings", other items in the owner's equity shall be converted at the spotexchange rate on the transaction date; the income and expense in the income statement shall be converted at thespot exchange rate on the transaction date. The difference in translation of foreign currency financial statementsgenerated from the above conversion is recognized as other comprehensive income.
10. Financial instruments
1. Recognition and derecognition of financial instruments
When the Company becomes one party of the financial instrument contract, it shall recognize a financialasset or financial liability.
The trading of financial assets in a conventional manner shall be recognized and derecognized according tothe accounting of the trading day. Conventional trading of financial assets refers to the collection or delivery offinancial assets within the time limit specified by laws and regulations or common practice in accordance withthe terms of the contract. Trading day refers to the date when the Company promises to buy or sell financialassets.
If the following conditions are met, the financial assets (or a part of financial assets, or a part of a set ofsimilar financial assets) shall be derecognized, i.e., they shall be written off from its accounts and balance sheets:
(1) The right to receive cash flow of financial assets has expired;
(2) The right to receive cash flow of financial assets has been transferred, or the Company has assumed theobligation to timely pay the full amount of the cash flow received to a third party under the "transfer agreement";and (a) has transferred substantially all the risks and rewards from the ownership of financial assets, or (b)abandoned the control of the financial asset, though almost all risks and rewards from the ownership of thefinancial asset are neither transferred nor retained.
2. Classification and measurement of financial assets
At the time of initial recognition, the financial assets of the Company are classified according to theCompany's business model for the management of financial assets and the contractual cash flow characteristicsof financial assets as follows: financial assets measured at amortized cost, financial assets measured at fair valuethrough other comprehensive income, and financial assets measured at fair value through current profits andlosses. The subsequent measurement of financial assets depends on its classification.
The classification of financial assets is based on the Company's business model for the management offinancial assets and the cash flow characteristics of financial assets.
(1) Financial assets measured at amortized cost
Financial assets that meet the following conditions at the same time are classified as financial assetsmeasured at amortized cost: the Company's business mode of managing the financial assets is to collect thecontract cash flow as the target; the contract terms of the financial asset stipulate that the cash flow generated ona specific date is only the payment of principal and interest based on the amount of outstanding principal. Forsuch financial assets, the effective interest rate method is adopted, and subsequent measurement is made atamortized cost, and the gains or losses arising from amortization or impairment are included in the currentprofits and losses.
(2) Debt instruments investment measured at fair value with changes included in other comprehensiveincome
Financial assets that meet the following conditions at the same time are classified as financial assetsmeasured at fair value with their changes included in other comprehensive income: the Company's businessmode of managing the financial assets aims to collect the contract cash flow and sell them; the contract terms of
the financial asset stipulate that the cash flow generated on a specific date is only the payment of principal andinterest based on the amount of outstanding principal. For such financial assets, fair value is adopted forsubsequent measurement. The discount or premium is amortized using the effective interest rate method andrecognized as interest income or expense. Except the impairment loss and the exchange difference of foreigncurrency monetary financial assets are recognized as the current profits and losses, the changes in the fair valueof such financial assets are recognized as other comprehensive income until their accumulated gains or lossesare transferred into the current profits and losses when the financial asset is derecognized. Interest incomerelated to such financial assets is included in the current profits and losses.
(3) Equity instruments investment measured at fair value with changes included in other comprehensiveincomeThe Company irrevocably chooses to designate part of the non-tradable equity instrument investment asfinancial assets measured at fair value through other comprehensive income. Only the relevant dividend incomeis included in the current profits and losses, and the changes in fair value are recognized as other comprehensiveincome, until their accumulated gains or losses are transferred into retained earnings when the financial asset isderecognized.
(4) Financial assets measured at fair value with changes included in the current profits and losses
The financial assets other than the above financial assets measured at amortized cost and those at fair valuethrough other comprehensive income are classified as financial assets measured at fair value with changesincluded in the current profits and losses. At the time of initial recognition, for the purpose of elimination orsignificant reduction of accounting mismatch, financial assets can be designated as those measured at fair valuewith changes included in the current profits and losses. For such financial assets, fair value is used forsubsequent measurement, and all changes in fair value are included in the current profits and losses.
If and only when the Company changes the business model for managing financial assets, it will reclassifyall the affected financial assets.
For the financial assets measured at fair value and whose changes are included in the current profits andlosses, the relevant transaction costs are directly included in the current profits and losses, and such costs ofother types of financial assets are included in the initial recognition amount.
3. Classification and measurement of financial liabilities
During initial recognition, the Company's financial liabilities are classified as: "financial liabilitiesmeasured at amortization cost" and "financial liabilities measured at fair value with their changes included intothe current profit and loss".Financial liabilities satisfying one of the following requirements can be designated as financial liabilitiesmeasured at fair value with their changes included in the current profit and loss during initial measurement: (1)Such designation can eliminate or remarkably reduce the accounting mismatch; (2) According to group riskmanagement or investment strategy in the formal written documents, the management and performanceevaluation of the portfolio of financial liabilities or portfolio of financial assets and financial liabilities areconducted on the basis of fair price, and within the group, it is reported to the key management personnel onsuch basis; (3) Such financial liabilities include embedded derivatives requiring separate splitting.The Company determines the classification of financial liabilities at the time of the initial recognition. Forthe financial liabilities measured at fair value with changes included in the current profits and losses, therelevant transaction costs are directly included in the current profits and losses, and such costs of other financialliabilities are included in the initial recognition amount.The subsequent measurement of financial liabilities depends on its classification:
(1) Financial liabilities measured at amortized cost
For such financial liabilities, the effective interest rate method is adopted and the subsequent measurementis conducted as per the amortized cost.
(2) Financial liabilities measured at fair value with changes included in the current profits and losses
Such financial liabilities include tradable financial liabilities (including derivatives that belong to financialliabilities) and financial liabilities designated upon initial recognition as those measured at fair value withchanges included in the current profits or losses.
4. Set off of financial instruments
If the following conditions are met at the same time, financial assets and financial liabilities are presentedin the balance sheet at the net amount after offsetting each other: the Company has the legal right to offset therecognized amount, which is currently enforceable; they plan to settle at the net amount, or realize the financialassets and pay off the financial liabilities at the same time.
5. Impairment of financial assets
The Company recognizes the loss provision based on the expected credit loss for the financial assetsmeasured at the amortized cost, the debt instrument investment and financial guarantee contract measured at thefair value and whose changes are included in other comprehensive income. The term "credit loss" refers to thedifference between all the contractual cash flows that the Company discounted at the original effective interestrate and received according to the contract and all the expected cash flows, i.e., the present value of all the cashshortage.
Upon considering all reasonable and well-founded information (including forward-looking information),the Company estimates the expected credit impairment loss is withdrawn for "financial assets measured atamortized cost" and "financial asset (debt instruments) measured at fair value with their changes included inother comprehensive income" in single or combined manner.
(1) General model of expected credit loss
If the credit risk of this financial instrument has increased obviously since initial recognition, the Companywill measure the loss reserves according to the expected credit loss amount of such financial instrument in thewhole duration; if the credit risk of this financial instrument hasn't increased obviously since initial recognition,the Company will measure the loss reserves according to the expected credit loss amount of such financialinstrument in the next 12 months. The increased or reversed amount of the loss provisions arising therefromshall be included in the current profits and losses as impairment losses or gains. The specific assessment ofcredit risk by the Company is detailed in the Note "IX. Risks Associated with Financial Instruments".
Generally, in case of overdue for more than 30 days, the Company will consider that the credit risk of suchfinancial instrument has increased obviously, unless conclusive evidence is available to prove that the credit riskof such financial instrument hasn't obviously increased since the initial recognition.
To be specific, the Company divides the credit impairment process of financial instruments that have notbeen impaired at the time of purchase or origination into three stages, with different accounting treatment forthe impairment of financial instruments at different stages:
First stage: credit risk has not increased significantly since initial recognition
For the financial instrument at this stage, the enterprise shall measure the loss provision according to theexpected credit loss in the next 12 months, and calculate the interest income as per its book balance (i.e. withoutdeducting the impairment provision) and the actual interest rate (if the instrument is a financial asset, the samebelow).
Second stage: the credit risk has increased significantly since the initial recognition, but the creditimpairment has not occurredFor the financial instrument at this stage, the enterprise shall measure the loss provision according to theexpected credit loss of the instrument thought the whole duration, and calculate the interest income as per itsbook balance and the actual interest rate.Third stage: credit impairment occurs after initial recognitionFor the financial instrument at this stage, the enterprise shall measure the loss provision according to theexpected credit loss of the instrument thought the whole duration, but the calculation of interest income isdifferent from the financial assets at the first two stages. For the financial assets with credit impairment, theenterprise shall calculate the interest income according to its amortized cost (book balance minus accruedprovision for impairment, i.e. book value) and the actual interest rate.For the financial assets with credit impairment at the time of purchase or origination, the enterprise shallonly recognize the change of expected credit loss in the whole duration after initial recognition as loss provision,and calculate the interest income as per its amortized cost and the effective interest rate adjusted by credit.
(2) For financial instruments with low credit risk on the balance sheet date, the Company directly assumesthat the credit risk of such instruments has not increased significantly since the initial recognition, while notcomparing them with the credit risk at the time of initial recognition.
A financial instrument may be considered to have a lower credit risk if the enterprise recognizes that thefinancial instruments feature low default risk, the borrower is able to fulfill its obligations to pay the contractualcash flow in the short term, and that even if there are adverse changes in economic situation and operatingenvironment over a longer period of time, it does not necessarily reduce the borrower's ability to fulfill itsobligations to pay the contractual cash flow.
(3) Receivables and lease receivables
The Company measures the loss provisions as per the amount of expected credit losses throughout thewhole duration by the use of simplified model for expected credit loss for receivables specified in AccountingStandards for Business Enterprises No. 14 - Income, excluding significant financing components (includingcases in which financing components in contracts not exceeding one year are not taken into account inaccordance with the standards).
The Company makes accounting policy choices to adopt a simplified model for expected credit loss, i.e.,measuring the loss provisions as per the amount equivalent to the expected credit loss throughout the wholeduration for receivables including significant financing components and lease receivables regulated byAccounting Standards for Business Enterprises No. 21 - Leasing.
6. Transfer of financial assets
The financial assets shall be derecognized when the Company has transferred all the risks and rewords onthe ownership of the financial assets to the transferee. The financial assets shall not be derecognized if theCompany retains all the risks and rewards on the ownership of the financial assets.
If the Company neither transfers nor retains almost all the risks and rewards in the ownership of thefinancial asset, the following conditions shall be referred to: if it gives up the control over the financial asset, itshall terminate the recognition of the financial asset and recognize the assets and liabilities generated; if it doesnot abandon the control over the financial asset, the relevant financial assets shall be recognized according tothe extent to which it continues to be involved in the transferred financial asset, and the relevant liabilities shallbe recognized accordingly.
If the financial guarantee is provided to the transferred financial assets to continue to be involved, theassets generated from the continued involvement shall be recognized according to the lower of the book valueof the financial assets and the amount of financial guarantee. Financial guarantee amount refers to the maximumamount that will be required to be repaid out of consideration received.
11. Notes receivable
The Company divides notes receivable into two portfolios of bank acceptance bills and commercialacceptance bills by type of financial instrument. With respect to bank acceptance bills, the Company considersits overdue default risk to be 0 for it has low overdue credit loss which has not significantly increased since theinitial recognition, because the acceptance bank pays the payee or holder a certain amount unconditionally whenthe bill is due. In respect of commercial acceptance bills, the Company believes that the probability of default iscorrelated with the aging, and the bad debts shall be accrued according to the accounting policy of expectedcredit loss of accounts receivable.
12. Accounts receivable
The Company measures the loss provisions as per the amount of expected credit losses throughout thewhole duration by the use of simplified model for expected credit loss for receivables specified in AccountingStandards for Business Enterprises No. 14 - Income, excluding significant financing components (includingcases in which financing components in contracts not exceeding one year are not taken into account inaccordance with the standards). The increased or reversed amount of loss provisions generated therefrom shallbe included in the current profits and losses as impairment losses or gains.The Company has implemented Accounting Standard No. 22 - Recognition and Measurement of FinancialInstruments (CK [2017] No. 7) since January 1, 2019. The Company believes that the probability of default isrelated to the aging, which is still a mark of whether the credit risk of the Company's accounts receivableincreases significantly, after it has reviewed the appropriateness of the provision for bad debts receivable inprevious years based on the Company's historical bad debt losses. Therefore, credit risk loss of the Company'saccounts receivable is still estimated on the basis of aging according to the original loss ratio of previous years.The accounting policies for measuring overdue credit loss of accounts receivable adopted by the Company areas follows:
1. Receivables with significant individual amount and individual provision for bad debts
Significant individual amount refers to the amount of which the ending balance of individual receivables ismore than RMB 1 million.
At the end of the period, a separate impairment test will be carried out on the individual receivables withsignificant amount. If there is objective evidence that it is impaired, the impairment loss shall be recognizedwith provision for bad debts according to the difference between the present value of future cash flow and thebook value.
2. Receivables with provision for bad debts by portfolio
The individual receivables with not significant amount at the end of the period, together with thereceivables that have not been impaired after separate test, are divided into several portfolios according to theaging as the credit risk characteristics, and the impairment loss is calculated and determined according to acertain proportion of the ending balance of these receivables portfolio (the impairment test can be conductedseparately), with provision for bad debts.
Except for the receivables for which impairment provision has been made separately, the Companydetermines the proportion for following bad debt provision based on the actual loss rate of the portfolio of thesame or similar receivables in previous years with the aging of receivables as the credit risk feature and incombination with the current situation:
| Aging | Estimated loss of accounts receivable (note) | Estimated loss of other receivables |
| Within 1 year (including 1 year) | 3.10% | 5.00% |
| 1-2 years (including 2 years) | 9.04% | 10.00% |
| 2-3 years (including 3 years) | 22.11% | 30.00% |
| 3-4 years (including 4 years) | 47.51% | 50.00% |
| 4-5 years (including 5 years) | 84.26% | 80.00% |
| Above 5 years | 100.00% | 100.00% |
| Including: those that have been determined to be irrecoverable | Write-off | Write-off |
Note: when measuring the expected credit loss of receivables, the Company has referred to the historicalexperience of credit loss and adjusted it based on forward-looking estimates.
3. Receivables with not significant amount but with single provision for bad debts
Reasons for individual provision for bad debts: the Company conducts a separate impairment test for thereceivables with the following characteristics, although its amount is not significant. If there is objectiveevidence that the receivables are impaired, the impairment loss shall be recognized with provision for bad debtsaccording to the difference between the present value of future cash flow and the book value; receivables thatare in dispute with the other party or involved in litigation or arbitration; receivables that have obviousindications that the debtor is likely to be unable to perform the repayment obligation, etc.
Method for bad debt provision: the impairment test shall be conducted separately. If there is objectiveevidence that it has been impaired, the impairment loss shall be recognized with provision for bad debtsaccording to the difference between the present value of future cash flow and its book value.
The Company measures the loss provisions as per the amount of expected credit losses throughout thewhole duration by the use of simplified model for expected credit loss for receivables specified in AccountingStandards for Business Enterprises No. 14 - Income, excluding significant financing components (includingcases in which financing components in contracts not exceeding one year are not taken into account inaccordance with the standards). The increased or reversed amount of loss provisions generated therefrom shallbe included in the current profits and losses as impairment losses or gains.
13. Receivables financing
Financial assets that meet the following conditions at the same time are classified as financial assetsmeasured at fair value with their changes included in other comprehensive income: the Company's businessmode of managing the financial assets aims to collect the contract cash flow and sell them; the contract terms ofthe financial asset stipulate that the cash flow generated on a specific date is only the payment of principal andinterest based on the amount of outstanding principal.The receivables held by the Company transferred in the endorsed or discounted form that such transactionsare frequent and involve significant amounts and the management mode aims to collect the contract cash flowand sell them in nature, are classified as financial assets measured at fair value with their changes included inother comprehensive income in accordance with the relevant provisions of the Financial Instruments Standards.
14. Other receivables
Recognition method and accounting treatment method for expected credit loss of other receivables
Recognition methods and accounting treatment of expected credit losses of other receivables. TheCompany measures the impairment loss by an amount equivalent to the expected credit loss within the next 12months or over the entire duration, depending on whether the credit risk of other receivables has increasedsignificantly since the initial recognition. In addition to other receivables with individual credit risk assessment,they are divided into different portfolios based on their credit risk characteristics:
| Portfolio name | Basis for determining the portfolios | Provision methods |
| Portfolio I | Risk-free portfolio | This portfolio is a risk-free account. |
| Portfolio II | Aging portfolio | The credit risk of the portfolio is characterized by the aging. |
15. Inventories
1. Classification of inventories
The inventory includes the finished products or commodities held for sale in daily activities, the unfinishedproducts and the materials consumed in the production or in the provision of labor services, etc.
2. Pricing method of delivered inventories
The delivered inventories are subject to the weighted-average system.
3. Determination basis for net realizable value of the inventory and counting and drawing method forinventory falling price reservesOn the balance sheet date, the inventories are measured at the lower of cost and net realizable value, andthe inventory revaluation reserves are calculated at the difference between the cost of inventory category andthe net realizable value. The net realizable value of the inventories ready for sale is determined at the estimatedsale price of such inventories minus the estimated sales expenses and relevant taxes during normal productionand operation, and that of the inventories to be processed is determined at the estimated sale price of thefinished products minus the costs, sales expenses and relevant taxes estimated to be incurred up to completionduring normal production and operation. On the balance sheet date, the net realizable values are determinedseparately and compared with the corresponding costs to determine the amount of withdrawal or reversal ofinventory revaluation reserve if a part of inventory is subject to the contractual price agreement and the rest isnot.
4. Inventory system
Perpetual inventory system is the inventories.
5. Amortization method of low-value consumables and packaging materials
One-off write-off method is employed for both the low-value consumables and the packaging materials.
16. Contract assets
1. Recognition methods and standards for the contractual assets
The Company presents contractual assets or contract liabilities in the balance sheet based on therelationship between performance obligations and customer payments. The Company's right to receiveconsideration for goods or services transferred to customers (excluding receivables) is listed as contractualassets.
2. The recognition method and accounting treatment for expected credit loss of contractual assets
The Company measures the loss provisions as per the amount of expected credit losses throughout thewhole duration by the use of simplified model for expected credit loss for contractual assets excludingsignificant financing components. The increased or reversed amount of loss provisions generated therefromshall be included in the current profits and losses as impairment losses or gains.
The Company measures the loss provisions as per the amount of expected credit losses throughout thewhole duration by the use of simplified model for expected credit loss for contractual assets includingsignificant financing components. The increased or reversed amount of loss provisions generated therefromshall be included in the current profits and losses as impairment losses or gains.
17. Contractual costs
None
18. Assets held for sale
None
19. Debt investment
None
20. Other debt investment
None
21. Long-term receivables
None
22. Long-term equity investment
1. Determination of investment costs
(1) If the investment cost is incurred in consolidation under the same control in which case the combiningparty pays the combination consideration in cash, by transferring the non-cash assets, undertaking the debts orissuing the equity securities, the initial investment cost shall be determined on the basis of the share of theowner's equity of the combined party in the book value of the ultimate controlling party's consolidated financialstatements on the combination date. For the difference between the initial investment cost of long-term equityinvestment and the book value of the consideration paid for combination or the total face value of the issuedshares, the capital reserve (capital premium or share premium) shall be adjusted. If the capital reserve isinsufficient to be offset, the retained earnings shall be adjusted.
If a consolidation under the same control is realized step by step, the initial investment cost shall bedetermined on the basis of the share of the owner's equity of the combining party in book that is obtained fromthe combined party on the combination date and calculated at shareholding ratio. For the difference between theinitial investment cost and the sum of the book value of the original long-term equity investment plus the bookvalue of the consideration newly paid for acquiring further shares on the combination date, the capital reserve(capital premium or share premium) shall be adjusted. If the capital reserve is insufficient to be offset, theretained earnings shall be adjusted.
(2) If the investment cost is incurred in the consolidation under different control, the initial investment costshall be determined as the fair value of the consideration paid for combination on the purchase date.
(3) Investment costs other than those incurred in consolidation: The initial investment cost shall be thepurchase price paid actually if the investment is obtained by paying cash, the fair value of the issued equitysecurities if by issuing the equity securities, and the value specified in the investment contract or agreement incase of investment from an investor (unless the unfair value is specified in the contract or agreement).
2. Subsequent measurement and recognition methods for profits and losses
The long-term equity investment that the Company has the control over the investee shall be calculatedwith cost method in its individual financial statement; those under the same control or significant influence shallbe calculated with equity method.
If the cost method is applied, the long-term equity investments shall be priced at the initial investment cost.The cash dividends or profits declared to be distributed by the investee other than those that have been declaredbut not distributed and included in the price or consideration paid actually when the investment is obtained shallbe recognized as the current investment income, and it is necessary to consider whether the long-terminvestment is impaired in accordance with the relevant policy of asset impairment.
When the equity method is applied, if the initial investment cost of a long-term equity investment is greaterthan the share of fair value of identifiable net assets entitled from the investee at the time of investment, it shallbe included in the initial investment cost of the long-term equity investment; otherwise, the difference shall beincluded in the current profits and losses and the cost of long-term equity investment shall be adjusted.
When the equity method is applied, the profits and losses on investment shall be recognized and the bookvalue of the long-term equity investment shall be adjusted according to share of the net profits and losses thatshall be entitled or shared and have been realized by the investee after the long-term equity investment is
obtained. When the share of the net profit and loss entitled from the investee is recognized, the proportionattributable to the investor shall be calculated at the shareholding ratio after offsetting the profits and losses ofinternal transactions with associated enterprises and joint ventures (full amount shall be recognized if the lossesof internal transactions are the asset impairment losses) in light of the accounting policies and period of theCompany on the basis of the fair value of the identifiable assets of the investee when the investment is obtained,and the net profit of the investee shall be recognized after adjustment. The portion to be distributed shall becalculated with reference to the profits or cash dividends declared to be distributed by the investee, and the bookvalue of the long-term equity investment shall be reduced accordingly. If a net loss of the investee confirmed bythe Company, the book value of the long-term equity investment, as well as other long-term equity investmentwhich form the net investment of the investment units shall be written down until zero limits, except that theCompany has to undertake obligations of additional losses. The book value of the long-term equity investmentwas adjusted and included in the owner's equity for other changes in the owner's equity other than the net profitsand losses of the investee.
3. Basis for determination of control over and significant influence on the investeeControl refers to having the power over the investee, being entitled to variable returns by participating inthe relevant activities of the investee and able to influence the amount of return by exercising the power overthe investee. Significant influence refers to that the investor has the right to participate in decision-making interms of the financial and operating policies of the investee but has no right to control or jointly control theformulation of these policies with other parties.
4. Disposal of long-term equity investments
(1) Partial disposal of long-term equity investments into subsidiaries without loss of controlThe difference between the disposal price and the corresponding book value of the disposed investmentshall be recognized as the current investment income in case of partial disposal of long-term equity investmentsinto subsidiaries without loss of control.
(2) Loss of control over subsidiaries due to partial disposal of long-term equity investments or otherreasonsIf the control over the subsidiaries is lost due to partial disposal of long-term equity investments or otherreasons, the book value of the long-term equity investment corresponding to the sold equity shall be carriedforward for the disposed equity, and the difference between the sales price and the book value of the disposed
long-term equity investment shall be recognized as investment income (loss). In addition, the remaining equityshall be recognized as long-term equity investment or other related financial assets at its book value. Theremaining equity after disposal that has joint control or significant influence on the subsidiaries shall be subjectto the accounting treatment in accordance with the relevant regulations on the conversion from the cost methodto the equity method.
5. Methods for impairment test and provision of impairment reserve
If there is any objective evidence showing that the investments into subsidiaries, associated enterprises andjoint ventures are impaired on the balance sheet date, the provision of impairment reserve shall be madeaccordingly based on the difference between the book value and the recoverable amount.
23. Investment property
Measurement model of investment property
Measurement with cost method
Depreciation or amortization method
1. Investment property includes leased land use rights, land use rights held and ready to be assigned afterappreciation, and leased buildings.
2. Investment property is measured initially at cost and subsequently with cost model. The provision fordepreciation and amortization of the investment property are made in the way as used for fixed assets andintangible assets. If there is any sign showing that the investment property is impaired on the balance sheet date,the provision of impairment reserve shall be made accordingly based on the difference between the book valueand the recoverable amount.
The Company applied the cost model to subsequent measurement of investment property, and depreciatedor amortized it in accordance with the policy as used for the buildings or land use rights.
See V. 31."Long-term Assets Impairment" for details of the methods for impairment test and provision ofimpairment reserve applicable to investment property.
If the real estate for private use or inventory is converted to an investment property or the investmentproperty is converted to a real estate for private use, the book value before such conversion shall be deemed asthe entry value after the conversion.
If the purpose of an investment property is changed to private use, this investment property shall beconverted into a fixed or intangible asset from the date of change. If the purpose of a property is changed to rentgains or capital appreciation from private use, the fixed asset or intangible asset shall be converted into aninvestment property from the date of change. If the purpose of a property is changed to rent gains or capitalappreciation from private use, the fixed asset or intangible asset shall be converted into an investment propertyfrom the date of change. If any asset is converted into an investment property measured with the cost model, thebook value before the conversion shall be deemed as the entry value after the conversion. If any asset isconverted into an investment property measured with the fair value model, the fair value on the conversion dateshall be deemed as the entry value after the conversion.An investment property shall be derecognized if this investment property is disposed of or permanentlyretired, and it is expected that no economic benefits can be obtained from its disposal. The disposal incomefrom the sale, transfer, scrapping or damage of an investment property shall be included in the current profitsand losses after deducting its book value and relevant taxes and dues. The disposal income from the sale,transfer, scrapping or damage of an investment property shall be included in the current profits and losses afterdeducting its book value and relevant taxes and dues.
24. Fixed assets
(1) Conditions for recognition
Fixed assets refer to the tangible assets that are held for production of goods, provision of labor services,lease or operation management and of which the service life exceeds one fiscal year.
Fixed assets shall be recorded at the actual cost upon the acquisition and subject to the provision forstraight-line depreciation from the next month following the date when they are ready for use as intended.
(2) Depreciation method
| Type | Depreciation method | Depreciable life | Residual rate | Annual depreciation rate |
| Houses and buildings | Straight-line method | 20-40 years | 5% | 2.375%-4.75% |
| Machinery and equipment | Straight-line method | 10 years | 5% | 9.5% |
| Transportation equipment | Straight-line method | 5 years | 5% | 19% |
| Tooling | Straight-line method | 5 years | 5% | 19% |
| Electronic equipment and other equipment | Straight-line method | 5 years | 5% | 19% |
(3) Basis for recognition, valuation and depreciation method of fixed assets under financing leaseFinancing lease will be recognized if one or more of following criteria is or are met: ① The ownership ofthe leased asset is transferred to the lessee at the expiration of the lease term; ② It can be reasonably determinedthat the lessee will exercise the option at the start of the lease since the lessee has such option to purchase theleased asset and the agreed purchase price is expected to be much lower than the fair value of the leased assetwhen the option is exercised; ③ The lease term accounts for most of the useful life of the leased asset[generally, it accounts for more than 75% (including 75%) of the useful life of the leased asset] even if theownership of the asset will not be transferred; ④ The present value of the minimum lease payment made by thelessee on the start date of lease is almost equivalent to the fair value [90% and above (including 90%)] of theleased asset on the start date of lease; the present value of the minimum lease payment received by the lessor onthe start date of lease is almost equivalent to the fair value [90% and above (including 90%)] of the leased asseton the start date of lease; ⑤ The leased asset is of a special nature and will be only used by the lessee if nomajor transformation is made.
The fixed assets under financing lease shall be recorded at the lower of the fair value of the leased assetson the start date of lease and the present value of the minimum lease payment and shall be subject to provisionfor depreciation in accordance with the depreciation policy of self-owned fixed assets.
25. Construction in progress
1. The construction in progress shall be transferred to fixed assets at the actual cost of the project when it isready for use as intended. If a product under construction has been ready for use as intended but has notundergone final settlement of account, this project shall be transferred to fixed assets at the estimated value first.After final settlement of account is made, the original temporary estimated value shall be adjusted according tothe actual cost without adjustment of depreciation previously accrued.
2. If there is any sign showing that a project under construction is impaired on the balance sheet date, theprovision for impairment shall be made accordingly at the difference between the book value and therecoverable amount.
26. Borrowing costs
1. Recognition principle for capitalizing borrowing cost
Borrowing costs occurred by the Company that may be directly attributable to the acquisition orconstruction of assets eligible for capitalization, are capitalized and accounted in the cost of relevant assets;while other borrowing costs are recognized as expenses and accounted into current profits and losses wheneveroccurred.
2. Capitalization period of borrowing costs
(1) The borrowing costs shall be capitalized if they meet the following conditions: 1) Asset expenditureshave been incurred; 2) Borrowing costs have been incurred; 3) Acquisition, construction or production activitiesnecessary for the assets to reach the usable or marketable state as intended have begun.
(2) The capitalization of borrowing costs shall be discontinued if the acquisition, construction orproduction of an asset that meets the conditions for capitalization is abnormally interrupted for more than 3successive months. The borrowing costs incurred during the period of interruption shall be recognized ascurrent expenses until the acquisition, construction or production of assets is resumed.
(3) The capitalization of borrowing costs shall cease when the purchased, constructed or produced assetsthat meet the conditions for capitalization reaches the intended usable or marketable state.
3. Capitalized amount of borrowing costs
If special borrowings are for the purpose of purchase, construction or production of assets that meet theconditions for capitalization, the amount of interest to be capitalized shall be determined as the interest expensesactually incurred (including the amortization of discounts or premiums determined with the effective interestrate method) in the current period of the special borrowing minus the interest income from the unusedborrowings that have been deposited in the bank or the profit from temporary investment by the unusedborrowings. If general borrowings are used for the purpose of purchase, construction or production of assets thatmeet the conditions for capitalization, the amount of interest to be capitalized shall be determined as theweighted average of asset expenditure with accumulated asset expenditure exceeding special borrowingmultiplied by capitalization rate of the general borrowing occupied.
27. Biological assets
None
28. Oil and gas assets
None
29. Right-of-use assets
On the commencement date of the lease term, the Company recognizes the right-of-use assets and leaseliabilities for the leases, except for simplified short-term leases and low-value asset leases.The Company initially measures the right-of-use assets at cost. This cost includes:
1. The initial measurement amount of the lease liability;
2. For lease payments paid on or before the starting date of the lease term, if there are lease incentives, theamount of lease incentives already enjoyed shall be deducted;
3. The initial direct expenses incurred by the Company;
4. Estimated costs to dismantle and remove the leased asset, restore the site where the leased asset islocated, or restore the leased asset to the state agreed upon in the lease terms. The aforementioned costs areincurred for the make-to-stock production, and the Accounting Standards for Business Enterprises No. 1 -Inventories shall apply.
The Company recognizes and measures the costs mentioned in Item 4 above in accordance with theAccounting Standards for Business Enterprises No. 13 - Contingencies.
Initial direct costs are the incremental costs incurred to achieve the lease. Incremental costs are the coststhat would not have been incurred if the enterprise did not completed the lease.
The provision for the depreciation of the right-of-use assets shall be made with reference to the relevantdepreciation provisions of the Accounting Standards for Business Enterprises No. 4 - Fixed Assets. If there isreasonable certainty that the lessee will obtain ownership of the leased assets when the lease term expires, theCompany shall make depreciation of leased assets over their remaining service life. If it is not reasonable to becertain that the lessee will obtain the ownership of the leased assets at the expiry of the lease term, the leasedassets shall be calculated and withdrawn as depreciation over the shorter one of the lease term or the remainingservice life.
The Company determines whether the right-of-use assets are impaired in accordance with the AccountingStandards for Business Enterprises No. 8 - Asset Impairment, and carries out accounting treatment for theidentified impairment losses.
30. Intangible assets
(1) Valuation method, service life and impairment test
1. Intangible assets include land usage right, software, patent rights and non-patent technologies, etc., andare initially measured at cost.
2. Intangible assets with limited service life shall be systematically and reasonably amortized according tothe expected realization mode of economic benefits related within the service life, and in case the expectedrealization mode cannot be reliably determined, the straight-line method shall be adopted for amortization.
The land usage right shall be averagely amortized within the remaining service life (generally 50 years),the software shall be averagely amortized within 3-5 years, and the patent rights and non-patent technologieswithin 5-10 years.
3. In case of evidence of impairment of intangible assets with defined service life on the balance sheet date,corresponding provision for impairment shall be made according to the difference between the book value andthe recoverable amount; For intangible assets with uncertain service life and intangible assets that have notreached the serviceable state, the impairment tests shall be carried out every year, whether there are signs ofimpairment or not.
(2) Accounting policy of internal R&D expenditure
Research stage expenditures of internal R&D projects shall be included in the current profits and losses atthe time of occurrence. In case following conditions have been met at the same time, expenditure of internalR&D projects in development stage shall be recognized as intangible assets: (1) It is technically feasible tocomplete the intangible assets for adoption and sale; (2) There is the intention to complete the intangible assetsfor adoption and sale; (3) There exist ways for intangible assets to generate economic benefits, including theevidence that there is a market for products produced by using the intangible assets or for the intangible assets.If the intangible assets will be used internally, it can be proved that they are useful; (4) There are sufficienttechnical, financial and other resources to support the development of the intangible assets and to use or sell theintangible assets; (5) Expenditure of the intangible assets in development stage can be measured reliably.
31. Long-term assets impairment
The enterprise shall judge whether there is any sign of possible assets impairment on the balance sheet date.
Goodwill arising from consolidation and intangible assets with uncertain service life shall be tested forimpairment every year, no matter whether there is any sign of impairment.
In case of following signs, the assets may be impaired:
(1) Market price of assets falls sharply in the current period, which is significantly higher than the expecteddecline due to time or normal use; (2) There are significant changes in current and future economic,technological or legal environment in which the enterprise operates and the market where assets are located,bringing adverse effects on the enterprise; (3) The market interest rate or other market return on investment hasbeen increased in the current period, affecting the discount rate of the enterprise to calculate the present value ofthe expected future cash flow of the assets and resulting in a significant decrease in the recoverable amount ofthe assets; (4) There exists evidence showing that the assets have become obsolete or the entity has beendamaged; (5) Assets have been or will be idle, terminated or planned to be disposed in advance; (6) Evidence inthe internal report of the enterprise shows that economic performance of assets has been or will be lower thanthe expected, for instance, the net cash flow arising from assets or the realized operating profit (or loss) is farlower (or higher) than the expected amount, etc. (7) Other indications showing that assets may have beenimpaired.
In case of signs of assets impairment, corresponding recoverable amount shall be estimated.
Recoverable amount shall be determined based on the higher of the net amount of fair value of assetsminus the disposal expenses and the present value of expected future cash flow of assets.
Disposal expenses include legal expenses, relevant taxes and handling fees related to disposal of assets aswell as direct expenses incurred to make the assets marketable.
Present value of expected future cash flow of assets shall be determined by selecting an appropriatediscount rate based on the expected future cash flow generated during continuous use and final disposal of theassets. To estimate present value of future cash flow of assets, measures shall be taken to comprehensivelyconsider factors as the expected future cash flow, service life and discount rate of the assets.
In case of measurement result of recoverable amount showing that recoverable amount of the asset is lowerthan its book value, the book value shall be written down to the recoverable amount, and the written downamount shall be recognized as the asset impairment loss and included in the current profits and losses; besides,corresponding provision for asset impairment shall be made at the same time.
32. Long-term deferred expenses
Long-term deferred expenses shall be recorded according to the actual amount, and shall be averagelyamortized in the benefit period or the specified period. In case future accounting period cannot benefit fromlong-term deferred expenses, all unamortized value of the item shall be transferred into the current profits andlosses.
33. Contractual liabilities
The Company presents contractual assets or contract liabilities in the balance sheet based on therelationship between performance obligations and customer payments. The Company's obligation to transfercommodities or services to customers for consideration received or receivable by the Company is listed ascontract liability.
34. Employee compensation
(1) Accounting treatment of short-term compensation
Employee wages refer to the remuneration or compensation in various forms which the Company pays toits employees for their services or severing of labor relations, Employee compensation includes short-termcompensation, post-employment benefits, dismissal benefits and other long-term employee benefits. Benefitsprovided by the Company to employees' spouses, children and dependants, family members of deceasedemployees as well as other beneficiaries shall also be included in employee compensation.
Share-based payments issued by the enterprise to its employees shall also be included in employeecompensation, and shall be handled in accordance with relevant provisions of Accounting Standards forBusiness Enterprises No. 11 - Share-based Payments.
During the accounting period when employees provide service for the Company, the actual short-termremuneration is recognized as liabilities and included in the current profits and losses or the relevant assets cost.Where, non-monetary welfare shall be measured at fair value.
(2) Accounting treatment of post-employment benefits
Post-employment benefit mainly includes basic endowment insurance, unemployment insurance and so on.Post-employment benefit plan includes defined contribution plan. Where the defined contribution plan is used,the corresponding amount shall be recorded into relevant asset costs or current profits and losses.
(3) Accounting treatment of dismissal benefits
In case the Company terminates labor relationship with employees prior to the expiration of employee'slabor contract, or offers compensation to encourage employees to accept the layoff voluntarily, it shall confirmthe compensation for termination of labor relationship with employees and include the compensation amount inthe current profits and losses at the earlier time when it fails to unilaterally withdraw labor relationshiptermination plan or layoff proposal and confirms costs related to reorganization involving the payment ofdismissal benefits.
(4) Accounting treatment of other long-term employee benefits.
None
35. Lease liabilities
On the commencement date of the lease term, the Company recognizes the right-of-use assets and leaseliabilities for the leases, except for simplified short-term leases and low-value asset leases.Lease liabilities are initially measured at the present value of outstanding lease payments from lease date.Lease payment refers to the amount paid by the Company to the lessor in connection with the right to usethe leased assets during the lease term, including:
1. For fixed payment and the actual fixed payment with lease incentives, the relevant amount of it shall bededucted;
2. The amount of variable lease payments depending on the index or ratio, which is recognized at the initialmeasurement according to the index or ratio on the starting date of the lease term;
3. The exercise price of the purchase option; provided that this option will be exercised base on thereasonable determination of the Company;
4. The amount to be paid for exercising the option to terminate the lease; provided that in the lease term, itreflects that the Company will exercise the option to terminate the lease;
5. The amount expected to be paid based on the guaranteed balance provided by the Company.When calculating the present value of the lease payments, the Company adopts the interest rate implicit inlease as the discount rate, but if the interest rate implicit in lease cannot be reasonably determined, theincremental borrowing rate of the Company will be used as the discount rate.
36. Estimated liabilities
None
37. Share-based payment
1. Types of share-based payment
It includes equity-settled share-based payment and cash-settled share-based payment
2. Determination method of fair value of equity instrument
(1) In case of active market, it shall be determined according to the quoted price in the active market.
(2) In case of no active market, it shall be determined by adopting valuation technologies, includingreferring to prices used in recent market transactions by parties familiar with the situation and willing to trade,current fair value of other financial instruments that are essentially the same, discounted cash flow method andoption pricing model.
3. Basis for confirming the best estimate of vesting equity instruments
Estimation shall be based on the latest available changes on vesting employee number and other subsequentinformation.
4. Accounting treatment of implementing, modifying and terminating share-based payment plan
(1) Equity-settled share-based payment
Equity-settled share-based payment in exchange for employee services that can be exercised immediatelyafter the grant shall be included in the relevant costs or expenses according to the fair value of equityinstruments on the grant date, and the capital reserve shall be adjusted accordingly. For equity-settled share-based payment in exchange for employee services only after completing service within the waiting period orreaching the specified performance conditions, it is required to include the services obtained in the currentperiod into relevant costs or expenses according to the best estimate of number of vesting equity instrumentsand the fair value on the grant date of equity instruments on each balance sheet date within the waiting period,and the capital reserve shall be adjusted accordingly.
For equity-settled share-based payment in exchange for other party's services, if the fair value of otherparty's services can be reliably measured, it shall be measured based on the fair value of other party's serviceson the acquisition date; In case the fair value of other party's services cannot be reliably measured, but the fairvalue of equity instruments can be reliably measured, it shall be measured based on the fair value of equityinstruments on the acquisition date and shall be included in relevant costs or expenses; besides, the owner'sequity shall be increased accordingly.
(2) Cash-settled share-based payment
Cash-settled share-based payment in exchange for employee services that can be exercised immediatelyafter the grant shall be included in relevant costs or expenses according to the fair value of the liabilitiesundertaken by the Company on the grant date, and the liabilities shall be increased accordingly. For cash-settledshare-based payment in exchange for employee services only after completing service within the waiting periodor reaching the specified performance conditions, it is required to include the services obtained in the currentperiod into relevant costs or expenses and relevant liabilities according to the best estimate of vesting situationand the fair value of the liabilities assumed by the Company on each balance sheet date within the waitingperiod.
(3) Modification and termination of share-based payment plan
In case of increase of fair value of the equity instruments granted due to modification, the Company shallrecognize the increase of services obtained based on the increase of fair value of equity instruments; In case ofincrease of the number of equity instruments granted due to modification, the Company shall recognize the fairvalue of the increased equity instruments as the increase of services obtained accordingly. Besides, if theCompany modifies vesting conditions in a way beneficial to employees, it shall consider all modified vestingconditions when dealing with the vesting conditions.
In case of decrease of fair value of the equity instruments granted due to modification, the Company shallcontinue to recognize the amount of services obtained based on the fair value of equity instruments on the grantdate without considering the decrease of fair value of equity instruments; In case of decrease of the number ofequity instruments granted due to modification, the Company shall recognize the decreased part as thecancellation of granted equity instruments; Besides, if the Company modifies vesting conditions in a way notbeneficial to employees, it shall not consider the modified vesting conditions when dealing with vestingconditions.
In case the Company cancels or settles the granted equity instruments within the waiting period (exceptthose cancelled due to failure to meet the vesting conditions), the cancellation or settlement shall be acceleratedfor vesting, and the amount originally recognized in the remaining waiting period shall be recognizedimmediately.
38. Preferred shares, perpetual bonds and other financial instruments
None
39. Revenue
Accounting policies adopted for revenue recognition and measurement
1. Revenue recognition
The Company's revenue mainly includes sales revenue of intelligent controller, lithium battery, motor andcontrol system.
The Company has fulfilled performance obligation in the Contract, that is, recognizing revenue when thecustomer obtains the control right of relevant commodities. Obtaining of the control right of relevantcommodities means to be able to dominate the use of the commodities and obtain almost all economic benefitsarising therefrom.
2. The Company shall judge the nature of relevant performance obligations as "performance obligationsfulfilled in a certain period" or "performance obligations fulfilled at a certain time point" based on relevantprovisions of revenue standards, and shall confirm revenue according to the following principles respectively.
(1) In case the Company meets one of the following conditions, it shall fulfill the performance obligationswithin a certain period of time:
① Customers obtain and consume economic benefits arising from performance of the Company during theCompany's performance of the Contract.
② Customers can control the assets under construction during the Company's performance of the Contract.
③ Assets of the Company during the performance of the Contract are irreplaceable, and the Company shallbe entitled to collect money for the performance part completed so far in the whole contract period.
For performance obligations fulfilled within a certain period of time, the Company shall recognize revenueaccording to the performance progress within that period, except that the performance progress cannot be
reasonably determined. The Company shall consider the nature of commodities, and shall determine the properperformance progress by adopting the output method or the input method.
(2) For performance obligations fulfilled at a certain time point rather than in a certain period, the Companyshall recognize revenue at the time when customers obtain the control right of relevant commodities.
When judging whether customers have obtained the control right of relevant commodities, the Companyconsider the following signs:
① The Company shall be entitled to immediately collect revenues from commodities, which means thatcustomers have the obligation to pay for commodities immediately.
② The Company has transferred the legal ownership of commodities to customers, which means thatcustomers have obtained the legal ownership of commodities.
③ The Company has transferred commodities in kind to customers, which means that customers havepossessed commodities in kind.
④ The Company has transferred main risks and rewards related to the ownership of commodities tocustomers, which means that customers have obtained main risks and rewards related to the ownership ofcommodities.
⑤ Customers have accepted the commodities.
⑥ Other indications that customers have obtained the control right of commodities.
The specific policies of revenue recognition of the Company are as follows:
In case the sales contract between the Company and customers has been deemed as a performanceobligation fulfilled at a certain time point, the specific revenue recognition method shall be formulatedaccording to the actual situation of the Company's product sales as follows:
Domestic sales: ① The customer picks up the goods in cash. After the payment and delivery, it isconsidered that the customer has obtained the control of the relevant goods, and the Company has recognizedthe sales revenue; ② If the advance payment is used for settlement, and the other party's customer confirmationreceipt is obtained after the delivery, it is considered that the customer has obtained the control of the relevantcommodities, and the Company has recognized the sales revenue; ③ If the credit sale is adopted according to acertain payment period, within which the customer settles, and after the delivery, the other party's customerconfirmation receipt is obtained, it is considered that the customer has obtained the control of the relevant goods,and the Company has recognized the sales revenue.
Foreign sales: the Company shall deliver commodities according to the signed order, hold special exportinvoice, delivery note and other original documents for customs clearance and export, pass customs audit,complete export declaration procedures, obtain the customs declaration documents as the point of transfer ofcontrol of the relevant goods, and recognize the sales revenue by recording the revenue based on the deliveryorder, special export invoice and customs declaration form.
3. Measurement of revenue
The Company shall measure revenue according to the transaction price allocated to each individualperformance obligation. In determining the transaction price, the Company shall consider the influence ofvariable consideration, significant financing components in the Contract, non-cash consideration, considerationpayable to customers as well as other factors.
(1) Variable consideration
The Company shall determine the best estimate of variable consideration according to the expected value orthe most likely amount, but the transaction price including the variable consideration shall not exceed theaccumulated recognized revenue that will not be significantly reversed when relevant uncertainty is eliminated.When evaluating whether the accumulative recognized revenue is unlikely to be significantly reversed, theenterprise shall further consider the possibility and proportion of revenue reversal.
(2) Significant financing components
In case of significant financing components in the Contract, the Company shall determine the transactionprice according to the amount payable in cash when assuming that customers obtain the control right ofcommodities. Difference between the transaction price and the contract consideration shall be amortized byadopting the effective interest rate method during the contract period.
(3) Non-cash consideration
In case customers pay non-cash consideration, the Company shall determine the transaction price accordingto the fair value of the non-cash consideration. In case the fair value of non-cash consideration cannot bereasonably estimated, the Company shall indirectly determine the transaction price by referring to the separateselling price of commodities for transferring commodities to customers that it promises.
(4) Consideration payable to customers
Consideration payable to customers shall be written down against the transaction price, and the currentincome shall be offset at the later of confirming relevant income or paying (or promising to pay) customer's
consideration, except that the consideration payable to customers is to obtain other clearly distinguishablecommodities from customers.
In case the consideration payable by an enterprise to customers is to obtain other clearly distinguishablecommodities from customers, the purchased commodities shall be confirmed in a way consistent with otherpurchases of the enterprise. In case the consideration payable by an enterprise to customers exceeds the fairvalue of a clearly distinguishable commodity obtained from the customer, the excess amount shall be used tooffset the transaction price. In case the fair value of clearly distinguishable commodities obtained fromcustomers cannot be reasonably estimated, the enterprise shall offset the transaction price with the considerationpayable to customers in full.Differences in revenue recognition accounting policies caused by different business models of similarbusinesses
None
40. Government subsidies
1. Government subsidies include government subsidies related to assets and government subsidies relatedto income.
2. In case the government subsidies can be included in monetary assets, they shall be measured accordingto the amount received or receivable; In case the government subsidies can be classified as non-monetary assets,they shall be measured at fair value, and once the fair value cannot be obtained reliably, they shall be measuredin nominal amount.
3. Government subsidies calculated by adopting the gross method:
(1) Government subsidies related to assets shall be recognized as deferred income and included in profitsand losses by stages in a reasonable and systematic way within the service life of relevant assets. In caserelevant assets are sold, transferred, scrapped or damaged prior to the end of their service life, the balance ofrelevant deferred income that has not been allocated shall be transferred to the profits and losses of the currentperiod of asset disposal.
(2) Government subsidies related to income and used to compensate related expenses or losses in the laterperiod shall be recognized as deferred income, and shall be included in the current profits and losses during the
period when related expenses are recognized; subsidies used to compensate relevant expenses or losses incurredshall be directly included in the current profits and losses.
4. Government subsidies calculated by adopting the net method:
(1) Government subsidies related to assets shall be used to offset the book value of relevant assets;
(2) Government subsidies related to income and used to compensate related expenses or losses in the laterperiod shall be recognized as deferred income, and shall be used to offset related costs when related expensesare recognized; subsidies used to compensate relevant expenses or losses incurred shall be directly used tooffset related costs.
5.For government subsidies including asset-related part and income-related part, measures shall be taken todistinguish different parts and carry out accounting treatment separately; Part difficult to distinguish shall beclassified as government subsidies related to income.
6. The government subsidies related to the daily activities of the Company shall be included into otherincomes or used to write down related costs and expenses in accordance with the essence of economicoperations; the government subsidies independent of the daily activities shall be included into the non-operatingincome and expense.
7. For discount interest of preferential policy loans to be obtained by the Company, two measures shall beadopted, including that the Ministry of Finance allocates the discount funds to the lending banks and that theMinistry of Finance allocates the discount funds to the Company:
(1) In case the Ministry of Finance allocates the discount funds to the lending banks, and the lending bankprovides loans to the Company at preferential policy interest rate, the Company shall choose the followingmethods for accounting treatment:
1) Taking the loan amount actually received as the entry value of the loan, and calculating relevantborrowing costs based on the loan principal and the preferential policy interest rate.
2) Taking the fair value of loan as the entry value, calculate the borrowing costs by adopting the effectiveinterest rate method, and recognizing the difference between the actual received amount and the fair value of theloan as deferred income. Deferred income shall be amortized by adopted the effective interest rate methodwithin the duration of loan to offset relevant borrowing costs.
(2) In case the Ministry of Finance allocates the discount funds to the Company, the Company will writedown the corresponding discount interest against relevant borrowing costs.
41. Deferred tax assets/deferred tax liabilities
1. It is required to calculate and recognize the deferred tax assets or liabilities according to the differencebetween the book value of the assets and liabilities and corresponding tax base (in case the tax base of items notrecognized as assets and liabilities can be determined according to the provisions of the tax law, the differencebetween the tax base and their book amount shall be adopted) as well as the applicable tax rate during the periodof expected recovery of the assets or settlement of the liabilities.
2. Recognition of deferred tax assets shall be limited to the taxable income that is likely to be obtained tooffset temporary deductible differences. On the balance sheet date, if there is conclusive evidence that it islikely to obtain sufficient taxable income in the future periods to offset the deductible temporary differences, thedeferred tax assets not recognized in the previous accounting periods shall be recognized.
3. The book value of deferred tax assets shall be reviewed on the balance sheet date. In case it isimpossible to obtain enough taxable income to offset the benefits of the deferred tax assets in the future, thebook value of the deferred tax assets shall be written down. If it is likely to obtain enough taxable income, thewrite down amount shall be reversed.
4. The current income tax and deferred tax of the Company shall be recognized as income tax expense orincome, and shall be included in the current profits and losses, except for income tax arising from the followingcircumstances: (1) consolidation; (2) transactions or matters directly recognized in the owner's equity.
42. Lease
(1) Accounting treatment of operating lease
1. Lessee
As the lessee, the Company recognizes the right-of-use assets and lease liabilities for the lease on thebeginning date of the lease term excluding short-term leases and leases of low-value assets to which thesimplified treatment applies.
After the starting date of the lease term, the Company uses the cost model to make subsequentmeasurement of the right-of-use assets. The provision for the depreciation of the right-of-use assets shall bemade with reference to the relevant depreciation provisions of the Accounting Standards for BusinessEnterprises No. 4 - Fixed Assets. If the lessee can reasonably determine that it will obtain the ownership of theleased assets upon the expiration of the lease term, provision for depreciation shall be made within the
remaining service life of the leased assets. If it is not reasonable to be certain that the lessee will obtain theownership of the leased assets at the expiry of the lease term, the leased assets shall be calculated andwithdrawn as depreciation over the shorter one of the lease term or the remaining service life. The Companydetermines whether the right-of-use assets are impaired in accordance with the Accounting Standards forBusiness Enterprises No. 8 - Asset Impairment, and carries out accounting treatment for the identifiedimpairment losses.The Company calculates the interest expense of the lease liabilities in each period of the lease at the fixedperiodic interest rate, which is included in the current profits and losses. If the cost shall be included in the costof relevant assets in accordance with the Accounting Standards for Business Enterprises No. 17 - BorrowingCosts and other standards, such provisions shall prevail.For short-term leases and low-value asset leases, the Company shall choose not to recognize right-of-useassets and lease liabilities, and include the lease payments for short-term leases and low-value asset leases in therelevant asset cost or current profit and loss according to the straight-line method during each period of the leaseterm.
2. Lessor
During each period of the lease term, the Company as the lessor shall adopt the straight-line method torecognize the rental revenue from operating lease as rental income. The lessor shall capitalize the initial directcost related to operating lease, and amortizes and includes such cost into the current profits and losses byinstallment according to the same recognition base of the rental revenue during the lease term.As for the fixed assets subject to operating leases, the Company shall calculate the depreciation of it byadopting depreciation policy for similar assets. As for other leased assets, systematic and reasonable methodsshall be adopted for its amortization according to the Accounting Standards for Business Enterprises applicableto this asset. The Company determines whether the operating lease assets are impaired in accordance withAccounting Standards for Business Enterprises, No. 8 -Asset Impairment, and carries out correspondingaccounting treatment.
(2) Accounting treatment of financing lease
Accounting treatment of the Company as the lessee is shown in Note V 29, Note V 35 and Note V 42 (1).
As the lessor, the Company shall confirm the receivable payment for financial lease on the beginning dateof the lease term, terminate the recognition of financial lease assets, and calculate and recognize the interestincome of each period in the lease term according to the fixed periodic interest rate.
43. Other important accounting policies and accounting estimation
Hedge accounting
The hedge means the risk management activity where the enterprise designates the financial instruments asthe hedge instruments for the risk exposure due to the management of the specific risks such as foreignexchange risk, interest rate risk, price risk, credit risk so that the fair value or the cash flow changes, which isexpected to countervail all or part of the fair value or cash flow change of the hedged projects.
1. In the hedge accounting, the hedge is divided into fair value hedge, cash flow hedge, and net investmenthedge for overseas operation.
2. Only when the fair value hedge, cash flow hedge, or net investment hedge for overseas operation meetthe following conditions at the same time can the hedge accounting method stipulated by the Code for handling:
(1) The hedge relationship is only composed of the hedge instruments and hedged projects that meet theconditions; (2) When the hedge begins, the enterprise officially designates the hedge instruments and hedgedprojects and prepares the written documents about hedge relationship and the risk management strategies andrisk management objectives related to the hedge for the enterprise. These documents at least describe the hedgeinstrument, hedged projects, nature of the hedged risks, and evaluation methods on hedge effectiveness(including the forming reason analysis for invalid part of the hedge and the recognition methods of the hedgeratio) etc. (3) The hedge relationship conforms to the requirements of hedge effectiveness.
If the hedge meets the following conditions at the same time, the enterprise shall identify that the hedgerelationship conforms to the requirements of hedge effectiveness:
(a) There is the economic relationship between the hedged projects and hedge instruments. The economicrelationship makes the value of the hedge instruments and hedged projects change in the reverse direction dueto the same hedged risks.
(b) In the value change generated for the hedged projects and hedge instruments, the effect of the creditrisk is not dominant.
(c) The hedge ratio of the hedge relationship shall be equal to the ratio between the hedged project quantityof the actual hedge for the enterprise and the actual quantity of the hedge instruments and shall not reflect theunbalance of the relative weight between the hedged projects and hedge instruments, which will cause thehedge invalidation and may generate the accounting results not consistent with the hedge accounting objectives.The enterprise shall continuously evaluate whether the hedge relationship conforms to the hedgeeffectiveness requirements when the hedge begins and during the sequent periods, especially for the analysis ofthe forming reasons why it is expected to affect the hedge relationship due to the invalid part of the hedgeduring the residual periods of the hedge. The enterprise shall at least evaluate the hedge relationship on the dayof balance sheet and when the major changes will happen for relevant situations affecting the hedgeeffectiveness requirements.
If the hedge relationship does not conform to the hedge effectiveness requirements any more due to thehedge ratio, but the risk management objective to designate the hedge relationship does not change, theenterprise shall re-balance the hedge relationship.
3. Accounting handling of the hedge.
(1) Fair value hedge
If the fair value hedge meets the conditions of the hedge accounting methods, it shall be handled inaccordance with the provisions below:
(a) The profit or loss generated by the hedge instrument shall be incorporated into the profits and losses. Ifthe hedge instrument is used to hedge the non-tradable equity instrument investment (or its components) whichis measured at fair value with the changes including in other comprehensive income, the profit or loss generatedby the hedge instruments shall be incorporated into other comprehensive income.
(b) The profit or loss generated by the hedged projects due to the hedge risk exposure shall be incorporatedinto the current profit or loss. At the same time, the account value shall be adjusted for the confirmed hedgedprojects measured at the fair value.
(2) Cash flow hedge
If the cash flow value hedge meets the conditions to apply the hedge accounting methods, it shall behandled in accordance with the provisions below:
(a) If the profit or loss generated by the hedge instrument belongs to the valid part of the hedge as the cashflow hedge reserve, it shall be incorporated into other comprehensive income. The amount of cash flow hedge
reserve included in other comprehensive income in each period shall be the change amount of cash flow hedgereserve in the current period. The amount of cash flow hedge reserve included in other comprehensive incomein each period shall be the change amount of cash flow hedge reserve in the current period.(b) If the profit or loss generated by the hedge instrument belongs to the invalid part of the hedge (that is,other profit or loss after deducting other comprehensive income), it shall be incorporated into the current profitsand losses.
(3) Net investment hedge for overseas operation
As for the net investment hedge for overseas operation, including the hedge of monetary items accountingas part of net investment, it shall be handled in accordance with the provisions similar to the cash flow hedgeaccounting:
(a) If the profit or loss generated by the hedge instrument belongs to the valid part of the hedge, it shall beincorporated into other comprehensive income.
When all or part of the overseas business is disposed, the above profit or loss of hedge instrumentsincluded in other comprehensive income shall be transferred out and incorporated into the current profits andlosses.
(b) If the profit or loss generated by the hedge instrument belongs to the invalid part of the hedge, it shallbe incorporated into the current profits and losses.
Repurchase shares
If the Company or its subsidiaries shares are acquired due to the reduction of registered capital or rewardof employees, the amount actually paid shall be treated as the treasury share, and the record shall be made forreference. If the repurchase shares are cancelled, the capital reserve will be offset by the difference between thetotal par value of the cancelled shares and the number of cancelled shares and the amount paid for the actualrepurchase. If the capital reserve is insufficient to be offset, the retained earnings shall be offset; If therepurchase shares are awarded to the employees of the Company as equity-settled share-based payment, whenthe employees exercise the right to purchase the shares of the Company or its subsidiaries and receive the price,the cost of treasury shares delivered to the employees and the accumulated amount of capital reserve (othercapital reserves) during the waiting period shall be resold, and the capital reserve (capital premium or sharepremium) shall be adjusted according to the difference.
44. Important accounting policy and accounting estimation changes
(1) Important accounting policy changes
? Applicable □ Not applicable
| Contents and reasons of the accounting policy change | Approval procedures | Remarks |
| On November 30, 2022, the Ministry of Finance released and Circular on Issuing Interpretation No. 16 of Accounting Standards for Business Enterprises (CK [2022] No.31, hereinafter referred to as "Interpretation No. 16"), in which, the requirement on the "accounting practice for deferred income taxes related to assets and liabilities generated by individual transactions which shall not be exempted from initial confirmation" shall be implemented from January 1, 2023. | Deliberated and passed by the 32nd Meeting of the 7th Board of Directors | If, at the beginning of the earliest period of the financial statements to which the Interpretation No. 16 applies for the first time, taxable temporary differences and deductible temporary differences arise from lease liabilities and right-of-use assets recognized as a result of a single transaction to which the Interpretation No. 16 applies, the Company will adjust the cumulative effects to the opening retained earnings and other related financial statement items in the earliest period for which the financial statements are presented in accordance with the provisions of the Interpretation No. 16 and those of the Accounting Standards for Business Enterprises No. 18 - Income Taxes. |
The specific adjustments are as follows:
1. For the items in the balance sheet as of December 31, 2022, the affected amount of deferred incometaxes was RMB 9,436,477.65, the affected amount deferred income tax liabilities was RMB 8,614,259.95, theaffected amount of undistributed profit was RMB 710,522.81, and the affected amount of non-controllinginterests was RMB 111,694.89.
2. For the items in the 2022 income statement (January - June), the affected amount of income taxes wasRMB -192,628.01.
(2) Important accounting estimation changes
□ Applicable ? Not applicable
(3) Relevant items in financial statements at the beginning of 2023 when such adjustments were made forthe first time for initial implementation of the new accounting standard
□ Applicable ? Not applicable
45. Others
None
VI. Tax
1. Main tax types and tax rate
| Tax type | Tax basis | Tax rate |
| VAT (value-added tax) | Revenue from sales of goods | 13%、9%、6%、3% |
| Consumption tax | Paid turnover tax amount | 4% |
| Urban maintenance and construction tax | Paid turnover tax amount | 7%、5% |
| Corporate income tax | Taxable income | Please refer to the different corporate income tax rates, subject of taxation and their tax rate disclosures below for details. |
Where there are any taxpayers with different corporate income tax rates, details shall be disclosed.
| Name of taxpayer | Corporate income tax |
| Shenzhen Topband Co., Ltd. | 15.00% |
| Shenzhen Topband Software Technology Co., Ltd. | 15.00% |
| Shenzhen Topband Automation Technology Co., Ltd. | 25.00% |
| Shenzhen Topband Battery Co., Ltd. | 15.00% |
| Chongqing Topband Industrial Co., Ltd. | 25.00% |
| Topband (Hong Kong) Co., Ltd. | 16.50% |
| Huizhou Topband Electrical Technology Co., Ltd. | 15.00% |
| TOPBAND INDIA PRIVATE LIMITED | 29.12% |
| Shenzhen YAKO Automation Technology Co., Ltd. | 15.00% |
| Shenzhen Allied Control System Co., Ltd. | 15.00% |
| Shenzhen Yansheng Software Co., Ltd. | 15.00% |
| Ningbo Topband Intelligent Control Co., Ltd. | 25.00% |
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 20.00% |
| Hangzhou Zhidong Motor Technology Co., Ltd. | 20.00% |
| Taixing Ninghui Lithium Battery Co., Ltd. | 15.00% |
| Shenzhen Topband Supply Chain Services Co., Ltd. | 25.00% |
| Shenzhen Topband Investment Co., Ltd. | 25.00% |
| Shenzhen Spark IOT Technology Co., Ltd. | 20.00% |
| Shenzhen Zhongli Consulting Co., Ltd. | 20.00% |
| Shenzhen Tunnu Innovation Co., Ltd. | 20.00% |
| TUNNU INNOVATION,INC | 21.00% |
| Shenzhen Senxuan Technology Co., Ltd. | 20.00% |
| Shenzhen Tengyi Industrial Co., Ltd. | 20.00% |
| Topband (Qingdao) Intelligent Control Co., Ltd. | 20.00% |
| Shenzhen Topband Automotive Electronics Co., Ltd. | 20.00% |
| TOPBAND JAPAN Co.,Ltd | 23.20% |
| Tunnu Innovation (Hong Kong) Limited | 8.25% |
| Topband （Vietnam) Co.,ltd | 20.00% |
| TOPBAND SMART DONGNAI(VIETNAM) Co.,ltd | 20.00% |
| Topband Germany GmbH | 15.825% |
| Huizhou Topband Lithium Battery Co., Ltd. | 20.00% |
| Nantong Topband Youneng Technology Co., Ltd. | 25.00% |
| Huizhou YAKO Automation Technology Co., Ltd. | 25.00% |
| Shenzhen Topband Motor Co., Ltd. | 20.00% |
| Shenzhen Yueshang Robot Co., Ltd. | 20.00% |
| Shenzhen Xiaoyou Aitu Innovation Technology Co., Ltd. | 20.00% |
| Huizhou Chiding Technology Co., Ltd. | 20.00% |
| Q.B.PTE.LTD | 17.00% |
| TOPBAND MEXICO,S.DE R.L.DE C.V. | 30.00% |
| TOPBAND SMART EUROPE COMPANY LIMITED S.R.L. | 16.00% |
2. Tax preference
On December 11, 2020, the Company obtained the Certificate for High-tech Enterprise that is numberedGR202044206158 and issued by Shenzhen Science and Technology Innovation Commission, Shenzhen FinanceBureau and Shenzhen Tax Service, State Taxation Administration. This Certificate is valid within 3 years fromthe date of issuance. The corporate income tax rate applicable for the Company from 2021 to 2023 is 15% inaccordance with relevant provisions of the Law of the People's Republic of China on Enterprise Income Tax,Regulations of the People's Republic of China on the Implementation of Enterprise Income Tax and theManagement Measures for the Certification of High-tech Enterprises.
On December 19, 2022, Shenzhen Topband Software Technology Co., Ltd. obtained the Certificate forHigh-tech Enterprise that is numbered GR202244203890 and issued by Shenzhen Science and TechnologyInnovation Commission, Shenzhen Finance Bureau and Shenzhen Tax Service, State Taxation Administration.This Certificate is valid within 3 years from the date of issuance. The corporate income tax rate applicable forthe Company from 2022 to 2024 is 15% in accordance with relevant provisions of the Law of the People'sRepublic of China on Enterprise Income Tax, Regulations of the People's Republic of China on theImplementation of Enterprise Income Tax and the Management Measures for the Certification of High-techEnterprises.
On December 23, 2021, Shenzhen Topband Battery Co., Ltd. obtained the Certificate for High-techEnterprise that is numbered GR202144203102 and issued by Shenzhen Science and Technology InnovationCommission, Shenzhen Finance Bureau and Shenzhen Tax Service, State Taxation Administration. ThisCertificate is valid within 3 years from the date of issuance. The corporate income tax rate applicable for theCompany from 2021 to 2023 is 15% in accordance with relevant provisions of the Law of the People's Republic
of China on Enterprise Income Tax, Regulations of the People's Republic of China on the Implementation ofEnterprise Income Tax and the Management Measures for the Certification of High-tech Enterprises.On December 20, 2021, Huizhou Topband Electrical Technology Co., Ltd. obtained the Certificate forHigh-tech Enterprise that is numbered GR202144003640 and issued by the Department of Science andTechnology of Guangdong Province, the Department of Finance of Guangdong Province, and GuangdongProvincial Tax Service, State Taxation Administration. This Certificate is valid within 3 years from the date ofissuance. The corporate income tax rate applicable for the Company from 2021 to 2023 is 15% in accordancewith relevant provisions of the Law of the People's Republic of China on Enterprise Income Tax, Regulations ofthe People's Republic of China on the Implementation of Enterprise Income Tax and the Management Measuresfor the Certification of High-tech Enterprises.On December 23, 2021, Shenzhen YAKO Automation Technology Co., Ltd. obtained the Certificate forHigh-tech Enterprise that is numbered GR202144205479 and issued by Shenzhen Science and TechnologyInnovation Commission, Shenzhen Finance Bureau and Shenzhen Tax Service, State Taxation Administration.This Certificate is valid within 3 years from the date of issuance. The corporate income tax rate applicable forthe Company from 2021 to 2023 is 15% in accordance with relevant provisions of the Law of the People'sRepublic of China on Enterprise Income Tax, Regulations of the People's Republic of China on theImplementation of Enterprise Income Tax and the Management Measures for the Certification of High-techEnterprises.On December 23, 2021, Shenzhen Allied Control System Co., Ltd. obtained the Certificate for High-techEnterprise that is numbered GR202144206368 and issued by Shenzhen Science and Technology InnovationCommission, Shenzhen Finance Bureau and Shenzhen Tax Service, State Taxation Administration. ThisCertificate is valid within 3 years from the date of issuance. The corporate income tax rate applicable for theCompany from 2021 to 2023 is 15% in accordance with relevant provisions of the Law of the People's Republicof China on Enterprise Income Tax, Regulations of the People's Republic of China on the Implementation ofEnterprise Income Tax and the Management Measures for the Certification of High-tech Enterprises.On December 23, 2021, Shenzhen Yansheng Software Co., Ltd. obtained the Certificate for High-techEnterprise that is numbered GR202144207744 and issued by Shenzhen Science and Technology InnovationCommission, Shenzhen Finance Commission and Shenzhen Tax Service, State Taxation Administration. ThisCertificate is valid within 3 years from the date of issuance. The corporate income tax rate applicable for the
Company from 2021 to 2023 is 15% in accordance with relevant provisions of the Law of the People's Republicof China on Enterprise Income Tax, Regulations of the People's Republic of China on the Implementation ofEnterprise Income Tax and the Management Measures for the Certification of High-tech Enterprises.On November 30, 2021, Taixing Ninghui Lithium Battery Co., Ltd. obtained the Certificate for High-techEnterprise that is numbered GR202132010782 and issued by the Jiangsu Provincial Department of Science andTechnology, the Department of Finance of Jiangsu Province, and Jiangsu Provincial Tax Service, StateTaxation Administration. This Certificate is valid within 3 years from the date of issuance. The corporateincome tax rate applicable for the Company from 2021 to 2023 is 15% in accordance with relevant provisionsof the Law of the People's Republic of China on Enterprise Income Tax, Regulations of the People's Republic ofChina on the Implementation of Enterprise Income Tax and the Management Measures for the Certification ofHigh-tech Enterprises.
According to the Notice No. 13 of the Ministry of Finance and the State Taxation Administration onFurther Implementation of Preferential Income Tax Policies for Small Enterprises with Low Profits in 2022, theportion of taxable income taxes above RMB 1 million but below RMB 3 million of small enterprises with lowprofits shall be taxed by 25% at a corporate income tax rate of 20%.According to the Notice No. 6 of theMinistry of Finance and the State Taxation Administration on Preferential Income Tax Policies for SmallEnterprises with Low Profits and Self-employed Individuals in 2023, the portion of taxable income taxes belowRMB 1 million of small enterprises with low profits shall be taxed by 25% at a corporate income tax rate of20%.The provisions of this Policy apply to Shenzhen Spark IOT Technology Co., Ltd., Shenzhen TunnuInnovation Co., Ltd., Huizhou Topband Battery Co., Ltd., Shenzhen Meanstone Intelligent Technology Co.,Ltd., Shenzhen Zhongli Consulting Co., Ltd., Shenzhen Senxuan Technology Co., Ltd., Shenzhen TengyiIndustrial Co., Ltd., Topband (Qingdao) Intelligent Control Co., Ltd., Shenzhen Topband AutomotiveElectronics Co., Ltd., Shenzhen Yueshang Robot Co., Ltd., Shenzhen Topband Motor Co., Ltd., ShenzhenXiaoyou Aitu Innovation Technology Co., Ltd., and Huizhou Chiding Technology Co., Ltd. that aresubsidiaries and sub-subsidiaries.
3. Others
None
VII. Notes to Items of Consolidated Financial Statements
1. Monetary capital
Unit: RMB
| Items | Ending balance | Beginning balance |
| Cash on hand | 963,395.56 | 606,436.16 |
| Bank deposit | 1,579,096,555.64 | 1,210,218,469.79 |
| Other monetary capital | 181,520,493.18 | 192,201,165.39 |
| Total | 1,761,580,444.38 | 1,403,026,071.34 |
| Including: total amount deposited abroad | 390,340,526.48 | 412,196,063.34 |
| Total amount subject to restricted use due to mortgage, pledge or freezing | 18,874,829.84 | 18,937,494.54 |
Other description
1. Other monetary capital mainly includes the large-denomination certificates of deposit of RMB100,000,000.00 and the fixed-time deposit of RMB 50,000,000.00.
2. At the end of the period, the other restricted monetary capital amounts to RMB 18,874,829.84. Fordetails, please refer to "VII. (LXXXI)" in this financial report.
3. At the end of the period, there is no amount deposited overseas and with the repatriation restricted.
2. Tradable financial assets
Unit: RMB
| Items | Ending balance | Beginning balance |
| Financial assets measured at fair value and whose changes are recorded in current profit or loss | 366,855,786.11 | 342,959,450.31 |
| Including: | ||
| Financial products | 5,687,202.21 | 1,790,866.41 |
| Investment in equity instruments | 361,168,583.90 | 341,168,583.90 |
| Including: | ||
| Total | 366,855,786.11 | 342,959,450.31 |
Other description
3. Derivative financial assets
Not applicable
4. Notes receivable
(1) List of classification of notes receivable
Unit: RMB
| Items | Ending balance | Beginning balance |
| Bank acceptance instruments | 46,224,108.36 | 40,056,132.32 |
| Commercial acceptance bill | 6,438,809.55 | 11,735,626.58 |
| Total | 52,662,917.91 | 51,791,758.90 |
Unit: RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
| Notes receivable with single provision for bad debts | 46,729,108.36 | 88.41% | 0.00% | 46,729,108.36 | 40,056,132.32 | 76.78% | 40,056,132.32 | |||
| Including: | ||||||||||
| Bank acceptance bill | 46,729,108.36 | 88.41% | 0.00% | 46,729,108.36 | 40,056,132.32 | 76.78% | 40,056,132.32 | |||
| Commercial acceptance bill | ||||||||||
| Notes receivable with provision for bad debts by portfolio | 6,123,642.46 | 11.59% | 189,832.91 | 3.10% | 5,933,809.55 | 12,111,069.74 | 23.22% | 375,443.16 | 3.10% | 11,735,626.58 |
| Including: | ||||||||||
| Commercial acceptance bill | 6,123,642.46 | 11.59% | 189,832.91 | 3.10% | 5,933,809.55 | 12,111,069.74 | 23.22% | 375,443.16 | 3.10% | 11,735,626.58 |
| Total | 52,852,750.82 | 100.00% | 189,832.91 | 0.36% | 52,662,917.91 | 52,167,202.06 | 100.00% | 375,443.16 | 0.72% | 51,791,758.90 |
Provision for bad debts by portfolio: 189,832.91
Unit: RMB
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Commercial acceptance bill | 6,123,642.46 | 189,832.91 | 3.10% |
| Total | 6,123,642.46 | 189,832.91 | |
Explanation of the basis for determining the portfolio:
NoneIf the provision for bad debts on notes receivable is based on the general model of expected credit loss, theinformation about the provision for bad debts shall be disclosed by referring to the disclosure method of otherreceivables:
□ Applicable ? Not applicable
(2) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in the current period:
Unit: RMB
| Type | Beginning balance | Amount changed in the current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts - notes receivable | 375,443.16 | -185,610.25 | 189,832.91 | |||
| Total | 375,443.16 | -185,610.25 | 189,832.91 | |||
Of which the amount of provision for bad debts recovered or reversed in the current period is significant:
□ Applicable ? Not applicable
(3) Notes receivable pledged by the Company at the end of the period
Not applicable
(4) Notes receivable endorsed or discounted by the Company at the end of the period and not due yet onbalance sheet date
Unit: RMB
| Items | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance instruments | 25,302,253.83 | |
| Commercial acceptance bill | ||
| Total | 25,302,253.83 |
(5) Notes converted into receivables at the end of the period due to unfulfillment of drawerNot applicable
(6) Notes receivable actually written off in the current period
Not applicable
5. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
| Accounts receivable with single provision for bad debts | 82,947,377.51 | 3.11% | 82,947,377.51 | 100.00% | 82,546,521.29 | 3.04% | 82,546,521.29 | 100.00% | ||
| Including: | ||||||||||
| Accounts receivable with a single significant amount and single bad debt | 82,546,521.27 | 3.09% | 82,546,521.27 | 100.00% | 82,546,521.29 | 3.04% | 82,546,521.29 | 100.00% | ||
| provision | ||||||||||
| Receivables with not significant amount but with single provision for bad debts | 400,856.24 | 0.02% | 400,856.24 | 100.00% | ||||||
| Accounts receivable with provision for bad debts by portfolio | 2,588,045,952.67 | 96.89% | 84,452,244.51 | 3.26% | 2,503,593,708.16 | 2,634,259,443.00 | 96.96% | 84,525,403.34 | 3.21% | 2,549,734,039.66 |
| Including: | ||||||||||
| Accounts receivable with provision for bad debts by combination (aging analysis method) | 2,588,045,952.67 | 96.89% | 84,452,244.51 | 3.26% | 2,503,593,708.16 | 2,634,259,443.00 | 96.96% | 84,525,403.34 | 3.21% | 2,549,734,039.66 |
| Total | 2,670,993,330.18 | 100.00% | 167,399,622.02 | 6.27% | 2,503,593,708.16 | 2,716,805,964.29 | 100.00% | 167,071,924.63 | 6.15% | 2,549,734,039.66 |
Single provision for bad debts: 82,947,377.51
Unit: RMB
| Name | Ending balance | |||
| Book balance | Provision for bad debts | Proportion of provision | Reasons for provision | |
| Accounts receivable with a single significant amount and single bad debt provision | 82,546,521.27 | 82,546,521.27 | 100.00% | It is difficult to recover |
| Accounts receivable with insignificant single amount but separate bad debt provision | 400,856.24 | 400,856.24 | 100.00% | It is difficult to recover |
| Total | 82,947,377.51 | 82,947,377.51 | ||
Provision for bad debts by portfolio: 84,452,244.51
Unit: RMB
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Accounts receivable with provision for bad debts by combination (aging analysis method) | 2,588,045,952.67 | 84,452,244.51 | 3.26% |
| Total | 2,588,045,952.67 | 84,452,244.51 | |
Explanation of the basis for determining the portfolio: NoneIf the provision for bad debts on notes receivable is based on the general model of expected credit loss, theinformation about the provision for bad debts shall be disclosed by referring to the disclosure method of otherreceivables:
□ Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 2,574,885,710.35 |
| 1-2 years | 23,266,320.14 |
| 2-3 years | 69,437,292.94 |
| Above 3 years | 3,404,006.75 |
| 3-4 years | 1,470,983.18 |
| 4-5 years | 2,209.26 |
| Above 5 years | 1,930,814.31 |
| Total | 2,670,993,330.18 |
(2) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in the current period:
Unit: RMB
| Type | Beginning balance | Amount changed in the current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts | 167,071,924.63 | 327,697.39 | 167,399,622.02 | |||
| Total | 167,071,924.63 | 327,697.39 | 167,399,622.02 | |||
Of which the amount of provision for bad debts recovered or reversed in the current period is significant: None
(3) Accounts receivable actually written off in the current period
Not applicable
(4) Accounts receivable of top five ending balances grouped by debtors
Unit: RMB
| Name of unit | Ending balance of accounts receivable | Proportion to total ending balances of accounts receivable | Ending balance of provision for bad debts |
| No. 1 | 777,101,913.06 | 29.09% | 24,140,633.39 |
| No. 2 | 100,229,926.83 | 3.75% | 3,107,127.73 |
| No. 3 | 65,080,405.66 | 2.44% | 65,080,405.66 |
| No. 4 | 58,513,584.29 | 2.19% | 1,813,921.11 |
| No. 5 | 58,267,700.34 | 2.18% | 1,806,298.71 |
| Total | 1,059,193,530.18 | 39.65% |
(5) Accounts receivable derecognized due to transfer of financial assets
Not applicable
(6) Amount of assets and liabilities formed by transferring accounts receivable and continuing to beinvolvedNot applicable
Other descriptions: None
6. Receivables financing
Unit: RMB
| Items | Ending balance | Beginning balance |
| Bank acceptance instruments | 66,063,246.95 | 79,652,525.19 |
| Accounts receivable | 197,996,859.04 | 173,392,414.33 |
| Digital voucher of accounts receivable creditor's rights | 16,289,078.85 | 1,943,263.08 |
| Total | 280,349,184.84 | 254,988,202.60 |
Changes in increase or decrease in receivables financing and changes in fair value in the current period
□ Applicable ? Not applicable
If the provision for impairment on receivables financing is based on the general model of expected credit loss,the information about the provision for impairment shall be disclosed by referring to the disclosure method ofother receivables:
□ Applicable ? Not applicable
Other descriptions: None
7. Prepayments
(1) List of advance payments by aging
Unit: RMB
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 75,519,296.40 | 98.34% | 52,386,993.93 | 98.83% |
| 1-2 years | 1,144,136.12 | 1.49% | 512,018.85 | 0.97% |
| 2-3 years | 129,193.79 | 0.17% | 16,728.11 | 0.03% |
| Above 3 years | 600.00 | 0.00% | 89,916.06 | 0.17% |
| Total | 76,793,226.31 | 53,005,656.95 | ||
Explanation of the cause for untimely settlement of advance payments aging more than one year with importantamounts: None
(2) Accounts prepaid of the top five prepaying entities for ending balance
The total amount of accounts prepaid of the top five prepaying entities for ending balance in the year was RMB27,503,799.30, accounting for 35.82% of the total ending balances of accounts prepaid.
Other descriptions: None
8. Other receivables
Unit: RMB
| Items | Ending balance | Beginning balance |
| Other receivables | 49,547,491.78 | 77,743,150.98 |
| Total | 49,547,491.78 | 77,743,150.98 |
(1) Interest receivable
□ Applicable ? Not applicable
(2) Dividends receivable
□ Applicable ? Not applicable
(3) Other receivables
1) Classification of other receivables by nature of amount
Unit: RMB
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Margin, deposit | 27,645,508.92 | 25,628,574.95 |
| Employee personal loan | 9,218,731.05 | 12,085,358.63 |
| Compensation | 10,820,710.33 | 10,820,710.33 |
| Payment for share title transfer | 4,000,000.00 | |
| Others | 6,679,516.73 | 882,396.17 |
| Export rebate | 21,954,980.84 | |
| Convertible loan | 14,000,000.00 | |
| Total | 58,364,467.03 | 85,372,020.92 |
2) Provision for bad debts
Unit: RMB
| Provision for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit loss in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as of January 1, 2023 | 7,628,869.94 | 7,628,869.94 | ||
| Balance as of January 1, 2023 in the current period | ||||
| Accrual in the current period | 1,188,105.31 | 1,188,105.31 | ||
| Balance as of June 30, 2023 | 8,816,975.25 | 8,816,975.25 |
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 40,804,744.42 |
| Subtotal within one year | 40,804,744.42 |
| 1-2 years | 9,255,611.00 |
| 2-3 years | 1,894,260.16 |
| Above 3 years | 6,409,851.45 |
| 3-4 years | 1,332,132.01 |
| 4-5 years | 3,294,695.49 |
| Above 5 years | 1,783,023.95 |
| Total | 58,364,467.03 |
3) Bad debt provision withdrawn, recovered or reversed in the current periodProvision for bad debts in the current period:
Unit: RMB
| Type | Beginning balance | Amount changed in the current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts | 7,628,869.94 | 1,188,105.31 | 8,816,975.25 | |||
| Total | 7,628,869.94 | 1,188,105.31 | 8,816,975.25 | |||
Of which the amount of provision for bad debts recovered or reversed in the current period is significant:
Not applicable
4) Other receivables actually written off in the current period
Not applicable
5) Other receivables of top five ending balances grouped by debtors
Unit: RMB
| Name of unit | Nature of payment | Ending balance | Aging | Proportion to total ending balances of other receivables | Ending balance of provision for bad debts |
| No. 1 | Compensation | 10,820,710.33 | Within 1 year | 18.54% | 541,035.52 |
| No. 2 | Margin, deposit | 4,354,266.95 | 1-2 years | 7.46% | 435,426.70 |
| No. 3 | Payment for share title transfer | 4,000,000.00 | Within 1 year | 6.85% | |
| No. 4 | Margin, deposit | 3,500,000.00 | 1-2 years | 6.00% | 350,000.00 |
| No. 5 | Margin, deposit | 1,520,178.00 | 4-5 years | 2.60% | 1,216,142.40 |
| Total | 24,195,155.28 | 41.45% | 2,542,604.62 |
6) Receivables involving government subsidies
Not applicable
7) Other receivables derecognized due to transfer of financial assets
Not applicable
8) Amount of assets and liabilities formed by transferring other receivables and continuing to be involvedNot applicable
9. Inventory
Whether the Company is required to comply with the disclosure requirements of the real estate industryNo
(1) Inventory classification
Unit: RMB
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for decline in value of inventories or provision for impairment of contract performance cost | Book value | Book balance | Provision for decline in value of inventories or provision for impairment of contract performance cost | Book value | |
| Purchase of raw materials | 1,016,694,577.43 | 78,800,496.97 | 937,894,080.46 | 1,173,950,054.61 | 83,688,904.02 | 1,090,261,150.59 |
| Goods in process | 90,327,452.10 | 90,327,452.10 | 125,103,265.61 | 125,103,265.61 | ||
| Goods on hand | 541,389,087.26 | 8,053,302.09 | 533,335,785.17 | 577,199,818.92 | 12,958,236.03 | 564,241,582.89 |
| Revolving materials | ||||||
| Consumptive biological assets | ||||||
| Contract performance cost | ||||||
| Goods shipped in transit | 77,830,183.58 | 3,364,522.70 | 74,465,660.88 | 114,595,833.38 | 3,797,469.37 | 110,798,364.01 |
| Self-manufactured semi-finished product | 119,855,271.00 | 3,629,416.60 | 116,225,854.40 | 107,289,297.10 | 4,809,578.57 | 102,479,718.53 |
| Low-value consumables | 56,837.78 | 56,837.78 | 65,460.90 | 65,460.90 | ||
| Materials entrusted for processing | 2,670.00 | 2,670.00 | ||||
| Total | 1,846,153,409.15 | 93,847,738.36 | 1,752,305,670.79 | 2,098,206,400.52 | 105,254,187.99 | 1,992,952,212.53 |
(2) Provision for decline in value of inventories and provision for impairment of contract performancecost
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrease amount in the current period | Ending balance | ||
| Provision | Others | Reversal or write-off | Others | |||
| Purchase of raw materials | 83,688,904.02 | 22,278,701.29 | 157,968.08 | 27,325,076.42 | 78,800,496.97 | |
| Goods in process | ||||||
| Goods on hand | 12,958,236.03 | 960,989.47 | 5,686.42 | 5,871,609.83 | 8,053,302.09 | |
| Self-manufactured semi-finished product | 4,809,578.57 | 175,174.67 | 5,572.17 | 1,360,908.81 | 3,629,416.60 | |
| Goods shipped in transit | 3,797,469.37 | 251,348.63 | 684,295.30 | 3,364,522.70 | ||
| Total | 105,254,187.99 | 23,666,214.06 | 169,226.67 | 35,241,890.36 | 93,847,738.36 | |
(3) Explanation of capitalized amount of borrowing costs included in ending balance of inventoryNot applicable
(4) Explanation of current amortization amount of contract performance costNot applicable
10. Contract assets
□ Applicable ? Not applicable
11. Assets held for sale
□ Applicable ? Not applicable
12. Non-current assets due within one year
□ Applicable ? Not applicable
13. Other current assets
Unit: RMB
| Items | Ending balance | Beginning balance |
| VAT to be deducted | 158,938,818.12 | 143,163,557.71 |
| Other prepaid taxes | 40,678,030.28 | 10,472,653.58 |
| IPO-related fees | 1,490,566.02 | 1,490,566.02 |
| Total | 201,107,414.42 | 155,126,777.31 |
Other descriptions: None
14. Debt investment
□ Applicable ? Not applicable
15. Other debt investment
□ Applicable ? Not applicable
16. Long-term receivables
(1) Situation of long-term receivables
□ Applicable ? Not applicable
(2) Long-term receivables derecognized due to transfer of financial assets
□ Applicable ? Not applicable
(3) Amount of assets and liabilities formed by transferring long-term receivables and continuing to beinvolved
□ Applicable ? Not applicable
17. Long-term equity investment
Unit: RMB
| Investee | Beginning balance (book value) | Changes in increase or decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||||||
| Additional investment | Decrease in investment | Profits and losses on investment recognized under equity method | Adjustment to other comprehensive income | Other changes in equity | Declaration of distribution for cash dividends or profits | Provision for impairment | Others | ||||
| I. Joint venture | |||||||||||
| II. Associated enterprises | |||||||||||
| Shenzhen Yuchengxin Power Technology Co., Ltd. | 9,764,719.19 | ||||||||||
| Shenzhen Daka | 5,886,346.16 | -40,895.18 | 5,845,450.98 | ||||||||
| Optoelectronics Co., Ltd. | |||||||||||
| Pas Electronic Technology (Nanjing) Co., Ltd. | 6,928,835.90 | 6,928,835.90 | |||||||||
| Shanghai Yidong Power Technology Co., Ltd. | 10,735,476.85 | -900,839.80 | 9,834,637.05 | ||||||||
| Dongguan Jujin Plastic Technology Co., Ltd. | 20,000,000.00 | 20,000,000.00 | |||||||||
| Subtotal | 23,550,658.91 | 20,000,000.00 | 6,928,835.90 | -941,734.98 | 35,680,088.03 | 9,764,719.19 | |||||
| Total | 23,550,658.91 | 20,000,000.00 | 6,928,835.90 | -941,734.98 | 35,680,088.03 | 9,764,719.19 |
Other descriptions: None
18. Investment in other equity instruments
□ Applicable ? Not applicable
19. Other non-current financial assets
□ Applicable ? Not applicable
20. Investment property
(1) Investment property with cost measurement model
? Applicable □ Not applicable
Unit: RMB
| Items | Houses and buildings | Land usage right | Construction in progress | Total |
| I. Original book value | ||||
| 1. Beginning balance | 119,070,562.06 | 119,070,562.06 | ||
| 2. Increase in the current period | ||||
| (1) Outsourcing | ||||
| (2) Transfer in of inventory, fixed assets and construction in progress | ||||
| (3) Increment from consolidation | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | 119,070,562.06 | 119,070,562.06 | ||
| II. Accumulated depreciation and accumulated amortization |
| 1. Beginning balance | 12,827,784.21 | 12,827,784.21 | ||
| 2. Increase in the current period | 1,419,187.51 | 1,419,187.51 | ||
| (1) Provision or amortization | 1,419,187.51 | 1,419,187.51 | ||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | 14,246,971.72 | 14,246,971.72 | ||
| III. Provision for impairment | ||||
| 1. Beginning balance | ||||
| 2. Increase in the current period | ||||
| (1) Accrual | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfer out | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 104,823,590.34 | 104,823,590.34 | ||
| 2. Beginning book value | 106,242,777.85 | 106,242,777.85 |
(2) Investment property with fair value measurement model
□ Applicable ? Not applicable
(3) Investment property without property certificate of title
□ Applicable ? Not applicable
21. Fixed assets
Unit: RMB
| Items | Ending balance | Beginning balance |
| Fixed assets | 1,901,326,770.71 | 1,840,358,093.74 |
| Total | 1,901,326,770.71 | 1,840,358,093.74 |
(1) Situation about fixed assets
Unit: RMB
| Items | Houses and buildings | Machinery and equipment | Transportation equipment | Electronics and other equipment | Total |
| I. Original book value: | |||||
| 1. Beginning balance | 1,210,636,967.86 | 1,121,012,648.11 | 2,952,750.39 | 67,432,207.98 | 2,402,034,574.34 |
| 2. Increase in the current period | 16,847,573.17 | 147,330,425.92 | 293,251.58 | 5,288,192.20 | 169,759,442.87 |
| (1) Purchase | 111,305,697.14 | 216,575.69 | 4,637,300.10 | 116,159,572.93 | |
| (2) Transfer into projects under | 9,436,384.86 | 21,500,623.52 | 30,937,008.38 |
| construction | |||||
| (3) Increment from consolidation | |||||
| (4) Impact of exchange rate changes | 7,411,188.31 | 14,524,105.26 | 76,675.89 | 650,892.10 | 22,662,861.56 |
| 3. Decrease in the current period | 1,230,720.78 | 52,220,915.34 | 214,926.92 | 3,384,841.56 | 57,051,404.60 |
| (1) Disposal or scrapping | 1,230,720.78 | 52,220,915.34 | 214,926.92 | 3,384,841.56 | 57,051,404.60 |
| 4. Ending balance | 1,226,253,820.25 | 1,216,122,158.69 | 3,031,075.05 | 69,335,558.62 | 2,514,742,612.61 |
| II. Accumulated depreciation | |||||
| 1. Beginning balance | 143,928,870.29 | 379,576,810.02 | 2,288,706.56 | 35,882,093.73 | 561,676,480.60 |
| 2. Increase in the current period | 15,626,442.65 | 62,902,099.31 | 210,052.87 | 4,753,980.93 | 83,492,575.76 |
| (1) Accrual | 15,034,764.39 | 61,601,986.06 | 192,530.40 | 4,535,846.05 | 81,365,126.90 |
| (2) Impact of exchange rate changes | 591,678.26 | 1,300,113.25 | 17,522.47 | 218,134.88 | 2,127,448.86 |
| 3. Decrease in the current period | 94,996.26 | 28,636,994.79 | 157,713.20 | 2,863,510.21 | 31,753,214.46 |
| (1) Disposal or scrapping | 94,996.26 | 28,636,994.79 | 157,713.20 | 2,863,510.21 | 31,753,214.46 |
| 4. Ending balance | 159,460,316.68 | 413,841,914.54 | 2,341,046.23 | 37,772,564.45 | 613,415,841.90 |
| III. Provision for impairment | |||||
| 1. Beginning balance | |||||
| 2. Increase in the current period | |||||
| (1) Accrual | |||||
| 3. Decrease in the current period | |||||
| (1) Disposal or scrapping | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 1,066,793,503.57 | 802,280,244.15 | 690,028.82 | 31,562,994.17 | 1,901,326,770.71 |
| 2. Beginning book value | 1,066,708,097.57 | 741,435,838.09 | 664,043.83 | 31,550,114.25 | 1,840,358,093.74 |
(2) Temporary idle fixed assets
□ Applicable ? Not applicable
(3) Fixed assets leased out through operating lease
□ Applicable ? Not applicable
(4) Fixed assets without certificate of title
□ Applicable ? Not applicable
(5) Disposal of fixed assets
□ Applicable ? Not applicable
22. Construction in progress
Unit: RMB
| Items | Ending balance | Beginning balance |
| Construction in progress | 360,390,687.64 | 234,775,312.11 |
| Total | 360,390,687.64 | 234,775,312.11 |
(1) Projects under construction
Unit: RMB
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Test equipment to be commissioned | 75,099,907.36 | 75,099,907.36 | 90,401,815.63 | 90,401,815.63 | ||
| Decoration of Huizhou Plant | 3,893,772.81 | 3,893,772.81 | 1,492,318.46 | 1,492,318.46 | ||
| Dormitory renovation of Huizhou plant | 183,486.24 | 183,486.24 | 394,884.48 | 394,884.48 | ||
| Huizhou YAKO Automation Plant | 129,886,803.39 | 129,886,803.39 | 78,399,893.68 | 78,399,893.68 | ||
| Sporadic items | 3,113,633.24 | 3,113,633.24 | ||||
| Nantong Lithium Battery Industrial Park | 74,874,590.28 | 74,874,590.28 | 5,259,209.25 | 5,259,209.25 | ||
| Ningbo Topband Industrial Park | 17,190,987.05 | 17,190,987.05 | 6,548,784.76 | 6,548,784.76 | ||
| Qingdao Plant | 1,835,469.17 | 1,835,469.17 | 1,804,902.19 | 1,804,902.19 | ||
| Plant Decoration in Shenzhen | 2,314,190.12 | 2,314,190.12 | 2,314,190.12 | 2,314,190.12 | ||
| Topband Huizhou No. 2 Industrial Park | 22,063,287.52 | 22,063,287.52 | 16,352,994.82 | 16,352,994.82 | ||
| Topband (India) Plant | 1,768,790.83 | 1,768,790.83 | 5,360,095.80 | 5,360,095.80 | ||
| Vietnam Dong Nai Decoration | 1,327,019.12 | 1,327,019.12 | 1,229,894.49 | 1,229,894.49 | ||
| Plant Decoration in Romania | 29,952,383.75 | 29,952,383.75 | 22,102,695.19 | 22,102,695.19 | ||
| Total | 360,390,687.64 | 360,390,687.64 | 234,775,312.11 | 234,775,312.11 | ||
(2) Changes in the important projects under construction in the current period
Unit: RMB
| Project name | Budget | Beginning balance | Increase in the current period | Amount of transfer into fixed assets this period | Other decrements this period | Ending balance | Proportion of accumulated project investment in budget | Project progress | Accumulated amount of interest capitalization | Including: interest capitalization amount in the current period | Interest capitalization rate in the current period | Source of capitals |
| Vietnam Dong Nai Decoration | 75,000,000.00 | 1,229,894.49 | 2,507,600.68 | 2,410,476.05 | 1,327,019.12 | 94.30% | 94% | Others | ||||
| Plant Decoration in Romania | 31,220,000.00 | 22,102,695.19 | 7,849,688.56 | 29,952,383.75 | 91.24% | 91% | Others | |||||
| Topband Huizhou No. 2 Industrial Park | 800,000,000.00 | 16,352,994.82 | 5,710,292.70 | 22,063,287.52 | 2.39% | 2% | Others | |||||
| Ningbo Topband Industrial Park | 465,704,300.00 | 6,548,784.76 | 20,078,587.15 | 9,436,384.86 | 17,190,987.05 | 87.79% | 88% | 7,018,762.50 | 1,956,262.50 | 4.12% | Capital raising | |
| Huizhou YAKO Automation Plant | 370,000,000.00 | 78,399,893.68 | 51,486,909.71 | 129,886,803.39 | 45.38% | 45% | Others | |||||
| Topband (India) Plant | 136,004,000.00 | 5,360,095.79 | 3,591,304.96 | 1,768,790.83 | 85.57% | 86% | Others | |||||
| Total | 1,877,928,300.00 | 129,994,358.73 | 87,633,078.80 | 11,846,860.91 | 3,591,304.96 | 202,189,271.66 | 7,018,762.50 | 1,956,262.50 | 4.12% |
(3) Provision for impairment of project under construction in the current period
□ Applicable ? Not applicable
(4) Project material
□ Applicable ? Not applicable
23. Productive biological assets
(1) Productive biological assets with cost measurement model
□ Applicable ? Not applicable
(2) Productive biological assets with fair value measurement model
□ Applicable ? Not applicable
24. Oil and gas assets
□ Applicable ? Not applicable
25. Right-of-use assets
Unit: RMB
| Items | Houses and buildings | Total |
| I. Original book value | ||
| 1. Beginning balance | 151,222,723.36 | 151,222,723.36 |
| 2. Increase in the current period | 20,981,761.90 | 20,981,761.90 |
| (1) Lease contract in current period | 13,050,213.69 | 13,050,213.69 |
| (2) Increase of original price due to changes to contract | 951,190.64 | 951,190.64 |
| (3) Exchange rate changes | 6,980,357.57 | 6,980,357.57 |
| 3. Decrease in the current period | 6,936,170.77 | 6,936,170.77 |
| (1) Contracts with lease terminated in current period | 6,936,170.77 | 6,936,170.77 |
| 4. Ending balance | 165,268,314.49 | 165,268,314.49 |
| II. Accumulated depreciation | ||
| 1. Beginning balance | 45,025,821.49 | 45,025,821.49 |
| 2. Increase in the current period | 23,059,987.14 | 23,059,987.14 |
| (1) Accrual | 21,919,558.35 | 21,919,558.35 |
| (2) Exchange rate changes | 1,140,428.79 | 1,140,428.79 |
| 3. Decrease in the current period | 5,493,498.94 | 5,493,498.94 |
| (1) Disposal | 5,493,498.94 | 5,493,498.94 |
| 4. Ending balance | 62,592,309.69 | 62,592,309.69 |
| III. Provision for impairment | ||
| 1. Beginning balance | ||
| 2. Increase in the current period | ||
| (1) Accrual | ||
| 3. Decrease in the current period | ||
| (1) Disposal | ||
| 4. Ending balance | ||
| IV. Book value | ||
| 1. Ending book value | 102,676,004.80 | 102,676,004.80 |
| 2. Beginning book value | 106,196,901.87 | 106,196,901.87 |
Other descriptions: None
26. Intangible assets
(1) Situation of intangible assets
Unit: RMB
| Items | Land usage right | Patent right | Non-patented technology | Software | Trademark | Total |
| I. Original book value | ||||||
| 1. Beginning balance | 340,787,809.19 | 435,321.58 | 488,608,352.28 | 27,456,858.38 | 9,728,450.00 | 867,016,791.43 |
| 2. Increase in the current period | 53,044,385.80 | 73,873,106.60 | 729,011.53 | 127,646,503.93 | ||
| (1) Purchase | 50,949,822.99 | 729,011.53 | 51,678,834.52 | |||
| (2) Internal R&D | 73,873,106.60 | 73,873,106.60 | ||||
| (3) Increment from consolidation | ||||||
| (4) Increase from exchange rate changes | 2,094,562.81 | 2,094,562.81 | ||||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | 393,832,194.99 | 435,321.58 | 562,481,458.88 | 28,185,869.91 | 9,728,450.00 | 994,663,295.36 |
| II. Accumulated amortization | ||||||
| 1. Beginning balance | 21,339,657.64 | 435,321.58 | 269,000,149.04 | 22,759,462.08 | 6,165,886.52 | 319,700,476.86 |
| 2. Increase in the current period | 3,391,231.85 | 46,298,027.40 | 1,115,043.92 | 50,804,303.17 | ||
| (1) Accrual | 3,391,231.85 | 46,298,027.40 | 1,115,043.92 | 50,804,303.17 | ||
| 3. Decrease in the current period | 854.70 | 854.70 | ||||
| (1) Disposal | 854.70 | 854.70 | ||||
| 4. Ending balance | 24,730,889.49 | 435,321.58 | 315,298,176.44 | 23,873,651.30 | 6,165,886.52 | 370,503,925.33 |
| III. Provision for impairment |
| 1. Beginning balance | ||||||
| 2. Increase in the current period | ||||||
| (1) Accrual | ||||||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Ending balance | ||||||
| IV. Book value | ||||||
| 1. Ending book value | 369,101,305.50 | 247,183,282.44 | 4,312,218.61 | 3,562,563.48 | 624,159,370.03 | |
| 2. Beginning book value | 319,448,151.55 | 219,608,203.24 | 4,697,396.30 | 3,562,563.48 | 547,316,314.57 |
The proportion of intangible assets formed through internal R&D in the balance of intangible assets at the endof the period accounted for 39.60%.
(2) Situation of land usage right without property certificate of title
□ Applicable ? Not applicable
27. Development expenditure
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrease amount in the current period | Ending balance | ||
| Internal development expenditure | Others | Recognized as intangible assets | Transferred to current profit and loss | |||
| Intelligent controller project | 70,263,773.15 | 46,198,597.14 | 45,245,377.46 | 71,216,992.83 | ||
| Lithium battery project | 12,689,781.05 | 19,168,665.97 | 12,689,781.05 | 19,168,665.97 | ||
| Motor and control system project | 17,993,758.94 | 6,277,330.09 | 15,937,948.09 | 8,333,140.94 | ||
| Total | 100,947,313.14 | 71,644,593.20 | 73,873,106.60 | 98,718,799.74 | ||
Other descriptions: None
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
| Name of investees or items forming goodwill | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance | ||
| Disposal formed by consolidation | Disposal | |||||
| Shenzhen YAKO Automation Technology Co., Ltd. | 107,314,446.71 | 107,314,446.71 | ||||
| Shenzhen Allied Control System Co., Ltd. | 53,768,699.68 | 53,768,699.68 | ||||
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 3,006,892.59 | 3,006,892.59 | ||||
| Hangzhou Zhidong Motor Technology Co., Ltd. | 1,322,921.77 | 1,322,921.77 | ||||
| Taixing Ninghui Lithium Battery Co., Ltd. | 1,962,891.12 | 1,962,891.12 | ||||
| Shenzhen Tengyi Industrial Co., Ltd. | 131,783.24 | 131,783.24 | ||||
| Total | 167,507,635.11 | 167,507,635.11 |
(2) Impairment of goodwill
Unit: RMB
| Name of investees or items forming goodwill | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance | ||
| Provision | Disposal | |||||
| Shenzhen Allied Control System Co., Ltd. | 53,768,699.68 | 53,768,699.68 | ||||
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 3,006,892.59 | 3,006,892.59 | ||||
| Total | 56,775,592.27 | 56,775,592.27 | ||||
Information about the asset group or portfolio of goodwill: NoneExplanation of goodwill impairment test process, key parameters (e.g. growth rate during the forecast period,growth rate during the stabilization period, profitability, discount rate, forecast period, etc. when the presentvalue of future cash flow is expected) and method for recognizing impairment loss of goodwill: NoneImpact of goodwill impairment test: NoneOther descriptions: None
29. Long-term deferred expense
Unit: RMB
| Items | Beginning balance | Increase in the current period | Amortization in the current period | Other reduced amount | Ending balance |
| Maintenance and installation costs | 132,090,828.44 | 40,063,020.46 | 21,421,752.99 | 150,732,095.91 | |
| Others | 130,736.79 | 5,475.66 | 125,261.13 | ||
| Total | 132,221,565.23 | 40,063,020.46 | 21,427,228.65 | 150,857,357.04 |
Other descriptions: None
30. Deferred tax assets/deferred tax liabilities
(1) Non-offset deferred tax assets
Unit: RMB
| Items | Ending balance | Beginning balance | ||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |
| Plus: Provision for asset impairment | 274,146,241.04 | 42,686,549.87 | 281,652,280.08 | 43,628,391.64 |
| Deductible loss | 226,161,509.61 | 44,411,436.16 | 188,813,388.08 | 39,381,980.91 |
| Amortization of intangible assets | 114,828,824.77 | 17,224,323.71 | 94,689,166.74 | 14,203,375.01 |
| Deferred income | 11,028,331.28 | 1,654,249.69 | 13,245,250.14 | 1,986,787.52 |
| Equity cost | 83,352,332.80 | 12,502,849.92 | 62,111,490.83 | 9,316,723.62 |
| Lease liabilities | 58,636,988.37 | 9,066,474.17 | 62,829,027.62 | 9,436,477.65 |
| Changes in fair value | 6,041,282.00 | 906,192.30 | ||
| Total | 774,195,509.87 | 128,452,075.82 | 703,340,603.49 | 117,953,736.35 |
(2) Deferred tax liabilities without offset
Unit: RMB
| Items | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Valuation and appreciation of assets of business consolidation under different control | 635,212.09 | 95,281.79 | 857,693.62 | 128,654.04 |
| Changes in fair value of tradable financial assets | 235,561,014.47 | 39,250,529.22 | 235,561,014.47 | 39,250,529.22 |
| Book-tax difference of fixed assets depreciation | 70,486,008.49 | 13,959,971.95 | 51,414,751.05 | 10,622,182.15 |
| Book-tax difference of rental income | 4,866,792.18 | 1,216,698.05 | 4,571,154.88 | 1,142,788.72 |
| Right-of-use assets | 53,754,424.48 | 8,333,847.23 | 57,428,399.67 | 8,614,259.95 |
| Total | 365,303,451.71 | 62,856,328.24 | 349,833,013.69 | 59,758,414.08 |
(3) Deferred tax assets or liabilities listed by net amount after offset
Unit: RMB
| Items | Amount of offset between deferred tax assets and liabilities at the end of the period | Ending balance of deferred tax assets or liabilities after offset | Amount of mutual offset between deferred tax assets and liabilities at the beginning of the period | Beginning balance of deferred tax assets or liabilities after offset |
| Deferred tax assets | 128,452,075.82 | 117,953,736.35 | ||
| Deferred tax liabilities | 62,856,328.24 | 59,758,414.08 |
(4) Details of unrecognized deferred tax assets
Unit: RMB
| Items | Ending balance | Beginning balance |
| Deductible temporary differences | 10,666,664.23 | 13,989,990.57 |
| Deductible loss | 129,082,278.25 | 73,447,423.03 |
| Total | 139,748,942.48 | 87,437,413.60 |
(5) Deductible loss of unrecognized deferred tax assets will mature in the following years
Unit: RMB
| Year | Ending amount | Beginning amount | Remarks |
| 2024 | |||
| 2025 | 2,003,221.13 | 2,034,722.96 | |
| 2026 | 13,266,401.49 | 14,435,579.52 | |
| 2027 | 26,270,394.36 | 25,446,622.08 | |
| 2028 and later | 22,525,391.77 | 1,793,498.72 | |
| No time limit | 65,016,869.50 | 29,736,999.75 | |
| Total | 129,082,278.25 | 73,447,423.03 |
Other descriptionNote: The deductible losses of unrecognized deferred tax assets with no maturity period are recoverable lossesof overseas subsidiaries, and there are no local policy requirements for deductible periods.
31. Other non-current assets
Unit: RMB
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Prepayment for long-term assets | 245,175,896.39 | 245,175,896.39 | 172,371,288.80 | 172,371,288.80 | ||
| Total | 245,175,896.39 | 245,175,896.39 | 172,371,288.80 | 172,371,288.80 | ||
32. Short-term loans
(1) Classification of short-term loans
Unit: RMB
| Items | Ending balance | Beginning balance |
| Credit loan | 245,000,000.00 | 12,325,580.00 |
| Letter of credit | 215,000,000.00 | 265,000,000.00 |
| Outstanding discounted bills | 6,025,915.57 | |
| Total | 460,000,000.00 | 283,351,495.57 |
Explanation of classification of short-term loans: None
(2) Overdue short-term loans
□ Applicable ? Not applicable
33. Tradable financial liabilities
Unit: RMB
| Items | Ending balance | Beginning balance |
| Financial liabilities held for trading | 6,041,282.00 | |
| Including: | ||
| Forward foreign exchange contract | 6,041,282.00 | |
| Including: | ||
| Total | 6,041,282.00 |
Other descriptions: None
34. Derivative financial liabilities
□ Applicable ? Not applicable
35. Notes payable
Unit: RMB
| Category | Ending balance | Beginning balance |
| Bank acceptance bill | 879,938,591.06 | 1,065,652,340.80 |
| Total | 879,938,591.06 | 1,065,652,340.80 |
The total amount of notes payable due but unpaid at the end of the current period was RMB 0.
36. Accounts payable
(1) Accounts payable listed
Unit: RMB
| Items | Ending balance | Beginning balance |
| Within 1 year (including 1 year) | 1,653,297,298.93 | 1,601,875,172.01 |
| 1-2 years (including 2 years) | 1,436,852.53 | 940,565.81 |
| 2-3 years (including 3 years) | 794,685.55 | 2,570,462.09 |
| Above 3 years | 2,064,011.37 | 1,060,004.11 |
| Total | 1,657,592,848.38 | 1,606,446,204.02 |
(2) Significant accounts payable aged over 1 year
□ Applicable ? Not applicable
37. Advances received
(1) Advances received listed
Unit: RMB
| Items | Ending balance | Beginning balance |
| Within 1 year | 1,598,192.95 | 1,130,165.23 |
| Total | 1,598,192.95 | 1,130,165.23 |
(2) Important advance receipts with aging over 1 year
□ Applicable ? Not applicable
38. Contractual liabilities
Unit: RMB
| Items | Ending balance | Beginning balance |
| Advances on sales | 206,595,293.99 | 138,281,929.17 |
| Total | 206,595,293.99 | 138,281,929.17 |
Amount of and reasons for significant changes in book value during the reporting period
□ Applicable ? Not applicable
39. Employee compensation payable
(1) Presentation of employee pay payable
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance |
| I. Short-term compensation | 206,810,975.44 | 833,643,494.25 | 901,849,397.30 | 138,605,072.39 |
| II. Post-employment benefits - defined contribution plan | 168,797.71 | 42,946,571.33 | 42,190,675.65 | 924,693.39 |
| Total | 206,979,773.15 | 876,590,065.58 | 944,040,072.95 | 139,529,765.78 |
(2) Reporting of short-term remuneration
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance |
| 1. Wages, bonuses, allowances and subsidies | 203,678,977.95 | 786,725,140.98 | 854,762,993.09 | 135,641,125.84 |
| 2. Employee benefits | 43,226.15 | 15,571,451.04 | 15,537,709.01 | 76,968.18 |
| 3. Social insurance expense | 529,503.33 | 11,432,158.15 | 11,847,392.47 | 114,269.01 |
| Including: medical insurance premiums | 525,104.36 | 9,926,327.02 | 10,339,857.22 | 111,574.16 |
| Industrial injury insurance expense | 4,398.97 | 568,028.79 | 569,732.91 | 2,694.85 |
| Maternity insurance expense | 937,802.34 | 937,802.34 | ||
| 4. Housing provident fund | 18,970,567.25 | 18,970,567.25 | ||
| 5. Trade union funds and staff education funds | 50,089.90 | 389,825.01 | 439,409.57 | 505.34 |
| 6. Others | 2,509,178.11 | 554,351.82 | 291,325.91 | 2,772,204.02 |
| Total | 206,810,975.44 | 833,643,494.25 | 901,849,397.30 | 138,605,072.39 |
(3) List of defined contribution plan
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance |
| 1. Basic endowment insurance | 161,799.37 | 42,207,999.54 | 41,448,955.24 | 920,843.67 |
| 2. Unemployment insurance expense | 6,998.34 | 738,571.79 | 741,720.41 | 3,849.72 |
| Total | 168,797.71 | 42,946,571.33 | 42,190,675.65 | 924,693.39 |
Other descriptions: None
40. Taxes payable
Unit: RMB
| Items | Ending balance | Beginning balance |
| VAT (value-added tax) | 60,047,410.31 | 53,017,545.90 |
| Corporate income tax | 15,709,959.43 | 19,648,268.34 |
| Individual income tax | 8,635,928.53 | 11,251,522.04 |
| Urban maintenance and construction tax | 151,727.15 | 336,488.64 |
| Education surcharge | 108,376.52 | 240,581.55 |
| Property tax | 4,751,032.14 | 3,647,511.72 |
| Other taxes | 461,544.32 | 263,596.46 |
| Total | 89,865,978.40 | 88,405,514.65 |
Other descriptions: None
41. Other payables
Unit: RMB
| Items | Ending balance | Beginning balance |
| Other account payable | 254,008,379.73 | 335,047,520.52 |
| Total | 254,008,379.73 | 335,047,520.52 |
(1) Interest payable
□ Applicable ? Not applicable
(2) Dividends payable
□ Applicable ? Not applicable
(3) Other payables
1) Other payables listed by fund nature
Unit: RMB
| Items | Ending balance | Beginning balance |
| Restricted stock repurchase obligations | 157,999,277.12 | 231,812,873.60 |
| Expenses | 37,616,568.22 | 25,199,800.55 |
| Long-term assets | 44,502,771.88 | 42,160,937.47 |
| Margin, deposit | 7,857,227.50 | 7,162,370.40 |
| Current accounts | 917,015.40 | 17,398,987.82 |
| Others | 5,115,519.61 | 11,312,550.68 |
| Total | 254,008,379.73 | 335,047,520.52 |
2) Other significant payables aged over 1 year
| Items | Ending balance | Reasons for not repaying or carrying forward |
| Restricted stock repurchase obligations | 157,999,277.12 | Repurchase obligation undue |
| Total | 157,999,277.12 |
42. Liabilities held for sale
□ Applicable ? Not applicable
43. Non-current liabilities due within one year
Unit: RMB
| Items | Ending balance | Beginning balance |
| Long-term borrowings due within one year | 21,380,000.00 | 37,135,000.00 |
| Lease liabilities due within one year | 40,907,487.08 | 38,221,303.72 |
| Total | 62,287,487.08 | 75,356,303.72 |
44. Other current liabilities
Unit: RMB
| Items | Ending balance | Beginning balance |
| Tax amount to be resold | 4,530,052.34 | 3,379,987.09 |
| Notes receivable that have been endorsed but not derecognized | 25,302,253.83 | 19,096,443.65 |
| Total | 29,832,306.17 | 22,476,430.74 |
Increase or decrease of short-term bond payable:
□ Applicable ? Not applicable
45. Long-term loans
(1) Classification of long-term loan
Unit: RMB
| Items | Ending balance | Beginning balance |
| Guaranteed loan | 62,000,000.00 | 84,000,000.00 |
| Credit loan | 756,120,000.00 | 497,500,000.00 |
| Total | 818,120,000.00 | 581,500,000.00 |
Explanation of long-term loan classification: NoneAdditional notes, including interest rate ranges: None
46. Bonds payable
□ Applicable ? Not applicable
47. Lease liabilities
Unit: RMB
| Items | Ending balance | Beginning balance |
| Building lease | 68,528,422.20 | 73,610,791.09 |
| Total | 68,528,422.20 | 73,610,791.09 |
Other descriptions: None
48. Long-term payables
□ Applicable ? Not applicable
49. Long-term employee compensation payable
□ Applicable ? Not applicable
50. Estimated liabilities
□ Applicable ? Not applicable
51. Deferred income
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance | Reasons of formation |
| Governmental subsidies | 13,370,250.14 | 2,241,918.86 | 11,128,331.28 | Governmental subsidies related to assets | |
| Total | 13,370,250.14 | 2,241,918.86 | 11,128,331.28 |
Items involving government subsidies:
Unit: RMB
| Liability items | Beginning balance | Newly increased subsidy in the current period | Amount accounted into non-operating revenue in the current period | Amount included in other income in the current period | Amount of write-down costs in the current period | Other changes | Ending balance | Asset-related/revenue-related |
| Nano lithium iron phosphate power battery project | 250,000.00 | 125,000.00 | 125,000.00 | Asset-related | ||||
| R&D project of 60A solar charging controller with peak power tracking technology | 290,000.00 | 60,000.00 | 230,000.00 | Asset-related | ||||
| Special fund for the industrialization of high-efficiency energy-saving rare-earth permanent magnet motor | 910,000.00 | 97,500.00 | 812,500.00 | Asset-related | ||||
| Key technology R&D of 18650-2.8A.h high power battery | 153,000.00 | 102,000.00 | 51,000.00 | Asset-related | ||||
| R&D project of unmanned robot cleaner | 1,950,000.00 | 300,000.00 | 1,650,000.00 | Asset-related | ||||
| Key technology R&D project of rare-earth permanent magnet | 2,030,950.14 | 229,918.86 | 1,801,031.28 | Asset-related |
| brushless DC motor and controller with high speed ratio and variable frequency | ||||||||
| R&D project of key technology for clean energy DC system measurement | 125,000.00 | 25,000.00 | 100,000.00 | Asset-related | ||||
| Huizhou National Debt Program for Anti-epidemic Technology Transformation | 2,080,150.00 | 416,030.00 | 1,664,120.00 | Asset-related | ||||
| Technological Transformation of Intelligent Controller and Lithium Battery Automated Production Line | 1,560,350.00 | 312,070.00 | 1,248,280.00 | Asset-related | ||||
| Provincial-level enterprise technology transformation fund for promoting high-quality economic development in 2022 | 4,020,800.00 | 574,400.00 | 3,446,400.00 | Asset-related |
Other descriptions: None
52. Other non-current liabilities
□ Applicable ? Not applicable
53. Share capital
Unit: RMB
| Beginning balance | Increase or decrease of change this time (+, -) | Ending balance | |||||
| Issuance of new shares | Stock dividend | Conversion of accumulation fund into shares | Others | Subtotal | |||
| Total number of shares | 1,269,535,372.00 | 1,269,535,372.00 | |||||
54. Other equity instruments
□ Applicable ? Not applicable
55. Capital reserve
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance |
| Capital premium (share premium) | 2,121,733,860.51 | 73,441,428.60 | 2,195,175,289.11 | |
| Other capital reserves | 144,408,337.93 | 36,922,067.43 | 77,375,475.96 | 103,954,929.40 |
| Total | 2,266,142,198.44 | 110,363,496.03 | 77,375,475.96 | 2,299,130,218.51 |
Additional descriptions, including the changes in increase or decrease in the current period and the reasons forchanges:
Note 1: RMB 73,441,428.60 was increased in the capital premium of the current period as RMB 73,441,428.60option fee recognized in other capital surplus of the prior period was transferred to the capital premium becauseof the release of the restricted shares.Note 2: Other capital reserves increased by RMB 36,922,067.43 in the current period, including RMB34,126,573.66 of share-based payment expenses confirmed by restricted stock equity incentive plan in thecurrent period and RMB 2,795,493.77 of share-based payment confirmed by Huizhou YAKO AutomationTechnology Co., Ltd. (subsidiary). RMB 77,375,475.96 was decreased in other capital surplus because RMB73,441,428.60 was transferred from other capital surplus to capital premium due to the release of restrictedshares, RMB 3,778,684.66 was decreased in other capital surplus due to the adjustment made for the resignationof some incentive grantees and RMB 155,362.7 was adjusted in other capital surplus due to the acquisition ofminority equities.
56. Treasury shares
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance |
| Restricted stock repurchase obligations | 284,257,854.91 | 67,614,497.28 | 216,643,357.63 | |
| Total | 284,257,854.91 | 67,614,497.28 | 216,643,357.63 |
Additional descriptions, including the changes in increase or decrease in the current period and the reasons forchanges: None
57. Other comprehensive income
Unit: RMB
| Items | Beginning balance | Amount incurred in the current period | Ending balance | |||||
| Amount of pre-income tax incurred in the current period | Minus: profits and losses included in other comprehensive income previously and transferred in the current period | Minus: current retained earnings included in other comprehensive income in the previous period | Minus: income tax expense | Attributable to parent company after tax | Attributable to minority shareholders after tax | |||
| II. Other comprehensive income that is reclassified into profits and losses | -8,479,622.35 | 60,692,638.82 | 60,692,638.82 | 52,213,016.47 | ||||
| Difference in translation of foreign currency financial statements | -8,479,622.35 | 60,692,638.82 | 60,692,638.82 | 52,213,016.47 | ||||
| Total amount of other comprehensive income | -8,479,622.35 | 60,692,638.82 | 60,692,638.82 | 52,213,016.47 |
Other description, including the adjustment to the effective portion of the profits and losses of cash flowhedging transferred to the amount initially recognized for the hedged item: None
58. Special reserve
□ Applicable ? Not applicable
59. Surplus reserves
Unit: RMB
| Items | Beginning balance | Increase in the current period | Decrement in the current period | Ending balance |
| Statutory surplus reserve | 214,764,194.14 | 214,764,194.14 | ||
| Total | 214,764,194.14 | 214,764,194.14 |
Explanation of the surplus reserve, including the changes in increase or decrease in the current period and thereasons for changes: None
60. Retained earnings
Unit: RMB
| Items | Current period | Previous period |
| Retained earnings at the end of the previous period before adjustment | 2,270,819,171.01 | 1,779,243,483.61 |
| Total retained earnings at the beginning of the period (+ for increase, - for decrease) | 710,522.81 | 365,494.44 |
| Retained earnings at the beginning of last period after adjustment | 2,271,529,693.82 | 1,779,608,978.05 |
| Plus: net profit attributable to owners of parent company in current year | 258,040,692.16 | 246,657,151.65 |
| Common stock dividends payable | 75,861,250.32 | 62,713,008.60 |
| Retained earnings at the end of the period | 2,453,709,135.66 | 1,963,553,121.10 |
61. Operating income and operating costs
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,245,380,855.39 | 3,332,427,372.30 | 4,212,996,240.53 | 3,420,959,502.11 |
| Other business | 10,740,298.33 | 5,399,460.85 | 15,006,897.04 | 474,527.50 |
| Total | 4,256,121,153.72 | 3,337,826,833.15 | 4,228,003,137.57 | 3,421,434,029.61 |
Income-related information:
Unit: RMB
| Contract classification | Division 1 | Division 2 | Intelligent Control Division | Total |
| Types of commodities | 4,256,121,153.72 | 4,256,121,153.72 | ||
| Including: | ||||
| Tools | 1,620,045,611.60 | 1,620,045,611.60 | ||
| Home appliances | 1,500,351,397.24 | 1,500,351,397.24 | ||
| New energy | 914,360,730.57 | 914,360,730.57 | ||
| Industry | 136,712,993.99 | 136,712,993.99 | ||
| Intelligent solutions | 73,910,121.99 | 73,910,121.99 | ||
| Others | 10,740,298.33 | 10,740,298.33 | ||
| Classified by business area | 4,256,121,153.72 | 4,256,121,153.72 | ||
| Including: | ||||
| Domestic | 1,634,215,062.54 | 1,634,215,062.54 | ||
| Export | 2,621,906,091.18 | 2,621,906,091.18 |
Information related to performance obligations:
Not applicableInformation related to the transaction price allocated to the remaining performance obligations:
At the end of the current reporting period, the amount of income corresponding to performance obligationsunder the signed contracts but not yet performed or not fully performed is RMB 0.00, with RMB ___ expectedto be confirmed as income in Year ___, RMB ___ expected to be confirmed as income in Year ___ and RMB___ expected to be confirmed as income in Year ___.
62. Taxes and surcharges
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Urban maintenance and construction tax | 8,735,223.48 | 6,262,071.28 |
| Education surcharge | 6,339,213.38 | 4,472,907.99 |
| Property tax | 5,088,912.36 | 4,579,610.57 |
| Land use tax | 650,764.25 | 601,530.92 |
| Stamp duty | 3,189,645.46 | 4,843,716.89 |
| Others | 28,626.66 | 300,307.02 |
| Total | 24,032,385.59 | 21,060,144.67 |
63. Sales expenses
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Employee compensation | 81,107,869.20 | 71,092,467.40 |
| Traveling and business entertainment fees | 18,480,497.11 | 10,604,540.93 |
| Intermediary service expenses | 9,341,011.65 | 8,406,618.19 |
| Equity incentive expenses | 6,573,868.05 | 13,224,050.94 |
| Advertising and exhibition fees | 4,731,322.60 | 3,492,322.00 |
| Others | 22,799,877.00 | 18,360,826.02 |
| Total | 143,034,445.61 | 125,180,825.48 |
64. Administrative expenses
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Employee compensation | 114,187,392.52 | 90,896,179.65 |
| Depreciation and amortization | 23,526,040.41 | 21,036,734.22 |
| Rent and utilities | 10,120,081.51 | 7,121,821.96 |
| Intermediary service expenses | 9,399,249.84 | 6,962,764.32 |
| Equity incentive expenses | 7,508,043.78 | 16,890,907.13 |
| Property insurance expenses | 2,052,153.88 | 1,294,426.48 |
| Others | 34,681,603.66 | 16,691,192.70 |
| Total | 201,474,565.60 | 160,894,026.46 |
Other descriptions: None
65. R&D expenses
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Employee compensation | 187,631,470.05 | 163,347,312.36 |
| Depreciation and amortization | 53,316,811.19 | 44,004,446.04 |
| Equity incentive expenses | 13,856,640.80 | 32,417,628.32 |
| Material and mould costs | 31,125,615.88 | 23,000,657.37 |
| Others | 31,360,012.19 | 22,077,163.83 |
| Total | 317,290,550.11 | 284,847,207.92 |
Other descriptions: None
66. Financial expenses
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Interest expense | 19,596,648.04 | 14,644,344.03 |
| Minus: interest income | 15,720,869.63 | 6,486,250.66 |
| Profit or loss on exchange | -55,962,757.24 | -75,077,691.81 |
| Others | 1,094,503.59 | 3,303,222.81 |
| Total | -50,992,475.24 | -63,616,375.63 |
Other descriptions: None
67. Other revenues
Unit: RMB
| Source for other revenues | Amount incurred in the current period | Amount incurred in prior period |
| Governmental subsidies | 13,327,625.08 | 14,488,480.96 |
| Added-value tax refund on demand | 2,657,861.16 | 1,793,694.48 |
| Return of individual income tax service charge | 1,164,180.69 | 646,161.64 |
| Others | 44,892.36 | 144,530.54 |
| Total | 17,194,559.29 | 17,072,867.62 |
68. Investment income
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Long-term equity investment income accounted by the cost method | -941,734.97 | -1,489,563.00 |
| Investment income from disposal of long-term equity investments | -2,928,835.90 | |
| Investment income of financial products | 248,584.66 | 241,902.47 |
| Forward foreign exchange profit and loss | 377,800.00 | |
| Total | -3,244,186.21 | -1,247,660.53 |
Other descriptions: None
69. Net exposure hedging revenue
□ Applicable ? Not applicable
70. Fair value change revenue
Unit: RMB
| Sources of income from change in fair value | Amount incurred in the current period | Amount incurred in prior period |
| Tradable financial assets | 31,603,205.99 | |
| Financial liabilities held for trading | -6,041,282.00 | |
| Total | -6,041,282.00 | 31,603,205.99 |
Other descriptions: None
71. Credit impairment loss
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Bad debt loss of other receivables | -1,063,126.85 | -229,235.75 |
| Bad debt loss of receivables | -712,252.82 | -6,705,780.21 |
| Loss from bad debt of discounted commercial acceptance | 185,610.25 | 121,687.18 |
| Loss from bad debt of accounts receivable financing | -787,139.10 | -4,094,005.92 |
| Total | -2,376,908.52 | -10,907,334.70 |
Other descriptions: None
72. Asset impairment loss
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| II. Loss on inventory valuation and contract performance cost impairment loss | -23,666,214.06 | -46,406,707.31 |
| Total | -23,666,214.06 | -46,406,707.31 |
Other descriptions: None
73. Assets disposal revenue
Unit: RMB
| Source of assets disposal revenue | Amount incurred in the current period | Amount incurred in prior period |
| Non-current assets disposal revenue | -1,279,902.83 | -284,674.88 |
| Total | -1,279,902.83 | -284,674.88 |
74. Non-operating income
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period | Amount included in the current non-recurring profit and loss |
| Non-current assets disposal revenue | 523,039.11 | 259,566.02 | 523,039.11 |
| Others | 4,068,291.96 | 894,448.64 | 4,068,291.96 |
| Total | 4,591,331.07 | 1,154,014.66 | 4,591,331.07 |
Government subsidy included in the current profits and losses:
□ Applicable ? Not applicable
75. Non-operating expenses
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period | Amount included in the current non-recurring profit and loss |
| Loss on damage and scrapping of non-current assets | 2,530,330.52 | 353,000.78 | 2,530,330.52 |
| Customer quality deduction expenses | 1,024,170.82 | 2,556,764.63 | 1,024,170.82 |
| Others | 696,257.35 | 208,629.48 | 696,257.35 |
| Total | 4,250,758.69 | 3,118,394.89 | 4,250,758.69 |
76. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Current income tax expenses | 13,309,352.18 | 29,479,656.28 |
| Deferred tax expense | -7,265,622.74 | -11,864,963.08 |
| Total | 6,043,729.44 | 17,614,693.20 |
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
| Items | Amount incurred in the current period |
| Total profit | 264,381,486.95 |
| Income tax expenses calculated at statutory/applicable tax rates | 39,657,223.04 |
| Influence of different tax rates applicable to subsidiary | 5,655,828.75 |
| Effect of income tax adjustment in previous period | -10,840,525.11 |
| Impact of non-taxable income | 225,209.95 |
| Impact of non-deductible cost, expense and loss | 2,815,338.78 |
| Impact of deductible loss of unrecognized deferred tax assets in previous period | -30,045.18 |
| Impact of deductible temporary differences or deductible losses of unrecognized deferred tax assets in the current period | 10,883,692.42 |
| Impact of additional deductible expenses | -22,376,233.68 |
| Influence of tax exemption policy for the sub-subsidiary in Vietnam | -13,873,375.16 |
| The impact of changes in tax rates on the initial balance of deferred tax | |
| Other adjustments | -6,073,384.37 |
| Income tax expenses | 6,043,729.44 |
77. Other comprehensive income
See the notes for details
78. Items of cash flow statement
(1) Other cash received related to operating activities
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Current accounts | 36,602,276.24 | 15,396,145.60 |
| Interest income | 10,914,934.74 | 11,355,372.53 |
| Governmental subsidies | 15,871,269.60 | 18,797,067.62 |
| Others | 4,104,276.19 | 340,044.04 |
| Total | 67,492,756.77 | 45,888,629.79 |
Explanation of other cash received related to operating activities: None
(2) Other cash paid related to operating activities
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Service charge | 913,661.81 | 1,326,317.40 |
| Out-of-pocket expenses | 149,586,149.20 | 112,557,963.56 |
| Margin and deposit expenses | 4,309,067.57 | 5,326,178.34 |
| Employee loans | 4,501,875.40 | 3,808,623.88 |
| Others | 16,019,796.16 | 6,208,734.33 |
| Total | 175,330,550.14 | 129,227,817.51 |
Explanation of other cash paid related to operating activities: None
(3) Other cash received related to investment activities
□ Applicable ? Not applicable
(4) Other cash paid related to investment activities
□ Applicable ? Not applicable
(5) Other cash received related to financing activities
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Note margin | 25,597,956.24 | |
| Bill discount | 3,101,583.74 | |
| Total | 3,101,583.74 | 25,597,956.24 |
Explanation of other cash received related to financing activities: None
(6) Other cash paid related to financing activities
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Note margin | 14,697,411.67 | |
| Share repurchase | 6,199,099.20 | 40,787,803.76 |
| Payment for lease liabilities | 16,010,724.01 | 9,944,478.12 |
| Takeover of minority equity | 7,800,000.00 | |
| Total | 30,009,823.21 | 65,429,693.55 |
Explanation of other cash paid related to financing activities: None
79. Supplementary information of cash flow statement
(1) Supplementary materials of cash flow statement
Unit: RMB
| Supplementary information | Amount in the current period | Amount in the previous period |
| 1.Adjusting net profit to cash flow from operating activities: | ||
| Net profit | 258,337,757.51 | 248,453,901.81 |
| Plus: impairment of assets | 26,043,122.58 | 57,314,042.01 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets | 83,492,575.76 | 67,167,180.29 |
| Depreciation of right-of-use assets | 21,919,558.35 | 11,559,119.61 |
| Amortization of intangible assets | 50,804,303.17 | 40,518,698.61 |
| Amortization of long-term deferred expenses | 21,427,228.65 | 18,332,182.03 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (income marked with "-") | -1,279,902.83 | 284,674.88 |
| Losses on scrapping of fixed assets (income marked with "-") | 2,007,291.41 | 353,000.78 |
| Loss from changes in fair value (income marked "-") | 6,041,282.00 | -31,603,205.99 |
| Financial expenses (income marked with "-") | -44,158,884.67 | 18,329,844.69 |
| Investment loss (income marked with "-") | 3,244,186.21 | 1,247,660.53 |
| Decrease in deferred tax assets (increase marked with "-") | -10,498,339.47 | 9,389,900.19 |
| Increase in deferred tax liabilities (decrease marked with "-") | 3,097,914.16 | 2,591,351.31 |
| Decrease in inventory (increase marked with "-") | 216,980,327.68 | -11,859,608.55 |
| Decrease in operating receivables (increase marked with "-") | 82,527,391.45 | -278,292,463.29 |
| Increase in operating payables (decrease marked with "-") | -222,491,229.78 | -82,499,123.52 |
| Others | 30,347,889.00 | 3,599,100.00 |
| Net cash flow from operating activities | 527,842,471.18 | 74,886,255.39 |
| 2Major investment and financing activities not involving cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets acquired under finance leases | ||
| 3.Net change in cash and cash equivalents: |
| Ending balance of cash | 1,732,898,730.97 | 1,573,782,719.24 |
| Minus: beginning balance of cash | 1,374,281,693.23 | 1,736,104,958.20 |
| Plus: ending balance of cash equivalents | ||
| Minus: beginning balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 358,617,037.74 | -162,322,238.96 |
(2) Net cash paid for obtaining subsidiaries in current period
□ Applicable ? Not applicable
(3) Net cash received for disposal of subsidiaries in current period
□ Applicable ? Not applicable
(4) Composition of cash and cash equivalents
Unit: RMB
| Items | Ending balance | Beginning balance |
| I. Cash | 1,732,898,730.97 | 1,374,281,693.23 |
| Including: cash in stock | 963,395.56 | 606,436.16 |
| Bank deposit available for payment at any time | 1,576,615,818.25 | 1,210,002,652.40 |
| Other monetary capital for payment at any time | 155,319,517.16 | 163,672,604.67 |
| III. Balance of cash and cash equivalents at the end of the period | 1,732,898,730.97 | 1,374,281,693.23 |
80. Notes to items in change statement of owner's equity
Describe the names and adjusted amounts of "other" items that adjusted the closing balance of the previous year:
None
81. Assets with limited ownership or use right
Unit: RMB
| Items | Book value at the end of the period | Restricted reasons |
| Monetary capital | 18,874,829.84 | Apply to the bank for the issuance of bills and guarantee deposits |
| Total | 18,874,829.84 |
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
| Items | Foreign currency balance at the end of the period | Exchange rate for conversion | Balance converted into RMB at the end of the period |
| Monetary capital | 382,709,664.02 |
| Including: US dollars | 29,345,579.71 | 7.2258 | 212,045,289.87 |
| Euros | 677,270.06 | 7.8771 | 5,334,923.99 |
| Hong Kong dollars | 1,129,116.79 | 0.9220 | 1,041,045.68 |
| Indian Rupee | 1,315,853,193.68 | 0.0880 | 115,795,081.04 |
| Vietnamese Dong | 144,654,277,645.00 | 0.0003 | 43,396,283.29 |
| Japanese Yen | 60,677,834.00 | 0.0501 | 3,039,959.48 |
| Romanian Leu | 1,145,162.75 | 1.5820 | 1,811,647.47 |
| Mexican Peso | 579,535.30 | 0.4235 | 245,433.20 |
| Accounts receivable | 1,259,520,545.87 | ||
| Including: US dollars | 160,796,237.31 | 7.2258 | 1,161,881,451.55 |
| Hong Kong dollars | 1,729,450.68 | 0.9220 | 1,594,553.53 |
| Indian Rupee | 1,040,479,331.98 | 0.0880 | 91,562,181.21 |
| Japanese Yen | 89,468,255.00 | 0.0501 | 4,482,359.58 |
| Receivables financing | 204,331,123.84 | ||
| Including: US dollars | 28,277,993.28 | 7.2258 | 204,331,123.84 |
| Accounts payable | 51,068,473.71 | ||
| Including: US dollars | 3,344,895.27 | 7.2258 | 24,169,544.24 |
| Euros | 691,767.03 | 7.8771 | 5,449,118.07 |
| Indian Rupee | 171,191,698.87 | 0.0880 | 15,064,869.50 |
| Vietnamese Dong | 7,364,669,212.00 | 0.0003 | 2,209,400.76 |
| Japanese Yen | 81,594,271.00 | 0.0501 | 4,087,872.98 |
| Mexican Peso | 207,008.64 | 0.4235 | 87,668.16 |
| Other receivables | 9,440,836.04 | ||
| Including: US dollars | 601,639.60 | 7.2258 | 4,347,327.42 |
| Euros | 36,810.83 | 7.8771 | 289,962.59 |
| Indian Rupee | 18,705,774.18 | 0.0880 | 1,646,108.13 |
| Vietnamese Dong | 9,573,928,877.00 | 0.0003 | 2,872,178.66 |
| Japanese Yen | 4,120,351.00 | 0.0501 | 206,429.59 |
| Mexican Peso | 186,138.49 | 0.4235 | 78,829.65 |
| Other account payable | 3,274,457.50 | ||
| Including: US dollars | 127,074.21 | 7.2258 | 918,212.83 |
| Vietnamese Dong | 7,001,957,721.00 | 0.0003 | 2,100,587.32 |
| Japanese Yen | 3,865,907.00 | 0.0501 | 193,681.94 |
| Mexican Peso | 146,340.99 | 0.4235 | 61,975.41 |
(2) Explanation of overseas business entities, including for important overseas business entities,disclosure of main overseas business locations, recording currency and selection basis as well asdisclosure of reasons for changes in recording currency.? Applicable □ Not applicable
1. Topband India Private Limited, a subsidiary of the Company, is mainly located in Pune City, Maharashtra,India, with Indian Rupee as the recording currency;
2. Topband (Vietnam) Co., Ltd., a sub-subsidiary of the Company, is mainly located in Binh Duong, Vietnam,with Vietnamese Dong as the recording currency;
3. TOPBAND SMART DONG NAI (VIETNAM) Co., Ltd., a sub-subsidiary of the Company, is mainly locatedin Dong Nai, Vietnam, with Vietnamese Dong as the recording currency;
4. Topband Germany GmbH, a sub-subsidiary of the Company, is mainly located in Unterf?hring, Germany,with Euro as the recording currency;
5. TOPBAND JAPAN Co., Ltd., a sub-subsidiary of the Company, is mainly located in Nagoya, Japan, withJapanese Yen as the recording currency;
6. Q.B.PTE.LTD, the sub-subsidiary of Topband, is located in Singapore, with Singapore dollar as thebookkeeping base currency;
7. TOPBAND SMART EUROPE COMPANY LIMITED S.R.L., the sub-subsidiary of Topband, is located inTimisoara, Romania, with Lei as the bookkeeping base currency the bookkeeping base currency;
8. TOPBAND MEXICO, S.DER.L.DEC.V, the sub-subsidiary of Topband, is located in Monterrey, Mexico,with peso as the bookkeeping base currency.
83. Hedging
The qualitative and quantitative information on hedging items, related hedging instruments, and hedged risks isdisclosed according to the type of hedging: None
84. Government subsidies
(1) Basic situation of government subsidies
Unit: RMB
| Category | Amount | Items presented | Amount included in the current profits and losses |
| Nano lithium iron phosphate power battery project | 125,000.00 | Other income | 125,000.00 |
| R&D project of 60A solar charging controller with peak power tracking technology | 60,000.00 | Other income | 60,000.00 |
| Special fund for the industrialization of high-efficiency energy-saving rare-earth permanent magnet motor | 97,500.00 | Other income | 97,500.00 |
| Key technology R&D of 18650-2.8A.h high power battery | 102,000.00 | Other income | 102,000.00 |
| R&D project of unmanned robot cleaner | 300,000.00 | Other income | 300,000.00 |
| Key technology R&D project of rare-earth permanent magnet brushless DC motor and controller with high speed ratio and variable frequency | 229,918.86 | Other income | 229,918.86 |
| R&D project of key technology for clean energy DC system measurement | 25,000.00 | Other income | 25,000.00 |
| Huizhou National Debt Program for Anti-epidemic Technology Transformation | 416,030.00 | Other income | 416,030.00 |
| Technological Transformation of Intelligent Controller and Lithium Battery Automated Production Line | 312,070.00 | Other income | 312,070.00 |
| Provincial-level enterprise technology transformation fund for promoting high-quality economic development in 2022 | 574,400.00 | Other income | 574,400.00 |
| Foreign-trade premium funding program | 1,840,000.00 | Other income | 1,840,000.00 |
| Governmental support subsidy for foreign trade | 190,000.00 | Other income | 190,000.00 |
| Incentive subsidy from government supported retail firm market development program | 120,000.00 | Other income | 120,000.00 |
| 2022 Incentive project fund for production capacity expansion and efficiency improvement of industrial enterprises (first half of year) | 660,000.00 | Other income | 660,000.00 |
| 2023 National hi-tech enterprise incubation incentive program | 100,000.00 | Other income | 100,000.00 |
| AEO advanced certified enterprise incentive program | 500,000.00 | Other income | 500,000.00 |
| Cultivation subsidy for high-tech enterprises in 2022 | 150,000.00 | Other income | 150,000.00 |
| 2023 JD college and university social security allowance | 2,087.65 | Other income | 2,087.65 |
| 2023 Hi-tech grant | 240,000.00 | Other income | 240,000.00 |
| 2023 Grant for enterprises that uses special and sophisticated technologies to produce novel and unique products | 100,000.00 | Other income | 100,000.00 |
| 2022 Special fund for fixed-asset technical transformation | 2,761,100.00 | Other income | 2,761,100.00 |
| 2023 Special fund for high quality development of manufacturing industry (first batch) | 50,000.00 | Other income | 50,000.00 |
| Grant from incentive program for enterprises that uses special and sophisticated technologies to produce novel and unique products | 200,000.00 | Other income | 200,000.00 |
| Award from 2022 steady growth program (second half of year) | 90,000.00 | Other income | 90,000.00 |
| 2022 Award for development and efficiency improvement of industrial enterprises (second half of year) | 290,000.00 | Other income | 290,000.00 |
| 2022 Award for recognized technological innovation project | 150,000.00 | Other income | 150,000.00 |
| 2023 Strategic emerging industry support program | 2,080,000.00 | Other income | 2,080,000.00 |
| 2022 General program for technological breakthroughs | 500,000.00 | Other income | 500,000.00 |
| Award for a water-conserving enterprise | 128,510.00 | Other income | 128,510.00 |
| 2023 Foreign-trade quality growth support program | 130,000.00 | Other income | 130,000.00 |
| Social security subsidy for small- and micro-sized enterprises | 8,879.22 | Other income | 8,879.22 |
| Subsidy for steady employment | 225,979.35 | Other income | 225,979.35 |
| Award for industrial park service sector | 320,000.00 | Other income | 320,000.00 |
| Other projects | 249,150.00 | Other income | 249,150.00 |
(2) Situation of government subsidies refund
□ Applicable ? Not applicable
Other descriptions: None
85. Others
None
VIII. Changes in the scope of consolidation
1. Consolidation under different control
□ Applicable ? Not applicable
2. Consolidation under the same control
□ Applicable ? Not applicable
3. Reverse purchase
Basic information of the transaction, the basis for the reverse purchase of the transaction, whether the assets andliabilities retained by the listed company constitute the business and its basis, the determination of theconsolidation cost, the amount of the adjustment of the equity when the transaction is processed as an equitytransaction and its calculation:
4. Disposal of subsidiaries
Is there single disposal of the investment in a subsidiary which results in loss of control
□ Yes ? No
Whether there are step-by-step disposal of the investment in a subsidiary through multiple transactions and lossof control in the current period
□ Yes ? No
5. Changes in the scope of consolidation due to other reasons
Explanations for the changes in the scope of the consolidation caused by other reasons (e.g., establishment ofnew subsidiaries, or liquidation of subsidiaries, etc.) and relevant circumstances: None
6. Others
None
IX. Interests in other entities
1. Equities in subsidiaries
(1) Composition of enterprise group
| Name of subsidiary | Principal place of business | Registered place | Nature of business | Proportion of shareholding | Acquisition method | |
| Direct | Indirect | |||||
| Shenzhen Topband Software Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Shenzhen Topband Automation Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Shenzhen Topband Battery Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Chongqing Topband Industrial Co., Ltd. | Chongqing | Chongqing | Production and sales | 100.00% | Establishment | |
| Topband (Hong Kong) Co., Ltd. | Hong Kong | Hong Kong | Investor: | 100.00% | Establishment | |
| Huizhou Topband Electrical Technology Co., Ltd. | Huizhou | Huizhou | Production and sales | 100.00% | Establishment | |
| TOPBANDINDIAPRIVATELIMITED | India | India | Production and sales | 100.00% | Establishment | |
| Shenzhen YAKO Automation Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 71.54% | Consolidation under different control | |
| Shenzhen Allied Control System Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Consolidation under different control | |
| Huizhou Topband Lithium Battery Co., Ltd. | Huizhou | Huizhou | Production and sales | 100.00% | Establishment | |
| Ningbo Topband Intelligent Control Co., Ltd. | Ningbo | Ningbo | Production and sales | 100.00% | Establishment | |
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 77.25% | Consolidation under different control | |
| Shenzhen Yansheng Software Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 71.54% | Consolidation under different control | |
| Hangzhou Zhidong Motor Technology Co., Ltd. | Hangzhou | Hangzhou | Production and sales | 53.66% | Consolidation under different control | |
| Topband（Vietnam)Co.,ltd | Vietnam | Vietnam | Production and sales | 100.00% | Establishment | |
| TOPBANDSMARTDONGNAI(VIETNAM)COMPANYLIMITED | Vietnam | Vietnam | Production and sales | 100.00% | Establishment | |
| TopbandGermanyGmbH | Germany | Germany | Sales | 100.00% | Establishment | |
| TOPBANDJAPANCo.,Ltd | Japan | Japan | Sales | 100.00% | Establishment | |
| Shenzhen Topband Supply Chain Services Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Shenzhen Topband Investment Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Shenzhen Spark IOT Technology Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Shenzhen Tunnu Innovation Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Shenzhen Senxuan Technology Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Topband (Qingdao) Intelligent Control Co., Ltd. | Qingdao | Qingdao | Production and sales | 100.00% | Establishment | |
| Shenzhen Tengyi Industrial Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Taixing Ninghui Lithium Battery Co., Ltd. | Taixing | Taixing | Production and sales | 100.00% | Consolidation under different control | |
| Shenzhen Topband Automotive Electronics Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Q.B.PTE.LTD | Singapore | Singapore | Sales | 100.00% | Establishment | |
| TOPBANDMEXICO,S.DER.L.DEC.V. | Mexico | Mexico | Production and sales | 100.00% | Establishment | |
| Tunnu Innovation (Hong Kong) Limited | Hong Kong | Hong Kong | Sales | 100.00% | Establishment | |
| TOPBANDSMARTEUROPECOMPANYLIMITEDS.R.L. | Romania | Romania | Sales | 100.00% | Establishment | |
| Huizhou YAKO Automation Technology Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 71.54% | Establishment | |
| Shenzhen Zhongli Consulting Co., Ltd. | Shenzhen | Qingdao | Sales | 100.00% | Establishment | |
| TUNNUINNOVATION,INC | The United States | The United States | Sales | 100.00% | Establishment | |
| Nantong Topband Youneng Technology Co., Ltd. | Nantong | Nantong | Production and sales | 100.00% | Establishment | |
| Shenzhen Topband Motor Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Shenzhen Yueshang Robot Co., Ltd. | Shenzhen | Shenzhen | Production and sales | 100.00% | Establishment | |
| Shenzhen Xiaoyou Aitu Innovation Technology Co., Ltd. | Shenzhen | Shenzhen | Sales | 100.00% | Establishment | |
| Huizhou Chiding Technology Co., Ltd. | Huizhou | Huizhou | Production and sales | 100.00% | Establishment |
Explanation of the shareholding ratio in the subsidiary being different from the voting rights ratio: None
Basis for holding half or less of the voting rights but still controlling the investee, and holding more than half ofthe voting rights but not controlling the investee: None
For important structured entities included in the consolidation scope, the basis for control: None
Basis for determining whether a company is an agent or a principal: None
Other descriptions: None
(2) Important non-wholly-owned subsidiaries
Unit: RMB
| Name of subsidiary | Shareholding ratio of minority shareholders | Profits and losses attributable to minority shareholders during the current period | Dividends declared and distributed to minority shareholders during the current period | Ending balance of minority shareholders' equity |
| Shenzhen YAKO Automation Technology Co., Ltd. | 28.46% | 1,267,722.24 | 0.00 | 86,134,654.02 |
Explanation of the shareholding ratio of minority shareholder in subsidiary shareholder being different from thevoting rights ratio: NoneOther descriptions: None
(3) Major financial information of important non-wholly-owned subsidiaries
Unit: RMB
| Name of subsidiary | Ending balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Shenzhen YAKO Automation Technology Co., Ltd. | 250,864,722.98 | 204,163,414.39 | 455,028,137.37 | 85,043,194.37 | 67,059,339.96 | 152,102,534.33 | 242,689,924.08 | 136,833,968.50 | 379,523,892.58 | 79,730,092.08 | 5,379,639.90 | 85,109,731.98 |
Unit: RMB
| Name of subsidiary | Amount incurred in the current period | Amount incurred in prior period | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Shenzhen YAKO Automation Technology Co., Ltd. | 130,828,047.16 | 4,219,067.95 | 4,219,067.95 | -11,361,875.55 | 248,511,066.02 | 676,743.90 | 676,743.90 | 22,473,846.35 |
Other descriptions: None
(4) Significant restrictions on the use of enterprise group assets and the liquidation of enterprise groupdebtsNot applicable
(5) Financial support or other support provided to structured entities included in the scope of theconsolidated financial statementsNot applicableOther descriptions: None
2. Transactions causing the owner's equity share change but still controlling the subsidiary
□ Applicable ? Not applicable
3. Interests in joint venture arrangements or associated enterprises
(1) Important joint ventures or associated enterprises
□ Applicable ? Not applicable
(2) Major financial information of important joint ventures
□ Applicable ? Not applicable
(3) Major financial information of important associated enterprises
□ Applicable ? Not applicable
(4) Summarized financial information of unimportant joint ventures and associated enterprises
Unit: RMB
| Ending balance/amount incurred in current period | Beginning balance/amount incurred in the previous period | |
| Joint venture: | ||
| Sum of the following items calculated according to the shareholding ratio | ||
| Associated enterprises: | ||
| Total book value of investment | 35,680,088.03 | 23,550,658.91 |
| Sum of the following items calculated according to the shareholding ratio | ||
| -- Net profit | -941,734.98 | -1,489,563.00 |
| -- Total comprehensive income | -941,734.98 | -1,489,563.00 |
Other descriptions: None
(5) Statement that there is a material limitation on the ability of the joint venture or associated enterpriseto transfer funds to the CompanyNone
(6) Excess losses incurred by the joint ventures or associated enterprises
□ Applicable ? Not applicable
(7) Unconfirmed commitments related to the investment of joint ventures
Not applicable
(8) Contingent liabilities related to the investment of joint ventures or associated enterprisesNone
4. Important joint operation
□ Applicable ? Not applicable
5. Rights and interests in structured entities not included in the scope of the consolidated financialstatementsRelevant explanations of structured entities not included in the scope of the consolidated financial statements:
None
6. Others
NoneX. Risks associated with financial instrumentsThe main financial instruments of the Company include equity investment, debt investment, borrowings,accounts receivable, accounts payable, convertible bonds, etc. For details of each financial instrument, pleaserefer to the relevant items in Note VI. The risks associated with these financial instruments and the riskmanagement policies adopted by the Company to mitigate these risks are described below. In order to ensure allthe above risks to be controlled within a limited scope, the management of the Company has controlled and
supervised the risk exposure.Sensitivity analysis technique is used for analyzing reasonableness of risk variable and possible impactsfrom its variation on current profits and losses or shareholders' equity. Since any risk variable rarely changes inisolation, and the correlation between the variables will have a significant effect on the final amount affected bya change in a risk variable, the following contents are based on the assumption that changes in each variable aremade in isolation. The main risks arising from the Company's financial instruments include the credit risk,liquidity risk and market risk.(I) Risk management objective and policyThe Company's risk management objective is to strike an appropriate balance between risks and returns,reduce the negative impact of risks on the Company's business performance to the lowest level, and maximizethe interests of shareholders and other equity investors. Based on this risk management objective, the basic riskmanagement strategy of the Company is to determine and analyze various risks faced by it, establish anappropriate risk bearing bottom line and carry out risk management, and conduct timely and reliable supervisionof various risks to control risks within the limited scope.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations. The Company's exposureto foreign exchange risks is mainly related to US dollars and Hong Kong dollars. Except for the Company andits subsidiary, Topband (HK) Co., Limited, which purchases and sells some materials and products in US dollars,Euros and Hong Kong dollars, TOPBAND INDIA PRIVATE LIMITED, the subsidiary, uses Indian Rupee,Topband (Vietnam) Co., Ltd. and TOPBAND SMART DONG NAI (VIETNAM) Co., Ltd., the sub-subsidiaries,use Vietnamese Dong, and Topband Germany GmbH, the sub-subsidiary, uses Euros; TOPBAND JAPAN Co.,Ltd., the sub-subsidiary, uses Japanese Yen, Q.B.PTE.LTD, the sub-subsidiary, uses Singapore dollars, andTOPBAND MEXICO, S.DER.L.DEC.V., the sub-subsidiary, uses Mexican Peso; TOPBAND SMARTEUROPE COMPANY LIMITED S.R.L., the grandson company, uses Romanian Leu, Tunnu Innovation HKLimited, the grandson company, uses Hong Kong dollars, and TUNNU INNOVATION, INC., the grandsoncompany, uses US dollars; other major business activities of Topband are settled in RMB.As of June 30, 2023,the assets and liabilities of the Company are RMB balances, except that the assets or liabilities stated in VI.(LVIII) foreign currency monetary items are US dollars, Hong Kong dollars, Euros, Vietnamese Dong, JapaneseYen, Indian Rupee, Romanian Leu and Mexican Peso balances. The foreign exchange risks arising from the
assets and liabilities of such foreign currency balances may have an impact on the Company's operating results.The Company pays close attention to the impact of exchange rate fluctuations on the Company's foreignexchange risks. The Company currently takes no measures to avoid foreign exchange risks.
(2) Other price risks
Investments held by the Company and classified as tradable financial assets are measured at fair value onthe balance sheet date. Therefore, the Company is exposed to the risk of changes in the securities market.
2. Credit risk
On June 30, 2023, the maximum credit risk exposure causing the Company's financial losses is mainlyincurred from the other party's failure to fulfill obligations, which leads the Company to financial asset losses,and financial guarantee undertaken by the Company, including confirmed carrying amounts of financial assetsin consolidated balance sheets; the carrying value only reflects risk exposure of financial instruments measuredat fair value rather than the maximum risk exposure, that varies with the fair value in the future.
In order to reduce credit risks, the Company has set up special positions responsible for determining creditlimits, conducting credit approval, and implementing other monitoring procedures to ensure that necessarymeasures are taken to recover overdue claims. In addition, the Company reviews the recovery of each individualreceivable on each balance sheet date to ensure that adequate provision is made for uncollectible amounts. As aresult, the Management of the Company believes that the credit risk assumed by the Company has beensignificantly reduced.
The Company's working capital is deposited in a bank with a high credit rating, so the credit risk ofworking capital is low.
The Company has adopted necessary policies to ensure that all sales customers have good credit records.The Company has no other major credit concentration risk.
3. Flow risk
When managing liquidity risk, the Company maintains sufficient cash and cash equivalents as deemed bythe management and monitors them to meet the Company's operational needs and reduce the impact of cashflow fluctuations. The management of the Company monitors the use of bank loans and ensures compliancewith loan agreements.
(II) Transfer of financial assets
There were no events related to the transfer of financial assets in the Company this year.
(III) Offsetting between financial assets and financial liabilities
There were no events related to the offsetting between financial assets and financial liabilities in theCompany this year.XI. Disclosure of Fair Value
1. Ending fair value of assets and liabilities measured at fair value
Unit: RMB
| Items | Ending fair value | |||
| The first level of fair value measurement | The second-level fair value measurement | The third level of fair value measurement | Total | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| (I) Tradable financial assets | 366,855,786.11 | 366,855,786.11 | ||
| 1. Financial asset at fair value and changes through current profits and losses | 366,855,786.11 | 366,855,786.11 | ||
| (1) Debt instrument investment | 5,687,202.21 | 5,687,202.21 | ||
| (2) Equity instrument investment | 361,168,583.90 | 361,168,583.90 | ||
| (II) Receivables financing | 280,349,184.84 | 280,349,184.84 | ||
| (1) Bank acceptance bill | 66,063,246.95 | 66,063,246.95 | ||
| (2) Accounts receivable | 197,996,859.04 | 197,996,859.04 | ||
| (3) Digital voucher of accounts receivable creditor's rights | 16,289,078.85 | 16,289,078.85 | ||
| Total assets continuously measured at fair value | 647,204,970.95 | 647,204,970.95 | ||
| (VI) Financial liabilities held for trading | 6,041,282.00 | 6,041,282.00 | ||
| Derivative financial liabilities | 6,041,282.00 | 6,041,282.00 | ||
| Total liabilities continuously measured at fair value | 6,041,282.00 | 6,041,282.00 | ||
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. The basis for determining the market price of continuous and non-continuous first-level fair valuemeasurement itemsNone
3. Continuous and non-continuous second-level fair value measurement items, valuation techniquesadopted and qualitative and quantitative information of important parametersNone
4. Continuous and non-continuous third-level fair value measurement items, valuation techniquesadopted and qualitative and quantitative information of important parametersNone
5. Continuous third-level fair value measurement items, adjustment information between beginning andending book value and sensitivity analysis of unobservable parametersNone
6. For continuous fair value measurement items, if the conversion occurs among different levels in thecurrent period, the reasons for the conversion and the policies for determining the conversion time pointNone
7. Technical changes in valuation during the current period and the reasons for such changesNone
8. Fair value of financial assets and financial liabilities not measured at fair valueNone
9. Others
NoneXII. Related parties and related transactions
1. Profile of parent company of the Company
| Name of parent company | Registered place | Nature of business | Registered capital | Shareholding ratio of parent company to the Company | Proportion of the parent company's voting rights in the Enterprise |
| Wu Yongqiang | Shenzhen | 16.70% | 16.70% |
Profile of parent company of the Company: NoneThe ultimate controller of the Company is Wu Yongqiang.Other descriptions: None
2. Profile of subsidiaries of the Company
Refer to Note IX. Equities in other entities: 1. Equities in subsidiaries for information about our subsidiaries.
3. Information on the joint ventures and associated enterprises of the EnterpriseSee the Note IX.3 on key joint ventures or associated enterprises of the enterprise.Other joint ventures or associated enterprises having related-party transaction in current period or in previous
period to form balance are listed as follows:
□ Applicable ? Not applicable
Other descriptions: None
4. Other related parties
| Names of other related parties | Relationship between other related parties and the Enterprise |
| Shenzhen Jizhiguang Electronics Co., Ltd. | A company substantially controlled by the relative of the Company's legal representative |
| Shenzhen Lianghui Technology Co., Ltd. | Shareholding companies of the Company |
| Shenzhen ORVIBO Technology Co., Ltd. | Shareholding companies of the Company |
| Shenzhen HANSC Intelligent Technology Co., Ltd. | Shareholding companies of the Company |
| Guangdong Zhongchuang Zhijia Scientific Research Co., Ltd. | Shareholding companies of the Company |
| Guangdong Huixin Semiconductor Co., Ltd. | Shareholding companies of the Company |
| Fujian Mini Dolphin New Energy Technology Co., Ltd. | Shareholding companies of the Company |
| Chengdu Senwei Technology Co., Ltd. | Shareholding companies of the Company |
| Shenzhen Youbi Technology Co., Ltd. | Shareholding companies of the Company |
| Shanghai Yidong Power Technology Co., Ltd. | Shareholding companies of the Company |
| Pas Electronic Technology (Nanjing) Co., Ltd. | Shareholding companies of the Company |
| Jiangsu Donghai Semiconductor Co., Ltd. | Shareholding companies of the Company |
| Jiangxi Sarui Microelectronics Technology Co., Ltd. | Shareholding companies of the Company |
| Shanghai Xinggan Semiconductor Co., Ltd. | Shareholding companies of the Company |
| Shenzhen Jizhi Laser Technology Co., Ltd. | Shareholding companies of the Company |
| Suzhou Legendsemi Technology Co., Ltd. | Shareholding companies of the Company |
| Dongguan Jujin Plastic Technology Co., Ltd. | Shareholding companies of the Company |
Other descriptions: None
5. Related party transaction
(1) Related transactions involving the purchase and sale of goods and the provision and acceptance ofservicesList of goods purchased/services received
Unit: RMB
| Related party | Related transaction content | Amount incurred in the current period | Approved transaction limit | Is the transaction limit exceeded | Amount incurred in prior period |
| Shenzhen Jizhiguang Electronics Co., Ltd. | Purchase of raw materials | 6,213,891.11 | 25,000,000.00 | No | 8,883,560.73 |
| Shenzhen ORVIBO Technology Co., Ltd. | Purchase of raw materials | 5,534.37 | No | ||
| Jiangsu Donghai Semiconductor | Purchase of | 49,179.00 | No |
| Co., Ltd. | raw materials | ||||
| Dongguan Jujin Plastic Technology Co., Ltd. | Purchase of raw materials | 6,775,522.76 | No |
List of goods sold/services provided
Unit: RMB
| Related party | Related transaction content | Amount incurred in the current period | Amount incurred in prior period |
| Shenzhen ORVIBO Technology Co., Ltd. | Goods on hand | 7,332,764.07 | 23,092,948.30 |
Related transactions involving the purchase and sale of goods and the provision and acceptance of services:
None
(2) Relevant entrusted management/contracting and entrusted management/outsourcing
□ Applicable ? Not applicable
(3) Related lease
□ Applicable ? Not applicable
(4) Related party guarantee situation
□ Applicable ? Not applicable
(5) Interbank lending of related parties
□ Applicable ? Not applicable
(6) Asset transfer and debt restructuring of related parties
□ Applicable ? Not applicable
(7) Remuneration of key management personnel
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Remuneration of key management personnel | 3,266,000.00 | 3,352,000.00 |
(8) Other related transactions
None
6. Receivables and payables due to related parties
(1) Item receivable
Unit: RMB
| Project name | Related party | Ending balance | Beginning balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | Shenzhen ORVIBO Technology Co., Ltd. | 1,895,358.83 | 58,756.12 | 6,487,666.99 | 201,117.68 |
| Accounts receivable | Fujian Mini Dolphin New Energy Technology Co., Ltd. | 1,753,420.02 | 158,509.17 | 1,753,420.02 | 158,509.17 |
(2) Payables
Unit: RMB
| Project name | Related party | Book balance at the end of the period | Book balance at the beginning of the period |
| Accounts payable | Shenzhen Jizhiguang Electronics Co., Ltd. | 782,927.63 | 1,411,710.91 |
| Accounts payable | Jiangsu Donghai Semiconductor Co., Ltd. | 55,087.50 | 43,708.50 |
| Notes payable | Shenzhen Jizhiguang Electronics Co., Ltd. | 2,620,000.00 | 110,000.00 |
| Contractual liabilities | Guangdong Zhongchuang Zhijia Scientific Research Co., Ltd. | 132,075.47 | |
| Accounts payable | Dongguan Jujin Plastic Technology Co., Ltd. | 3,162,552.43 |
7. Commitment of related parties
None
8. Others
NoneXIII. Share-based payment
1. General situation of share-based payments
? Applicable □ Not applicable
Unit: RMB
| Total amount of equity instruments granted by the Company during the current period | 0.00 |
| Total amount of equity instruments exercised by the Company during the current period | 9,351,936.00 |
| Total amount of the Company's equity instruments that expired during the current period | 0.00 |
| The range of the exercise price of the Company's stock options outstanding at the end of the period and the remaining term of the contract | On November 2, 2021, the Company granted restricted stocks to incentive objects at a grant price of RMB 7.23 per share, including 1,224 registered objects and 33.54432 million restricted stocks in total. Topband carried out the performance appraisal for companies and the individual incentive objects once in each fiscal year, taking the performance appraisal target as the unlocking condition for restricted stocks. This incentive plan was valid from the grant date of restricted stocks to the date when all restricted stocks were unlocked or canceled, with the maximum time of 48 months. After 12 months from the grant date of the restricted stocks granted this time, the incentive objects that meet the unlocking conditions could be unlocked at the exercise ratio of 30%, 30% and 40% within the unlocking day. |
Other description:
1. Restricted stock in 2021
On October 13, 2021, the Company held the 14th Meeting of the 7th Board of Directors, and deliberatedand passed the Proposal on the Company's Restricted Stock Incentive Plan in 2021 (Draft) and Its Abstract,Proposal on the Appraisal Management Measures for the Implementation of the Restricted Stock Incentive Planin 2021 and Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors toHandle Matters Related to the Company's Restricted Stock Incentive Plan in 2021, agreeing that the Companywould grant 34 million restricted stocks to 1,250 incentive objects.On November 2, 2021, the Company held the 16th (Extraordinary) Meeting of the 7th Board of Directorsand the 13th (Extraordinary) Meeting of the 7th Board of Supervisors, to deliberate and approve the Proposal onAdjusting the Number of Granted Options and List of Incentive Objects in Restricted Stock Incentive Plan in2021. In view of the resignation of Ou Li who is one of the incentive objects, and Wang Cheng, Shen Zhiwenand Tian Conghui who voluntarily gave up the subscription of the restricted stocks granted due to personalreasons, incentive objects were adjusted from 1,250 to 1,246, and the total restricted stocks granted for the firsttime was changed from 34 million to 33.951 million.On December 7, 2021, the Company held the 17th (Extraordinary) Meeting of the 7th Board of Directors,to deliberate and approve the Proposal on Adjusting the Number of Granted Options and List of IncentiveObjects in Restricted Stock Incentive Plan in 2021.The Board of Directors believed that after determiningNovember 2, 2021 as the grant date of the restricted stock incentive plan in 2021, in the process of capitalpayment before the share registration, 22 incentive objects determined in this incentive plan, including Li Xiang,Yu Dingguo and Lu Yuanshan, voluntarily gave up the subscription of all the restricted stocks granted due topersonal reasons, and 10 incentive objects, including Ao Xinmeng, Wang Cao, and Liu Xiaoshi, voluntarilygave up the subscription of some of the restricted stocks granted to them due to personal reasons. With the
authorization of the 2nd Extraordinary General Meeting of Shareholders in 2021, the Board of Directorsadjusted the grant objects and grant quantities of this incentive plan. After adjustment, the number of incentiveobjects under the Restricted Stock Incentive Plan in 2021 decreased from 1,246 to 1,224, and the number ofrestricted stocks granted decreased from 33.951 million to 33.54432 million.On March 30, 2022, the 23rd (Extraordinary) Meeting of the 7th Board of Directors and the 19th(Extraordinary) Meeting of the 7th Board of Supervisors of the Company deliberated and passed the Proposalon the Proposal on Repurchase and Cancellation of Some Restricted Stocks from Restricted Stock IncentivePlan in 2021. 10 incentive objects, including Wu Song and Luo Qingshan in the Restricted Stock Incentive Planin 2021, resigned from the Company due to personal reasons and no longer met conditions for becoming stockincentive objects. Therefore, their 201,000 restricted stocks that have been granted but not yet unlocked wouldbe canceled by the Company. In the restricted stock incentive plan in 2021, the objects to be granted werereduced from 1,224 to 1,214.On July 25, 2022, the 26th Meeting of the 7th Board of Directors and the 22nd Meeting of the 7th Board ofSupervisors deliberated and passed the Proposal on Adjusting the Repurchase Price of Restricted StockIncentive Plan in 2021. The 2021 annual equity distribution plan was implemented, and the repurchase pricewas adjusted from RMB 7.23 per share to RMB 7.18 per share accordingly.On August 19, 2022, the 27th (Extraordinary) Meeting of the 7th Board of Directors and the 22nd(Extraordinary) Meeting of the 7th Board of Supervisors of the Company deliberated and passed the Proposalon the Proposal on Repurchase and Cancellation of Some Restricted Stocks from Restricted Stock IncentivePlan in 2021. 66 incentive objects, including Wei Yin and Li Xinwei in the Restricted Stock Incentive Plan in2021, resigned from the Company due to personal reasons and no longer met conditions for becoming stockincentive objects. Therefore, their 1.291 million restricted stocks that have been granted but not yet unlockedwould be canceled by the Company. In the restricted stock incentive plan in 2021, the objects to be granted werereduced from 1,214 to 1,148.On September 23, 2022, the 28th (Extraordinary) Meeting of the 7th Board of Directors and the 23rd(Extraordinary) Meeting of the 7th Board of Supervisors, deliberated and passed the Proposal on AdjustingCorporate-level Performance Evaluation Indicators of Restricted Stock Incentive Plan in 2021, andsimultaneously announced the Revised Draft of the Restricted Stock Incentive Plan (Draft) in 2021, Abstract onRevised Draft of the Restricted Stock Incentive Plan (Draft) in 2021 and Revised Draft of AppraisalManagement Measures for the Restricted Stock Incentive Plan in 2021, and agreed to adjust the corporate-level
performance evaluation indicators of restricted stock incentive plan in 2021.Independent directors expressedindependent opinions, the law firm issued legal opinions, and affiliated directors recused themselves fromvoting. The above matters had been deliberated and passed on the Third Extraordinary General Meeting ofShareholders in 2022.On December 27, 2022, after the review and confirmation by Shenzhen Branch of China SecuritiesDepository and Clearing Corporation Limited (CSDC), the repurchase and deregistration of the 1,492,000restricted shares owned by 76 former employees including Wu Song, Luo Qingshan, Wei Yin and Li Xinweiwith restriction not lifted were completed. The number of incentive objects in the restricted stock incentive planin 2021 reduced from 1,224 to 1,148, and the general capital reduced from 1,271,027,372 shares to1,269,535,372 shares.
On March 29, 2023, the 32nd Meeting of the 7th Board of Directors and the 27th Meeting of the 7th Boardof Supervisors, deliberated and passed the Proposal on Fulfillment of Restricted Share Release Conditions for2021 Restricted Stock Incentive Plan after the First Restricted Stock Trade Period and Proposal on Repurchaseand Cancellation of Some Restricted Stocks from Restricted Stock Incentive Plan in 2021. 9,351,936 sharesgranted to 1,109 people under the 2021 Incentive Plan can be released after the first restricted stock trade period.Meanwhile, 39 people, including Li Chaoyi, Wang Caihui and Ding Bo, resigned and left the Company due topersonal reasons, and four of the grantees, including Tang Yingjie and Shi Wenhui, of the incentive planachieved a "Good" or "OK" level in the performance appraisal, resulted in the release of 80% of the restrictedstock. It was approved to repurchase and deregister a total of 870,660 restricted shares formerly owned by theabove 43 people that shall not be released. This item was deliberated and passed in the 2022 general meeting ofshareholders, and the deregistration of the shares involved has not completed at CSDC.On April 25, 2023, the 33rd Meeting of the 7th Board of Directors and the 28th Meeting of the 7th Boardof Supervisors deliberated and passed the Proposal on Adjusting the Repurchase Price of Restricted StockOption Incentive Plan in 2021.Due to the equity distribution of the Company for the year 2022, the repurchaseprice of Restricted Stock was adjusted from RMB 7.18 to RMB 7.12 in accordance with (I) Adjustment methodof repurchase price in Chapter XVI Principles for Repurchase and Deregistration of Restricted Stock in the2021 Restricted Stock Incentive Plan (Draft Amendment).
2. Equity-settled share-based payments
? Applicable □ Not applicable
Unit: RMB
| Method for determining the fair value of the equity instrument on the grant date | Fair value of equity instruments = (market price on grant date - grant price) * number of shares |
| Basis for determining the number of exercisable equity instruments | Estimation shall be based on the latest available changes on vesting employee number and other subsequent information. |
| Reasons for the significant difference between the estimates of the current period and that of the previous period | None |
| Accumulated amount of equity-settled share-based payments included in capital reserves | 270,090,473.41 |
| Total amount of expenses recognized by equity-settled share-based payments in the current period | 30,347,889.00 |
Other descriptions: None
3. Cash-settled share-based payments
□ Applicable ? Not applicable
4. Modification and termination of share-based payments
□ Applicable ? Not applicable
5. Others
NoneXIV. Commitments and contingencies
1. Important commitments
Important commitments that existed on the balance sheet dateNone
2. Contingencies
(1) Significant contingencies on the balance sheet date
□ Applicable ? Not applicable
(2) The important contingencies not required to be disclosed shall be explained as wellNo signification contingencies need to be disclosed by the Company.
3. Others
None
XV. Events after the balance sheet date
1. Important non-adjusting matters
□ Applicable ? Not applicable
2. Profit distribution
□ Applicable ? Not applicable
3. Sales return
□ Applicable ? Not applicable
4. Explanation of other events after the balance sheet date
□ Applicable ? Not applicable
XVI. Other important matters
1. Correction of early accounting errors
□ Applicable ? Not applicable
2. Debt restructuring
□ Applicable ? Not applicable
3. Asset replacement
(1) Exchange of non-monetary assets
□ Applicable ? Not applicable
(2) Replacement of other assets
□ Applicable ? Not applicable
4. Annuity plan
□ Applicable ? Not applicable
5. Discontinued operation
□ Applicable ? Not applicable
6. Division information
□ Applicable ? Not applicable
7. Other important transactions and matters that have an impact on investors' decisionsNone
8. Others
NoneXVII. Notes to main items of financial statements of the parent company
1. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Proportion of provision | Amount | Proportion | Amount | Proportion of provision | |||
| Accounts receivable with single provision for bad debts | 283,275,593.03 | 17.74% | 283,275,593.03 | 450,165,784.04 | 25.14% | 450,165,784.04 | ||||
| Including: | ||||||||||
| Accounts receivable with a single significant amount and single bad debt provision | 282,638,145.22 | 17.70% | 282,638,145.22 | 449,954,452.01 | 25.13% | 449,954,452.01 | ||||
| Accounts receivable with insignificant single amount but separate bad debt provision | 637,447.81 | 0.04% | 637,447.81 | 211,332.03 | 0.01% | 211,332.03 | ||||
| Accounts receivable | 1,313,933,162.36 | 82.26% | 44,094,032.6 | 3.36% | 1,269,839,129.72 | 1,340,185,677.97 | 74.86% | 43,496,510.1 | 3.25% | 1,296,689,167.78 |
| with provision for bad debts by portfolio | 4 | 9 | ||||||||
| Including: | ||||||||||
| Accounts receivable with provision for bad debts by combination (aging analysis method) | 1,313,933,162.36 | 82.26% | 44,094,032.64 | 3.36% | 1,269,839,129.72 | 1,340,185,677.97 | 74.86% | 43,496,510.19 | 3.25% | 1,296,689,167.78 |
| Total | 1,597,208,755.39 | 100.00% | 44,094,032.64 | 2.76% | 1,553,114,722.75 | 1,790,351,462.01 | 100.00% | 43,496,510.19 | 2.43% | 1,746,854,951.82 |
Single provision for bad debts: 0
Unit: RMB
| Name | Ending balance | |||
| Book balance | Provision for bad debts | Proportion of provision | Reasons for provision | |
| Accounts receivable with a single significant amount and single bad debt provision | 282,638,145.22 | |||
| Accounts receivable with insignificant single amount but separate bad debt provision | 637,447.81 | |||
| Total | 283,275,593.03 | |||
Provision for bad debts by portfolio: 44,094,032.64
Unit: RMB
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Accounts receivable with provision for bad debts by combination (aging analysis method) | 1,313,933,162.36 | 44,094,032.64 | 3.36% |
| Total | 1,313,933,162.36 | 44,094,032.64 | |
Explanation of the basis for determining the portfolio: NoneIf the provision for bad debts on notes receivable is based on the general model of expected credit loss, theinformation about the provision for bad debts shall be disclosed by referring to the disclosure method of otherreceivables:
□ Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 1,577,960,180.13 |
| 1-2 years | 16,123,681.62 |
| 2-3 years | 12,806.89 |
| Above 3 years | 3,112,086.75 |
| 3-4 years | 1,179,063.18 |
| 4-5 years | 2,209.26 |
| Above 5 years | 1,930,814.31 |
| Total | 1,597,208,755.39 |
(2) Provision for bad debts withdrawn, recovered or reversed in current periodProvision for bad debts in the current period:
Unit: RMB
| Type | Beginning balance | Amount changed in the current period | Ending balance | |||
| Provision | Recover or reversal | Write-off | Others | |||
| Provision for bad debts | 43,496,510.19 | 597,522.45 | 44,094,032.64 | |||
| Total | 43,496,510.19 | 597,522.45 | 44,094,032.64 | |||
Of which the amount of provision for bad debts recovered or reversed in the current period is significant:
□ Applicable ? Not applicable
(3) Accounts receivable actually written off in the current period
□ Applicable ? Not applicable
(4) Accounts receivable of top five ending balances grouped by debtors
Unit: RMB
| Name of unit | Ending balance of accounts receivable | Proportion to total ending balances of accounts receivable | Ending balance of provision for bad debts |
| No. 1 | 454,958,345.05 | 28.48% | 14,154,182.78 |
| No. 2 | 221,202,963.34 | 13.85% | |
| No. 3 | 100,229,926.83 | 6.28% | 3,107,127.73 |
| No. 4 | 58,267,700.34 | 3.65% | 1,806,298.71 |
| No. 5 | 42,089,587.04 | 2.64% | 1,304,777.20 |
| Total | 876,748,522.60 | 54.90% |
(5) Accounts receivable derecognized due to transfer of financial assets
□ Applicable ? Not applicable
(6) Amount of assets and liabilities formed by transferring accounts receivable and continuing to beinvolved
□ Applicable ? Not applicable
Other descriptions: None
2. Other receivables
Unit: RMB
| Items | Ending balance | Beginning balance |
| Other receivables | 723,132,112.18 | 902,544,005.07 |
| Total | 723,132,112.18 | 902,544,005.07 |
(1) Interest receivable
□ Applicable ? Not applicable
(2) Dividends receivable
□ Applicable ? Not applicable
(3) Other receivables
1) Classification of other receivables by nature of amount
Unit: RMB
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Employee loans | 5,775,730.56 | 7,933,323.35 |
| Margin, deposit | 6,213,965.10 | 6,090,182.95 |
| Internal related transactions | 714,909,518.12 | 878,703,958.79 |
| VAT reimbursement for export | 13,029,637.12 | |
| Others | 125,327.78 | 30,456.33 |
| Total | 727,024,541.56 | 905,787,558.54 |
2) Provision for bad debts
Unit: RMB
| Provision for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit loss in the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as of January 1, 2023 | 3,243,553.47 | 3,243,553.47 | ||
| Balance as of January 1, 2023 in the current period | ||||
| Accrual in the current period | 648,875.91 | 648,875.91 | ||
| Balance as of June 30, 2023 | 3,892,429.38 | 3,892,429.38 |
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Ending balance |
| Within 1 year (including 1 year) | 9,847,275.43 |
| Subtotal within one year | 9,847,275.43 |
| 1-2 years | 1,313,345.80 |
| 2-3 years | 903,408.84 |
| Above 3 years | 3,924,546.22 |
| 3-4 years | 1,209,556.00 |
| 4-5 years | 1,600,480.22 |
| Above 5 years | 1,114,510.00 |
| Total | 15,988,576.29 |
3) Bad debt provision withdrawn, recovered or reversed in the current period
□ Applicable ? Not applicable
4) Other receivables actually written off in the current period
□ Applicable ? Not applicable
5) Other receivables of top five ending balances grouped by debtors
Unit: RMB
| Name of unit | Nature of payment | Ending balance | Aging | Proportion to total ending balances of other receivables | Ending balance of provision for bad debts |
| No. 1 | Transactions with related parties | 486,971,165.70 | Within 1 year | 66.98% | |
| No. 2 | Transactions with related parties | 144,559,168.66 | Within 1 year | 19.88% | |
| No. 3 | Transactions with related parties | 54,763,664.00 | Within 1 year | 7.53% | |
| No. 4 | Transactions with related parties | 9,612,154.47 | 1-2 years | 1.32% | |
| No. 5 | Transactions with related parties | 5,538,386.00 | Within 1 year | 0.76% | |
| Total | 701,444,538.83 | 96.47% |
6) Receivables involving government subsidies
□ Applicable ? Not applicable
7) Other receivables derecognized due to transfer of financial assets
□ Applicable ? Not applicable
8) Amount of assets and liabilities formed by transferring other receivables and continuing to be involved
□ Applicable ? Not applicable
Other descriptions: None
3. Long-term equity investment
Unit: RMB
| Items | Ending balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidiaries | 3,967,275,851.91 | 3,967,275,851.91 | 3,952,516,773.78 | 3,952,516,773.78 | ||
| Investment in associated enterprises and joint ventures | 18,279,106.03 | 12,433,655.05 | 5,845,450.98 | 18,320,001.21 | 12,433,655.05 | 5,886,346.16 |
| Total | 3,985,554,957.94 | 12,433,655.05 | 3,973,121,302.89 | 3,970,836,774.99 | 12,433,655.05 | 3,958,403,119.94 |
(1) Investment in subsidiaries
Unit: RMB
| Investee | Beginning balance (book value) | Changes in increase or decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||
| Additional investment | Decrease in investment | Provision for impairment | Others | ||||
| Shenzhen Topband Software Technology Co., Ltd. | 24,095,074.68 | 1,051,142.90 | 25,146,217.58 | ||||
| Shenzhen Topband Battery Co., Ltd. | 623,157,548.45 | 2,090,531.31 | 625,248,079.76 | ||||
| Shenzhen Topband Automation Technology Co., Ltd. | 35,743,370.43 | 294,479.64 | 36,037,850.07 | ||||
| Chongqing Topband Industrial Co., Ltd. | 211,139,884.59 | 217,968.30 | 211,357,852.89 | ||||
| Topband (Hong Kong) Co., Ltd. | 528,408,500.00 | 528,408,500.00 | |||||
| Huizhou Topband Electrical Technology Co., Ltd. | 1,024,724,989.64 | 4,215,722.60 | 1,028,940,712.24 | ||||
| Ningbo Topband Intelligent Control Co., Ltd. | 670,583,468.55 | 195,159.74 | 670,778,628.29 | ||||
| Shenzhen Allied Control System Co., Ltd. | 125,645,445.51 | 1,139,885.40 | 126,785,330.91 | ||||
| Shenzhen Meanstone Intelligent Technology Co., Ltd. | 10,000,000.00 | 10,000,000.00 | |||||
| TOPBANDINDIAPRIVATELIMITED | 195,026,748.97 | 195,026,748.97 | |||||
| Shenzhen YAKO Automation Technology Co., Ltd. | 350,014,659.96 | 350,014,659.96 | |||||
| Shenzhen Topband Investment Co., Ltd. | 100,236,468.18 | 30,026.28 | 100,266,494.46 | ||||
| Shenzhen Topband Supply Chain Services Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Shenzhen Senxuan Technology Co., Ltd. | 8,074,247.94 | -38,922.91 | 8,035,325.03 | ||||
| Topband (Qingdao) Intelligent Control Co., Ltd. | 30,000,000.00 | 30,000,000.00 | |||||
| Shenzhen Topband Motor Co., Ltd. | 10,666,366.88 | 563,084.87 | 11,229,451.75 | ||||
| Huizhou Chiding Technology Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Total | 3,952,516,773.78 | 14,759,078.13 | 3,967,275,851.91 | ||||
(2) Investment in associated enterprises and joint ventures
Unit: RMB
| Investment unit | Beginning balance (book value) | Changes in increase or decrease in the current period | Ending balance (book value) | Ending balance of provision for impairment | |||||||
| Additional investment | Decrease in investmen | Profits and losses on investment recognized under equity | Adjustment to other comprehensive | Other changes in equity | Declaration of distribution for cash dividends | Provision for impairment | Others | ||||
| t | method | income | or profits | ||||||||
| I. Joint venture | |||||||||||
| II. Associated enterprises | |||||||||||
| Shenzhen Daka Optoelectronics Co., Ltd. | 5,886,346.16 | -40,895.18 | 5,845,450.98 | ||||||||
| Shenzhen Yuchengxin Power Technology Co., Ltd. | 12,433,655.05 | ||||||||||
| Subtotal | 5,886,346.16 | -40,895.18 | 5,845,450.98 | 12,433,655.05 | |||||||
| Total | 5,886,346.16 | -40,895.18 | 5,845,450.98 | 12,433,655.05 | |||||||
(3) Other descriptions
None
4. Operating income and operating cost
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period | ||
| Income | Cost | Income | Cost | |
| Main business | 2,168,888,404.03 | 1,828,400,603.03 | 2,387,700,802.78 | 2,029,249,076.26 |
| Other business | 83,107,729.82 | 78,139,272.60 | 72,146,674.17 | 64,311,335.67 |
| Total | 2,251,996,133.85 | 1,906,539,875.63 | 2,459,847,476.95 | 2,093,560,411.93 |
Income-related information:
□ Applicable ? Not applicable
Information related to performance obligations:
Not applicableInformation related to the transaction price allocated to the remaining performance obligations:
At the end of the current reporting period, the amount of income corresponding to performance obligationsunder the signed contracts but not yet performed or not fully performed is RMB 0.00.Other descriptions: None
5. Investment income
Unit: RMB
| Items | Amount incurred in the current period | Amount incurred in prior period |
| Long-term equity investment income accounted by the cost method | -40,895.18 | -31,393.79 |
| Forward foreign exchange profit and loss | 377,800.00 | |
| Total | 336,904.82 | -31,393.79 |
6. Others
NoneXVIII. Supplementary Information
1. Schedule of current non-recurring profit and loss
? Applicable □ Not applicable
Unit: RMB
| Items | Amount | Description |
| Profits and losses on disposal of non-current assets (including the write-off portion of the provision for asset impairment) | -6,219,093.14 | |
| Government subsidies included in current profits and losses (except those that are closely related to the normal business of the Company, conform to national policies and regulations and are continuously enjoyed in a fixed or quantitative manner according to certain standards) | 13,429,284.92 | |
| Profits and losses due to fair value changes arising from the holding of tradable financial assets and liabilities, as well as the investment income from the disposal of tradable financial assets and liabilities and available-for-sale financial assets, except for the effective hedging business related to the normal business of the Company | -5,414,897.34 | |
| Other non-operating income and expenses other than those mentioned above | 3,716,436.80 | |
| Minus: amount affected by income tax | 1,329,800.01 | |
| Impact amount of minority shareholders' equity | 245,093.87 | |
| Total | 3,936,837.36 | -- |
Details of other items of profits and losses that conform to the definition of non-recurring profit and loss:
□ Applicable ? Not applicable
None.Explanation of defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit andLoss as recurring profit and loss items
□ Applicable ? Not applicable
2. Return on equity and earnings per share
| Profits of the reporting period | Weighted return on average equity | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net income attributable to the ordinary shareholders of the Company | 4.37% | 0.20 | 0.20 |
| Net profit attributable to the ordinary shareholders of the Company after deduction of non-recurring profit and loss | 4.30% | 0.20 | 0.20 |
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profit and net assets between financial reports disclosed in accordance withInternational Accounting Standards and those disclosed in accordance with PRC GAAP at the same time
□ Applicable ? Not applicable
(2) Difference between the net profit and net assets in the financial reports disclosed in accordance withboth foreign accounting standards and Chinese accounting standards at the same time
□ Applicable ? Not applicable
(3) Reasons for differences in accounting data under domestic and foreign accounting standards. If thedata audited by an overseas audit institution is adjusted for differences, the name of the overseas auditinstitution shall be indicatedNone
4. Others
None
Section XI Other Reported Data
I. Other Major Social Security Issues
Whether the listed company and its subsidiaries have other major social security issues
□ Yes □ No ? Not applicable
Existing problems and rectificationWhether any administrative punishment was imposed during the reporting period
□ Yes □ No ? Not applicable
Punishment items, punishment measures and rectificationII. Registration form of reception, investigation, communication, interview and otheractivities during the reporting period
? Applicable □ Not applicable
| Time of reception | Location of reception | Method of reception | Type of reception object | Reception object | Main contents of interview and materials provided | Basic Information index for investigation |
| 2023/01/06 | Conference room of the Company | Field survey | Organizations | TF Securities, Everbright Securities, Shanghai Ducheng Investment, Yimi Fund, Hangzhou Laixing Yuanpin Investment, Guolian Fund, Efunds, Western Leadbank FMC, China Merchants Securities, Deppon, Shanghai Sunsource, TF Securities, Shanghai Qushi Assets, dealers of Haitong Securities, CITIC Prudential Fund, Taikang Pension, CITIC Wealth, Shenzhen HillView Capital, Shanghai Lingze Investment, Ping An Asset Management, Temasek Holdings Consulting (Shanghai), Teng Yue Partners, LP, Sinolink Securities, Ucan Asset Management, Chengnuo (Shanghai) Investment, HSBC Jintrust Fund, AXA SPDB Investment Managers, Current VC, Guotai Junan Securities, Sino Life Asset, Shanghai Greenwoods, Shenzhen Hongding Wealth | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| BOC International, Rosefinch Fund. | ||||||
| 2023/02/01 | Conference room of the Company | Field survey | Organizations | Fullgoal Fund, Shenzhen Flying Tiger Investment, SDIC UBS Funds, Rising Asset Management, Essence Fund, Foresea Life Insurance, Taikang Pension Insurance, Zoomtrend Investment, Guosen Securities, Lion Fund, Penghua Fund, Baoying Fund, Qianyou Investment, Yinhua Fund, Ping An Fund, Panze Assets, Legend Investment, Shenzhen ELITIMES Fund, Shenzhen Weihong Long-term Asset Management, China Securities, FOUNDER Fubon Fund, First Capital, Changjiang Securities, Hainan Sanhua Private Equity, Lead Horse Capital, Hua Chuang Securities, Hwabao Securities, New China Asset, BOC Asset Management, Orient Fund, Shenwan Hongyuan Securities, CMS Asset Management, Jincan Capital, Bosera Funds, Hwabao WP Fund, China Post Securities, Cao Yanmei, Zheshang Communications, Hotland Innovation Asset Management, BlackRock, China Merchants Fund, Sinolink Securities, Aegon-Industrial Fund, regents capita, ICBC Credit Suisse Fund, China Merchants Securities, CICC Securities, Foresight Fund, Harvest Fund | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| 2023/02/14 | Conference room of the Company | Field survey | Organizations | FOUNDER Securities, Guotai Junan, Changjiang Pension, ZSAMC, Exodus Point, BrillianCapital, MiraeAsset, Polymer Capital, Oberweis, Jefferies, China Securities, Huashang Fund, Haitong, Harvest Fund, CICC, Yude Capital, CIGNA & CMB Asset Management | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| 2023/02/27 | Conference room of the Company | Field survey | Organizations | AXA SPDB Investment Managers, TF Securities, Caitong Fund, Samsung Asset Management, Shinhan Asset Management, abrdn, FY Investment, Library Group Capital, Haitong, Dymon Asia, Rongtong Fund, Harvest Fund, Shenzhen Qianhai Yiyang Investment, Citibank, Samsung | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| Investment Management (Hong Kong), Hinrich Foundation, HSBC Global Asset Management (Hong Kong), Wonderland International, Wobai Business Consulting (Shanghai), Heqi Investment, FountainCap Research & Investment (Hong Kong), Sumitomo Mitsui DS Asset Management (Hong Kong), Matthews Global Investors (Hong Kong), Manulife Investment (Hong Kong), CICC, Hel Ved capital, GLG Partners, Pleiad Investment, OMERS Asia, Baopurongyi Asset Management, Tiger Pacific | ||||||
| 2023/03/30 | Conference room of the Company | Field survey | Organizations | TF Securities, CITIC Securities, Huatai Securities, Zhongtai Securities, Guosen Securities, CICC Securities, Guotai Junan Securities, Haitong Securities, China Merchants Securities, Shenwan Hongyuan Securities, Changjiang Securities, Soochow Securities, Western Securities, Everbright Securities, Jefferies Securities, China Galaxy Securities, China Life Asset Management, Greenwoods Asset Management, Sinolink Securities, TF Securities, HFT Investment Management, Korea Investment Trust Management, Fullgoal Fund Management, Shanghai Panjing Investment Center (Limited Partnership), Harvest Fund Management, Hengtai Securities, HENGJIAN INTERNATIONAL INVESTMENT HOLDING (HONG KONG), Shenzhen Hong Ding Wealth Management, Yimi Fund Management, Shanghai Xitai Investment Management, Shanghai HeDao Asset Management, Parametrica Management, Neuberger Berman, First-trust Fund Management, HSBC Jintrust Fund Management, Infore Capital Management, Cyber Atlas Capital, JIAXUYINGHAI(Shanghai)FUND Management, China International Capital Corporation, Shanghai Jujin | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| Investment, Beijing Ruigu Investment, Beijing Ding Investment, Goldstate Securities, Shenzhen Gemboom Investment Management, HSBC Jintrust Fund Management, Zhejiang Rice Bank Asset Management, BOC International (China), Shanghai Stock Exchange, DH Fund Management, Beijing Yunfeng Asset Management, Sealand Securities, Pacific Asset Management, Essence Securities, Mingya Fund Management, Shanghai Chaos Investment (Group), Taiping Asset Management, Hengtai Securities, China Securities, Hotland Innovation Asset Management, Fengpei CAPITAL LLC, Shenzhen Hong Ding Wealth Management, Everbright Securities, Shanghai Tourmaline Asset Management, Shanghai Foresight Investment, Huatai-Pinebridge Fund Management, Hang Seng Qianhai Fund Management, Sealand Securities, China Life AMP Asset Management, Western Leadbank Fund Management, Ningbo Liansheng Asset Management, Origin Asset Management, SINO LIFE ASSET, Regent Capital, ShenZhen Comein Finance and Technology, HONOUR ALLIANCE INVESTMENTS, Shengang Securities, Maxwealth Fund Management, Yude Capital, Tibet YuanCheng Investment. | ||||||
| 2023/04/11 | Conference room of the Company | Field survey | Organizations | Shenzhen Qianhai OnlyWin Fund Management, Deju Brothers Venture Capital, Shenzhen New Value Capital Management, HYWIN WEALTH MANAGEMENT, Mingfu Fund, Mondrian, China International Capital Corporation, Nomura Asset Management, Capital Investment Trust Corporation, Franklin Templeton SinoAM SIM Inc., IGWT Investment, Cathay Capital Management Inc., Manulife TEDA Fund Management, Tianhong Asset Management, Bosera Fund | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| Management, China Life Asset Management, Huachuang Securities, Sinosafe Asset Management, CICC Securities, Wellington, Neuberger Berman, CICC Securities, NanJing Double-Safeguard Asset Management, CICC Securities | ||||||
| 2023/04/14 | Flush Roadshow Platform | On-line communication on network platforms | Organizations | Performance presentation session | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| 2023/04/25 | Conference room of the Company | Telephone communication | Organizations | Guotai Asset Management, BlackRock Fund Management, BOC Insurance, China Future Capital Group, Guodu Securities, Beijing Longrising Asset Management, Exodus Point, China Merchants Securities, Shanghai Silver Leaf Investment, Harvest Fund Management, Beijing Ding Investment, Shanghai Everbest Investment Managers, Truvalue Asset Management, Sinolink Securities, Rosefinch Fund Management, Sinosafe Asset Management, China Life AMP Asset Management, Shanghai Chaser Asset Management, TF Securities, Penghua Fund Management, Xinyuan Asset Management, Shanghai Yude Capital Management Center (Limited Partnership), Shanghai Lingze Asset Management, Changzhou Boyan Ruixuan Venture Capital, Beijing Eastern Smart Rock Asset Management, Minya Fund Management, Shenzhen Hong Ding Wealth Management, AEGON-INDUSTRIAL Fund Management, Shanghai Panjing Investment Center (Limited Partnership), Pinpoint Investment Management, Orient Securities, Hotland Innovation Asset Management, Jt Asset Management, Beijing Ruigu Investment, BOC International (China), Shanghai Fuge Investment Management, Shanghai Qinyuan Investment Management, Dajia Asset Management, DA CHENG FUND MANAGEMENT, | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
| Guangzhou RUIMIN ASSET MANAGEMENT, Guosen Securities, Western Leadbank Fund Management, Shanghai Yingdong Private Fund Management, Guangzhou Jinkong Asset Management, Nuode Asset Management, CCB Life Insurance Asset Management, Shanghai Lingze Asset Management, China Post Life Insurance, Chongqing Derui Hengfeng Asset Management, Zheshang Securities, Bearing No (Shanghai) Investment Management Center (L.P.), Taikang Pension Insurance, Beijing Ding Investment, Fuanda Fund Management, Shanghai Chaos Investment (Group), Neuberger Berman, Huatai Securities, Golden Eagle Asset Management, Taipei Fubon Securities, Shanghai Xitai Investment Management, CITIC Securities, ABC Wealth Management, Haojun Asset Management, RegentsCapital, Shengang Securities, Guotai Junan Securities, Zheshang Securities, China Securities, Soochow Securities, Western Securities, Changjiang Securities, Shenwan Hongyuan Securities, GF Securities, Sinolink Securities, CICC Securities, Citibank, Guosen Securities, Huatai Securities, ZHONGTAI SECURITIES | ||||||
| 2023/05/30 | Conference room of the Company | Field survey | Organizations | Citibank, Citi Private Bank, Neuberger Berman, Temasek Holdings, Summit Partners, ICBC International, Fullgoal Fund Management, Hang Seng Investment Management, Lanzhong Investment Management | Learn about the operation of the Company; no information provided. | http://www.cninfo.com.cn |
III. Fund Transfers between the Company & Controlling Shareholders and Other RelatedParties
□ Applicable ? Not applicable