/Zongshen Power: 2026 Semi-Annual Report

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Zongshen Power: 2026 Semi-Annual Report

Shenzhen Stock Exchange

2026/08/29

Full text of Chongqing Zongshen Power Machinery Co., Ltd.'s 2026 Semi-Annual Report Chongqing Zongshen Power Machinery Co., Ltd.'s 2026 Semi-Annual Report

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Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Section 1 Important Tips, Table of Contents and Definitions

The company's board of directors, directors and senior managers guarantee that the contents of the semi-annual report are true, accurate and complete, and that there are no false records, misleading statements or major omissions, and bear individual and joint legal liability.

The company leaders, Mr. Zuo Zongshen and Mr. Huang Peiguo, the person in charge of accounting work, Mr. Liu Yuanhong, and the person in charge of the accounting department (accounting officer), Ms. Xia Dan, declare that they guarantee the authenticity, accuracy and completeness of the financial report in this semi-annual report.

All directors have attended the board meeting to review this semi-annual report.

The company has explained the company's main business situation and the risks it may face from macroeconomic changes in Section 3 "Management Discussion and Analysis" of this report. This report involves the company's future business plans and forward-looking statements, which do not constitute the company's profit forecast for future years and its substantial commitment to investors. Investors are advised to pay attention to investment risks.

The company plans not to distribute cash dividends, give away bonus shares, or convert public reserve funds into share capital.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

1. Company Profile

Stock abbreviation Zongshen Power Stock code 001696 Stock Exchange Shenzhen Stock Exchange

Chinese name of the company Chongqing Zongshen Power Machinery Co., Ltd. Chinese abbreviation of the company (if any) Zongshen Power

The company's foreign name (if any) CHONGQING ZONSEN POWER MACHINERY CO., LTD The company's foreign name abbreviation (if any) ZONSEN POWER

The legal representative of the company Huang Peiguo

2. Contact person and contact information

Secretary of the Board of Directors Name of Securities Affairs Representative Lin Yi

Contact address: Zongshen Industrial Park, Banan District, Chongqing Tel: 023-66372632

Fax 023-66372648

Email [email protected]

3. Other situations

Company contact information

Whether the company's registered address, company office address and its postal code, company website, e-mail address, etc. have changed during the reporting period □Applicable Not applicable

The company's registered address, company office address and its postal code, company website, e-mail address, etc. did not change during the reporting period. For details, please refer to the 2025 annual report.

Information disclosure and preparation location

Whether the location of information disclosure and preparation changes during the reporting period

□Applicable Not applicable

The name and URL of the stock exchange website and media where the company discloses its semi-annual report. The location where the company's semi-annual report is prepared has not changed during the reporting period. For details, please refer to the 2025 annual report.

Other relevant information

Whether other relevant information has changed during the reporting period

□Applicable Not applicable

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

4. Main accounting data and financial indicators

Whether the company needs to retroactively adjust or restate previous years’ accounting data

□Yes No

This reporting period The same period last year This reporting period increased or decreased operating income compared with the same period last year (yuan) 6,564,774,552.87 6,654,903,835.38 -1.35% Net profit attributable to shareholders of listed companies

418,579,820.35 505,635,951.16 -17.22% profit (yuan)

Deductions attributable to shareholders of listed companies

Net profit from non-recurring gains and losses 382,270,337.85 487,717,872.41 -21.62% (yuan)

Net cash flow from operating activities

953,424,248.66 564,827,788.95 68.80% (yuan)

Basic earnings per share (yuan/share) 0.3656 0.4416 -17.21% Diluted earnings per share (yuan/share) 0.3656 0.4416 -17.21% Weighted average return on equity 7.50% 9.64% A decrease of 2.14 percentage points

End of the reporting period End of the previous year Increase or decrease in total assets at the end of the reporting period compared with the end of the previous year (yuan) 13,247,150,150.97 12,382,816,499.82 6.98% Net assets attributable to shareholders of listed companies

5,535,547,058.22 5,392,813,317.93 2.65% output (yuan)

5. Differences in accounting data under domestic and foreign accounting standards

Differences in net profit and net assets in financial reports disclosed in accordance with both international accounting standards and Chinese accounting standards

□Applicable Not applicable

During the reporting period, there was no difference between the net profit and net assets in the financial reports disclosed in accordance with international accounting standards and Chinese accounting standards.

Differences in net profit and net assets in financial reports disclosed in accordance with both foreign accounting standards and Chinese accounting standards

□Applicable Not applicable

During the reporting period, there was no difference between the net profit and net assets in the financial reports disclosed in accordance with foreign accounting standards and Chinese accounting standards.

6. Non-recurring profit and loss items and amounts

Applicable □Not applicable

Unit: Yuan

Item Amount Description

Gains and losses on disposal of non-current assets (including accrued

12,142,984.82

Offset portion of asset impairment provision)

Government subsidies included in current profits and losses (related to the company’s regular

Closely related to regular business operations and in compliance with national policies

24,618,646.66

stipulates, enjoys according to determined standards, and treats the company

Except for government subsidies that have a lasting impact on profits and losses)

Except for effective transactions related to the company’s normal business operations,

4,728,687.40

In addition to futures hedging business, non-financial enterprises hold financial

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Changes in fair value of assets and financial liabilities

Profit and loss and disposal of financial assets and financial liabilities

profit and loss

Impairment standards for accounts receivable that are individually tested for impairment

232,285.05 to be transferred back

Other non-operating income other than the above items and

1,342,650.87 expenses

Less: Impact on income tax 4,917,669.55

Amount of impact on minority shareholders’ equity (after tax) 1,838,102.75

Total 36,309,482.50

Details of other profit and loss items that meet the definition of non-recurring profits and losses:

□Applicable Not applicable

The company has no other specific circumstances of profit and loss items that meet the definition of non-recurring profits and losses.

Explanation on defining the non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 on Information Disclosure of Companies Publicly Offering Securities - Non-recurring Profit and Loss" as recurring profit and loss items

□Applicable Not applicable

The company does not define the non-recurring profit and loss items listed in the "Explanatory Announcement No. 1 on Information Disclosure of Companies that Offer Securities to the Public - Non-recurring Profit and Loss" as recurring profit and loss items.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Section 3 Management Discussion and Analysis

1. The main business of the company during the reporting period

(1) The company’s main business

The company is one of the domestic specialized manufacturing bases for small and medium-sized power machinery products. It is mainly engaged in the research and development, manufacturing and sales of small and medium-sized power machinery products and some terminal products. It is an industry leader in small and medium-sized power fields such as general machinery, motorcycle power, and aviation piston power. The company's main products include: engines and accessories; general gasoline engines, tillers, lawn mowers, water pump units, gasoline generator sets and other complete machines and parts; motorcycle parts, auto parts, lithium energy storage equipment and accessories, lithium-ion batteries and accessories, electronic components, and battery control systems. During the reporting period, there were no major changes in the company's business model, main business and main products.

Zongshen Power takes "powering technology to empower a better life" as its mission and is committed to becoming the world's leading provider of system solutions for various operating scenarios. The company uses analytical strategies and construction strategies to create two growth curves. Through analytical strategies, it accelerates the upgrading of fuel power business (general machinery, motorcycle engines, aerospace engines and parts business) to high-end and high value-added fields, extending the first growth curve; through construction strategies, it rapidly increases the operating scale of new energy business (electric drive systems, energy storage, hydrogen energy and other industries) in electric drive systems, energy storage, hydrogen energy and other industries, creating the company's second growth curve; through comprehensive digital strategies, it improves the efficiency of fuel power business and promotes the growth of new energy business. An industrial layout has been formed with "general machinery and motorcycle engines" as the core and covering emerging business fields such as "aviation power, new energy, and high-end parts".

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

General machinery business

The company's general machinery business is jointly carried out by two core entities, its wholly-owned subsidiary Chongqing Zongshen General Power Machinery Co., Ltd. ("Zongshen General Machinery Company") and Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. ("Dajiang Power Company"), building a comprehensive portfolio of traditional power and new energy products (energy storage and electric tools) matrix. At present, the company's products have achieved large-scale sales in many countries and regions such as North America, Europe, Africa, Asia, and Oceania. It has established long-term and stable cooperative relationships with many well-known domestic and foreign companies. It is an influential domestic manufacturer of general small power equipment and new energy outdoor equipment.

In terms of fuel power products, Zongshen Tongji Company specializes in R&D, manufacturing and sales of general-purpose gasoline engines, small generator sets, high-pressure cleaners, water pumps, electric products and agricultural and garden machinery. Among them, general-purpose gasoline engines have fully covered the mainstream displacement range of 31CC to 999CC, and subcategories such as generator sets, high-pressure washers, water pumps, marine power, engineering machinery, electric products, mini-tillers, pastoral management machines, and trucks have built a multi-specification and multi-scenario product matrix. Dajiang Power Company focuses on power generation equipment, cleaning equipment and outdoor gardening products, mainly providing gasoline generators, high-pressure washers, agricultural irrigation equipment, lawn mowers, etc. Related products are both practical and convenient, and widely cover outdoor construction, emergency rescue, leisure and entertainment, agricultural production, garden maintenance, industrial cleaning and other scenarios. They can meet the diversified use needs in outdoor work power supply, home and public area cleaning, agricultural production irrigation, gardening trimming, emergency power outage backup, farmland water conservancy maintenance and other aspects.

In terms of new energy products, Dajiang Power Company has a complete series of outdoor power tools (including lawn mowers, snowplows, micro-tillers, lawn trimmers, hair dryers, chain saws, pruners, lawn mower robots, etc.), which are widely used in farm work, gardening maintenance, municipal cleaning and other scenarios to meet consumers' needs for efficient outdoor work, convenient gardening maintenance, low-carbon production and labor, etc., assisting the company's business diversification development and expanding more green consumption scenarios.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Motorcycle engine business

The company's motorcycle engine business is carried out by its wholly-owned subsidiary Chongqing Zongshen Engine Manufacturing Co., Ltd. ("Zongshen Engine Company" for short). As one of the largest and most comprehensive motorcycle power manufacturing bases in China, Zongshen Engine Company has built a full-category power matrix covering two-wheeled, three-wheeled, and four-wheeled products on the product side, fully meeting the needs of diverse segmented scenarios such as commuting, professional off-road, heavy-duty freight, and outdoor play. The products have superior performance, complete varieties, and rich machine models. The sales network covers the whole country and is exported to many countries and regions such as Europe, the United States, the Middle East, Southeast Asia, and Africa. At the technical level, we are deeply involved in the research and development and integration services of motorcycle power systems, mastering the core technologies of gasoline engines, diesel engines, hybrid engines, and hydrogen fuel engines. We can provide integrated solutions for power system integrated design, vehicle-machine collaborative matching, customized supply, and full-process engineering services, empowering product applications with technical strength.

Aviation power business

The company's aviation power business is carried out by its indirect holding subsidiary Chongqing Zongshen Aero Engine Manufacturing Co., Ltd. ("Zongshen Aero Engine Manufacturing Company"), which mainly provides power system solutions for general aviation aircraft such as rotors and fixed wings, and aviation aircraft such as drones. Zongshen Aviation Development Co., Ltd. is one of the few national high-tech private aviation power enterprises in China that has independently developed, manufactured and obtained airworthiness certification. It has formed a product line focusing on small and medium-sized aviation piston engines, built five major power platforms, and launched more than 20 derivative products and propeller products, covering the UAV and light general aviation aircraft markets. In terms of products, Zongshen Aviation Development Company has realized integrated designs such as engine + propeller + thermal management system + power generation system, established a relatively complete product pedigree and system integration capabilities in the field of small and medium-sized aviation power, and is in a leading position among domestic private aviation engine companies. The independently developed CA500 aviation piston engine has been approved by the Civil Aviation Administration of China for airworthiness. It has become the first small and medium-sized domestic aviation power product in China that strictly complies with the applicable airworthiness requirements of CAAC and the ASTMF 2339 international standard, passed the "random verification" model, and obtained airworthiness approval. With the successful commercial delivery of the first Arora aircraft equipped with the CA500 aviation piston engine, it marks that the company's R&D and service system has passed the actual market test and completed a key leap in domestic general aviation power from technological breakthrough to commercial closed loop.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

New energy business

The company's energy storage business is jointly carried out by its holding subsidiary Dongguan Lithium Smart Energy Co., Ltd. ("Dongguan Lithium Smart Company") and Dajiang Power Company. Dajiang Power Company has mastered core technologies such as PCS (bidirectional inverter), BMS (lithium battery management system), EMS (energy management system), and has full-power segment portable energy storage Products (100W-5kW) are widely used in home energy storage backup, outdoor camping power supply, emergency rescue power supply and other scenarios; Dongguan Lithium Smart Company focuses on providing customized energy products and one-stop comprehensive solutions for power batteries, RV intelligent control, AIDC (artificial intelligence data center) power supply guarantee, residential and industrial and commercial scenarios. The industrial and commercial energy storage business focuses on the three core products of outdoor cabinet energy storage systems, containerized energy storage systems and air-cooled sodium-ion batteries. At the same time, it continues to enrich the product matrix and collaboratively covers diverse needs such as distributed industrial and commercial, special scenarios and flexible deployment, effectively improving the company's comprehensive solution capabilities and market competitiveness in the field of industrial and commercial energy storage. The global layout of household energy storage business continues to make breakthroughs, successfully entering the core supply chain of leading companies in the energy storage industry, and achieving a strategic leap from qualification certification to large-scale mass production and delivery. The power battery business mainly provides lithium/sodium battery system solutions for golf carts, industrial vehicles, etc. The AIDC power supply assurance business segment focuses on the quality of power supply and uninterrupted power supply in the 400V/800VDC area, providing highly reliable and high-quality high-voltage DC power supply products to the industry, including supercapacitors and high-rate energy storage related products, focusing on engineering solutions and product implementation of high-precision collection, real-time control, and fast charge and discharge management technology of supercapacitors and chemical batteries. The RV all-electric system business has entered the North American market, focusing on the development of core special modules such as system control panels and control modules.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The company's electric drive system business is carried out by its wholly-owned subsidiary, Chongqing Zongshen Jiyan Mechanical and Electrical Technology Co., Ltd. ("Zongshen Jiyan Company" for short). While consolidating the advantages of its main business of fuel power, it vigorously develops electric, hybrid and other clean energy power, insists on being demand-oriented, and focuses on clean energy power solutions. In the field of electric drive, Zongshen Jiyan Company uses card-issuing motor technology as its core to create a diversified product matrix covering card-issuing motors, winding motors and intelligent controllers, which are widely used in various scenarios such as electric two-wheeled/three-wheeled vehicles, garden machinery, sightseeing vehicles and UTVs.

The company's hydrogen energy business is carried out by its wholly-owned subsidiary, Chongqing Zongshen Hydrogen Energy Power Technology Co., Ltd. ("Zongshen Hydrogen Energy Company" for short), with the core of creating a "hydrogen energy green park·park application" demonstration. It continues to invest in the research and development of key hydrogen fuel cell technologies, conduct research around stack integration, system integration and multi-scenario applications, and steadily build a hydrogen energy full-chain industrialization capability covering R&D, manufacturing and testing and evaluation.

High-end parts business

The company's high-end parts business focuses on the field of aluminum alloy casting molding and precision machining, and has built a full-process manufacturing system covering raw materials to finished product delivery. The foundry factory has process capabilities such as smelting, low-pressure casting, high-pressure casting, shot blasting, heat treatment, and passivation, with an annual production capacity of 22,000 tons of aluminum alloy castings; the machining plant has process capabilities such as coding, precision machining, friction stir welding, high-pressure cleaning, vacuum cleaning, and helium leak testing, with an annual production capacity of 20 million pieces of aluminum alloy parts. The company's high-end component products are widely used in automotive four-wheel drive systems, gearboxes, new energy electric drive systems, engine systems, motorcycle power systems, general power and other fields, covering hundreds of lightweight components and structural parts. The company has established in-depth project cooperation with well-known domestic and foreign companies such as China FAW, SDS, NEMAK, GKN, BorgWarner, Dana, HME, Suzhou Inovance and other well-known enterprises.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(2) The company’s main business model

R&D model: Adhere to the two-wheel drive of market demand and technological trends, implement a product innovation strategy that focuses on independent development and is supplemented by industry-university-research collaboration. Focusing on market and customer needs, we carry out new product research and development and iterative upgrades of existing products, continue to improve product performance, optimize cost structure, continuously increase product market share and company competitiveness, and consolidate the company's industry leading position.

Production model: Oriented by order delivery, the front-end dynamically matches material needs, and the internal digital system is used to optimize scheduling to achieve accurate matching of production capacity and orders; the back-end builds a customer service response mechanism to ensure that the entire delivery process is visible and controllable. We will continue to promote intelligent manufacturing and flexible production, widely adopt automatic logistics, automatic assembly, intelligent error-proofing and other technologies, and use data to drive the dual improvement of production efficiency and quality assurance.

Procurement model: Adhere to the supply chain management strategy of "strategic cooperation, hierarchical management, and digital intelligence collaboration", select and cultivate core suppliers, and implement hierarchical performance evaluation and survival of the fittest mechanisms. Promote a dual-track resource layout at home and abroad, and achieve complementary advantages with suppliers through joint development, technology empowerment, etc. At the same time, we will promote the digital transformation of the supply chain, rely on data collaboration to achieve rapid response to the market, products and delivery, and build a win-win, agile and efficient supply chain ecosystem.

Sales model: Adopt the "OEM/ODM/OBM" trinity combination strategy to adapt to different regional market needs. Domestic sales strengthen the penetration of independent brands, combining various methods such as regional agents, terminal dealers and bidding supply; overseas exports mainly rely on OEM and ODM supply models, and some businesses expand the OBM model. At the same time, we will further promote the sales of system solutions oriented toward "differentiation, customization, and integration" to provide customers with integrated support from the entire process of design, collaboration, and service to enhance product competitiveness.

(3) Main performance drivers

In the first half of 2026, the company's operating management and all employees, under the scientific decision-making and leadership of the company's board of directors, will deepen the implementation of the business policy of "maintaining growth, strengthening transformation, and creating value", adhere to the strategic orientation of "seeking progress while maintaining stability, and breaking through through innovation", closely following the development main line of "extending the first growth curve, creating the second growth curve", and steadily advancing major capital investments. Product replacement matters, promote business clarification and professional development, thereby concentrating resources to strengthen core businesses such as general machinery, fulfilling the role of "enabler of stock optimization, leader of incremental breakthroughs", using technological innovation as the engine, actively promoting the company to move towards the strategic vision of "becoming the world's leading provider of system solutions for various operating scenarios". During the reporting period, the company achieved operating income of 6.565 billion yuan and net profit attributable to shareholders of the listed company of 419 million yuan.

(1) The general machinery business continues to lead the market, accelerating global layout and balanced development of subdivisions.

In the first half of 2026, under external pressures such as intensified trade frictions, industry cycle fluctuations, and high raw material prices, the company's general machinery business continued to maintain its leading position in the market and achieved breakthrough progress in multiple segments. In terms of market expansion, on the one hand, it actively optimized its global layout and actively explored the Asian, African and European markets on the basis of consolidating existing advantageous regions, making the regional structure more balanced; on the other hand, it achieved remarkable results in the construction of its own brands. During the reporting period, the proportion of its own brand sales continued to increase, and its brand influence and premium capabilities were simultaneously enhanced. In terms of tackling key subdivisions, the construction machinery segment has successfully entered the supply system of industry leaders and achieved a jump in the supply chain level; the 4.2-20kW marine power business maintains an overall lead in the Asian market, with a market share of more than 90% in some Southeast Asian countries, and its leading position continues to be consolidated; water The pump business has joined hands with core strategic partners, and the scale of cooperation has jumped to a historical peak, becoming the core driving force for the sustained and steady growth of the water products business; the export volume of the lawn mower business has reached a new high, and through the combination strategy of "deep cultivation of existing stocks + breakthrough of incremental growth", the structural competitive advantages in the North American market have been continuously broadened. In terms of business innovation,

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

New product promotion and channel expansion go hand in hand, actively deploying C-end business, innovatively building an "online traffic + offline sales" model, and opening up the closed loop of the entire consumption conversion process; at the same time, using new media to expand brand communication channels, effectively improve brand reach efficiency and user awareness, and inject new momentum into business growth. During the reporting period, the company's general machinery business achieved total operating income of 2.943 billion yuan and net profit of 171 million yuan.

(2) The motorcycle power business is making steady progress, with two-way efforts in product structure optimization and global market expansion.

In the first half of 2026, against the background of volatile raw material prices and intensified industry competition, the company anchored its high value-added product route and its operational resilience continued to show. In terms of product structure, by grasping the trend of consumption upgrading, high value-added categories such as off-road power and three-wheel power have experienced outstanding growth, effectively hedging upstream cost pressure and promoting the continuous optimization of the profit structure. In terms of market expansion, we adhere to the coordinated efforts of domestic and foreign dual-cycles to consolidate the fundamentals of growth: Domestically, we deeply cultivate sinking channels, promote the collaborative development and customized supporting of vehicles and machines, and stabilize the existing market; overseas, we seize the opportunity of going overseas, promote product iterative upgrades based on international emission regulations, and customize differentiated power solutions based on regional application scenarios, and our overseas market share has steadily increased. In terms of technological innovation, we simultaneously promote technology research and development and intelligent manufacturing upgrades: on the one hand, we independently research core engine technologies such as VVA variable valves and high-efficiency extended-range power and achieve mass production to support high-end product iterations; on the other hand, we accelerate the digital and intelligent transformation of production lines. The industry's first intelligent coating production line has been stably put into production, and smart logistics projects are advanced in an orderly manner to improve production efficiency and manufacturing quality in an all-round way. The current trend of high-end, personalization and globalization in the industry is clear. The company's high value-added power products accurately meet the needs of consumer upgrades. Coupled with the continuous expansion of overseas markets, both internal and external growth momentum are fully released, laying a solid foundation for steady growth in medium and long-term performance. During the reporting period, the company's motorcycle engine business achieved total operating income of 2.532 billion yuan and net profit of 137 million yuan.

(3) Emerging businesses are diversified and market expansion is steadily increasing.

In terms of aviation power business, the growth trend will continue in the first half of 2026, with operating income and profits achieving significant year-on-year increases. The core drivers are the in-depth advancement of market expansion and the accelerated conversion and implementation of orders on hand. During the reporting period, we participated deeply in key industry exhibitions and took advantage of the exhibition platform to efficiently promote market docking and customer contact, accumulating sufficient momentum for the implementation of subsequent projects and large-scale business expansion.

In terms of energy storage business, the new product matrix has been launched step by step, laying a new foundation for strategic growth. The sodium battery energy storage system has completed technological iterations. With the advantages of low temperature resistance and high safety, it has realized the implementation of large-scale projects in subdivided scenarios; the independently developed household storage intelligent operation and maintenance platform realizes remote management and control and system self-upgrading, building a trinity of cloud, terminal and App intelligent closed loop, effectively strengthening user stickiness and technical barriers. The first delivery of portable energy storage products to the North American market was successfully completed, breaking the ice on the commercialization of this category in the North American market. The power battery complies with the changing trend of the AI smart lithium battery industry, focusing on the North American industrial vehicle track, and accelerating the commercialization of standardized new products through BMS hardware iteration and PACK process upgrades. At the same time, we actively seize the development opportunities of AIDC's emerging energy storage scenarios and steadily promote the research and development and production capacity matching of AIDC power supply guarantee series products, making it one of the key tracks of the company's energy storage business layout.

In terms of the electric drive system business, the company has deeply promoted intelligent manufacturing upgrades, realized automated iterations of card issuance, winding and controller production lines, and increased the output efficiency of a single line of card issuance motors by 20%. Key breakthroughs were made on the research and development side. The EAS fully automatic shifting and EI integrated drive systems were launched in batches on the "Zongshen Qike" three-wheelers. The EI integrated drive system successfully passed the IP67 waterproof test and full working condition verification, and its environmental adaptability and circuit stability reached industry-leading levels.

In terms of hydrogen energy business, the independently developed forklift fuel cell system has been installed in small batches and used regularly on 3.5-ton and 2-ton forklift platforms. It has demonstrated excellent stability and durability in high-intensity, multi-working conditions industrial application scenarios, and product reliability has been fully and solidly verified by engineering. In park applications,

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Relying on the park's hydrogen consumption growth and the systematic optimization of hydrogen supply station operation efficiency, the hydrogenation volume increased by 59.5% year-on-year, creating a benchmark paradigm for hydrogen energy application in low-carbon parks and laying a solid foundation for efficient and stable energy supply for the construction of low-carbon parks.

2. Analysis of core competitiveness

Deep brand value helps industrial development

The company is one of the leading companies in the domestic manufacturing of general gasoline engines, general mechanical terminal products and motorcycle engines. The company has a high market share in market segments, a stable management team and thousands of marketing networks at home and abroad. The company is deeply involved in the field of small and medium-sized power machinery and continues to explore and innovate along the development direction of high-end, informatization, service-oriented, intelligent and green manufacturing. It has been selected into the "Top 500 Chinese Machinery" and "Top 50 Chinese Die Casting" for many years in a row. It is a nationally recognized "National Excellent Smart Factory", "National 5G Factory" and "National Green Factory" National Supply Chain Innovation and Pilot Enterprise", "National Green Supply Chain Management Demonstration Enterprise" and "National High-tech Enterprise", and has won honors/titles such as "National Workers Pioneer", "China Benchmark Smart Factory", "Chongqing Digital Workshop", "Chongqing Smart Factory", "Chongqing Intelligent Manufacturing Benchmark Enterprise", and "Chongqing Outstanding Innovative Enterprise". In recent years, the company, Zongshen General Machinery Co., Ltd., Dajiang Power Co., Ltd., and Zongshen Aviation Development Co., Ltd. have been recognized as national-level specialized, special and new "Little Giant" enterprises.

Strong R&D capabilities to promote technological innovation

The company has built a core technology matrix covering multiple power fields, and has achieved comprehensive layout in the fields of large-displacement engines, electric drive systems, hydrogen fuel cells, energy storage systems, and aviation power. Through the combination of industry, academia, and research, it has established a cooperation platform with well-known enterprises, universities, and scientific research institutions to strengthen its research and development capabilities, effectively integrate innovation resources, accelerate the transformation of technological achievements, and significantly shorten the research and development cycle. In the global competitive landscape, the company drives development with technological innovation, strengthens the improvement of R&D capabilities and the construction of R&D institutions, increases the technological development of independent intellectual property rights, continues to improve the R&D organizational structure and talent echelon construction, and forms a multi-channel innovation investment mechanism. As of the end of the reporting period, the company owned 1,465 valid patents, including: Zongshen Engine Company owned 346 technology patents; Zongshen General Machinery Company owned

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

There are 502 technology patents; Dajiang Power Company has 295 technology patents; Zongshen Aviation Development Company has 103 technology patents; Zongshen New Energy Company has 92 technology patents; Dongguan Lithium Smart Company has 60 technology patents; and the Parts and Components Division has 67 technology patents.

First-class manufacturing technology to ensure product quality

The company reshapes the industrial benchmark with intelligent manufacturing and establishes the engine industry's first Industry 4.0 intelligent production line, a domestically modeled automated painting production line, and an automated engine assembly line. It also introduces multiple coordinate measuring instruments, Testrai100 series spill detectors, imported spectrum analyzers, AVL emission analyzers and other high-precision inspection and testing equipment, which greatly reduces manual control errors in the engine assembly and production process and greatly improves the quality of engine products. The company adheres to the concept of "excellent and intelligent manufacturing" and in terms of quality inspection, it is equipped with various online inspection equipment and advanced inspection equipment such as dynamic balancing machines, camshaft testers, flaw detectors, complete machine vibration testers, dynamometers, emission meters, etc.; it builds intelligent control production lines, introduces internationally advanced assembly equipment, and realizes full-process monitoring of production management through information systems. The qualification rate of general mechanical products reaches more than 99%, setting a new benchmark for intelligent manufacturing.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

3. Main business analysis

Overview

Please refer to the relevant content of "1. Main businesses engaged in by the company during the reporting period".

Year-on-year changes in major financial data

Unit: Yuan

This reporting period The same period last year Year-on-year increase or decrease Reasons for changes

Operating income 6,564,774,552.87 6,654,903,835.38 -1.35%

Operating costs 5,657,915,426.72 5,711,394,322.61 -0.94%

Selling expenses 118,720,310.42 135,282,798.68 -12.24%

Management expenses 142,238,590.63 131,687,204.70 8.01%

Mainly due to financial expenses related to fluctuations in the exchange rate of US dollars against RMB during the current period 97,468,906.66 14,588,780.04 568.11%

This was due to the year-on-year increase in exchange losses. Income tax expense 66,099,411.06 83,268,672.80 -20.62%

R&D investment 158,266,602.34 167,004,047.28 -5.23%

Cash generated from operating activities mainly comes from Zongshen Small Loan Company and Financial Leasing Company.

953,424,248.66 564,827,788.95 68.80%

Net flow is due to the company's recovery of loan and lease payments.

Cash generated from investment activities is mainly cash paid for purchasing bank financial products.

-356,089,910.64 -147,983,105.18 -140.63%

The net flow amount increased year-on-year.

Cash generated from financing activities mainly represents cash paid for repayment of bank borrowings.

-383,116,752.90 -136,989,268.74 -179.67%

Net flow ratio increased.

Net cash and cash equivalents Mainly represents cash generated from financing and investing activities

204,830,092.59 312,791,452.70 -34.52%

The increase was due to the year-on-year decrease in net traffic.

There are major changes in the company's profit composition or profit sources during the reporting period

□Applicable Not applicable

There were no major changes in the company's profit composition or profit sources during the reporting period.

Operating income composition

Unit: Yuan This reporting period Same period last year

Year-on-year increase or decrease

Amount % of operating income Amount % of operating income

Total operating income 6,564,774,552.87 100% 6,654,903,835.38 100% -1.35% Industry

Machinery manufacturing industry 6,305,037,216.09 96.04% 6,516,225,615.06 97.92% -3.24% Others 259,737,336.78 3.96% 138,678,220.32 2.08% 87.29% Products

General machinery products 2,939,760,837.03 44.78% 3,643,919,510.42 54.76% -19.32% Engine products 2,525,803,883.13 38.47% 2,323,936,137.65 34.92% 8.69% New energy products 591,567,445.92 9.01% 261,911,613.54 3.94% 125.87% Product parts 247,905,050.01 3.78% 286,458,353.45 4.30% -13.46% Others 259,737,336.78 3.96% 138,678,220.32 2.08% 87.29% by region

Domestic sales 3,605,282,086.65 54.92% 3,342,600,355.85 50.23% 7.86%Export sales 2,959,492,466.22 45.08% 3,312,303,479.53 49.77% -10.65% Industry, product or region accounting for more than 10% of the company's operating revenue or operating profit

Applicable □Not applicable

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Unit: Yuan Operating income compared with the previous year Operating costs compared with the previous year Gross profit margin compared with the previous year Operating income Operating costs Gross profit margin

Increase and decrease in the same period Increase and decrease in the same period Increase and decrease in the same period by industry

Machinery manufacturing industry 6,305,037,216.09 5,468,176,072.77 13.27% -3.24% -2.10% -1.02% by product

General machinery products 2,939,760,837.03 2,488,738,301.28 15.34% -19.32% -18.19% -1.18%Engine products 2,525,803,883.13 2,261,684,994.84 10.46% 8.69% 9.24% -0.45% Product parts 247,905,050.01 209,951,573.10 15.31% -13.46% -12.02% -1.38% By region

Domestic sales 3,605,282,086.65 3,142,845,237.21 12.83% 7.86% 8.50% -0.51%Export sales 2,959,492,466.22 2,515,070,189.51 15.02% -10.65% -10.65% 0.00% When the statistical caliber of the company's main business data is adjusted during the reporting period, the company's main business data for the most recent period will be adjusted based on the caliber at the end of the reporting period.

□Applicable Not applicable

4. Analysis of non-main business

Applicable □Not applicable

Unit: Yuan as a share of total profit Whether there is an amount Explanation of reasons for formation

Proportion Sustainability

Mainly related to investment income of associates and disposal of equity of associates

Investment income 111,826,908.17 22.39% Income, financial management income and forward settlement and sales for the current period are income generated at the same time

Mainly due to financial management income and business mergers not under common control

Gains and losses from changes in fair value -1,928,518.41 -0.39% No

The impact of performance compensation

Asset impairment -36,719,365.96 -7.35% Mainly due to asset impairment losses and credit impairment losses accrued Yes Non-operating income 1,662,748.29 0.33% Mainly due to liquidated damages and fines, unpaid amounts, etc. No

Mainly due to losses due to damage and scrapping of non-current assets, liquidated damages and penalties

Non-operating expenses 1,624,207.25 0.33% No

expenditures, etc.

5. Analysis of assets and liabilities

Major changes in asset composition

Unit: Yuan End of the reporting period End of the previous year

Percentage of total assets Increase or decrease in proportion of total assets Explanation of significant changes Amount

Proportion Proportion

Monetary funds 1,830,635,479.53 13.82% 1,629,324,579.17 13.16% 0.66%

Accounts receivable 2,620,304,310.21 19.78% 1,856,001,129.04 14.99% 4.79%

Trading financial assets 591,072,254.55 4.46% 393,000,772.96 3.17% 1.29%

Contract assets 2,270,629.37 0.02% 1,851,496.14 0.01% 0.01% There is no significant change in the proportion of investment real estate in total assets 1,228,945,032.88 9.28% 1,084,303,126.72 8.76% 0.52% 78,865,346.27 0.60% 82,339,765.00 0.66% -0.06%

Long-term equity investment 1,197,094,912.12 9.04% 1,153,255,875.37 9.31% -0.27%

Fixed assets 1,620,043,479.82 12.23% 1,682,207,978.49 13.59% -1.36%

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Construction in progress 352,988,131.59 2.66% 191,138,777.02 1.54% 1.12% Right-of-use assets 181,735,256.18 1.37% 119,991,990.17 0.97% 0.40% Short-term borrowings 360,233,333.33 2.72% 300,562,271.76 2.43% 0.29% Contract liabilities 119,212,006.68 0.90% 123,151,426.99 0.99% -0.09% Long-term borrowings 1,120,956,942.97 8.46% 1,719,183,839.34 13.88% -5.42% Lease liabilities 143,901,021.56 1.09% 89,212,156.34 0.72% 0.37%

Major overseas assets

□Applicable Not applicable

Assets and liabilities measured at fair value

Applicable □Not applicable

Unit: Yuan included in equity

Fair price for the current period Provision for the current period Purchase money for the current period Sales money for the current period

Item Opening amount Accumulated fair price Other changes Gains and losses from changes in value at the end of the period Impairment amount Amount

value change

financial assets

Transactional financing

assets (excluding derivatives 393,000,77 1,050,000, 850,000,00

1,928,518. 591,072,254.55 financing assets) 2.96 000.00 0.00

Derivative financial assets
Accounts receivable financing 1,273,283, 1,602,540, 1,886,560,

989,263,103.98

292.72 504.01 692.75

Other debt investments
Other equity instruments

investment

Subtotal of financial assets 1,666,284, 2,652,540, 2,736,560, 1,580,335,358. 1,928,518.

065.68 504.01 692.75 53Investment real estate

productive biological assets

Others

The total of the above is 1,666,284, 2,652,540, 2,736,560, 1,580,335,358. 1,928,518.

065.68 504.01 692.75 53 Financial liabilities

Whether there are any significant changes in the measurement attributes of the company's main assets during the reporting period

□Yes No

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Restrictions on asset rights as of the end of the reporting period

For details, see Section 8 Financial Reports, 7. Notes to Consolidated Financial Statement Items, 25. Assets with restricted ownership or use rights.

6. Investment status analysis

Overall situation

Applicable □Not applicable

Investment amount during the reporting period (yuan) Investment amount during the same period last year (yuan) Change rate 10,000,000.00 0.00 100.00%

Major equity investments obtained during the reporting period

Applicable □Not applicable

Unit: Yuantou Investment Preliminary Yes Disclosure Disclosure

As of asset negative

Invested Capital Stock Capital Product Calculation No Date Index

Main business Investment amount Partner Progress on the debt statement date Investment profit and loss in the current period Company name Amount Compared to the next period Type Involvement (such as (such as development situation)

Formula Example Source Limited Benefit Suing Yes) Yes) R&D, production and sales:

Fuel cell, energy type straight

Power battery (energy density)

≥110 Wh/kg, cycle and

Lifespan ≥2000 times): hydrogen time

Chongqing Zongshen increased from

Technologies in the energy sector See details

Hydrogen Energy Dynamics Add 10,000,0 Yes -

R&D, technology transfer, and holdings -- major transactions completed. Fuli Technology invested 00.00 1,091,433.52

Technical consulting and related technology stock business

Co., Ltd. funds

technical services; goods import and export

Mouth. (Subject to approval by law)

projects, approved by relevant departments 100

% can only be carried out after door approval

business activities)

10,000,0 -Total -- - -- - -- -- -- -- -- -- -- 00.00 1,091,433.52

Major non-equity investments ongoing during the reporting period

□Applicable Not applicable

Financial asset investment

(1) Securities investment situation

□Applicable Not applicable

The company had no securities investments during the reporting period.

(2) Derivatives investment situation

Applicable □Not applicable

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Derivative investments for the purpose of hedging during the reporting period

Applicable □Not applicable

Unit: 10,000 yuan

Ending investment amount fairly included in equity during the period Derivative investment category Initial investment Opening amount During the reporting period During the reporting period

Changes in value Cumulative fair price Ending amount Percentage of the company’s reporting period type (Note 1) Amount Amount purchased Amount sold

Changes in profit and loss value Ratio of net assets at the end of the year Forward foreign exchange business (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) Total

Accounting policies and accounting details for hedging business during the reporting period

During the reporting period, the company’s accounting policies and specific accounting principles for derivatives were compared with those of the previous reporting period, and whether there were any significant changes compared with the previous reporting period.

Less significant changes.

Description

Recognition of gains from changes in fair value of RMB 0,000 during the reporting period and confirmation of investment income. Explanation of actual profits and losses during the reporting period

1.4259 million yuan, with a total income of 1.4259 million yuan.

Explanation of hedging effect Not applicable

Source of funds for derivatives investment Own funds

Risk analysis and control measures description of derivatives positions during the reporting period (including

The company's management has appropriate internal control systems to manage and control relevant risks. This reporting period includes but is not limited to market risk, liquidity risk, credit risk, operational risk,

At the end of the year, the company's derivatives positions did not face significant risks.

operating risks, legal risks, etc.)

Changes in the market price or product fair value of invested derivatives during the reporting period. The company confirmed the gains and losses from derivative investment during the reporting period. The analysis of the fair value of derivatives should disclose the specific gains and losses from changes in fair value of RMB 0,000. The calculation of fair value is based on the forward exchange rate quotation on the balance sheet date consistent with the product maturity date using the method provided by the financial institution and the setting of relevant assumptions and parameters. Litigation involvement (if applicable) Not applicable

Derivatives investment approval board announcement disclosure date (if any) April 23, 2026

Announcement and disclosure date of shareholders’ meeting for approval of derivatives investment (if any) May 14, 2026

Note 1: Derivatives investments are classified according to financial institutions and derivatives investment types.

Note 2: Forward foreign exchange business does not require initial net investment, so the items of the initial investment amount, the purchase amount during the reporting period, the amount sold during the reporting period, the ending amount and the proportion of the ending investment amount to the company's net assets at the end of the reporting period are not applicable.

Derivative investments for speculative purposes during the reporting period

□Applicable Not applicable

There were no derivative investments for speculative purposes during the reporting period.

Usage of raised funds

□Applicable Not applicable

The company has no use of raised funds during the reporting period.

7. Sale of major assets and equity

Sale of major assets

□Applicable Not applicable

The company did not sell any major assets during the reporting period.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Sale of major equity interests

□Applicable Not applicable

8. Analysis of major holding and participating companies

Applicable □Not applicable

Information about major subsidiaries and joint-stock companies that affect the company's net profit by more than 10%

Unit: Yuan

Company name Company type Main business Registered capital Total assets Net assets Operating income Operating profit Net profit General items: Production and sales: motorcycle engines, electric Chongqing Zongshen engines and spare parts, gearboxes

743,710, 2,545,765, 1,561,428, 2,522,471, 157,263,93 135,427,95 Engine manufacturing has subsidiaries and parts; goods import and export

200.00 276.60 408.65 303.13 4.85 8.35 Co., Ltd., lubricating oil sales, plug-in hybrid special engine sales.

Licensed items: Category II value-added telecommunications services.

General items: general equipment manufacturing (excluding special equipment manufacturing); generators and generator sets manufacturing; generators and generator sets sales; hydraulic power machinery and components manufacturing; hydraulic power machinery and components sales; construction engineering machinery manufacturing; construction engineering machinery sales; agricultural machinery sales; agricultural machinery manufacturing; agriculture, forestry, animal husbandry, and sideline fishery professional machinery manufacturing; general parts manufacturing; machinery parts, parts sales; off-highway recreational vehicles and spare parts manufacturing; off-highway recreational vehicles and spare parts sales Chongqing Zongshentong

Sales; Marine supporting equipment manufacturing 258,270, 1,817,398, 522,185,15 1,231,796, 106,929,21 90,951,303 Power machinery subsidiary

Manufacturing; battery sales; electric power 341.94 564.54 4.94 351.72 2.02 .40 Co., Ltd.

Sales of sub-components; manufacturing of mechanical and electrical equipment; sales of mechanical and electrical equipment; sales of lubricants; import and export of goods; technology import and export; manufacturing of refrigeration and air-conditioning equipment; sales of refrigeration and air-conditioning equipment; sales of mechanical equipment; sales of electrical equipment; sales of material handling equipment; manufacturing of material handling equipment; technical services, technology development, technical consulting, technical exchanges, technology transfer, technology promotion; motor manufacturing; sales of agricultural, forestry, animal husbandry and fishery machinery accessories; sales of professional machinery for agriculture, forestry, animal husbandry, sideline and fishery; research and development of mechanical equipment; production of battery spare parts; battery zero

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Accessories sales; battery manufacturing.

General projects: general equipment manufacturing

manufactured (excluding special equipment manufactured

manufacturing); agricultural machinery manufacturing;

Agricultural machinery sales; production,

Sales: General Gasoline Engine (press

Chongqing Dajiang Dong engages in license verification matters

12,000,0 2,145,311, 356,771,03 1,794,173, 84,389,587 70,730,873 Li equipment manufacturing subsidiary (operating); production and sales: Pu

00.00 981.67 3.76 245.29 .26 .62 Co., Ltd. General machinery, electrical machinery and equipment

materials, fitness equipment, household appliances

appliances, electronic products, new energy

Energy storage power supply, electric tools;

Engaged in import and export of goods and technology

business.

General projects: technical services,

Technology development, technology consulting,

Chongqing Chenyuke

Technology exchange, technology transfer, 71,186,9 1,199,704, 998,007,83 214,405,24 48,093,015 42,032,600 Technology Co., Ltd. Subsidiary

Technology promotion; general equipment manufacturing 88.00 591.62 0.41 6.04 .90 .62 company

manufactured (excluding special equipment manufactured

manufacturing); import and export of goods.

General projects: business management consulting

consultation; information consulting services (not

Chongqing Zongshenxin including licensing information consulting service

1,683,08 19,575,205 9,823,648, 9,775,242, 1,089,247, 912,077,49 Intelligent Manufacturing Technology has joint-stock companies; technical services, technology

5,100.00,571.02 869.88 695.13 416.59 7.52 Co., Ltd. Development, technical consulting, technology

exchange, technology transfer, technology

promotion.

Acquisition and disposal of subsidiaries during the reporting period

Applicable □Not applicable

Company name Method of acquiring and disposing of subsidiaries during the reporting period Impact on overall production operations and performance Zongshen Vietnam Engine Technology Co., Ltd. Investment in new establishment No significant impact

9. Structured entities controlled by the company

□Applicable Not applicable

10. Risks faced by the company and countermeasures

In the first half of 2026, the company faces operating pressures and external difficulties such as Sino-US trade friction, exchange rate fluctuations, rising raw material and production costs, and fierce market competition.

Difficult. The company's operating management will work together with all employees to ensure the successful completion of the company's 2026 business goals through the following measures:

Improve efficiency: The company will focus on its core business, further improve efficiency through intelligent transformation, supply chain management, process optimization and other methods, and continue to optimize the company's

The company's business, assets and product structure provide guarantee for the company's healthy development;

Excellent inventory: The company will further strengthen inventory management, order management and fund management, improve the company's capital and inventory turnover rate, and ensure the company's cash flow

The health and stability of the company provide sufficient financial guarantee for overseas market expansion and emerging business investment;

Deleveraging: The company will continue to compress the existing financial business scale, strictly control the company’s external financial management, external guarantee and other risks; gradually optimize the company’s

Improve the company's credit structure, rationally utilize the capital operation platform of listed companies, increase the company's capital reserves, reduce the company's asset-liability ratio, and enhance the company's long-term risk resistance;

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Cost reduction: The company will continue to strengthen the control of procurement costs and operating costs, improve supply chain management and product quality control mechanisms; continue to accelerate the layout of intelligent production lines, and improve product quality stability and per capita efficiency;
Make up for weak points: The company will optimize the management structure and business processes, improve management level and work efficiency; strengthen professional training in operations management, compliance governance and other aspects, continue to improve the business capabilities and professional skills of the company's management, strengthen risk management and control awareness, cultivate the company's talent echelon, and support the implementation of the functional strategy of "strong middle office and refined back office".

11. Formulation and implementation of market value management system and valuation improvement plan

Whether the company has formulated a market value management system.

Yes □No

Whether the company has disclosed plans to increase its valuation.

□Yes No

In order to strengthen the company's market value management, effectively promote the improvement of the company's investment value, enhance investor returns, and protect the interests of investors, in accordance with the "Company Law of the People's Republic of China", "Securities Law of the People's Republic of China", "Measures for the Administration of Information Disclosure of Listed Companies" and "Regulatory Guidelines for Listed Companies No. 10 - Market Value Management" " and other laws and regulations, normative documents and the "Articles of Association of Chongqing Zongshen Power Machinery Co., Ltd." and other provisions, combined with the company's actual situation, the company formulated the "Chongqing Zongshen Power Machinery Co., Ltd. Market Value Management System", which was reviewed and approved at the fifth meeting of the 12th Board of Directors on April 21, 2026.

12. Implementation of the “Double Improvement of Quality and Return” action plan

Has the company disclosed an announcement on the action plan of “double improvement of quality and return”?

Yes □No

In order to implement the guiding ideology of "activating the capital market and boosting investor confidence" proposed by the Political Bureau of the Central Committee and "vigorously improving the quality and investment value of listed companies and taking more effective measures to stabilize the market and stabilize confidence" as pointed out by the National Standing Committee, the company has formulated an action plan of "double improvement of quality and return" with the main purpose of comprehensively promoting high-quality development of the company and achieving win-win results between the company and all stakeholders. For specific progress, please refer to the “Progress Announcement on the “Double Improvement of Quality and Return” Action Plan disclosed on the same day as this report.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Section 4 Corporate Governance, Environment and Society

1. Changes in directors and senior managers of the company

Applicable □Not applicable

Name Position held Type Date Reason

The fifth meeting of the 12th Board of Directors Chen Gang Deputy General Manager Appointment April 21, 2026

Appointed as deputy general manager

2. Profit distribution and conversion of capital reserve funds into share capital during the reporting period

□Applicable Not applicable

The company plans not to distribute cash dividends, give away bonus shares, or convert public reserve funds into share capital in the first half of the year.

3. Implementation of the company’s equity incentive plan, employee stock ownership plan or other employee incentive measures

□Applicable Not applicable

The company has no equity incentive plan, employee stock ownership plan or other employee incentive measures and their implementation during the reporting period.

4. Environmental information disclosure

Whether listed companies and their major subsidiaries are included in the list of companies that disclose environmental information in accordance with the law

Yes □No

Number of companies included in the list of companies that disclose environmental information in accordance with the law (household) 3 Serial number Company name Query index for environmental information disclosure reports in accordance with the law 1 Chongqing Zongshen Power Machinery Co., Ltd.

http://219.152.238.198:20041/eps/index/enter 2 Chongqing Zongshen General Power Machinery Co., Ltd.

prise-list?input=%E5%AE%97%E7%94%B3&area=

3 Chongqing Zongshen Engine Manufacturing Co., Ltd.

5. Social Responsibility

The company implements a labor contract system. In accordance with the provisions of the "Labor Contract Law of the People's Republic of China" and relevant labor laws and regulations, it strictly implements the national employment system, labor protection system, social security system and medical security system. In accordance with the regulations and requirements of the national and local competent authorities, it pays medical insurance, pension insurance, unemployment insurance, work-related injury insurance and provident fund for its employees. The company effectively protects the rights and interests of its employees and makes continuous efforts to enhance the cohesion of the company and achieve the common growth of employees and the company. The company fully respects the legitimate rights and interests of all stakeholders, adheres to the principles of honesty, trustworthiness, fairness and justice in economic activities, establishes a good corporate image, achieves coordination and balance of the interests of society, customers, shareholders, employees and other parties, and promotes the company's stable and healthy development.

Practice social welfare and spread positive energy

As a benchmark enterprise in Banan District, the company has provided nearly a thousand positions in total to strengthen the "government + enterprise" partnership, solving employment problems for more than 3,200 employees, including more than 150 college students and more than 2,500 migrant workers. The annual employee stability rate is more than 78%, making positive contributions to social employment and people's livelihood, and maintaining social harmony and stability.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Build harmonious labor relations and improve employee satisfaction

In terms of employee professional ability training, the company actively carried out hierarchical and classified special ability improvement training in the first half of 2026, with 54,395 people trained, covering management, production, technology, quality and other positions.

In terms of employee career development, the company provides a fair and impartial career development platform, and has established a complete qualification system and talent evaluation mechanism to provide employees with a broad career development stage and dual channels of professional + management development.

In terms of employee care, we organize physical examinations for employees in toxic and harmful positions every year, and provide employees with free health knowledge and psychological consultation. For employees in need within the company who need financial support, the company has also set up the "Golden Autumn Student Aid" and "Employee Serious Illness Care" projects to solve employees' practical difficulties and convey Zongshen's warmth and love.

Pay attention to the protection of shareholders’ rights and interests and actively give back to investors

The company strictly complies with the requirements of laws and regulations such as the Company Law, Securities Law, Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 1 - Standardized Operation of Main Board Listed Companies, and continuously improves the corporate governance structure, improves the internal control system, improves the company's standard operation level, prevents business risks, and protects the legitimate rights and interests of all shareholders. The company's board of directors and operating management attach great importance to investor relations management. In daily work, they maintain multi-level, multi-channel and diversified communication with institutional investors and individual investors through phone calls, emails, the company or Shenzhen Stock Exchange website, interviews, surveys, etc., carefully listen to and respond to the suggestions and consultations of small and medium-sized investors, and actively communicate with the company's designated information disclosure media to create a good public opinion environment.

The company adheres to the provisions and requirements of the "Notice on Further Implementing Matters Related to Cash Dividends of Listed Companies", "Regulatory Guidelines for Listed Companies No. 3 - Cash Dividends of Listed Companies" and the "Articles of Association" and other documents, formulates compliant and reasonable profit distribution policies, actively gives back to investors, and shares the results of corporate development with investors. Since the company's reorganization in 2003, it has distributed dividends a total of 22 times, with a cumulative dividend amount of 3.686 billion yuan. The company has distributed a total of 744 million yuan in cash dividends in the past three years.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Section 5 Important Matters

1. The company’s actual controller, shareholders, related parties, acquirers, the company and other relevant parties’ commitments have been completed within the reporting period

and commitments that were overdue and unfulfilled as of the end of the reporting period.

Applicable □Not applicable

Reason for commitment Commitment party Commitment type Commitment content Commitment time Commitment period Performance status

The company’s actual controller and chairman Zuo Zongshenxian

Born on May 2, 2013, made a commitment: to

The shares held by it were originally available on October 17, 2011

The 22.1 million restricted shares that were released from listing were

Willing to continue to lock it for three years.

first public release

Regularly extended to May 2, 2016, such 2013 05

Bank or refinancing Zuo Zongshen Restricted sale of shares for three years No violation of commitments. After the share lock-up period expires, if the company’s stock level 2

commitments made

The market price is lower than 7.49 yuan/share (the company’s actual

Implemented a profit distribution plan from 2012 to 2025

After the case, the original promised price of "10 yuan/share" was changed.

without corresponding ex-rights treatment), it will not pass the secondary

The market is reducing holdings.

The company’s controlling shareholder Zongshen High Speed Boat Company

Additional commitments made on July 7, 2008: (1)

The assets held by our company will expire on January 25, 2009

The shares that have been listed on the market since January 2009

Other pairs of companies Chongqing Zongshengao

Voluntarily continue to be locked for three years starting from the 26th; (2) Ruozong 2008 07

The small and medium-sized shareholders of Speed Boat Development have a three-year restriction on the sale of their shares and no breach of commitments. Shenli’s secondary market share price is lower than 10.34 yuan/month 07

Make Promise Co., Ltd.

shares (the company implemented from 2008 to 2025

After the profit distribution plan, the original promised price

"30 yuan/share" has been ex-rights treated accordingly),

The holdings will not be reduced through the secondary market.

Commitments fulfilled.

As of July 11, 2025,

The original shareholders of Dongguan Lithium Wisdom have committed that the total amount of Dongguan Lithium Wisdom's additional shares in the company will be increased by 24 months after the company pays the first installment of 25,121,551 yuan and completes the purchase price of the underlying assets. The above amount corresponds to the number of shares held to purchase the company's stocks in the secondary market, and the purchase capital will be 1,736,100 shares pledged by Dongguan Lithium Wisdom. The amount shall not be less than RMB 25 million. Registration procedures from May 11, 2023 to 2025.

Other commitments Commitments to increase holdings

The original shareholders (including the purchase funds within 12 months after the company paid the first-phase target capital on July 11, 2026, the purchase price of Dongguan Property on June 17, 2026. The original shareholders of Lithium Wisdom paid the above full amount of not less than 15 million yuan), and all the shares were pledged to the company or registered within 5 working days after the purchase of the shares, and the company designated a third party to release the company's pledge. The number of pledged shares is 1,736,100, accounting for 100% of the company’s shares held by him and the company’s total share capital.

0.15%.

The original shareholders of Dongguan Lithium Wisdom promised, and Dongguan Lithium has fulfilled its commitment.

Wisdom in 2023, 2024, and 2025 (1) The amount of net profit realized by Dongguan Lithium Wisdom in the year shall not be less than the actual realized amount of RMB 35 million and RMB 45 million in 2023 respectively. After auditing and deducting non-recurring gains and losses, Dongguan Lithium Wisdom 2023 05 2023 -

Other commitments Performance commitment RMB 55 million. If Dongguan Lithium Wisdom’s net profit attributable to the shareholders of the parent company in any year to the original shareholders is March 24, 2025

The actual realized net profit (referring to the company's profit of 23.9061 million yuan, audited and deducted 35 million yuan by an accounting firm that has not been hired and complies with the "Law of the People's Republic of China on Securities Achieving the Profit Commitment for the Year", the difference is 11.0939 million yuan attributable to the parent company's shares after non-recurring gains and losses. According to the full text of the 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

If Dongguan Lithium Wisdom's net profit after tax) plus the profit amount (if any) in excess of the promised amount in the previous year is lower than the agreed annual profit amount of Dongguan Lithium Wisdom's original shares, Dongguan Lithium Wisdom shall compensate the company in the form of 2,218.77 performance compensation payments in cash. Ten thousand yuan. As of April 22, 2024, the company has received performance compensation of RMB 22.1877 million from the original shareholders of Dongguan Lithium Wisdom, the performance commitment party, Mr. Gao Shaoheng, Ms. Xu Ting, Mr. Yang Guangliang, and Mr. Zhang Huijin.

(2) Dongguan Lithium Wisdom’s audited net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses in 2024 was 47.1783 million yuan, completing 104.84% of this year’s performance commitment. If it exceeds the promised amount, Dongguan Lithium Wisdom does not need to compensate for the current period.

(3) The net profit actually realized by Dongguan Lithium Wisdom attributable to shareholders of the parent company after deducting non-recurring gains and losses in 2025 was 53.0888 million yuan, which failed to reach the promised profit amount of 55 million yuan for that year, with a difference of 1.9112 million yuan. According to the Equity Transfer and Capital Increase Agreement, the original shareholders of Dongguan Lithium Wisdom should pay the company performance compensation of RMB 1.9112 million in cash for the difference. As of May 20, 2026, the company has received performance compensation of RMB 1.9112 million from the original shareholders of Dongguan Lithium Wisdom, the performance commitment party, Mr. Gao Shaoheng, Ms. Xu Ting, Mr. Yang Guangliang, and Mr. Zhang Huijin. At this point, according to the Equity Transfer and Capital Increase Agreement, the performance commitment compensation obligations of the original shareholders of Dongguan Lithium Wisdom to the company have been fully fulfilled.

(1) The committed party will strictly fulfill its commitments in accordance with applicable laws and regulations.

and regulatory rules, with the consent of the relevant securities regulatory authorities, the company plans to transfer the motorcycles it holds, in a manner that is conducive to the development of Zongshen Engine business-related assets and liabilities and safeguards the interests of shareholders, especially small and medium-sized debt (based on the principle of the interests of Zongshen Engine Company shareholders, with the core of obtaining Longquan from the committed party) and Loncin General Zuo Zongshen, Zhongshen

Within 30 months from the date of control of Xin General, Comprehensive (stock code: 603766) Qing Zongshen Investment December 2024

To solve the problem of peer joint ventures using asset restructuring or other legal methods, some general machinery business-related capital companies will be closed from December 20, 2024 to

Other commitments Competition issues Properly resolve the existing assets and liabilities of Loncin General and Zongshen Power (based on the new Loncin Electromechanical Chongqing Zongshen New Month 24th 2027 06

commitment to horizontal competition issues. The company's equity is the core) to purchase intelligent manufacturing technology on January 19

(2) In the exchange of other subsidiaries controlled by the committing party, the assets to be placed and the company to be purchased are

The horizontal competition between the company and Zongshen Power has been eliminated. The difference in transaction price of assets has been eliminated by one party. The party promised to strictly abide by relevant laws and compensate the other party in cash for regulations and normative documents as well as the articles of listed company.

As of August 28, 2026, shareholders' rights will be exercised in accordance with the law and the relevant matters related to this transaction are being properly handled through the provisions of the internal management system such as the stock rights relationship.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Actively promote the handling of matters involving the interests of the listed company, use the control position to seek improper benefits or conduct profit transfers, and do not engage in any behavior that damages the legitimate rights and interests of the listed company, transactions and minority shareholders. The two parties have not signed any agreement yet. (3) The commitment letter will continue to be valid while the committing party still needs further demonstration of control over the listed company's transaction plan. The committed party undertakes, communicates and negotiates, and must make necessary decisions and/or expenses in accordance with the provisions of compensating the listed company for any losses suffered or incurred due to the committed party's violation of the laws, regulations and any provisions of the company's articles of association. Only after the approval process can it be formally implemented.

Give.

Are commitments fulfilled on time? Yes

If a commitment is overdue and has not been fulfilled, the specific reasons for the unfulfilled performance and the next work plan should be explained in detail. Not applicable

2. Non-operating capital occupation of listed companies by controlling shareholders and other related parties

□Applicable Not applicable

During the company's reporting period, there was no non-operational occupation of funds by the controlling shareholder or other related parties of the listed company.

3. Illegal external guarantees

□Applicable Not applicable

The company had no illegal external guarantees during the reporting period.

4. Appointment and dismissal of accounting firms

Has the semi-annual financial report been audited?

□Yes No

The company's semi-annual report has not been audited.

5. The board of directors’ explanation of the accounting firm’s “non-standard audit report” for this reporting period

□Applicable Not applicable

6. Explanation of the Board of Directors on the “Non-standard Audit Report” of the previous year

□Applicable Not applicable

7. Matters related to bankruptcy and reorganization

□Applicable Not applicable

The company had no bankruptcy or reorganization related matters during the reporting period.

8. Litigation matters

Major litigation and arbitration matters

□Applicable Not applicable

The Company had no major litigation or arbitration matters during the reporting period.

Other litigation matters

Full text of Chongqing Zongshen Power Machinery Co., Ltd.'s 2026 semi-annual report□Applicable Not applicable

9. Punishment and Rectification

□Applicable Not applicable

There were no penalties or rectifications during the company's reporting period.

10. Integrity status of the company, its controlling shareholders and actual controllers

□Applicable Not applicable

11. Major related transactions

Related transactions related to daily operations

Applicable □Not applicable

Related cross-border transactions account for similar approvals and are available

Whether related-party transactions exceed Related-party transactions Related-party transactions Related-party transactions Related-party transaction amount Transaction amount Transaction amount Disclosure date Disclosure request

Easy Pricing Approved Easy Settlement Easy Party System Transaction Type Easy Price (Ratio of 10,000 Amount (10,000) Transaction Market Period Quotation Principle Quota Method

Yuan) Example Yuan) Price Chongqing Sai Company Actual

2025 http:/Kelon Motor International Control

Seller Complete machine and market-determined market-determined 34,711 Monthly settlement Year 12/www.c trailer manufacturer Indirect 42.84% 61,000 No Not applicable

Product Accessories Price .98 Calculated on January 11 ninfo.manufactured by Limited Controlled

Japanese com.cn company legal person

34,711

Total -- -- -- 61,000 -- -- -- -- --

.98

Details of large sales returns None

Daily correlations that will occur in this period by category

During the reporting period, the company strictly followed the "Estimation of the Total Amount of Related Transactions with Related Parties" reviewed and approved by the company's 2023 Annual General Meeting of Shareholders.

Related transactions shall be conducted in accordance with the principles set forth in the Proposal on the Joint Transaction Framework Agreement.

Actual performance during the period (if any)

The difference between the transaction price and the market reference price is relatively

Not applicable

Big reason (if applicable)

Related transactions arising from asset or equity acquisition and sale

□Applicable Not applicable

The company had no related transactions related to asset or equity acquisition or sale during the reporting period.

Related transactions related to joint external investment

□Applicable Not applicable

The company had no related transactions related to joint external investments during the reporting period.

Related credit and debt transactions

□Applicable Not applicable

The company had no related creditor's rights or debts during the reporting period.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Dealings with related financial companies

□Applicable Not applicable

There are no deposits, loans, credit or other financial business between the company and its related financial companies and related parties.

The transactions between the financial company controlled by the company and related parties

□Applicable Not applicable

There are no deposits, loans, credit or other financial business between the financial companies controlled by the company and related parties.

Other major related transactions

□Applicable Not applicable

The company had no other major related transactions during the reporting period.

12. Major contracts and their performance

Custody, contracting and leasing matters

(1) Custody situation

□Applicable Not applicable

There was no custody situation during the company's reporting period.

(2) Contracting situation

□Applicable Not applicable

There was no contracting situation during the reporting period of the company.

(3) Leasing situation

□Applicable Not applicable

There was no leasing situation during the company's reporting period.

Major guarantee

Applicable □Not applicable

Unit: 10,000 yuan

External guarantees provided by the company and its subsidiaries (excluding guarantees to subsidiaries) Guarantee amount Collateral Counter-guarantee Is it a guaranteed pair Actual occurrence Actual guarantee amount

Relevant announcements Guarantee amount Guarantee type (e.g. Condition (e.g. Guarantee period Performance) Name of related party Date Amount

Disclosure date Yes) Yes) Completed Guarantee

None

Amount of external guarantees approved during the reporting period Actual amount of external guarantees incurred during the reporting period

0 0 degrees total (A1) total (A2)

Approved external guarantees at the end of the reporting period Total balance of external guarantees at the end of the reporting period

0 0 Total quota (A3) (A4)

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The company’s guarantees for subsidiaries

Guarantee amount, collateral, counter-guarantee situation, whether it is a guaranteed pair, actual occurrence, actual guarantee amount

Relevant announcements Guarantee amount Guarantee type (e.g. Condition (e.g. Guarantee period Performance) Name of related party Date Amount

Disclosure date Yes) Yes) Completed Guarantee 2025 02 Joint and several liability Debt performance deadline expires

16,796.51 No No 26th of the month Guarantee Three years from the date of expiration

2025 07 Joint and several liability debt performance deadline expires

4,800.00 No No 17th of the month Guarantee Three years from the date of expiration

October 2025 Joint liability debt performance deadline expires

Chongqing Zong 12,420.68 No No

Guarantee for three years from the 30th of the month

STO 2026

2026 03 Joint liability debt performance deadline expires

Power machine April 23 103,000 12,488.38 No No

Three years from the day after the expiry of the guarantee on the 16th of the month

Machinery Co., Ltd.

2025 02 Joint liability Debt performance deadline expires

Company 12,900 No No Guarantee on the 26th of the month until three years after the expiration date

June 2026 Joint and several liability debt performance deadline expires

15,000 No No 15th of the month Guarantee Three years from the date of expiration

2026 03 Joint liability debt performance deadline expires

2,000.63 No No 16th of the month Guarantee Three years from the date of expiration

2026 05 Joint and several liability debt performance deadline expires

8,345.35 No No Month 07 Guarantee Three years from the date of expiration

2026 03 Joint liability debt performance deadline expires

12,000 No No

Three years from the date of expiration of the guarantee on the 16th of the month

Chongqing University

2025 04 Joint liability debt performance deadline expires

Jiang Dynamic 2026 11,941.46 No No

Guarantee on the 15th of the month for three years from the date of expiration

Equipment manufacturing April 23 92,000

2025 07 Joint and several liability debt performance deadline expires

Limited manufacturing date 10,204.01 No No

Three years after the expiration date of the guarantee on the 17th of the month

company

2025 07 Joint and several liability debt performance deadline expires

14,500 No No 17th of the month Guarantee ends three years after the expiration date

October 2025 Joint liability debt performance deadline expires

2,452.76 No No Guarantee on the 30th of the month, plus three years after expiration

2026 05 Joint and several liability debt performance deadline expires

11,929.13 No No

Three years from the date of expiration of the guarantee on July 07

Dongguan City 2025 07 Joint and several liability debt performance deadline expires

2026 14,495.95 No No Lithium Wisdom January 17 Guarantee Three years from the date of expiration

April 23 56,000

Energy has 03 joint liabilities in 2026. The debt performance deadline expires

Day 5,000 No No Limited company Guarantee Three years from the date of expiry

October 2025 Joint liability debt performance deadline expires

1,649.39 No No

Three years from the date of expiration of the guarantee on the 30th of the month

Chongqing Hundred

Nodajin 2026

Export trade April 23 1,500

Easy limited day

company

Chongqing Du

Kashenrui 2026

International Trade April 23 1,500

Easy limited day

company

Guarantees for subsidiaries were approved during the reporting period. Guarantees for subsidiaries were actually issued during the reporting period.

254,000 102,195.86 Total quota (B1) Total student quota (B2)

The total balance of guarantees to subsidiaries that have been approved at the end of the reporting period

254,000 168,924.25 Total guarantee limit (B3) Total (B4)

Guarantees provided by subsidiaries to subsidiaries

Guaranteed pair Guarantee amount Actual guarantee amount Collateral Counter-guarantee situation Whether it is

Guarantee amount Guarantee type Guarantee period

Name of object Relevant announcement Date Amount (if status (such as performance) Related parties

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Disclosure date Yes) Yes) Completed Guaranteed DUCAR 2026

Technology has April 23 2,000

Co., Ltd. Day

Zong Shenyue

Nantong 2026

Power Machine April 23 2,000

Machinery Co., Ltd.

company

Lithium wisdom

2026

Energy is more

April 23 2,000

south limited

day

company

Guarantees for subsidiaries were approved during the reporting period. Guarantees for subsidiaries were actually issued during the reporting period.

6,000 0 Total quota (C1) Total student quota (C2)

The total balance of guarantees to subsidiaries that have been approved at the end of the reporting period

6,000 0 Total guarantee limit (C3) Total (C4)

The total amount of company guarantees (i.e. the total of the first three major items)

The total amount of guarantees approved during the reporting period. The total amount of guarantees actually incurred during the reporting period.

260,000 102,195.86 (A1+B1+C1) (A2+B2+C2)

Approved guarantee lines at the end of the reporting period Total balance of all guarantees at the end of the reporting period

260,000 168,924.25Total (A3+B3+C3) (A4+B4+C4)

The total guarantee balance (i.e. A4+B4+C4) accounts for 30.52% of the company’s net assets, of which:

The balance of guarantees provided to shareholders, actual controllers and their related parties (D) 0 The balance of debt guarantees provided directly or indirectly to guaranteed objects whose asset-liability ratio exceeds 70% (E) 168,924.25 The amount of the total guarantee exceeding 50% of net assets (F) 0 The total amount of the above three guarantees (D+E+F) 168,924.25 For unexpired guarantee contracts, guarantee liabilities occurred during the reporting period or there is evidence that it is possible to bear joint liability for repayment.

Explanation of non-applicable situations (if any)

Explanation on providing external guarantees in violation of prescribed procedures (if any) Not applicable

Entrusted financial management

Applicable □Not applicable

Unit: 10,000 yuan

Product Category Risk Characteristics Balance of entrusted financial management during the reporting period Overdue amount not recovered Bank financial management products See the table below for details 59,000 0 The company, as a single client, entrusts a financial institution to carry out asset management, or invest in high-risk entrusted financial management with low security and poor liquidity. Details

Applicable □Not applicable

Unit: 10,000 yuan Trustee name Trustee Reporting period Loss during the reporting period Summary of matters and

funds

Called (or entrusted (or entrusted) Risk characteristics Product type Amount Start date End date Actual profit and loss Actual income Related query requests

invest in

Name of person) Type of person) Amount of benefit Response situation Quotation (if any)

PR1 (cautious 09 2025 01 2026

Huaxia Bank Bank Structured Deposits 5,000 Others 7.01 Yes

Type)/Low Risk Month 23 Month 26

PR1 (cautious 09 2025 03 2026

Zheshang Bank Bank Structured deposit 5,000 Others 23.39 Yes

Type)/Low Risk Month 30 Month 30

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

PR1 (cautious 2025-10 2026-04

Bank of China Bank Structured deposit 4,000 Others 26.87 Yes type)/Low risk Month 22 Month 24

PR1 (cautious 2025-10 2026-04

Zheshang Bank Bank Structured deposit 5,000 Others 31.41 Yes type)/low risk Month 31st Month 30th

PR1 (cautious 2025-11 2026-05

Zheshang Bank Bank Structured deposit 2,000 Others 12.26 Yes type)/Low risk Month 14th Month 14th

PR1 (cautious 2025-11 2026-05

Bank of China Bank Structured Deposits 4,000 Others 31.15 Yes)/Low Risk Month 06 Month 12

PR1 (cautious 2025 12 2026 04

Bank of China Bank Structured deposit 4,000 Others 11.8 Yes type)/Low risk Month 29th Month 14th

PR1 (cautious 2026 01 2026 05

Hua Xia Bank Bank Structured Deposits 10,000 Others 4.65 Yes)/Low Risk Month 19th Month 15th

PR1 (cautious 2026 01 2026 07

Zheshang Bank Bank Structured Deposits 3,000 Others 20.91 No)/Low Risk Month 30th Month 30th

PR1 (cautious 2026 03 2026 06

Bank of China Bank Structured deposits 3,000 Others 15.03 Yes type)/low risk Month 13th Month 12th

PR1 (cautious 2026 03 2026 07

Hua Xia Bank Bank Structured Deposits 5,000 Others 6.05 No)/Low Risk Month 19th Month 22nd

PR1 (cautious 2026 04 2026 09

Zheshang Bank Bank Structured Deposits 5,000 Others 20.64 No)/Low Risk Month 02 Month 30

PR1 (cautious 2026 04 2026 11

Bank of China Bank Structured Deposits 5,000 Others 17.07 No)/Low Risk Month 30 Month 06

PR1 (cautious 2026 05 2026 09

Hua Xia Bank Bank Structured Deposits 6,000 Others 1.3 No)/Low Risk Month 06 Month 08

PR1 (cautious 2026 05 2026 11

Zheshang Bank Bank Structured Deposits 2,000 Others 3.03 No)/Low Risk Month 29th Month 25th

PR1 (cautious 2026 05 2026 11

Zheshang Bank Bank Structured Deposit 5,000 Others 11.69 No)/Low Risk Month 11th Month 09

PR1(cautious 2026-05 2026-12

Bank of China Bank Structured Deposits 11,000 Others 19.52 No)/Low Risk Month 29th Month 04

PR1 (cautious 2026 06 2027 01

Bank of China Bank Structured Deposits 3,000 Others 0.13 No)/Low Risk Month 30th Month 05

PR1 (cautious 2026-06 2026-10

Hua Xia Bank Bank Structured Deposits 10,000 Others 5.04 No)/Low Risk Month 01 Month 30

PR1 (cautious 2025 11 2026 02

China CITIC Bank Bank Structured Deposits 1,000 Others 1.78 (Yes)/Low Risk Month 17th Month 13th

PR1 (cautious 2025 11 2026 02

China CITIC Bank Bank Structured Deposits 1,000 Others 1.61 (Yes)/Low Risk Month 10th Month 09

PR1 (cautious 2025 12 2026 01

China Guangfa Bank Bank Structured Deposits 8,000 Others 10.19 Yes type)/Low Risk Month 26th Month 30th

PR1 (cautious 2026 01 2026 03

Minsheng Bank Bank Structured Deposits 2,000 Others 5.37 Yes)/Low Risk Month 09 Month 10

PR1 (cautious 2026 01 2026 03

Bank of China Bank Structured deposit 2,000 Others 1.83 Yes type)/Low risk Month 06 Month 06

PR1 (cautious 2026 01 2026 02

Bank of China Bank Structured deposit 3,000 Others 5.21 Yes type)/Low risk Month 05 Month 09

PR1 (cautious 2026 02 2026 02

Bank of China Bank Structured Deposits 3,000 Others 0.5 (Yes)/Low Risk Month 12th Month 28th

PR1 (cautious 2026 02 2026 04

Minsheng Bank Bank Structured Deposits 1,000 Others 2.61 Yes)/Low Risk Month 10th Month 13th

PR1 (cautious 2026 02 2026 02

China CITIC Bank Bank Structured Deposits 1,000 Others 0.58 (Yes)/Low Risk Month 12th Month 26th

PR1 (cautious 2026 03 2026 04

China CITIC Bank Bank Structured Deposits 2,000 Others 2.73 Yes)/Low Risk Month 27th Month 28th

PR1 (cautious 2026 03 2026 05

Minsheng Bank Bank Structured deposit 2,000 Others 5.21 Yes

Type)/Low Risk Month 26th Month 25th

Minsheng Bank Bank PR1 (Prudent Structured Deposits 1,000 2026 04 2026 06 Others 2.65 Yes

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Type)/Low Risk Month 22 Month 24

PR1 (cautious 2026 04 2026 06

China Guangfa Bank Bank Structured Deposits 2,000 Others 3.53 Yes)/Low Risk Month 30th Month 08th

PR1 (cautious 2026-05 2026-05

China CITIC Bank Bank Structured Deposits 3,000 Others 3.58 (Yes)/Low Risk Month 01 Month 29

PR1 (cautious 2026-05 2026-05

Minsheng Bank Bank Structured Deposits 2,000 Others 2.68 Yes type)/low risk Month 01 Month 31

PR1 (cautious 2026-06 2026-06

Bank of China Bank Structured deposit 2,000 Others 1.85 Yes type)/Low risk Month 01 Month 22

PR1 (cautious 2026-06 2026-06

Bank of China Bank Structured deposit 3,000 Others 2.58 Yes type)/low risk Month 11th Month 30th

PR1 (cautious 2026-06 2026-06

Minsheng Bank Bank Structured Deposits 2,000 Others 2.52 Yes type)/low risk Month 01 Month 30

PR1 (cautious 2026-06 2026-06

China CITIC Bank Bank Structured Deposits 2,000 Others 2.47 Yes)/Low Risk Month 01 Month 30

PR1(cautious 2026-06 2026-07

China Guangfa Bank Bank Structured Deposits 2,000 Others 1.41 No)/Low Risk Month 15th Month 13th

PR1 (cautious 2026 06 2026 08

Guangfa Bank Bank Structured deposit 2,000 Others 0.44 No

Type)/Low Risk Month 26 Month 05

Total 144,000 -- -- -- 330.28 -- --

Other major contracts

□Applicable Not applicable

The company had no other major contracts during the reporting period.

13. Registration form for reception of research, communication, interviews and other activities during the reporting period

Applicable □Not applicable

Reception objects, main content of discussion and

Reception time Reception place Reception method Reception objects Basic situation of the survey Index type Information provided

For details, please see Juchao Information Network to participate through Panorama Network

Through Panorama Network's "Investment Introduction to the Company in 2025 (www.cninfo.com.cn Company in 2025

May 2026 "Interactive Platform for Researcher Relations" Online Platform Annual Report, 2026) "Chongqing Zongshen Power Machinery Others and No. 1 in 2026"

07th (https://ir.p5w. Online communication, first quarter report and operating situation, quarterly performance of Co., Ltd. investors online

net) Kuang et al. "Relationship Activity Record Form" (Investors of Mingminghui)

No.: 2026-01)

14. Description of other major matters

□Applicable Not applicable

There are no other significant matters that need to be explained during the company's reporting period.

15. Major events of the company’s subsidiaries

□Applicable Not applicable

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Section 6 Share changes and shareholder status

1. Changes in shares

Changes in shares

Unit: Before this change in share capital Increase or decrease in this change (+, -) After this change

Quantity Proportion Issuance of new shares Bonus shares Conversion of provident funds Others Subtotal Quantity Proportion

Shares with sales restrictions 253,641,820 22.15% -128,419 -128,419 253,513,401 22.14%
State shareholding
Shareholding by state-owned legal persons
Other domestic shareholdings 253,641,820 22.15% -128,419 -128,419 253,513,401 22.14% of which: domestic legal persons

230,192,114 20.10% 230,192,114 20.10% shareholding

Shareholdings held by domestic natural persons 23,449,706 2.05% -128,419 -128,419 23,321,287 2.04%

Foreign shareholding

Among them: overseas legal persons

shareholding

Shareholding by foreign natural persons

Shares without selling restrictions 891,385,100 77.85% 128,419 128,419 891,513,519 77.86%
RMB ordinary shares 891,385,100 77.85% 128,419 128,419 891,513,519 77.86%
Foreign and domestic listed companies

capital stock

Foreign listed companies

capital stock

Others
Total number of shares 1,145,026,920 100.00% 1,145,026,920 100.00% Reasons for changes in shares

Applicable □Not applicable

The change in shareholdings of Mr. Hu Xianyuan, the company’s director, in 2025 resulted in a decrease of 44,100 shares in the number of shares locked by senior executives during the reporting period;
Changes in shareholdings of Mr. Li Yao, the company’s director, in 2025, resulting in a decrease of 31,819 shares in the number of shares locked by senior executives during the reporting period;
Mr. Zhang Kui, the company's former senior manager, resigned on September 10, 2025. In accordance with the relevant provisions of the "Shenzhen Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 18 - Reduction of Shareholdings by Shareholders, Directors, and Senior Managers (Revised in 2025)", all 52,500 executive lock-up shares held by him have been unlocked six months after leaving office, and the number of unrestricted tradable shares increased by 52,500 shares.

Approval status of share changes

□Applicable Not applicable

Transfer status of changes in shares

□Applicable Not applicable

Implementation progress of share buybacks

□Applicable Not applicable

Implementation progress of using centralized bidding method to reduce and repurchase shares

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

□Applicable Not applicable

The impact of changes in shares on financial indicators such as basic earnings per share and diluted earnings per share in the most recent year and period, net assets per share attributable to the company's common shareholders □Applicable Not applicable

Other content that the company deems necessary or required to be disclosed by securities regulatory authorities

□Applicable Not applicable

Changes in restricted shares

Applicable □Not applicable

Unit: Share

Increased in this issue

Name of shareholder Number of shares with trading restrictions at the beginning of the period Number of shares with trading restrictions released during the period Number of shares with trading restrictions at the end of the period Reasons for selling restrictions Number of shares with trading restrictions released on the date of release

According to executive share management phase Hu Xianyuan 176,531 44,100 0 132,431 Executive locked shares

Relevant regulations are implemented according to the executive stock management phase Li Yao 159,094 31,819 0 127,275 Executive locked shares

Relevant regulations are implemented according to the executive share management phase Zhang Kui 52,500 52,500 0 0 Executive locked shares

Implementation of relevant regulations

Total 388,125 128,419 0 259,706 -- --

2. Securities issuance and listing

□Applicable Not applicable

3. Number of shareholders and shareholding status of the company

Unit: Share

Total number of preference shareholders whose voting rights were restored at the end of the reporting period

Total number of ordinary shareholders at the end of the reporting period 111,434 0 (if any) (see Note 8)

Shareholding status of shareholders holding more than 5% of the shares or the top 10 shareholders (excluding shares lent through refinancing)

Held with sales limit. Held with no sales limit. Pledge, marking or freezing status. Held at the end of the reporting period. Increase during the reporting period.

Name of shareholder Nature of shareholder Shareholding ratio Conditional shares Conditional shares

Number of shares minus changes Share status Number

quantity quantity

Chongqing Zongshen high-speed boat is not state-owned within the territory

20.10% 230,192,114 0 230,192,114 0 Pledge 90,000,000 Development Co., Ltd. Legal person

Tibet Guolong Trading Services is not state-owned within the territory

16.28% 186,445,000 0 0 186,445,000 Pledge 54,000,000 Securities Co., Ltd. Legal person

Hong Kong Securities Clearing Company has

Overseas legal person 3.22% 36,910,342 27,397,656 0 36,910,342 Not applicable 0 Co., Ltd.

Zuo Zongshen Domestic natural person 2.64% 30,227,200 0 22,670,400 7,556,800 Not applicable 0 Industrial and Commercial Bank of China shares

Co., Ltd.-Silver

Central China Small Cap Selected Mixed Others 1.09% 12,438,686 12,438,686 0 12,438,686 Not applicable 0 Combined Securities Investment Fund

gold

Yinhua Fund-China

Life insurance shares have

Co., Ltd. - Participating insurance Others 1.03% 11,793,800 11,793,800 0 11,793,800 Not applicable 0 - Yinhua Fund China Life

growth stock type

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Combined single asset management

management plan (available for

for sale)

Goldman Sachs International - Owned

Overseas legal person 0.83% 9,456,304 8,761,678 0 9,456,304 Not applicable 0 capital

Wang Bin Domestic natural person 0.64% 7,300,000 0 0 7,300,000 Not applicable 0 J. P. Morgan

Securities PLC Overseas legal person 0.53% 6,094,193 6,094,193 0 6,094,193 Not applicable 0 - Own funds

UBS AG Overseas legal person 0.48% 5,496,894 4,065,817 0 5,496,894 Not applicable 0 Strategic investors or general legal persons due to placement

Situation of new shares becoming the top 10 shareholders Not applicable

(if any) (see note 3)

According to the information available to the company, the company’s controlling shareholder Chongqing Zongshen High-Speed Boat Development Co., Ltd. and Mr. Zuo Zongshen have related relationships or concerted actions with the above-mentioned shareholders.

They are persons acting in concert; apart from this, the company does not know whether there is any related relationship among other shareholders, nor any other explanation.

Whether shareholders are persons acting in concert.

The above-mentioned shareholders are involved in proxy/trustee voting

Not applicable

Explanation on the circumstances of voting rights and renunciation of voting rights

There are special repurchase accounts among the top 10 shareholders

special instructions, if any (see note N/A

11)

Shareholdings of the top 10 shareholders without sales restrictions (excluding shares lent through refinancing and shares locked by executives)

Share type

Name of shareholder Number of shares without selling restrictions held at the end of the reporting period

Type of shares Quantity Tibet Guolong Trading Services Co., Ltd. 186,445,000 RMB ordinary shares 186,445,000 Hong Kong Securities Clearing Company Limited 36,910,342 RMB ordinary shares 36,910,342 Industrial and Commercial Bank of China Limited -

Yinhua Small and Medium Cap Selected Hybrid Securities Investment 12,438,686 RMB Ordinary Shares 12,438,686 Capital Fund

Yinhua Fund-China Life Insurance Co., Ltd.

Co., Ltd. - Participating Insurance - Yinhua Fund

11,793,800 RMB ordinary shares 11,793,800 China Life shares growth stock portfolio single

Asset Management Plan (available for sale)

Goldman Sachs International - Own funds 9,456,304 RMB ordinary shares 9,456,304 Zuo Zongshen 7,556,800 RMB ordinary shares 7,556,800 Wang Bin 7,300,000 RMB ordinary shares 7,300,000 J. P. Morgan Securities

6,094,193 RMB ordinary shares 6,094,193 PLC - own funds

UBS AG 5,496,894 RMB ordinary shares 5,496,894 Ping An Life Insurance Co., Ltd. of China

5,289,800 RMB ordinary shares 5,289,800 Company - own funds

Among the top 10 shareholders with no sales limit

time, and the conditions for the top 10 unrestricted shares. According to the information available to the company, the company is not aware of whether there is a relationship between the above 10 shareholders of unrestricted shares, or whether there is a relationship between the shareholders and the top 10 shareholders. It is unknown whether these shareholders are persons acting in concert as stipulated in the Information Disclosure Management Measures for Changes in Shareholdings of Listed Companies.

Description of relationship or concerted action

The top 10 common shareholders participated in the financing

Description of securities lending business (if any) Wang Bin held 7,300,000 unrestricted shares of the company at the end of the reporting period, all of which were held through credit accounts.

(See note 4)

The situation of shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares participating in the refinancing business and lending shares

□Applicable Not applicable

The top 10 shareholders and the top 10 shareholders of unrestricted tradable shares have changed from the previous period due to refinancing lending/returning.

□Applicable Not applicable

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Whether the company's top 10 ordinary shareholders and the top 10 unrestricted ordinary shareholders conducted agreed repurchase transactions during the reporting period

□Yes No

The company's top 10 common shareholders and the top 10 common shareholders without selling restrictions did not conduct agreed repurchase transactions during the reporting period.

4. Changes in shareholdings of directors and senior managers

Applicable □Not applicable

Awarded at the beginning of the period Awarded at the end of the period Awarded at the end of the period

Increase holdings in this period Reduce holdings in this period

Shareholdings at the beginning of the period Shareholdings at the end of the period Restrictions on you Restrictions on you Restrictions on you Name Position Position status Number of shares Number of shares

Number (shares) Number (shares) Number of shares Number of shares Number of shares (shares) (shares)

Volume (shares) Volume (shares) Volume (shares) Hu Xianyuan Director Current 176,575 0 44,144 132,431 0 0 0Total -- -- 176,575 0 44,144 132,431 0 0 0

5. Changes in controlling shareholders or actual controllers

If the company has previously disclosed that the actual controller is planning a change of control but has not yet completed it, please explain the progress of the change of control.

□Applicable Not applicable

Changes in controlling shareholders during the reporting period

□Applicable Not applicable

The company's controlling shareholder did not change during the reporting period.

Changes in actual controller during the reporting period

□Applicable Not applicable

The actual controller of the company did not change during the reporting period.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Relevant information on preference shares □Applicable Not applicable

There were no preferred shares in the company during the reporting period.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Section 7 Bond-related situations □Applicable Not applicable

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Section 8 Financial Report

1. Audit report

Has the semi-annual report been audited?

□Yes No

The company's semi-annual financial report has not been audited.

2. Financial statements

The unit of statements in the financial report is: Yuan

Consolidated balance sheet

Prepared by: Chongqing Zongshen Power Machinery Co., Ltd.

June 30, 2026

Unit: Yuan

Item Ending balance Beginning balance

Current assets:

Monetary funds 1,830,635,479.53 1,629,324,579.17 Settlement reserves

Loan funds

Trading financial assets 591,072,254.55 393,000,772.96 Derivative financial assets

Notes receivable

Accounts receivable 2,620,304,310.21 1,856,001,129.04 Accounts receivable financing 989,263,103.98 1,273,283,292.72 Prepayments 78,942,905.42 80,562,883.26 Premiums receivable

Reinsurance accounts receivable

Receivable reinsurance contract reserves

Other receivables 70,436,748.26 67,501,755.50 Including: Interest receivable 705.00 466,333.32 Dividends receivable 2,471,100.00 2,471,100.00

Other receivables 67,964,943.26 64,564,322.18 Financial assets purchased under resale agreements

Inventory 1,228,945,032.88 1,084,303,126.72

Among them: data resources

Contract assets 2,270,629.37 1,851,496.14 Assets held for sale

Non-current assets due within one year 26,724,823.97 77,574,903.04 Other current assets 69,805,131.29 122,028,100.06

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total current assets 7,508,400,419.46 6,585,432,038.61 Non-current assets:

Loans and advances issued 522,217,453.47 805,775,593.09 Debt investments

Other debt investments

Long-term receivables 3,271,558.01 10,456,659.83 Long-term equity investment 1,197,094,912.12 1,153,255,875.37 Other equity instrument investments

Other non-current financial assets

Investment real estate 78,865,346.27 82,339,765.00 Fixed assets 1,620,043,479.82 1,682,207,978.49 Construction in progress 352,988,131.59 191,138,777.02 Productive biological assets

oil and gas assets

Right-of-use assets 181,735,256.18 119,991,990.17 Intangible assets 301,377,384.04 314,477,910.21

Among them: data resources

development expenditure

Among them: data resources

Goodwill 1,091,142,329.72 1,091,142,329.72 Long-term deferred expenses 69,703,344.74 59,841,225.71 Deferred income tax assets 170,999,026.26 156,502,528.51 Other non-current assets 149,311,509.29 130,253,828.09 Total non-current assets 5,738,749,731.51 5,797,384,461.21 Total assets 13,247,150,150.97 12,382,816,499.82 Current liabilities:

Short-term borrowings 360,233,333.33 300,562,271.76 Borrowings from the central bank

borrowing funds

Trading financial liabilities

Derivative financial liabilities

Notes payable 821,627,025.46 647,083,648.54 Accounts payable 2,322,001,029.96 1,730,639,384.86 Advance payments 1,146,396.19 9,737,321.42 Contract liabilities 119,212,006.68 123,151,426.99 Financial assets sold and repurchased

Taking deposits and placing deposits with other banks

Agent for buying and selling securities

Agent underwriting securities funds

Employee benefits payable 118,925,219.53 174,168,469.23 Taxes payable 58,139,240.26 75,129,747.31

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Other payables 364,512,394.02 343,408,205.44 Including: interest payable

Dividends payable

Other payables 364,512,394.02 343,408,205.44 Handling fees and commissions payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one year 1,264,076,721.95 875,900,032.10 Other current liabilities 6,996,139.57 6,728,310.33 Total current liabilities 5,436,869,506.95 4,286,508,817.98 Non-current liabilities:

insurance contract reserves

Long-term borrowings 1,120,956,942.97 1,719,183,839.34 Bonds payable

Among them: preferred shares

perpetual bond

Lease liabilities 143,901,021.56 89,212,156.34 Long-term payables 295,955,884.86 231,007,530.74 Long-term employee benefits payable

Estimated liabilities 13,144,024.03 11,428,991.12 Deferred income 181,967,378.40 158,777,503.45 Deferred income tax liabilities 83,440,466.33 72,822,089.13 Other non-current liabilities

Total non-current liabilities 1,839,365,718.15 2,282,432,110.12 Total liabilities 7,276,235,225.10 6,568,940,928.10 Owners’ equity:

Share capital 1,145,026,920.00 1,145,026,920.00 Other equity instruments

Among them: preferred shares

perpetual bond

Capital reserve 518,226,292.78 547,248,218.27 Less: treasury shares

Other comprehensive income -76,753,370.60 -58,934,600.03Special reserve

Surplus reserve 608,917,333.35 608,917,333.35 General risk reserve 21,237,173.27 21,237,173.27 Undistributed profits 3,318,892,709.42 3,129,318,273.07 Total owners’ equity attributable to the parent company 5,535,547,058.22 5,392,813,317.93 Minority shareholders’ equity 435,367,867.65 421,062,253.79 Total owners’ equity 5,970,914,925.87 5,813,875,571.72 Total liabilities and owners’ equity 13,247,150,150.97 12,382,816,499.82 Legal representative: Huang Peiguo Person in charge of accounting work: Liu Yuanhong Person in charge of accounting department: Xia Dan

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Balance sheet of the parent company

Unit: Yuan

Item Ending balance Beginning balance

Current assets:

Monetary funds 54,006,190.88 73,847,694.61 Trading financial assets 1,911,240.77 Derivative financial assets

Notes receivable

Accounts receivable 196,919,298.95 194,788,338.20 Accounts receivable financing 36,066,753.14 47,514,923.59 Prepayments 16,196,897.79 12,708,832.67 Other receivables 676,968,745.54 823,477,954.55 of which: interest receivable

Dividends receivable 2,471,100.00 2,471,100.00

Other receivables 674,497,645.54 821,006,854.55 Inventory 158,996,356.43 137,635,311.66

Among them: data resources

contract assets

Assets held for sale

Non-current assets due within one year

Other current assets 144,163.09 2,092,746.32 Total current assets 1,139,298,405.82 1,293,977,042.37 Non-current assets:

debt investment

Other debt investments

long-term receivables

Long-term equity investment 4,621,170,084.13 4,567,331,047.38 Other equity instrument investments

Other non-current financial assets

Investment real estate 100,111,624.04 102,432,423.61 Fixed assets 779,558,490.65 819,460,515.48 Construction in progress 7,405,879.66 5,488,079.68 Productive biological assets

oil and gas assets

Right-of-use assets 185,546.81 Intangible assets 123,018,517.75 125,218,286.88

Among them: data resources

development expenditure

Among them: data resources

goodwill

Long-term deferred expenses 22,769,247.15 22,744,067.36

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Deferred income tax assets 53,066,775.46 53,639,156.56 Other non-current assets 9,351,732.05 9,547,729.61 Total non-current assets 5,716,452,350.89 5,706,046,853.37 Total assets 6,855,750,756.71 7,000,023,895.74 Current liabilities:

Short-term borrowings 300,193,333.33 300,220,000.00 Trading financial liabilities

Derivative financial liabilities

Notes payable 4,408,001.48 3,275,993.24 Accounts payable 57,032,608.11 40,027,441.28 Advance payments 8,212,995.00 Contract liabilities 7,227,805.60 14,462,084.91 Employee benefits payable 13,550,943.86 20,129,059.29 Taxes payable 422,766.71 1,571,737.17 Other payables 457,732,468.42 550,981,455.07 Including: interest payable

Dividends payable

Other payables 457,732,468.42 550,981,455.07 Liabilities held for sale

Non-current liabilities due within one year 797,735,761.11 447,022,741.42 Other current liabilities 3,925.20 231,433.97 Total current liabilities 1,638,307,613.82 1,386,134,941.35 Non-current liabilities:

Long-term borrowings 752,800,000.00 1,040,700,000.00 Bonds payable

Among them: preferred shares

perpetual bond

Lease liability

long-term payables

Long-term employee benefits payable

Estimated liabilities

Deferred income 87,031,947.13 92,319,301.87 Deferred income tax liabilities 23,892,698.72 24,733,927.97 Other non-current liabilities

Total non-current liabilities 863,724,645.85 1,157,753,229.84 Total liabilities 2,502,032,259.67 2,543,888,171.19 Owners’ equity:

Share capital 1,145,026,920.00 1,145,026,920.00 Other equity instruments

Among them: preferred shares

perpetual bond

Capital reserve 611,900,202.64 643,210,045.66

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Less: treasury shares

Other comprehensive income -546,692.27 245,756.01 Special reserves

Surplus reserve 572,513,460.00 572,513,460.00 Undistributed profits 2,024,824,606.67 2,095,139,542.88 Total owners’ equity 4,353,718,497.04 4,456,135,724.55 Total liabilities and owners’ equity 6,855,750,756.71 7,000,023,895.74

Consolidated income statement

Unit: Yuan

Project Half-year 2026 Half-year 2025

Total operating income 6,587,434,008.43 6,692,538,728.16 Including: operating income 6,564,774,552.87 6,654,903,835.38 Interest income 22,659,455.56 37,634,892.78 Premiums earned

Fee and commission income

Total operating costs 6,203,521,642.80 6,184,585,561.01 Including: operating costs 5,657,915,426.72 5,711,394,322.61 Interest expenses

Handling fees and commission expenses

surrender deposit

Net compensation expenses

Net withdrawal of insurance liability reserves

policy dividend payout

Reinsurance cost

Taxes and surcharges 28,911,806.03 26,418,743.73 Sales expenses 118,720,310.42 135,282,798.68 Management expenses 142,238,590.63 131,687,204.70 Research and development expenses 158,266,602.34 165,213,711.25 Financial expenses 97,468,906.66 14,588,780.04 Including: interest expenses 41,703,144.00 50,846,855.50

Interest income 3,832,001.42 9,739,135.64 plus: other income 41,903,649.67 40,189,412.19 investment income (losses are filled in with "-"

111,826,908.17 63,120,319.05 columns)

Of which: for associates and joint ventures

92,052,055.82 61,814,727.73 Enterprise investment income

Measured at amortized cost

Income from derecognition of financial assets

Exchange gains (losses are filled in with "-"

column)

Net exposure hedging gains (losses expressed as “—

"Fill in the column)

Gains from changes in fair value (losses calculated as

-1,928,518.41 1,664,299.59 (Fill in “—”)

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Credit impairment losses (losses are preceded by “—”

-24,980,643.48 -12,676,235.02 (fill in the numbers)

Asset impairment losses (losses are represented by “—”

-11,738,722.48 -12,354,152.36)

Gains from asset disposals (losses are marked with “—”

329,448.11 122,745.05 (please fill in the list)

3. Operating profit (loss should be filled in with “—”

499,324,487.21 588,019,555.65 columns)

Add: non-operating income 1,662,748.29 8,680,191.01

Less: Non-operating expenses 1,624,207.25 2,123,676.92

4. Total profit (total loss is marked with “—”

499,363,028.25 594,576,069.74 fill in the column)

Less: Income tax expense 66,099,411.06 83,268,672.80

5. Net profit (net loss is filled in with "-"

433,263,617.19 511,307,396.94 columns)

(1) Classification by business continuity

Net profit from continuing operations (net loss divided by

433,263,617.19 511,307,396.94 (Fill in “—”)

Net profit from discontinued operations (net loss equal to

Fill in the column with "—" sign)

(2) Classification according to ownership ownership

Net profit attributable to shareholders of the parent company

418,579,820.35 505,635,951.16 (Net loss is listed with "—")

Profit and loss of minority shareholders (net loss is represented by “—

14,683,796.84 5,671,445.78 "Fill in the numbers)

Net after-tax other comprehensive income -18,513,624.67 -28,168,211.81 Other comprehensive income attributable to owners of the parent company

-17,818,770.57 -27,760,731.73 net amount after tax

(1) Others that cannot be reclassified into profit or loss

Comprehensive income

Remeasure changes in defined benefit plans

Others that cannot be transferred to profit or loss under the equity method

Comprehensive income

Fair value of other equity instrument investments

change

Fair value of the company’s own credit risk

change

5.Others

(2) Other comprehensive items that will be reclassified into profit or loss

-17,818,770.57 -27,760,731.73 combined income

Other comprehensive items that can be transferred to profits and losses under the equity method

-792,448.28 1,211,213.86 combined income

Changes in fair value of other debt investments
Financial assets are reclassified into other comprehensive

Amount of combined income

Credit impairment provisions for other debt investments
Cash flow hedging reserve
Translation differences of foreign currency financial statements -17,026,322.29 -28,971,945.59 7. Others

Other comprehensive income attributable to minority shareholders

-694,854.10 -407,480.08 Net after tax

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total comprehensive income 414,749,992.52 483,139,185.13 Total comprehensive income attributable to owners of the parent company

400,761,049.78 477,875,219.43 amount

Total comprehensive income attributable to minority shareholders 13,988,942.74 5,263,965.70

8. Earnings per share:

(1) Basic earnings per share 0.3656 0.4416

(2) Diluted earnings per share 0.3656 0.4416 Legal representative: Huang Peiguo Person in charge of accounting: Liu Yuanhong Head of accounting department: Xia Dan

Income statement of the parent company

Unit: Yuan

Project Half-year 2026 Half-year 2025

Operating income 505,265,925.96 538,107,165.64 Less: Operating costs 470,320,380.95 488,347,049.98 Taxes and surcharges 6,351,312.18 5,624,585.32 Sales expenses 2,777,364.89 6,028,439.14 Administrative expenses 30,115,544.68 27,171,815.83 Research and development expenses 9,234,230.17 16,351,505.24 Financial expenses 22,706,977.41 8,564,149.75 Including: interest expenses 20,027,785.41 16,140,886.86

Interest income 2,864,762.85 3,065,430.66 plus: other income 6,975,047.59 11,210,494.50 investment income (losses are filled in with "-"

192,228,363.13 89,327,316.99 columns)

Of which: for associates and joint ventures

92,052,055.82 61,814,727.73 Investment income from the industry

Money measured at amortized cost

Gains from derecognition of financial assets (losses are represented by “—”

(Fill in the number)

Net exposure hedging gains (losses expressed as “—

"Fill in the column)

Gains from changes in fair value (losses calculated as

-1,911,240.77 123,766.08 (Fill in “—”)

Credit impairment losses (losses are preceded by “—”

No. 1,560,301.45 374,438.41 (please fill in the list)

Asset impairment losses (losses are represented by “—”

-3,271,383.43 -3,549,112.28 (fill in the numbers)

Gains from asset disposals (losses are marked with “—”

109,318.82

(Fill in the number)

2. Operating profit (loss should be filled in with “—”

159,450,522.47 83,506,524.08 columns)

Add: Non-operating income 19,003.26 45,430.20 Less: Non-operating expenses 1,047,926.09 219,213.48

3. Total profit (total loss is marked with “—”

158,421,599.64 83,332,740.80 fill in the column)

Less: Income tax expense -268,848.15 -865,303.33

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Net profit (net loss is filled in with “—”

158,690,447.79 84,198,044.13 columns)

(1) Net profit from continuing operations (net loss divided by

158,690,447.79 84,198,044.13 (Fill in “—”)

(2) Net profit from discontinued operations (net loss is listed with “—”)

Net after-tax amount of other comprehensive income -792,448.28 1,211,213.86

(1) Other comprehensive income that cannot be reclassified into profit or loss

Remeasure the changes in defined benefit plan
Other comprehensive income that cannot be transferred to profit or loss under the equity method
Changes in fair value of other equity instrument investments
Changes in the fair value of the company’s own credit risk

5.Others

(2) Other comprehensive items that will be reclassified into profit or loss

-792,448.28 1,211,213.86 combined income

Other comprehensive items that can be transferred to profits and losses under the equity method

-792,448.28 1,211,213.86 combined income

Changes in fair value of other debt investments
The amount of financial assets reclassified and included in other comprehensive income
Credit impairment provisions for other debt investments 5. Cash flow hedging reserves
Translation differences of foreign currency financial statements

7.Others

Total comprehensive income 157,897,999.51 85,409,257.99

7. Earnings per share:

(1) Basic earnings per share

(2) Diluted earnings per share

Consolidated cash flow statement

Unit: Yuan

Project Half-year 2026 Half-year 2025

1. Cash flow generated from operating activities:

Cash received from selling goods and providing services 5,628,281,817.02 6,170,916,085.58 Net increase in customer deposits and deposits from banks

Net increase in borrowing from the central bank

The net increase in funds borrowed from other financial institutions is the cash obtained from premiums received from the original insurance contract.

Net cash received from reinsurance business

Net increase in policyholders’ savings and investment funds

Cash collected from interest, fees and commissions 24,662,230.94 37,731,238.19 Net increase in borrowed funds

Net increase in repurchase business funds

Net cash received from buying and selling securities on behalf of agents

Tax refunds received 271,118,756.05 258,188,968.99

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Other cash received related to operating activities 81,763,382.54 47,591,370.94 Subtotal of cash inflows from operating activities 6,005,826,186.55 6,514,427,663.70 Cash paid for purchasing goods and receiving services 4,481,625,760.88 4,892,073,461.24

Net increase in customer loans and advances -345,101,805.75 173,387,298.95

Net increase in deposits with central banks and inter-banks

Cash used to pay compensation from the original insurance contract

Net increase in lending funds

Cash payments for interest, fees and commissions

Cash payment for policy dividends

Cash paid to and for employees 614,443,099.65 618,900,012.08 Various taxes and fees paid 152,563,099.48 123,642,194.83 Cash paid for other operating activities 148,871,783.63 141,596,907.65 Subtotal cash outflow from operating activities 5,052,401,937.89 5,949,599,874.75 Net cash flow generated from operating activities 953,424,248.66 564,827,788.95

2. Cash flow generated from investing activities:

Cash received from recovery of investment 878,807,118.89 405,000,000.00 Cash received from investment income 4,640,525.54 4,972,650.66 Disposal of fixed assets, intangible assets and other long-term assets

3,958,149.03 Net cash amount recovered from assets in period 13,428,127.15

Received from disposal of subsidiaries and other business units

net cash

Other cash received related to investing activities 1,911,240.77

Subtotal of cash inflows from investing activities 889,317,034.23 423,400,777.81 Purchase and construction of fixed assets, intangible assets and other long-term assets

195,406,944.87 146,383,882.99 Cash paid for assets

Cash paid for investment 1,050,000,000.00 425,000,000.00 Net increase in pledged loans

Obtain payment from subsidiaries and other business units

net cash

Other cash payments related to investing activities

Subtotal of cash outflows from investing activities 1,245,406,944.87 571,383,882.99 Net cash flow generated from investing activities -356,089,910.64 -147,983,105.18

3. Cash flow generated from financing activities:

Absorbing cash received from investments

Among them: subsidiaries absorb investment income from minority shareholders

Cash arrived

Cash received from borrowings 779,414,559.62 779,829,228.04 Cash received from other financing activities 247,850,000.00

Subtotal of cash inflows from financing activities 1,027,264,559.62 779,829,228.04 Cash paid to repay debts 938,042,228.04 339,195,388.69

Distribution of dividends, profits or repayment of interest payments

260,508,040.19 259,591,849.57 cash

Including: shares paid by subsidiaries to minority shareholders

Profit, profit

Cash payments related to other financing activities 211,831,044.29 318,031,258.52 Subtotal cash outflows from financing activities 1,410,381,312.52 916,818,496.78 Net cash flow generated from financing activities -383,116,752.90 -136,989,268.74

4. The impact of exchange rate changes on cash and cash equivalents

-9,387,492.53 32,936,037.67 impact

Net increase in cash and cash equivalents 204,830,092.59 312,791,452.70 plus: opening balance of cash and cash equivalents 1,562,027,620.82 1,227,457,579.58
Balance of cash and cash equivalents at the end of the period 1,766,857,713.41 1,540,249,032.28

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Cash flow statement of the parent company

Unit: Yuan

Project Half-year 2026 Half-year 2025

1. Cash flow generated from operating activities:

Cash received from selling goods and providing services 488,338,165.68 567,015,443.57 Tax refunds received 1,921,648.45 2,509,339.80 Cash received from other operating activities 13,460,388.00 17,856,712.46 Subtotal of cash inflows from operating activities 503,720,202.13 587,381,495.83 Cash paid for purchasing goods and receiving services 380,834,382.13 332,320,114.39 Cash paid to and for employees 91,652,247.99 96,876,465.35 Various taxes and fees paid 10,040,546.92 5,445,805.52 Other cash payments related to operating activities 11,508,771.20 15,149,264.56 Subtotal of cash outflows from operating activities 494,035,948.24 449,791,649.82 Net cash flow generated from operating activities 9,684,253.89 137,589,846.01

2. Cash flow generated from investing activities:

Cash received from recovery of investment 28,807,118.89

Cash received from investment income 86,121,288.40 28,963,199.26 Disposal of fixed assets, intangible assets and other long-term assets

2,518,058.46 628,870.40 Net cash amount from asset recovery

Received from disposal of subsidiaries and other business units

net cash

Other cash received related to investing activities 608,696,754.63 22,723,397.72 Subtotal of cash inflows from investing activities 726,143,220.38 52,315,467.38 Purchase and construction of fixed assets, intangible assets and other long-term assets

10,073,800.14 33,413,805.69 Cash paid for assets

Cash paid for investment 10,000,000.00

Obtain payment from subsidiaries and other business units

net cash

Other cash payments related to investing activities 458,000,000.00 344,000,000.00 Subtotal cash outflow from investing activities 478,073,800.14 377,413,805.69 Net cash flow generated from investing activities 248,069,420.24 -325,098,338.31

3. Cash flow generated from financing activities:

Absorbing cash received from investments

Cash received from borrowings 565,000,000.00 270,000,000.00 Cash received from other financing activities 343,000,000.00 988,000,000.00 Subtotal of cash inflows from financing activities 908,000,000.00 1,258,000,000.00 Cash paid to repay debts 501,900,000.00 46,500,000.00 Cash paid to distribute dividends, profits or pay interest

249,145,493.72 245,166,729.83 cash

Cash payments related to other financing activities 434,000,000.00 796,018,217.02 Subtotal cash outflows from financing activities 1,185,045,493.72 1,087,684,946.85 Net cash flow generated from financing activities -277,045,493.72 170,315,053.15

4. The impact of exchange rate changes on cash and cash equivalents

-550,193.35 515,288.86 impact

Net increase in cash and cash equivalents -19,842,012.94 -16,678,150.29 Plus: opening balance of cash and cash equivalents 71,833,386.40 110,142,413.40
Balance of cash and cash equivalents at the end of the period 51,991,373.46 93,464,263.11

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Consolidated statement of changes in owners’ equity

Amount of current period

Unit: yuan for the first half of 2026

Owner's equity attributable to parent company

Other equity workers

Items Less: Special minority rights, owners’ equity and other comprehensive income items General risk allowance Others

Share capital Yong Capital reserve Inventory Surplus reserve Undistributed profits Subtotal profit Calculated profit reserve Others

Continue shares first

He prepares

stocks bonds

End of the previous year 1,145,026,920 547,248,218 608,917,333 21,237,173. 3,129,318,273 5,392,813,317 421,062,253 5,813,875,571

58,934,600.

Balance .00 .27 .35 27 .07 .93 .79 .72

Plus: Accounting

Policy changes

Early stage

error correction

Others

Beginning of the current year 1,145,026,920 547,248,218 608,917,333 21,237,173. 3,129,318,273 5,392,813,317 421,062,253 5,813,875,571

58,934,600.

Balance .00 .27 .35 27 .07 .93 .79 .72

3. Increases and decreases in this period

Change amount (minus 189,574,436.3 142,733,740.2 14,305,613. 157,039,354.1

29,021,925. 17,818,770.

Use "—" less often 5 9 86 5

49 57

Fill in the column)

(1) Comprehensive income 418,579,820.3 400,761,049.7 13,988,942. 414,749,992.5

17,818,770.

Total profit 5 8 74 2

(2) Owner

2,287,917.5

Investment and reduction of capital 2,287,917.53 316,671.12 2,604,588.65

1． owner input

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

of common stock

Other equity workers

Tool holder investment

capital

share-based payment plan

Amount of 1,962,491.3 entered into owners’ equity 1,962,491.31 99,720.31 2,062,211.62

Others 325,426.22 325,426.22 216,950.81 542,377.03

(3) Profit sharing

229,005,384.0 229,005,384.0 229,005,384.0 allocation

0 0 0 1. Withdrawal of surplus

Accumulate

extract general wind

Risk preparation

Distribution to owners - - - (or shareholders) 229,005,384.0 229,005,384.0 229,005,384.0 0 0 0 4. Others

(4) Owner

Internal transfer of equity

1． Capital reserve transfer

Increase capital (or shares

this)

Transfer of surplus reserve

Increase capital (or shares

this)

surplus reserve

make up for losses

defined benefit plan

Transfer changes carried forward

retained earnings

Other comprehensive income

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Earnings carried forward and retained

benefit

Others

(5) Special storage

Prepare

1． Extract this period

Used in this issue

(6) Others 31,309,843.

31,309,843.02 31,309,843.02

End of the current period 1,145,026,920 518,226,292 608,917,333 21,237,173. 3,318,892,709 5,535,547,058 435,367,867 5,970,914,925

76,753,370.

Balance .00 .78 .35 27 .42 .22 .65 .87

Amount of previous year

Unit: yuan for the first half of 2025

Owner's equity attributable to parent company

Other rights less

Project Benefit Tools: Professional

Other Comprehensive Income General Risk Provision Other Minority Shareholders’ Equity Owner’s Equity Total Equity Excellent Capital Reserve Surplus Reserve Undistributed Profit Subtotal

its profit reserve

Continue to save first

He prepares

stocks bonds stocks

End of the previous year 1,145,026,920. 544,034,947. 608,917,333. 20,998,242. 2,693,047,827. 4,989,644,246. 428,263,624. 5,417,907,871.

22,381,024.

Balance 00 93 35 97 19 74 99 73

Plus: Accounting

Policy changes

Early stage

error correction

Others

At the beginning of the current year 1,145,026,920. 544,034,947. - 608,917,333. 20,998,242. 2,693,047,827. 4,989,644,246. 428,263,624. 5,417,907,871. Balance 00 93 22,381,024. 35 97 19 74 99 73

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

3. Increases and decreases in this period

-Change amount (less

538,494.69 27,760,731. 276,630,567.16 249,408,330.12 5,310,531.99 254,718,862.11 less marked with "-"

Fill in the column)

(1) Comprehensive collection

27,760,731. 505,635,951.16 477,875,219.43 5,263,965.70 483,139,185.13 Total profit

(2) Owner

Investment and reduction of capital 701,574.65 701,574.65 46,566.29 748,140.94

1． owner vote

Common shares invested

Other rights and interests

Instrument holders vote

invest capital

share-based payment

Amount included in owner's equity 916,422.65 916,422.65 46,566.29 962,988.94

Others -214,848.00 -214,848.00 -214,848.00

(3) Profit share - - -Allocation 229,005,384.00 229,005,384.00 229,005,384.00 1. Withdraw surplus

public area

Extract general

risk preparation

to owner

- - (or shareholders)

229,005,384.00 229,005,384.00 229,005,384.00 allocation

Others

(4) Owner

Internal transfer of equity

1． capital reserve

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

transfer capital (or

equity)

Surplus reserve

transfer capital (or

equity)

Surplus reserve

make up for losses

Set benefits

Plan change balance

Transfer to retained earnings

Other comprehensive

Earnings carried forward and retained

income

Others

(5) Special storage

Prepare

1． Extract this period

Used in this issue

(6) Others -163,079.96 -163,079.96 -163,079.96

End of the current period 1,145,026,920. 544,573,442. 608,917,333. 20,998,242. 2,969,678,394. 5,239,052,576. 433,574,156. 5,672,626,733.

50,141,756.

Balance 00 62 35 97 35 86 98 84

Statement of changes in owner’s equity of the parent company

Amount of current period

Unit: Yuan Other equity instruments for the first half of 2026

Item Less: Treasury Other comprehensive income Special item Its share capital Priority Perpetual Its capital reserve Surplus reserve Undistributed profits Owners’ equity Total deposited equity Reserves Others

stocks debt him

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Closing balance of the previous year 1,145,026,920.00 643,210,045.66 245,756.01 572,513,460.00 2,095,139,542.88 4,456,135,724.55 Add: changes in accounting policies

Early error correction

Others

Opening balance of the year 1,145,026,920.00 643,210,045.66 245,756.01 572,513,460.00 2,095,139,542.88 4,456,135,724.55
Amount of increase or decrease in the current period (decrease by “—

-31,309,843.02 -792,448.28 -70,314,936.21 -102,417,227.51 "Fill in the number)

(1) Total comprehensive income -792,448.28 158,690,447.79 157,897,999.51

(2) Owner’s investment and capital reduction

1． Common stock invested by owners

Capital invested by other equity instrument holders 3. The amount of share-based payment included in owners’ equity 4. Others

(3) Profit distribution -229,005,384.00 -229,005,384.00 1. Withdrawal from surplus reserve

Distribution to owners (or shareholders) -229,005,384.00 -229,005,384.00 3. Others

(4) Internal carryover of owners’ equity

1． Convert capital reserve to capital (or share capital) 2. Convert surplus reserves to capital (or share capital) 3. Surplus reserve to cover losses

Changes in defined benefit plans are carried forward to retained earnings
Other comprehensive income carried forward to retained earnings
Others

(5) Special reserves

1． Extract this period

Used in this issue

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(6) Others -31,309,843.02 -31,309,843.02

Ending balance of the current period 1,145,026,920.00 611,900,202.64 -546,692.27 572,513,460.00 2,024,824,606.67 4,353,718,497.04Amount from the previous year

Unit: yuan for the first half of 2025

Other equity instruments

Items Less: Library Special Items

Equity Priority Perpetual Other Capital Reserves Other Comprehensive Income Surplus Reserves Undistributed Profits Total Owners’ Equity Shares Reserves Others

stocks debt him

Closing balance of the previous year 1,145,026,920.00 643,449,025.25 298,610.30 572,513,460.00 1,876,426,426.00 4,237,714,441.55 Add: changes in accounting policies

Early error correction

Others

Balance at the beginning of the year 1,145,026,920.00 643,449,025.25 298,610.30 572,513,460.00 1,876,426,426.00 4,237,714,441.55

3. Amount of increase or decrease in the current period (decrease marked with “—

-377,927.96 1,211,213.86 -144,807,339.87 -143,974,053.97 "Fill in the number)

(1) Total comprehensive income 1,211,213.86 84,198,044.13 85,409,257.99

(2) Owner’s investment and capital reduction -214,848.00 -214,848.00 1. Common stock invested by owners

Capital invested by other equity instrument holders
The amount of share-based payment included in owners’ equity
Others -214,848.00 -214,848.00

(3) Profit distribution -229,005,384.00 -229,005,384.00 1. Withdrawal from surplus reserve

Distribution to owners (or shareholders) -229,005,384.00 -229,005,384.00 3. Others

(4) Internal carryover of owners’ equity

1． Conversion of capital reserves to capital (or share capital)

Conversion of surplus reserves into capital (or share capital)

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Surplus reserve to cover losses
Changes in defined benefit plans are carried forward to retained earnings
Other comprehensive income carried forward to retained earnings
Others

(5) Special reserves

1． Extract this period

Used in this issue

(6) Others -163,079.96 -163,079.96

Ending balance of the current period 1,145,026,920.00 643,071,097.29 1,509,824.16 572,513,460.00 1,731,619,086.13 4,093,740,387.58

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

3. Basic situation of the company

Company profile

Chongqing Zongshen Power Machinery Co., Ltd. (hereinafter referred to as the company or the company) was formerly Chengdu Lianyi Industrial Co., Ltd. It was a joint-stock pilot enterprise established by Chengdu Lianyi (Group) Co., Ltd. (formerly Shuangliu County Lianyi Iron and Steel Enterprise Co., Ltd.) and other companies in 1989 and was approved by the Chengdu Municipal Structural Reform Commission Chengti Reform (1989) No. 23 and raised part of its shares from the public. Approved by the China Securities Regulatory Commission's Zhengjianfazi (97) No. 39 document, the company's shares were listed on the Shenzhen Stock Exchange on March 6, 1997.

As of June 30, 2026, the company's registered capital was RMB 1,145,026,900, and its legal representative was Huang Peiguo; its registered address, that is, its headquarters address is located in Chaoyouchang, Banan District, Chongqing. The company's largest shareholder is Chongqing Zongshen High-Speed Boat Development Co., Ltd., and its actual controller is Zuo Zongshen.

The company belongs to the machinery manufacturing industry. The company's business scope mainly includes the development, production and sales of various types of engines and their spare parts; the development, production and sale of general gasoline engines, cultivators, lawn mowers, water pump units, generators and their power machinery products and other complete machines and parts; the development, manufacture and sale of motorcycle parts and general machinery parts. parts, automobile parts and large agricultural machinery parts; design, R&D, manufacturing, sales and after-sales service of UAV engines and their parts, general aviation engines and their parts, marine diesel engines and their parts and propellers; design, R&D, production, sales and technical services of UAVs; civilian Design, research and development, production, sales and technical services of aircraft; import and export of goods and technology; fuel cells, energy-based power batteries; hydrogen energy and new energy technology research and development, technology transfer, technical consulting and related technical services; research and development, production and sales of electric power equipment, electric two-wheeled vehicles, electric Tricycles, electric vehicles and motorcycles, auto parts, new energy vehicles and parts, lithium-ion batteries and accessories, battery production equipment, mobile power supplies, portable power supplies, electronic circuit boards, plastic products, hardware products, power tools, charging equipment, lithium battery energy storage equipment: design of charging stations. At the same time, the company's business scope also includes handling various loans, bill discounts, asset transfers; commercial factoring; entrusted asset management, investment management, equity investment, investment and establishment of industries, business information consulting, enterprise management consulting, information consulting services, enterprise management, marketing planning, social economic consulting services, information technology Consulting services, corporate credit management consulting services, bill information consulting services, project management services; financial leasing business; leasing business; purchasing leased properties at home and abroad; residual value processing and maintenance of leased properties; leasing transaction consulting and guarantees; leasing-related technology development, technical consulting, technical services, and technology transfer.

The company's main products include: engines and accessories; general gasoline engines, tillers, lawn mowers, water pump units, gasoline generator sets and other complete machines and parts; motorcycle parts, general machinery parts, automobile parts, large agricultural machinery parts, lithium energy storage equipment and accessories, lithium-ion batteries and accessories, electronic components, and battery control systems.

This financial statement has been approved for external reporting by the company at the eighth meeting of the 12th board of directors on August 27, 2026.

Scope of consolidated financial statements for the year

As of June 30, 2026, the subsidiaries within the scope of the company’s consolidated financial statements are as follows:

Subsidiary name

Chongqing Zongshen Engine Manufacturing Co., Ltd.

Zongshen Vietnam Engine Technology Co., Ltd.

Chongqing Ruixinda Power Machinery Co., Ltd.

Chongqing Zongshen General Power Machinery Co., Ltd.

Chongqing Benoda Import and Export Trading Co., Ltd.

Zongshen Vietnam General Power Machinery Co., Ltd.

Chongqing Tuoyuan Power Machinery Co., Ltd.

Chongqing Liangjiang New Area Zongshen Small Loan Co., Ltd.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Shenzhen Qianhai Zongshen Asset Management Co., Ltd.

Chongqing Qijiang District Qihui Machinery Manufacturing Co., Ltd.

Yibin Jiawang Real Estate Co., Ltd.

Chongqing Zongshen Commercial Factoring Co., Ltd.

Chongqing Chenyu Technology Co., Ltd.

Chongqing Zongshen Aero Engine Manufacturing Co., Ltd.

Chongqing Small and Medium-sized Aviation Power Research Institute Co., Ltd.

Chongqing Chenguang Aviation Technology Co., Ltd.

Chongqing Zongshen New Energy Development Co., Ltd.

Chongqing Zongshen Hydrogen Energy Power Technology Co., Ltd.

Chongqing Zongshen Jiyan Mechanical and Electrical Technology Co., Ltd.

Chongqing Zongshen Continuously Variable Transmission Co., Ltd.

Chongqing Zongshen Electric Power Technology Co., Ltd.

Chongqing Zongshen Financial Leasing Co., Ltd.

Chongqing Dajiang Power Equipment Manufacturing Co., Ltd.

DUCAR TECHNOLOGY CO., LTD.

Chongqing Dukashenrui International Trade Co., Ltd.

Chengdu Zongshen Machinery Parts Manufacturing Co., Ltd.

Dongguan Lithium Smart Energy Co., Ltd.

Shenzhen Lithium Valley Technology Co., Ltd.

Jiangsu Haibode Energy Technology Co., Ltd.

splemet gmbh

Zongshen German Lithium Intelligence Co., Ltd.

Lithium Smart Energy Vietnam Co., Ltd.

Note: The company has a total of 32 subsidiaries included in the scope of consolidation from January to June 2026. For details, please see Section 8 Financial Report, 10. Equity in other entities. This period combines

The scope of consolidation increased by 1 compared with the previous year. For details, please refer to Section 8 Financial Report, 9. Changes in the scope of consolidation.

4. Basis for preparation of financial statements

Basics of preparation

The company's financial statements are based on the going concern assumption, based on actual transactions and events, and in accordance with the "Accounting Standards for Business Enterprises - Basic" promulgated by the Ministry of Finance.

Standards" and specific Accounting Standards for Business Enterprises, Application Guidelines for Accounting Standards for Business Enterprises, Interpretations of Accounting Standards for Business Enterprises and other relevant regulations (hereinafter collectively referred to as "Accounting Standards for Business Enterprises")

Confirmation and measurement are carried out, and on this basis, combined with the China Securities Regulatory Commission's "Information Disclosure and Preparation Rules for Companies that Issue Securities to the Public No. 15 - Financial

Financial statements are prepared in accordance with the General Provisions on Reporting.

Continued operations

Based on the information currently available to the company, comprehensive consideration will be given to macro policy risks, market operating risks, the company’s current or long-term profitability, solvency, and financial resources.

Source support and other factors, the company believes that there are no matters or circumstances that would cast significant doubt on the company's ability to continue operating in the next 12 months, and it is prepared on a going concern basis.

The financial statements are sound.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

5. Important accounting policies and accounting estimates

Important note: The Company has formulated specific accounting policies and accounting estimates based on the actual production and operation characteristics for transactions or matters such as impairment of financial instruments, inventory, depreciation of fixed assets, construction in progress, intangible assets, revenue recognition, etc.

Statement on compliance with corporate accounting standards

The financial statements prepared by the company comply with the requirements of the Accounting Standards for Business Enterprises and truly and completely reflect the company's financial status, operating results, cash flow and other relevant information.

Accounting period

The fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.

Business cycle

The company's operating business has a short operating cycle, and 12 months is used as the liquidity classification standard for assets and liabilities.

Accounting standard currency

The Company and its domestic subsidiaries use RMB as their accounting standard currency. Overseas subsidiaries such as Zongshen Vietnam General Power Machinery Co., Ltd. and DUCAR Technology Co., Ltd. engage in overseas operations and choose the currency in the main economic environment in which they operate as their accounting standard currency.

Determination method and selection basis of importance standards

The company prepares and discloses financial statements in compliance with the principle of materiality. The matters disclosed in this financial statement involve the judgment of materiality standards and the determination methods and selection basis of the materiality standards are as follows:

Disclosure matters involving the judgment of materiality standards. The method for determining the materiality standards and the selection of accounts receivable based on important individual items for bad debt provision. The individual amount exceeds 0.3% of total assets.

The bad debt provision for important accounts receivable is recovered or reversed. The individual amount exceeds 0.3% of total assets.

Important other receivables for which bad debt provisions are individually provided The individual amount exceeds 0.3% of total assets

Important overdue interest receivable: individual amount exceeds 0.1% of total assets

Important dividends receivable aged more than 1 year, the individual amount exceeds 0.1% of total assets

Important prepayments aged more than 1 year. The individual amount exceeds 0.3% of total assets.

Important construction projects in progress The total investment in a single project exceeds 0.3% of the total assets Important accounts payable with an age exceeding 1 year The individual amount exceeds 0.3% of the total assets

Important other payables aged more than 1 year. The individual amount exceeds 0.3% of total assets.

Important advance receipts aged more than 1 year. The individual amount exceeds 0.3% of the total assets.

Important contract liabilities aged more than 1 year, the individual amount exceeds 0.3% of total assets

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Important estimated liabilities: individual amount exceeds 0.3% of total assets

Important cash flows from investing activities: The amount of a single item exceeds 3% of total assets

Major investment and financing activities that do not involve cash receipts and payments. The amount of a single item exceeds 3% of total assets.

Important overseas operating entities whose total profits exceed 10% of the group’s total profits

The individual amount of important capitalized R&D projects and outsourced R&D projects exceeds 0.3% of the total operating income.

Important non-wholly owned subsidiaries whose total assets exceed 8% of the group's total assets or whose total profits exceed 10% of the group's total profits important joint ventures and associates whose investment income calculated using the individual equity method exceeds 10% of the group's total profits

Important commitment matters: The amount of a single item exceeds 0.3% of total assets

Important contingencies: The amount of a single item exceeds 0.1% of total assets

Important post-balance sheet events The amount of a single item exceeds 0.5% of total assets

Accounting treatment methods for business combinations under the same control and those not under the same control

(1) Accounting treatment for business combinations under common control

The assets and liabilities acquired by the company in a business merger are measured according to the book value of the merged party in the consolidated financial statements of the ultimate controlling party on the merger date. The company adjusts the capital reserve based on the difference between the book value share of the owner's equity of the merged party in the final controlling party's consolidated financial statements and the book value of the merger consideration paid or the total face value of the shares issued; if the capital reserve is insufficient for offset, the company adjusts the retained earnings.

(2) Accounting treatment for business combinations not under common control

On the acquisition date, the company recognizes the difference between the merger cost and the fair value share of the acquiree's identifiable net assets acquired in the merger as goodwill; if the merger cost is less than the fair value share of the acquiree's identifiable net assets acquired in the merger, the difference is first recognized as goodwill. The fair value of the acquiree's identifiable assets, liabilities and contingent liabilities and the measurement of merger costs are reviewed. After review, if the merger cost is still less than the fair value share of the acquiree's identifiable net assets obtained in the merger, the difference is included in the current profit and loss.

Judgment standards for control and preparation methods of consolidated financial statements

(1) Judgment of control

If it has power over the investee, enjoys variable returns by participating in the relevant activities of the investee, and has the ability to use its power over the investee to affect the amount of its variable returns, it is deemed to be control.

(2) Preparation method of consolidated financial statements

The parent company includes all subsidiaries it controls in the consolidated financial statements. The consolidated financial statements are based on the financial statements of the parent company and its subsidiaries, and based on other relevant information, are prepared by the parent company in accordance with the "Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements".

Classification of joint arrangements and accounting treatment methods for joint operations

(1) Joint arrangements are divided into joint operations and joint ventures.

(2) When the company is a joint venture partner, the following items related to the interest share in the joint operation are recognized:

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Confirm individually held assets, and confirm jointly held assets based on holding shares;
Recognize liabilities borne individually and liabilities borne jointly based on holding shares;
Recognize the income generated from the sale of the company’s share of joint operating output;
The income generated by the joint operation from the sale of assets is recognized based on the company’s share;
Recognize the expenses incurred individually, and recognize the expenses incurred by joint operations based on the company’s share.

Determination standards for cash and cash equivalents

The cash shown in the cash flow statement refers to cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments held by an enterprise that are short-term, highly liquid, easily convertible into known amounts of cash, and have little risk of value changes.

Foreign currency business and foreign currency statement conversion

(1) Foreign currency business conversion

When foreign currency transactions are initially recognized, they are converted into RMB amounts using the spot exchange rate on the date of the transaction. On the balance sheet date, foreign currency monetary items are translated using the spot exchange rate on the balance sheet date. The exchange differences arising from different exchange rates, except for the exchange differences on the principal and interest of special foreign currency borrowings related to the acquisition and construction of assets that qualify for capitalization, are included in the current profits and losses; historical costs are used. Foreign currency non-monetary items measured at this time are still translated using the spot exchange rate on the date of the transaction, and their RMB amounts do not change; foreign currency non-monetary items measured at fair value are translated using the spot exchange rate on the date the fair value is determined, and the difference is included in the current profit and loss or other comprehensive income.

(2) Conversion of foreign currency financial statements

Assets and liability items in the balance sheet are translated using the spot exchange rate on the balance sheet date; owners' equity items, except for "undistributed profits" items, are translated using the spot exchange rate on the date of the transaction; income and expense items in the income statement are translated using the approximate exchange rate of the spot exchange rate on the date of the transaction. The translation difference of foreign currency financial statements arising from the above translation shall be included in other comprehensive income.

Financial instruments

(1) Classification of financial assets and financial liabilities

Financial assets are divided into the following three categories upon initial recognition: 1) Financial assets measured at amortized cost; 2) Financial assets measured at fair value with changes included in other comprehensive income; 3) Financial assets measured at fair value with changes included in current profits and losses.

Financial liabilities are divided into the following four categories upon initial recognition: 1) Financial liabilities measured at fair value and whose changes are included in current profits and losses; 2) Financial liabilities formed when the transfer of financial assets does not meet the conditions for derecognition or continued involvement in the transferred financial assets; 3) Financial guarantee contracts that do not belong to the above 1) or 2), and loan commitments that do not belong to the above 1) and provide loans at lower than market interest rates; 4) Financial liabilities measured at amortized cost.

(2) Recognition basis, measurement method and derecognition conditions of financial assets and financial liabilities

Recognition basis and initial measurement method of financial assets and financial liabilities

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

When a company becomes a party to a financial instrument contract, it recognizes a financial asset or financial liability. When initially recognizing financial assets or financial liabilities, they are measured at fair value; for financial assets and financial liabilities measured at fair value and whose changes are included in current profits and losses, relevant transaction costs are directly included in current profits and losses; for other types of financial assets or financial liabilities, relevant transaction costs are included in the initial recognition amount. However, if the company's initial recognition of accounts receivable does not contain a significant financing component or the company does not consider the financing component in a contract that does not exceed one year, the initial measurement will be based on the transaction price defined in "Accounting Standards for Business Enterprises No. 14 - Revenue".

Subsequent measurement method of financial assets

① Financial assets measured at amortized cost

The actual interest rate method is adopted and subsequent measurement is carried out based on amortized cost. Gains or losses arising from financial assets that are measured at amortized cost and are not part of any hedging relationship are included in the current profit and loss when derecognized, reclassified, amortized according to the effective interest method, or impairment is recognized.

② Debt instrument investments measured at fair value and changes included in other comprehensive income

Fair value is used for subsequent measurement. Interest, impairment losses or gains and exchange gains and losses calculated using the effective interest rate method are included in the current profit and loss, and other gains or losses are included in other comprehensive income. When derecognition is terminated, the accumulated gains or losses previously included in other comprehensive income will be transferred out of other comprehensive income and included in the current profit and loss.

③ Equity instrument investments measured at fair value and changes included in other comprehensive income

Fair value is used for subsequent measurement. Dividends received (except for the recovery part of investment costs) are included in the current profits and losses, and other gains or losses are included in other comprehensive income. Upon derecognition, the accumulated gains or losses previously included in other comprehensive income will be transferred out of other comprehensive income and included in retained earnings.

④Financial assets measured at fair value and changes included in current profits and losses

Subsequent measurement is carried out at fair value, and the resulting gains or losses (including interest and dividend income) are included in the current profits and losses, unless the financial asset is part of a hedging relationship.

Subsequent measurement method of financial liabilities

①Financial liabilities measured at fair value and changes included in current profits and losses

Such financial liabilities include trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities designated as measured at fair value with changes included in current profits and losses. Such financial liabilities are subsequently measured at fair value. The amount of changes in the fair value of financial liabilities designated as at fair value through profit or loss due to changes in the company's own credit risk is included in other comprehensive income, unless such treatment would cause or expand accounting mismatches in profit or loss. Other gains or losses arising from such financial liabilities (including interest expenses, excluding changes in fair value caused by changes in the company's own credit risk) are included in the current profits and losses, unless the financial liabilities are part of a hedging relationship. Upon derecognition, the accumulated gains or losses previously included in other comprehensive income will be transferred out of other comprehensive income and included in retained earnings.

② Financial liabilities arising from the transfer of financial assets that do not meet the conditions for derecognition or continued involvement in the transferred financial assets

Measurement shall be carried out in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets".

③Financial guarantee contracts that do not belong to the above ① or ②, and loan commitments that do not belong to the above ① and provide loans at lower than market interest rates

After initial recognition, subsequent measurement shall be carried out according to the higher of the following two amounts: the amount of loss provision determined in accordance with the impairment regulations of financial instruments; the balance after the initial recognition amount deducts the accumulated amortization amount determined in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 14 - Revenue".

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④ Financial liabilities measured at amortized cost

Measured at amortized cost using the effective interest method. Gains or losses arising from financial liabilities that are measured at amortized cost and are not part of any hedging relationship are included in the current profits and losses when they are derecognized and amortized according to the effective interest method.

Derecognition of financial assets and financial liabilities

① When one of the following conditions is met, the recognition of financial assets will be terminated:

A. The contractual right to receive cash flows from financial assets has terminated;

B. The financial assets have been transferred, and the transfer meets the provisions of "Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets" regarding the derecognition of financial assets. ② When the current obligation of a financial liability (or part thereof) has been discharged, the recognition of the financial liability (or part thereof) shall be terminated accordingly.

(3) Recognition basis and measurement method of financial asset transfer

If the company transfers almost all the risks and rewards of ownership of a financial asset, it shall terminate the recognition of the financial asset, and separately recognize the rights and obligations arising or retained in the transfer as assets or liabilities; if it retains almost all the risks and rewards of ownership of the financial asset, it shall continue to recognize the transferred financial assets. If the company neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, the following situations will apply: 1) If it does not retain control over the financial asset, the financial asset will be derecognised, and the rights and obligations arising or retained in the transfer will be separately recognized as assets or liabilities; 2) If it retains control over the financial asset, the relevant financial assets will be recognized to the extent of its continued involvement in the transferred financial assets, and the relevant liabilities will be recognized accordingly.

If the overall transfer of a financial asset meets the conditions for derecognition, the difference between the following two amounts will be included in the current profit and loss: 1) The book value of the transferred financial asset on the date of derecognition; 2) The sum of the consideration received for the transfer of the financial asset and the amount corresponding to the derecognition part of the cumulative amount of changes in fair value that was originally directly included in other comprehensive income (the financial assets involved are debt instrument investments measured at fair value and their changes are included in other comprehensive income). If a part of a financial asset is transferred, and the transferred part as a whole meets the conditions for derecognition, the entire book value of the financial asset before transfer will be apportioned between the derecognized part and the continued recognition part according to their respective relative fair values on the date of transfer, and the difference between the following two amounts shall be included in the current profit and loss: 1) The book value of the derecognized part;

The sum of the consideration for the derecognized part and the amount corresponding to the derecognized part of the cumulative amount of changes in fair value that was originally directly included in other comprehensive income (the financial assets involved in the transfer are debt instrument investments measured at fair value and whose changes are included in other comprehensive income).

(4) Determination method of fair value of financial assets and financial liabilities

The company determines the fair value of relevant financial assets and financial liabilities using valuation techniques that are applicable under the current circumstances and supported by sufficient available data and other information. The company divides the input values used in the valuation technology into the following levels and uses them in sequence:

The first level input value is the unadjusted quoted price in the active market for the same asset or liability that can be obtained on the measurement date;
The second level input value is the directly or indirectly observable input value of the relevant assets or liabilities in addition to the first level input value, including: quotations of similar assets or liabilities in active markets; quotations of the same or similar assets or liabilities in inactive markets; other observable input values other than quotations, such as interest rates and yield curves that are observable during normal quotation intervals; market verification input values, etc.;
The third level input value is the unobservable input value of the relevant assets or liabilities, including interest rates that cannot be directly observed or cannot be verified by observable market data, stock volatility, future cash flows of abandonment obligations assumed in business combinations, financial forecasts made using its own data, etc.

(5) Impairment of financial instruments

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Based on expected credit losses, the company calculates financial assets measured at amortized cost, debt instrument investments measured at fair value with changes included in other comprehensive income, contract assets, lease receivables, and financial liabilities classified as measured at fair value with changes included in current profits and losses. Other than loan commitments, financial liabilities that are not measured at fair value through profit or loss for the current period, or financial guarantee contracts that are not financial liabilities arising from the transfer of financial assets that do not meet the conditions for derecognition or continue to be involved in the transferred financial assets, they are subject to impairment treatment and loss provisions are recognized.

Expected credit losses refer to the weighted average of the credit losses of financial instruments with the risk of default as the weight. Credit loss refers to the difference between all contractual cash flows receivable under the contract and all cash flows expected to be received by the company, discounted at the original effective interest rate, that is, the present value of all cash shortfalls. Among them, credit-impaired financial assets purchased or originated by the company are discounted according to the credit-adjusted actual interest rate of the financial assets.

For purchased or originated financial assets that have suffered credit impairment, the company will only recognize the cumulative change in expected credit losses during the entire duration since initial recognition as loss provisions on the balance sheet date.

For lease receivables, receivables and contract assets formed by transactions regulated by "Accounting Standards for Business Enterprises No. 14 - Revenue", the company uses simplified measurement methods and measures loss provisions based on an amount equivalent to the expected credit losses during the entire duration.

For financial assets other than the above measurement methods, the company evaluates at each balance sheet date whether its credit risk has increased significantly since initial recognition. If the credit risk has increased significantly since the initial recognition, the company will measure the loss provision based on the amount of expected credit losses during the entire duration; if the credit risk has not increased significantly since the initial recognition, the company will measure the loss provisions based on the amount of expected credit losses of the financial instrument in the next 12 months.

The Company uses reasonable and evidence-based information available, including forward-looking information, to determine whether the credit risk of a financial instrument has increased significantly since initial recognition by comparing the risk of default on the financial instrument on the balance sheet date with the risk of default on the initial recognition date.

On the balance sheet date, if the company determines that a financial instrument has only low credit risk, it is assumed that the credit risk of the financial instrument has not increased significantly since initial recognition.

The company assesses expected credit risk and measures expected credit losses on the basis of a single financial instrument or a combination of financial instruments. When based on a portfolio of financial instruments, the company divides financial instruments into different portfolios based on common risk characteristics.

The company remeasures expected credit losses on each balance sheet date, and the resulting increase or reversal of loss provisions is included in the current profit and loss as impairment losses or gains. For financial assets measured at amortized cost, the loss provision is deducted from the book value of the financial asset listed in the balance sheet; for debt investments measured at fair value with changes included in other comprehensive income, the company recognizes its loss provision in other comprehensive income and does not deduct the book value of the financial asset.

(6) Offset of financial assets and financial liabilities

Financial assets and financial liabilities are presented separately in the balance sheet and do not offset each other. However, if the following conditions are met at the same time, the company will present the net amount after offsetting each other in the balance sheet: 1) The company has the legal right to offset the recognized amount, and the legal right is currently enforceable; 2) The company plans to settle on a net basis, or realize the financial assets and pay off the financial liabilities at the same time.

For transfers of financial assets that do not meet the conditions for derecognition, the company will not offset the transferred financial assets and related liabilities.

Recognition standards and accrual methods for expected credit losses on accounts receivable and contract assets

(1) Accounts receivable and contract assets for which expected credit losses are accrued based on combinations of credit risk characteristics

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Portfolio category Basis for determining portfolio Method for measuring expected credit losses

Bank acceptance bills receivable Note type No provision for bad debts is made with reference to historical credit loss experience

According to the credit risk classification of the acceptor, it should be

Commercial Acceptance Bills Receivable See Accounts Receivable for details

The combination of "Account Collection" is divided into the same

Referring to the historical credit loss experience, combined with the current situation and the forecast of the economic status of unsecured accounts receivable - no collateral or no This portfolio uses the overdue days of accounts receivable as the credit economic status, prepare a comparison table between the overdue days of accounts receivable and the risk characteristics of the entire credit insurance portfolio, and calculate the expected credit losses.

This portfolio calculates accounts receivable based on the overdue days of accounts receivable and considers guarantees. Accounts receivable are first calculated according to the accrual method of no collateral or no credit guarantee portfolio - with collateral or with guarantee.

The risk exposure of the collateral or credit insurance is calculated as a special credit risk, and then the calculation result is combined with the expected receivable credit insurance combination of the collateral or credit insurance claims.

Compare the present value of the tax recovery amount to calculate expected credit losses. Accounts receivable of companies within the scope of consolidation. Accounts receivable of companies within the scope of consolidation have similar comparisons.

Do not calculate expected credit losses

Corporate Portfolio Low Credit Risk Characteristics

Refer to historical credit loss experience, combined with current conditions and future

Forecast of future economic conditions, through default risk exposure and other receivables in the next 12 years - aging portfolio Aging

Expected credit loss rate within a month or entire duration, calculate expected

credit loss

Other receivables - within the scope of consolidation Other receivables of the company within the scope of consolidation have similar

Do not calculate expected credit losses

Portfolio of companies Lower credit risk characteristics

Referring to the historical credit loss experience, combined with the current situation and the forecast of the economic status of uncontracted assets - no collateral or no This portfolio uses the accounts receivable corresponding to the contract asset customers, prepares a comparison table of the number of overdue days of accounts receivable and the number of overdue days of the entire credit insurance portfolio as the credit risk characteristics, and calculates the expected credit losses.

This portfolio uses the accounts receivable corresponding to the contract asset customers. The contract assets are first calculated according to the accrual method of the unsecured or uncredited portfolio - with collateral or with

Calculate the number of overdue days and consider the risk of the collateral or credit insurance, and then combine the calculation results with the expected receivable credit insurance portfolio of the collateral or credit insurance claims

Exposure as a credit risk characteristic. Compare the present value of the return amount to calculate the expected credit loss. Contract assets - the company within the scope of consolidation. The contract assets of the company within the scope of consolidation have similar comparisons.

Do not calculate expected credit losses

Corporate Portfolio Low Credit Risk Characteristics

Long-term receivables - non-consolidation scope The company chooses to use the simplified measurement method, based on the equivalent of the entire

Simplified measurement methods

Group of companies within the scope The amount of expected credit losses during the duration Measurement of loss provisions Long-term receivables - within the scope of consolidation The long-term receivables of companies within the scope of consolidation have similar characteristics

No provision for credit impairment losses

Portfolio of companies Lower credit risk characteristics

(2) Comparison table between the number of days overdue for accounts receivable and the expected credit loss rate throughout the duration

Number of days past due Expected credit loss rate (%)

Not overdue 5

Overdue 1-30 days (inclusive) 6

Overdue 31-90 days (inclusive) 8

Overdue for 91 days or more 20

(3) Comparison table of aging portfolio and expected credit loss rate

Aging Expected credit loss rate of other receivables (%)

Within 1 year (inclusive, the same below) 5

1-2 years 10

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Aging Expected credit loss rate of other receivables (%) 2-3 years 20

3-4 years 40

4-5 years 80

More than 5 years 100

(4) Recognition standards for accounts receivable and contract assets for which expected credit losses are to be provided individually

For receivables and contract assets whose credit risk is significantly different from the combined credit risk, the company accrues expected credit losses on an individual basis.

Inventory

(1) Classification of inventory

Inventories include finished products or commodities held for sale in daily activities, work-in-progress in the production process, materials and supplies consumed in the production process or in the process of providing services, etc.

(2) Valuation method for issued inventory

Inventories are issued using the weighted average method at the end of the month.

(3) Inventory inventory system

The inventory system of inventories is the perpetual inventory system.

(4) Amortization method for low-value consumables and packaging materials

Low value consumables

Amortization is carried out according to the one-time write-off method.

Packaging

Amortization is carried out according to the one-time write-off method.

(5) Provision for inventory decline

Recognition standards and accrual methods for inventory depreciation provisions

On the balance sheet date, inventories are measured at the lower of cost and net realizable value, and inventory depreciation provisions are made based on the difference between cost and net realizable value. For inventories that are directly used for sale, the net realizable value is determined by the estimated selling price of the inventory minus the estimated sales expenses and related taxes in the normal production and operation process; for inventories that need to be processed, the estimated selling price of the finished products produced during the normal production and operation process is deducted by the estimated costs to be incurred upon completion. The amount after the estimated sales expenses and related taxes is determined to determine its net realizable value; on the balance sheet date, if part of the same inventory has a contract price and other parts do not have a contract price, its net realizable value is determined separately and compared with its corresponding cost to determine the amount of provision or reversal of inventory depreciation provisions.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Classification into non-current assets or disposal groups held for sale, discontinuation of operations

(1) Classification of non-current assets or disposal groups held for sale

The company classifies non-current assets or disposal groups that meet the following conditions into the category held for sale: 1) According to the practice of selling such assets or disposal groups in similar transactions, they can be sold immediately under the current conditions; 2) The sale is very likely to occur, that is, the company has made a resolution on the sale plan and obtained a firm purchase commitment, and the sale is expected to be completed within one year.

If the non-current assets or disposal groups acquired by the company specifically for resale meet the condition of "the sale is expected to be completed within one year" on the acquisition date, and are likely to meet other classification conditions for the held-for-sale category in the short term (usually 3 months), they will be classified as held-for-sale category on the acquisition date.

If a transaction between unrelated parties fails to be completed within one year due to one of the following reasons beyond the control of the company, and the company is still committed to selling non-current assets or disposal groups, the non-current assets or disposal groups will continue to be classified as held for sale: 1) The buyer or other party unexpectedly sets conditions that lead to the postponement of the sale, and the company has taken timely action on these conditions, and it is expected to be able to successfully resolve the delay factors within one year from the setting of the conditions that lead to the postponement of the sale; 2) Due to rare circumstances, the sale of non-current assets or disposal groups held for sale failed to be completed within one year. The company has taken necessary measures in response to these new circumstances within the first year and has re-satisfied the conditions for classification into the held-for-sale category.

(2) Accounting treatment of non-current assets or disposal groups held for sale

Initial measurement and subsequent measurement

During initial measurement and re-measurement on the balance sheet date of non-current assets or disposal groups held for sale, if their book value is higher than the net amount of fair value minus selling expenses, the book value will be written down to the net amount of fair value minus selling expenses. The amount of the write-down is recognized as an asset impairment loss and included in the current profit and loss, and an impairment provision for assets held for sale is made at the same time.

For non-current assets or disposal groups that are classified as held for sale on the acquisition date, at the time of initial measurement, the initial measurement amount and the net amount of fair value minus selling expenses are compared assuming that they are not classified as held for sale, and the lower of the two is measured. Except for non-current assets or disposal groups acquired in business combinations, the difference arising from the initial measurement amount of non-current assets or disposal groups based on their fair value minus selling expenses shall be included in the current profit and loss.

For the amount of asset impairment loss recognized by a disposal group held for sale, the book value of the goodwill in the disposal group is first deducted, and then the book value is deducted proportionally based on the proportion of the book value of each non-current asset in the disposal group.

No depreciation or amortization is provided for non-current assets held for sale or non-current assets in the disposal group, and interest and other expenses on liabilities in the disposal group held for sale continue to be recognized.

Accounting treatment for reversal of asset impairment losses

If the net amount of the fair value of non-current assets held for sale less selling expenses increases on the subsequent balance sheet date, the amount previously written down will be restored and reversed within the amount of asset impairment losses recognized after being classified as held for sale, and the reversed amount will be included in the current profit and loss. Impairment losses on assets recognized before they are classified as held for sale are not reversed.

If the net amount of the fair value of the disposal group held for sale less selling expenses increases on the subsequent balance sheet date, the previously written-down amount will be restored and reversed within the amount of asset impairment losses recognized after the non-current assets were classified as held-for-sale, and the reversed amount will be included in the current profit and loss. The book value of goodwill that has been deducted and the asset impairment losses recognized before non-current assets are classified as held for sale are not reversed.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The subsequent reversal amount of asset impairment losses recognized by the disposal group held for sale will increase its book value in proportion according to the proportion of the book value of various non-current assets in the disposal group except goodwill.

The accounting treatment of no longer being classified as held for sale and derecognition

When a non-current asset or disposal group is no longer classified as a held-for-sale category because it no longer meets the conditions for classification as a held-for-sale category or when a non-current asset is removed from a held-for-sale disposal group, it is measured according to the lower of the following two: ① The book value before being classified as a held-for-sale category, adjusted for the depreciation, amortization or impairment that would have been recognized if it was not classified as a held-for-sale category; ② The recoverable amount.

When non-current assets or disposal groups held for sale are derecognised, the unrecognized gains or losses will be included in the current profits and losses.

(3) Confirmation criteria for terminating operations

Components that meet one of the following conditions, have been disposed of or classified as held for sale and can be individually distinguished are recognized as discontinued operations:

The component represents an independent major business or a separate major operating area;
The component is part of an associated plan to dispose of a separate major business or a separate major operating area;
The component is a subsidiary acquired exclusively for resale.

(4) Presentation method of discontinued operations

The company separately lists profits and losses from continuing operations and profits and losses from discontinued operations in the income statement. Impairment losses and reversal amounts from discontinued operations and other operating gains and losses as well as disposal gains and losses are presented as gains and losses from discontinued operations. For discontinued operations reported in the current period, the information originally presented as profits and losses from continuing operations will be re-presented as profits and losses from discontinued operations in the comparable period in the financial statements for the current period. If the discontinued operations no longer meet the conditions for classification into the held-for-sale category, the information originally presented as profits and losses from discontinued operations will be re-presented as profits and losses from continuing operations for the comparable period in the current financial statements.

Long-term equity investment

(1) Judgment of joint control and significant influence

If there is shared control over an arrangement in accordance with the relevant agreement, and the relevant activities of the arrangement must be decided with the unanimous consent of the parties sharing control rights, it is deemed to be joint control. Having the power to participate in decision-making on the financial and operating policies of the investee, but not being able to control or jointly control the formulation of these policies with other parties, is deemed to have significant influence.

(2) Determination of investment cost

Formed by a merger of enterprises under common control, if the merging party pays cash, transfers non-cash assets, assumes debts or issues equity securities as the merger consideration, the initial investment cost shall be the share of the book value of the owner's equity of the merged party in the consolidated financial statements of the ultimate controlling party on the merger date. The difference between the initial investment cost of the long-term equity investment and the book value of the merger consideration paid or the total face value of the shares issued is adjusted to the capital reserve; if the capital reserve is insufficient for offset, the retained earnings are adjusted.

The company realizes the long-term equity investment formed by the merger of enterprises under the same control step by step through multiple transactions to determine whether it is a "package transaction". If it belongs to a "package transaction", each transaction shall be accounted for as a transaction that obtains control. If it does not belong to a "package deal", on the merger date, the initial investment cost will be determined based on the share of the book value of the combined party's net assets in the ultimate controlling party's consolidated financial statements that should be enjoyed after the merger. Initial investment of long-term equity investment on merger date

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The difference between the capital cost and the book value of the long-term equity investment before the merger plus the book value of the new consideration for further acquisition of shares on the merger date is adjusted to the capital reserve; if the capital reserve is insufficient for offset, the retained earnings are adjusted.

If it is formed by a business combination not under the same control, the fair value of the merger consideration paid on the purchase date shall be used as its initial investment cost.

The company realizes the long-term equity investment formed by the merger of enterprises not under common control step by step through multiple transactions, and distinguishes individual financial statements and consolidated financial statements for relevant accounting treatment:

① In individual financial statements, the sum of the book value of the original equity investment plus the new investment cost is regarded as the initial investment cost calculated according to the cost method.

② In the consolidated financial statements, determine whether it is a "package deal". If it belongs to a "package transaction", each transaction shall be accounted for as a transaction that obtains control. If it does not belong to a "package transaction", the equity of the purchased party held before the purchase date will be remeasured according to the fair value of the equity on the purchase date, and the difference between the fair value and its book value will be included in the investment income of the current period; if the equity of the purchased party held before the purchase date involves other comprehensive income under equity method accounting, the other comprehensive income related to it will be converted into the current period income on the purchase date. However, other comprehensive income arising from changes in the net liabilities or net assets of the defined benefit plan due to the remeasurement of the investee is excluded.

Except for business mergers: if it is obtained by paying cash, the actual purchase price paid will be used as its initial investment cost; if it is obtained by issuing equity securities, its initial investment cost will be based on the fair value of the equity securities issued; if it is obtained by debt restructuring, its initial investment cost will be determined according to "Accounting Standards for Business Enterprises No. 12 - Debt Restructuring"; if it is obtained by exchanging non-monetary assets, its initial investment cost will be determined according to "Accounting Standards for Business Enterprises No. 7 - Exchange of Non-monetary Assets".

(3) Subsequent measurement and profit and loss recognition methods

Long-term equity investments that control the invested unit are accounted for using the cost method; long-term equity investments in associates and joint ventures are accounted for using the equity method. (4) Methods of disposing of investment in subsidiaries step by step through multiple transactions until loss of control

Principles for judging whether it is a “package deal”

If the equity investment in a subsidiary is disposed of in stages through multiple transactions until it loses control, the company shall determine whether the step-by-step transaction is a "package transaction" based on the transaction agreement terms of each step of the step-by-step transaction, the disposal consideration obtained respectively, the object of the equity sale, the disposal method, the time of disposal, and other information. If the terms, conditions and economic impact of each transaction meet one or more of the following conditions, it usually indicates that multiple transactions are a "package deal":

① These transactions are entered into at the same time or with consideration of mutual effects;

② Only these transactions as a whole can achieve a complete business result;

③ The occurrence of one transaction depends on the occurrence of at least one other transaction;

④A transaction is uneconomical when viewed alone, but it is economical when considered together with other transactions.

Accounting treatment that does not belong to “package deal”

① Individual financial statements

For the equity disposed of, the difference between its book value and the actual price obtained shall be included in the current profit and loss. For the remaining equity, if it still has a significant influence on the invested unit or exercises joint control with other parties, it will be converted to equity method accounting; if it can no longer exercise control, joint control or significant influence on the invested unit, it will be calculated according to the equity method.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Accounting is carried out in accordance with the relevant provisions of "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments".

②Consolidated financial statements

Before the loss of control, the difference between the disposal price and the share of the subsidiary's net assets corresponding to the disposal of the long-term equity investment continuously calculated from the date of purchase or merger will be adjusted to the capital reserve (capital premium). If the capital premium is insufficient to offset, the retained earnings will be offset.

When control over the atomic company is lost, the remaining equity will be remeasured according to its fair value on the date of loss of control. The difference between the sum of the consideration obtained for disposing of the equity and the fair value of the remaining equity, minus the share of the original subsidiary's net assets calculated continuously from the date of purchase or merger based on the original shareholding ratio, shall be included in the investment income for the period when control is lost, and goodwill shall be offset at the same time. Other comprehensive income related to the equity investment in the original subsidiary shall be converted into investment income for the current period when control is lost.

Accounting treatment for “package transactions”

① Individual financial statements

Each transaction is accounted for as a transaction in which a subsidiary is disposed of and control is lost. However, the difference between the price of each disposal before the loss of control and the book value of the long-term equity investment corresponding to the disposal investment is recognized as other comprehensive income in individual financial statements, and is transferred to the profit and loss of the current period when control is lost.

② Consolidated financial statements

Each transaction is accounted for as a transaction in which a subsidiary is disposed of and control is lost. However, before the loss of control, the difference between the price of each disposal and the share of the subsidiary's net assets corresponding to the disposal investment is recognized as other comprehensive income in the consolidated financial statements, and is transferred to the profits and losses of the current period when the control is lost.

Investment real estate

(1) Investment real estate includes leased land use rights, land use rights held and prepared to be transferred after appreciation, and leased buildings.

(2) Investment real estate is initially measured according to cost, and subsequently measured using the cost model, and depreciation or amortization is calculated using the same methods as fixed assets and intangible assets.

Fixed assets

(1) Recognition conditions for fixed assets

Fixed assets refer to tangible assets held for the production of goods, provision of labor services, leasing or operation and management, and with a useful life of more than one accounting year. Fixed assets are recognized when it is likely that economic benefits will flow in and the cost can be measured reliably.

(2) Depreciation methods for various types of fixed assets

Category Depreciation method Depreciation life (years) Salvage value rate (%) Annual depreciation rate (%) Houses and buildings Average annual method 20-50 3-10 1.80-4.85 General equipment Average annual method 5-20 3-10 4.50-19.40 Special equipment Average method 10-15 3-10 6.00-9.70

Means of transportation Average age method 5-10 3-10 9.00-19.40

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Projects under construction

(1) Projects under construction are recognized when it is likely that economic benefits will flow in and the costs can be measured reliably. Construction in progress is measured based on the actual costs incurred before the asset reaches its intended usable condition.

(2) When the project under construction reaches the intended usable state, it will be transferred to fixed assets according to the actual cost of the project. If the asset has reached its intended usable state but has not yet completed the final settlement, the estimated value will be transferred to fixed assets first. After the final settlement has been processed, the original estimated value will be adjusted based on the actual cost, but the originally accrued depreciation will not be adjusted. Category Standards and timing for transferring construction in progress to fixed assets

After installation and commissioning, the machinery and equipment meet the design requirements or standards stipulated in the contract.

Houses and buildings meet construction completion acceptance standards

Borrowing costs

(1) Recognition principles for capitalization of borrowing costs

If the borrowing costs incurred by the company can be directly attributed to the purchase, construction or production of assets that meet the capitalization conditions, they shall be capitalized and included in the cost of the relevant assets; other borrowing costs shall be recognized as expenses when incurred and included in the current profits and losses.

(2) Capitalization period of borrowing costs

Capitalization begins when borrowing costs meet the following conditions at the same time: ① asset expenditures have occurred; ② borrowing costs have been incurred; ③ the purchase, construction or production activities necessary to bring the asset to its intended usable or salable state have begun.
If an asset that meets the capitalization conditions is abnormally interrupted during the acquisition, construction or production process, and the interruption lasts for more than 3 months, the capitalization of borrowing costs is suspended; the borrowing costs incurred during the interruption are recognized as current expenses until the acquisition, construction or production activities of the asset are restarted.
When the assets purchased, constructed or produced that meet the capitalization conditions reach the intended usable or salable state, the capitalization of borrowing costs will cease.

(3) Capitalization rate and capitalization amount of borrowing costs

If a special loan is borrowed for the purpose of purchasing, constructing or producing assets that meet the capitalization conditions, the interest expense actually incurred on the special loan in the current period (including the amortization of the discount or premium determined according to the actual interest rate method) shall be deducted from the interest income obtained from depositing the unused borrowed funds in the bank or the investment income obtained from temporary investment. The amount of interest that should be capitalized is determined based on the amount after profit; if general borrowings are occupied for the purchase, construction or production of assets that meet the capitalization conditions, the amount of interest that should be capitalized on the general borrowings is calculated and determined based on the weighted average of the cumulative asset expenditures exceeding the special borrowings multiplied by the capitalization rate of the general borrowings occupied.

Intangible assets

(1) Intangible assets include land use rights, patent rights and software, which are initially measured at cost.

(2) Intangible assets with limited service life shall be amortized systematically and reasonably within the service life according to the expected realization method of the economic benefits related to the intangible asset. If the expected realization method cannot be reliably determined, the straight-line method shall be used for amortization. The details are as follows:

Item Useful life and basis for determination Amortization method

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Item Useful life and basis for determination Amortization method

Land use rights 33-50 years, land certificate useful life straight-line method

Software 1-10 years, estimated service life Straight-line method

Patent rights 3-15 years, estimated useful life Straight-line method

(3) Scope of collection of R&D expenditures

Personnel labor costs

Personnel labor expenses include the wages and salaries of the company's R&D personnel, basic pension insurance premiums, basic medical insurance premiums, unemployment insurance premiums, work-related injury insurance premiums, maternity insurance premiums and housing provident funds, as well as labor costs for external R&D personnel.

If R&D personnel serve multiple R&D projects at the same time, the labor costs will be recognized based on the working hours records of R&D personnel for each R&D project provided by the company, and will be allocated proportionally among different R&D projects.

Direct investment costs

Direct investment expenses refer to the actual expenditures incurred by the company to implement research and development activities. Including: ① Direct consumption of materials, fuel and power costs; ② Development and manufacturing costs of molds and process equipment used for intermediate testing and product trial production, purchase fees for samples, prototypes and general testing methods that do not constitute fixed assets, and inspection fees for trial products; ③ Operation and maintenance, adjustment, inspection, detection, repair and other costs of instruments and equipment used for research and development activities.

Depreciation expenses and long-term prepaid expenses

Depreciation expenses refer to the depreciation expenses of instruments, equipment and buildings in use used for research and development activities.

If instruments, equipment, and buildings in use are used for R&D activities and are also used for non-R&D activities, necessary records shall be made of the use of such instruments, equipment, and buildings in use, and the actual depreciation expenses incurred shall be allocated between R&D expenses and production and operating expenses in a reasonable manner based on factors such as actual working hours and usage area. Long-term deferred expenses refer to the long-term deferred expenses incurred during the reconstruction, modification, decoration and repair of R&D facilities. They are collected based on actual expenditures and amortized evenly in installments within the specified period.

Amortization expense of intangible assets

Amortization expenses of intangible assets refer to the amortization expenses of software, intellectual property, non-patented technology (proprietary technology, licenses, design and calculation methods, etc.) used in research and development activities.

Design fee

Design expenses refer to the expenses incurred in conceiving, developing and manufacturing new products and new processes, and designing processes, technical specifications, procedures, operating characteristics, etc., including expenses related to creative design activities to obtain innovative, creative, and breakthrough products.

Commissioned external research and development expenses

Entrusted external research and development expenses refer to the expenses incurred by the company entrusting other institutions or individuals at home and abroad to conduct research and development activities (the results of research and development activities are owned by the company and are closely related to the company's main business).

Other expenses

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Other expenses refer to other expenses directly related to research and development activities in addition to the above expenses, including technical book materials fees, data translation fees, expert consultation fees, high-tech R&D insurance fees, retrieval, demonstration, review, identification, and acceptance fees for R&D results, application fees, registration fees, agency fees for intellectual property rights, conference fees, travel expenses, communication fees, etc.

(4) Expenditures in the research phase of internal research and development projects shall be included in the current profits and losses when incurred. Expenditures in the development phase of internal research and development projects are recognized as intangible assets if they meet the following conditions: 1) It is technically feasible to complete the intangible asset so that it can be used or sold; 2) There is the intention to complete the intangible asset and use or sell it; 3) The way in which the intangible asset generates economic benefits includes being able to prove that there is a market for the products produced using the intangible asset or that the intangible asset itself has a market. If the intangible asset will be used internally, its usefulness can be proven; 4) It has sufficient technical, financial and other resource support to complete the development of the intangible asset and has the ability to use or sell the intangible asset; 5) Expenditures attributable to the development stage of the intangible asset can be measured reliably.

(5) The company’s specific standards for dividing the research phase expenditures and development phase expenditures of internal research and development projects:

The in-company research phase refers to original, planned investigations conducted to acquire and understand new scientific or technical knowledge. The company will clean up the expenditures in the research phase of internal research and development projects at the end of the accounting period. According to the actual situation, the R&D expenditures for contracted projects will be transferred to the production costs of the corresponding projects, and other R&D expenditures will be directly included in the current profit and loss.

The company development stage refers to applying research results or other knowledge to a plan or design to produce new or substantially improved materials, devices, products, etc. before commercial production or use.

Impairment of some long-term assets

For long-term assets such as long-term equity investments, investment properties measured using the cost model, fixed assets, projects under construction, right-of-use assets, intangible assets with limited useful lives, etc., if there are signs of impairment on the balance sheet date, the recoverable amount is estimated. Goodwill and intangible assets with indefinite useful lives formed due to business combinations are subject to impairment testing every year regardless of whether there are signs of impairment. Goodwill is tested for impairment in combination with its related asset groups or combinations of asset groups.

If the recoverable amount of the above-mentioned long-term assets is lower than its book value, the asset impairment provision shall be recognized based on the difference and included in the current profit and loss.

Goodwill is tested for impairment in combination with its related asset groups or combinations of asset groups. The Company conducts a goodwill impairment test and allocates the book value of goodwill formed due to business combinations to the relevant asset groups in a reasonable manner from the date of purchase; if it is difficult to allocate it to the relevant asset groups, it will allocate it to the relevant asset group combinations. When allocating the book value of goodwill to relevant asset groups or asset group combinations, the allocation is based on the proportion of the fair value of each asset group or asset group combination to the total fair value of the relevant asset group or asset group combination. If the fair value is difficult to measure reliably, the fair value shall be apportioned according to the proportion of the book value of each asset group or asset group combination to the total book value of the relevant asset group or asset group combination.

When conducting an impairment test on a relevant asset group or combination of asset groups that contains goodwill, if there are signs of impairment in the asset group or combination of asset groups that are related to goodwill, first conduct an impairment test on the asset group or combination of asset groups that does not contain goodwill, calculate the recoverable amount, and compare it with the relevant book value to confirm the corresponding impairment loss. Then conduct an impairment test on the asset group or asset group combination containing goodwill, and compare the book value of these related asset groups or asset group combinations (including the book value portion of the allocated goodwill) with their recoverable amount. If the recoverable amount of the relevant asset group or asset group combination is lower than its book value, the impairment loss of goodwill is recognized. Once the above-mentioned asset impairment losses are recognized, they will not be reversed in subsequent accounting periods.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Long-term deferred expenses

Long-term deferred expenses are calculated as expenses that have been spent and have an amortization period of more than 1 year (excluding 1 year). Long-term deferred expenses are recorded based on the actual amount incurred, and are amortized evenly over the benefit period or a specified period. If a long-term deferred expense item cannot benefit future accounting periods, all the amortized value of the item that has not yet been amortized will be transferred to the current profit and loss.

Employee compensation

(1) Employee remuneration includes short-term remuneration, post-employment benefits, dismissal benefits and other long-term employee benefits.

(2) Accounting treatment method for short-term compensation

During the accounting period when employees provide services to the company, the actual short-term compensation is recognized as a liability and included in the current profit and loss or related asset costs.

(3) Accounting treatment of post-employment benefits

Post-employment benefits are divided into defined contribution plans and defined benefit plans.

During the accounting period when employees provide services to the company, the deposit amount payable calculated according to the defined contribution plan is recognized as a liability and included in the current profit and loss or related asset costs.
The accounting treatment of defined benefit plans usually includes the following steps:

① Based on the expected cumulative benefit unit method, use unbiased and mutually consistent actuarial assumptions to estimate relevant demographic variables and financial variables, measure the obligations arising from the defined benefit plan, and determine the period to which the relevant obligations belong. At the same time, the obligations arising from the defined benefit plan are discounted to determine the present value of the defined benefit plan obligations and the current service cost;

② If there are assets in the defined benefit plan, the deficit or surplus formed by deducting the present value of the defined benefit plan obligations from the fair value of the defined benefit plan assets is recognized as a net liability or net asset of the defined benefit plan. If a defined benefit plan has a surplus, the net assets of the defined benefit plan shall be measured at the lower of the surplus of the defined benefit plan and the asset upper limit;

③At the end of the period, the employee compensation costs generated by the defined benefit plan are recognized as service costs, net interest on the net liabilities or net assets of the defined benefit plan, and changes caused by remeasurement of the net liabilities or net assets of the defined benefit plan. Among them, service costs and net liabilities or net assets of the defined benefit plan are The net interest on assets is included in the current profit and loss or related asset costs, and the changes resulting from the remeasurement of the net liabilities or net assets of the defined benefit plan are included in other comprehensive income, and are not allowed to be transferred back to profit or loss in subsequent accounting periods, but these amounts recognized in other comprehensive income can be transferred within the scope of equity.

(4) Accounting treatment method for dismissal benefits

For dismissal benefits provided to employees, the employee compensation liabilities arising from the dismissal benefits are recognized and included in the current profit and loss at the earliest of the following two situations: 1) when the company cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor relations plan or layoff proposal; 2) when the company recognizes costs or expenses related to the restructuring involving the payment of dismissal benefits.

(5) Accounting treatment methods for other long-term employee benefits

Other long-term benefits provided to employees that meet the conditions of the defined contribution plan shall be accounted for in accordance with the relevant provisions of the defined contribution plan; other long-term benefits shall be accounted for in accordance with the relevant provisions of the defined benefit plan. In order to simplify the relevant accounting treatment, the employee compensation costs incurred are recognized as service costs.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The total net amount of the service costs, net interest on other long-term employee benefit net liabilities or net assets, and changes resulting from the remeasurement of other long-term employee benefit net liabilities or net assets are included in the current profit and loss or related asset costs.

Estimated liabilities

(1) Obligations resulting from contingencies such as external guarantees, litigation matters, product quality guarantees, loss-making contracts, etc., become current obligations borne by the company. When the performance of this obligation is likely to cause economic benefits to flow out of the company, and the amount of the obligation can be measured reliably, the company will recognize the obligation as an estimated liability.

(2) The company initially measures estimated liabilities based on the best estimate of the expenditure required to fulfill relevant current obligations, and reviews the book value of estimated liabilities on the balance sheet date.

Share-based payment

(1) Types of share-based payment

Including equity-settled share-based payments and cash-settled share-based payments.

(2) Accounting treatments related to the implementation, modification, and termination of share-based payment plans

Equity-settled share-based payment

Equity-settled share-based payments that become exercisable immediately after grant in exchange for employee services will be included in relevant costs or expenses based on the fair value of the equity instrument on the date of grant, and the capital reserve will be adjusted accordingly. For equity-settled share-based payments in exchange for employee services that are vested upon completion of services within the waiting period or upon meeting specified performance conditions, on each balance sheet date during the waiting period, based on the best estimate of the number of exercisable equity instruments and the fair value on the date of grant of the equity instrument, the services obtained in the current period are included in the relevant costs or expenses, and the capital reserve is adjusted accordingly.

For equity-settled share-based payments in exchange for services from other parties, if the fair value of the other party's services can be reliably measured, it will be measured based on the fair value of the other party's services on the date of acquisition; if the fair value of the other party's services cannot be reliably measured, but the fair value of the equity instrument can be measured reliably, it will be measured based on the fair value of the equity instrument on the date of service acquisition, and the relevant costs or expenses will be included, and the owner's equity will be increased accordingly.

Cash-settled share-based payment

Cash-settled share-based payments that are exercisable immediately after grant in exchange for employee services will be included in relevant costs or expenses based on the fair value of the company's liabilities on the date of grant, with corresponding increases in liabilities. For cash-settled share-based payments in exchange for employee services that are vested upon completion of services within the waiting period or upon meeting specified performance conditions, on each balance sheet date during the waiting period, based on the best estimate of the vesting situation and the fair value of the liabilities borne by the company, the services obtained in the current period are included in the relevant costs or expenses and corresponding liabilities.

Modify and terminate share-based payment plan

If the modification increases the fair value of the equity instruments granted, the company will recognize the increase in the services obtained according to the increase in the fair value of the equity instruments; if the modification increases the number of equity instruments granted, the company will recognize the increased fair value of the equity instruments as an increase in the services obtained accordingly; if the company modifies the vesting conditions in a way that is beneficial to employees, the company will consider the modified vesting conditions when processing the vesting conditions.

If the modification reduces the fair value of the equity instruments granted, the company will continue to recognize the amount of services obtained based on the fair value of the equity instruments on the date of grant, regardless of the decrease in the fair value of the equity instruments; if the modification reduces the number of equity instruments granted, the company will treat the reduction as equity work granted.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

If the vesting conditions are modified in a way that is unfavorable to the employee, the modified vesting conditions will not be considered when processing the vesting conditions. If the company cancels the granted equity instruments or settles the granted equity instruments during the waiting period (except for cancellation due to failure to meet vesting conditions), the cancellation or settlement will be treated as accelerated vesting, and the amount originally recognized during the remaining waiting period will be immediately recognized.

Income

(1) Principle of revenue recognition

On the contract commencement date, the company evaluates the contract, identifies each individual performance obligation contained in the contract, and determines whether each individual performance obligation is to be performed within a certain period of time or at a certain point in time.

When one of the following conditions is met, the performance obligation is fulfilled within a certain period of time; otherwise, the performance obligation is fulfilled at a certain point in time: 1) The customer obtains and consumes the economic benefits brought by the company's performance while the company performs the contract; 2) The customer is able to control the goods under construction during the company's performance; 3) The goods produced during the company's performance have irreplaceable uses, and the company has the right to collect payment for the cumulative performance part that has been completed so far during the entire contract period.

For performance obligations performed within a certain period of time, the company recognizes revenue based on the performance progress within that period of time. When the progress of contract performance cannot be reasonably determined, if the costs incurred are expected to be compensated, revenue shall be recognized based on the amount of costs incurred until the progress of contract performance can be reasonably determined. For performance obligations fulfilled at a certain point in time, revenue is recognized at the point when the customer obtains control of the relevant goods or services. When judging whether the customer has obtained control of the goods, the company considers the following signs: 1) The company has a current right to receive payment for the goods, that is, the customer has a current payment obligation for the goods; 2) The company has transferred the legal ownership of the goods to the customer, that is, the customer has legal ownership of the goods; 3) The company has physically transferred the goods to the customer, that is, the customer has physical possession of the goods; 4) The company has transferred the main risks and rewards of ownership of the commodity to the customer, that is, the customer has obtained the main risks and rewards of ownership of the commodity; 5) the customer has accepted the commodity; 6) other indications that the customer has obtained control of the commodity.

(2) Income measurement principles

The company measures revenue based on the transaction price allocated to each individual performance obligation. The transaction price is the amount of consideration that the company expects to be entitled to receive for the transfer of goods or services to the customer, excluding amounts collected on behalf of third parties and amounts expected to be returned to the customer.
If there is variable consideration in the contract, the company determines the best estimate of the variable consideration based on the expected value or the most likely amount, but the transaction price including the variable consideration shall not exceed the amount at which a significant reversal of the accumulated recognized revenue is unlikely to occur when the relevant uncertainty is eliminated.
If there is a significant financing component in the contract, the company determines the transaction price based on the amount payable in cash when the customer obtains control of the goods or services. The difference between the transaction price and the contract consideration is amortized using the effective interest method during the contract period.
If the contract contains two or more performance obligations, the company will allocate the transaction price to each individual performance obligation based on the relative proportion of the standalone selling price of the goods promised by each individual performance obligation on the contract commencement date.

(3) Specific method of revenue recognition

The company's operating income mainly includes sales of engines, general machinery and parts, income from loans and factoring business, etc.

Income from sales of goods

The Company's sales of goods are performance obligations performed at a certain point in time.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Export sales business: The company's export business mainly uses FOB or EXW transactions. FOB revenue is recognized when the customs declaration procedures are completed and loaded on the vehicle, and EXW revenue is recognized when the factory delivers the goods; domestic sales business: for the factory to pick up the goods, revenue is recognized when the customer signs for delivery; for the company is responsible for transportation, revenue is recognized when the customer signs for it; for goods stored in the customer's warehouse and the customer confirms the purchase by actual receipt, revenue is recognized when the quantity is checked monthly.

Loan interest income

According to the loan contract or agreement signed with the customer, when the loan has been issued and the company collects interest or obtains the right to collect interest, the interest income on the loan shall be recognized according to the loan interest rate and loan principal stipulated in the loan contract or agreement during the loan period attributable to the current period.

Interest income from factoring financing

According to the factoring financing contract signed with the customer, when the company provides funds to the customer and the company collects interest or obtains the right to collect interest, the interest income from the factoring financing is recognized according to the financing period attributable to the current period based on the financing interest rate and principal agreed in the factoring financing contract.

Contract acquisition costs and contract performance costs

The incremental costs incurred by the company to obtain the contract are expected to be recovered and are recognized as an asset as the contract acquisition cost.

If the costs incurred by the company to fulfill the contract do not apply to the scope of relevant standards such as inventories, fixed assets or intangible assets and meet the following conditions at the same time, they will be recognized as an asset as contract performance costs:

(1) The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing overhead (or similar expenses), costs clearly borne by the customer, and other costs incurred solely because of the contract;

(2) This cost increases the company’s future resources for fulfilling performance obligations;

(3) The cost is expected to be recovered.

The company amortizes assets related to contract costs on the same basis as the revenue recognition of goods or services related to the assets, and includes them in the current profits and losses. If the book value of an asset related to the contract cost is higher than the remaining consideration expected to be obtained from the transfer of the goods or services related to the asset minus the estimated costs to be incurred, the company will make an impairment provision for the excess and recognize it as an asset impairment loss. If the factors of impairment in the previous period subsequently change, so that the remaining consideration expected to be obtained from the transfer of the goods or services related to the asset minus the estimated costs to be incurred is higher than the book value of the asset, the asset impairment provision that has been originally accrued will be reversed and included in the current profit and loss, but the book value of the asset after the reversion shall not exceed the book value of the asset on the date of reversal if no impairment provision is made.

Contract assets and contract liabilities

Companies present contract assets or contract liabilities on their balance sheets based on the relationship between the fulfillment of performance obligations and payments from customers. The company will present the net amount after offsetting contract assets and contract liabilities under the same contract.

The Company presents the right to receive consideration from customers that is unconditional (i.e., dependent only on the passage of time) as receivables and the right to receive consideration for goods transferred to the customer (that right is dependent on factors other than the passage of time) as a contract asset.

The Company presents obligations to transfer goods to customers for consideration received or receivable from customers as contract liabilities.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Government subsidies

(1) Government subsidies are recognized when the following conditions are met at the same time: 1) The company can meet the conditions attached to the government subsidy; 2) The company can receive government subsidies. If government subsidies are monetary assets, they shall be measured based on the amount received or receivable. If the government subsidy is a non-monetary asset, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at the nominal amount.

(2) Judgment basis and accounting treatment method for government subsidies related to assets

Government documents stipulate that government subsidies used to purchase, construct or otherwise form long-term assets are classified as asset-related government subsidies. If the government documents are unclear, the judgment will be based on the basic conditions that must be met to obtain the subsidy. If the basic condition is the acquisition, construction or other means of forming long-term assets, it will be regarded as an asset-related government subsidy. Government subsidies related to assets are offset against the book value of the relevant assets or recognized as deferred income. If government subsidies related to assets are recognized as deferred income, they shall be included in profits and losses in installments in a reasonable and systematic manner within the useful life of the relevant assets. Government subsidies measured according to the nominal amount are directly included in the current profit and loss. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the undistributed balance of relevant deferred income will be transferred to the profit and loss of the current period of asset disposal.

(3) Judgment basis and accounting treatment method for government subsidies related to income

Government subsidies other than asset-related government subsidies are classified as income-related government subsidies. For government subsidies that contain both asset-related parts and income-related parts, it is difficult to distinguish whether they are asset-related or income-related, and are generally classified as income-related government subsidies. If government subsidies related to income are used to compensate for relevant costs, expenses or losses in the future period, they are recognized as deferred income. During the period when the relevant costs, expenses or losses are recognized, they are included in the current profits and losses or offset the relevant costs; if they are used to compensate for the relevant costs, expenses or losses that have already occurred, they are directly included in the current profits and losses or offset the relevant costs.

(4) Government subsidies related to the company's daily operating activities shall be included in other income or offset related costs and expenses according to the economic business essence. Government subsidies that are not related to the company's daily activities are included in non-operating income and expenses.

(5) Accounting treatment method for policy preferential loan interest discounts

If the finance department directly allocates interest discount funds to the company, the corresponding interest discount will be used to offset related borrowing costs.

Deferred income tax assets and deferred income tax liabilities

(1) Based on the difference between the book value of assets and liabilities and their tax basis (if the tax basis of items not recognized as assets and liabilities can be determined in accordance with tax laws, the difference between the tax basis and their book amount), deferred income tax assets or deferred income tax liabilities are calculated and recognized according to the applicable tax rate during the period when the asset is expected to be recovered or the liability is settled.

(2) Recognition of deferred income tax assets is limited to the amount of taxable income that is likely to be used to offset the deductible temporary differences. On the balance sheet date, if there is conclusive evidence that sufficient taxable income is likely to be obtained in the future period to offset the deductible temporary differences, deferred income tax assets that have not been recognized in previous accounting periods will be recognized.

(3) On the balance sheet date, review the book value of the deferred tax assets. If it is likely that sufficient taxable income will not be available in the future to offset the benefits of the deferred tax assets, the book value of the deferred tax assets will be written down. The amount of the write-down is reversed when it is probable that sufficient taxable income will be obtained.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(4) The company's current income tax and deferred income tax are included in the current profit and loss as income tax expenses or income, but do not include income tax arising from the following situations: 1) business merger; 2) transactions or events directly recognized in owner's equity.

Leasing

(1) The company as lessee

On the start date of the lease period, the company identifies leases with a lease period of no more than 12 months and that do not include a purchase option as short-term leases; leases with a value of no more than 40,000 yuan when a single leased asset is a new asset are identified as low-value asset leases. If a company subleases or anticipates subletting a leased asset, the original lease will not be deemed a low-value asset lease.

For all short-term leases and low-value asset leases, the company includes the lease payments into the relevant asset cost or current profit and loss on a straight-line basis throughout the lease term.

In addition to the above-mentioned short-term leases and low-value asset leases that adopt simplified treatment, the company recognizes right-of-use assets and lease liabilities for leases on the start date of the lease period.

Right-of-use assets

The right-of-use assets are initially measured at cost, which includes: ① the initial measurement amount of the lease liability; ② the lease payment amount paid on or before the start date of the lease period, and if there is a lease incentive, the amount related to the lease incentive that has been enjoyed is deducted; ③ the initial direct costs incurred by the lessee; ④ the costs that the lessee expects to incur to dismantle and remove the leased asset, restore the site where the leased asset is located, or restore the leased asset to the state agreed upon in the lease terms.

The company depreciates right-of-use assets on a straight-line basis. If it is reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, the company will accrue depreciation over the remaining useful life of the leased asset. If it is not reasonably certain that the company will be able to obtain ownership of the leased asset at the expiration of the lease term, the company will accrue depreciation during the shorter of the lease term and the remaining useful life of the leased asset.

Lease liabilities

At the beginning of the lease period, the company recognizes the present value of the unpaid lease payments as lease liabilities. When calculating the present value of lease payments, the interest rate implicit in the lease is used as the discount rate. If the interest rate implicit in the lease cannot be determined, the company's incremental borrowing rate is used as the discount rate. The difference between the lease payment and its present value is regarded as an unrecognized financing expense, and the interest expense is recognized at the discount rate used to confirm the present value of the lease payment during each period of the lease term, and is included in the current profit and loss. Variable lease payments that are not included in the measurement of lease liabilities are included in the current profit and loss when they actually occur.

After the start date of the lease period, when the actual fixed payment amount changes, the estimated amount payable of the guaranteed residual value changes, the index or ratio used to determine the lease payment amount changes, the evaluation results or actual exercise of the purchase option, lease renewal option or termination option change, When a change occurs, the company remeasures the lease liability based on the present value of the changed lease payment, and adjusts the book value of the right-of-use asset accordingly. If the book value of the right-of-use asset has been reduced to zero, but the lease liability still needs to be further reduced, the remaining amount will be included in the current profit and loss.

(2) The company acts as lessor

On the lease commencement date, the Company classifies leases that substantially transfer almost all risks and rewards related to the ownership of the leased assets as finance leases, and other leases as operating leases.

Operating lease

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The company recognizes the lease receipts as rental income according to the straight-line method in each period during the lease period. The initial direct expenses incurred are capitalized and apportioned on the same basis as the rental income recognition, and included in the current profit and loss in installments. Variable lease payments obtained by the company related to operating leases that are not included in the lease receipts are included in the current profit and loss when they actually occur.

Finance lease

On the start date of the lease period, the company recognizes financial lease receivables based on the net lease investment (the sum of the unguaranteed residual value and the present value of the lease payments not yet received on the start date of the lease discounted at the interest rate implicit in the lease), and terminates the recognition of financial lease assets. During each period of the lease term, the company calculates and recognizes interest income based on the interest rate implicit in the lease.

Variable lease payments obtained by the company that are not included in the measurement of the net lease investment are included in the current profit and loss when they actually occur.

(3) Sale and leaseback

The company as lessee

The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in accordance with the provisions of "Accounting Standards for Business Enterprises No. 14 - Revenue".

If the asset transfer in a sale and leaseback transaction is a sale, the company measures the right-of-use assets formed by the sale and leaseback based on the portion of the original asset's book value related to the right of use obtained through the leaseback, and only recognizes relevant gains or losses for the rights transferred to the lessor.

If the asset transfer in a sale and leaseback transaction does not constitute a sale, the company will continue to recognize the transferred assets, and at the same time recognize a financial liability equal to the transfer income, and perform accounting treatment on the financial liability in accordance with the "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments".

The company acts as lessor

If the asset transfer in a sale and leaseback transaction is a sale, the company will account for the asset purchase in accordance with other applicable accounting standards for enterprises, and account for the asset leasing in accordance with "Accounting Standards for Business Enterprises No. 21 - Lease".

If the asset transfer in a sale and leaseback transaction does not constitute a sale, the company does not recognize the transferred asset, but recognizes a financial asset equal to the transfer income, and performs accounting treatment on the financial asset in accordance with the "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments".

Segment report

The company determines its operating segments based on its internal organizational structure, management requirements, internal reporting system, etc. A company's operating segments refer to components that simultaneously meet the following conditions:

(1) This component can generate income and incur expenses in daily activities;

(2) The management can regularly evaluate the operating results of this component to decide to allocate resources to it and evaluate its performance;

(3) Be able to obtain relevant accounting information such as the financial status, operating results and cash flow of the component through analysis.

General risk preparation

General risk reserve: a reserve used to make up for unidentified possible losses, which is withdrawn at the end of the year based on 10% of the after-tax net profit of the credit business company. When it's normal

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

When the risk reserve balance reaches 1.5% of the closing balance of risk assets, no further provision can be made.

Other important accounting policies and accounting estimates

None.

Changes in important accounting policies and accounting estimates

(1) Changes in important accounting policies

The important accounting policies during the reporting period have not changed.

(2) Changes in important accounting estimates

There are no changes in important accounting estimates during the reporting period.

6. Taxes

Main tax types and tax rates

Type of tax Tax calculation basis Tax rate and collection rate

Value-added tax (Note 1) Value-added tax taxable income 13%, 10%, 9%, 6%, 3%

If the tax is assessed on an ad valorem basis, it will be deducted once from the original value of the property.

Property tax is 1.2% of the residual value after 30%; 1.2% and 12% are levied on rent.

, calculated at 12% of rental income

Urban maintenance and construction tax Actual turnover tax paid 7%, 5%

Education fee surcharge Actual turnover tax paid 3%

Local education surcharge Actual turnover tax paid 2%

Corporate income tax: taxable income 25%, 20%, 15%

Note 1: The Company, Chongqing Zongshen Engine Manufacturing Co., Ltd. and its subsidiaries Chongqing Ruixinda Power Machinery Co., Ltd., Chongqing Zongshen General Power Machinery Co., Ltd. and its subsidiaries Chongqing Benoda Import and Export Trading Co., Ltd., Chongqing Tuoyuan Power Machinery Co., Ltd., Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd., Chongqing Zongshen New Energy Development Co., Ltd. and its subsidiaries, Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. and its subsidiaries The value-added tax rate of the company's Chongqing Dukashenrui International Trade Co., Ltd., Chengdu Zongshen Machinery Parts Manufacturing Co., Ltd., Chongqing Qijiang District Qihui Machinery Manufacturing Co., Ltd., Dongguan Lithium Smart Energy Co., Ltd. and its subsidiaries Shenzhen Lithium Valley Technology Co., Ltd. and Jiangsu Haibode Energy Technology Co., Ltd. is 13% (note: the water pumps, micro-tillers and tractors used by the above companies for agricultural products are subject to a 9% value-added tax rate). The VAT rate for Zongshen Vietnam Engine Technology Co., Ltd., Zongshen Vietnam General Power Machinery Co., Ltd., DUCAR Technology Co., Ltd. and Lithium Smart Energy Vietnam Co., Ltd. is 10% (from January 1, 2025 to December 31, 2026, Vietnam is temporarily charged at 8%); Chongqing Liangjiang New Area Zongshen Small Loan Co., Ltd. and its subsidiaries Shenzhen Qianhai Zongshen Asset Management Co., Ltd. and Chongqing Zongshen Commercial Factoring Co., Ltd. The value-added tax rate of the company and Chongqing Chenguang Aviation Technology Co., Ltd. is 6%; Chongqing Small and Medium-sized Aviation Power Research Institute Co., Ltd., Yibin Jiawang Real Estate Co., Ltd., and Chongqing Chenyu Technology Co., Ltd. are small-scale taxpayers, and the value-added tax rate is 3%; Chongqing Zongshen Financial Leasing Co., Ltd. has a direct lease VAT rate of 13% and a sale-leaseback VAT rate of 6%; Zongshen German Lithium Wisdom Co., Ltd. has a VAT rate of 19%.

The situation of taxpayers with different corporate income tax rates is as follows:

Name of tax payer Income tax rate

Our company 25%

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Chongqing Zongshen Engine Manufacturing Co., Ltd. 15% Chongqing Zongshen General Power Machinery Co., Ltd. 15% Chongqing Liangjiang New Area Zongshen Small Loan Co., Ltd. 15% Chongqing Zongshen Commercial Factoring Co., Ltd. 15% Chongqing Ruixinda Power Machinery Co., Ltd. 15% Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. 15% Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd. 15% Chongqing Benoda Import and Export Trading Co., Ltd. 15% Chongqing Duka Shenrui International Trade Co., Ltd. 15% Chongqing Zongshen Jiyan Mechanical and Electrical Technology Co., Ltd. 15% Chongqing Zongshen Electric Power Technology Co., Ltd. 20% Dongguan Lithium Smart Energy Co., Ltd. 15% Zongshen German Lithium Smart Co., Ltd. (Note 1) 15% Shenzhen Lithium Valley Technology Co., Ltd. 20% Chongqing Qijiang District Qihui Machinery Manufacturing Co., Ltd. 20% Yibin Jiawang Real Estate Co., Ltd. 20% Chongqing Zongshen Hydrogen Energy Power Technology Co., Ltd. 20% Chongqing Zongshen Continuously Variable Transmission Co., Ltd. 20% Chengdu Zongshen Machinery Parts Manufacturing Co., Ltd. 20% Jiangsu Haibode Energy Technology Co., Ltd. 20% Zongshen Vietnam Engine Technology Co., Ltd. (Note 2) 20% Zongshen Vietnam General Power Machinery Co., Ltd. (Note 2) 20% DUCAR Technology Co., Ltd. (Note 2) 20% Chongqing Small and Medium-sized Aviation Power Research Institute Co., Ltd. 20% Chongqing Chenyu Technology Co., Ltd. 20% Chongqing Chenguang Aviation Technology Co., Ltd. 20% Chongqing Tuoyuan Power Machinery Co., Ltd. 25% Chongqing Zongshen New Energy Development Co., Ltd. 25% Shenzhen Qianhai Zongshen Asset Management Co., Ltd. 25% Chongqing Zongshen Financial Leasing Co., Ltd. 25% Spurme Co., Ltd. (Note 3) 16.5% Lithium Smart Energy Vietnam Co., Ltd. (Note 2) 20%

Note 1: Zongshen German Lithium Wisdom Co., Ltd. is registered in Germany. According to Article 23, paragraph 1, of the German Corporate Income Tax Law, Zongshen German Lithium Wisdom Co., Ltd.

The income tax rate for limited liability companies is 15%

Note 2: According to the provisions of Article 10 of the Decree of the Socialist Republic of Vietnam "Detailed Explanation and Guidance on the Implementation of the Corporate Income Tax Law", Zongshen Vietnam Engine Technology Co., Ltd.

The income tax rate of the company, Zongshen Vietnam General Power Machinery Co., Ltd., DUCAR Technology Co., Ltd. and Lithium Smart Energy Vietnam Co., Ltd. is 20%.

Note 3: The registered place of SPLUS Co., Ltd. is Hong Kong. According to Article 14 of the "Hong Kong Taxation Ordinance", SPLME Co., Ltd. is taxed according to the Hong Kong profits tax standard.

Calculate and pay Hong Kong profits tax at the rate (16.5%).

Tax incentives

(1) Income tax

①According to the relevant provisions of the "Administrative Measures for the Recognition of High-tech Enterprises" (Guokefahuo [2016] No. 32 and 195), after an enterprise obtains the qualification of a high-tech enterprise,

Enjoy tax incentives starting from the year when the high-tech enterprise certificate is issued. Dongguan Lithium Smart Energy Co., Ltd. has passed the high-tech enterprise certification, with a tax rate of 15%

Corporate income tax is calculated and paid at the tax rate.

In April 2020, the Ministry of Finance, the State Administration of Taxation, and the National Development and Reform Commission jointly issued the "Announcement on the Continuation of the Corporate Income Tax Policy for the Development of the Western Region"

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(2020 No. 23), stipulates that from January 1, 2021 to December 31, 2030, enterprises in encouraged industries located in the western region will be levied a corporate income tax at a reduced rate of 15%. In December 2023, the National Development and Reform Commission issued the "Guidance Catalog for Industrial Structural Adjustment (2024 Edition)". In November 2024, the National Development and Reform Commission announced the "Catalogue of Encouraged Industries in the Western Region (2025 Edition)". Chongqing Zongshen Engine Manufacturing Co., Ltd., Chongqing Zongshen General Power Machinery Co., Ltd., Chongqing Ruixinda Power Machinery Co., Ltd., Chongqing Liangjiang New Area Zongshen Small Loan Co., Ltd., Chongqing Zongshen Commercial Factoring Co., Ltd., Chongqing Dajiang Power Equipment Manufacturing Co., Ltd., Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd., Chongqing Benoda Import and Export Trading Co., Ltd., Chongqing Dukashenrui International Trade Co., Ltd., and Chongqing Zongshen Jiyan Mechanical and Electrical Technology Co., Ltd. all comply with the relevant provisions of the above-mentioned preferential policies for the development of the western region, and accrue and pay corporate income tax at a tax rate of 15%.

② Chongqing Qijiang District Qihui Machinery Manufacturing Co., Ltd., Yibin Jiawang Real Estate Co., Ltd., Chongqing Zongshen Hydrogen Energy Power Technology Co., Ltd., Chengdu Zongshen Mechanical Parts Manufacturing Co., Ltd., Chongqing Zongshen Continuously Variable Transmission Co., Ltd., Jiangsu Haibode Energy Technology Co., Ltd., Shenzhen Lithium Valley Technology Co., Ltd., Chongqing Small and Medium-sized Aviation Power Research Institute Co., Ltd., Chongqing Chenyu Technology Co., Ltd., Chongqing Chenguang Aviation Technology Co., Ltd. and Chongqing Zongshen Electric Power Technology Co., Ltd. comply with Article 3 of the Announcement No. 12 of 2023 of the Ministry of Finance and the State Administration of Taxation on "Relevant Tax Policies to Further Support the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households": For small and low-profit enterprises, the taxable income is calculated at a reduced rate of 25%, and the corporate income tax policy is paid at a rate of 20%, which will continue to be implemented until December 31, 2027.

③ According to Paragraph 3 of Article 16 of Vietnam’s Decree No. 218/2013/N-CP (as amended) and Paragraph 6 of Article 1 of Decree No. 91/2014/N-CP, Lithium Smart Energy Vietnam Co., Ltd. enjoys a two-year exemption from corporate income tax and a 50% reduction in corporate income tax for the following four years on its income from new investment projects in the industrial park.

Notes on items in the consolidated financial statements (the ending balance refers to the balance on June 30, 2026, the opening balance refers to the balance on January 1, 2026, the amount incurred in the current period refers to the amount occurring from January to June 2026, and the amount incurred in the previous period refers to the amount occurring from January to June 2025, the amount unit: RMB yuan)
Monetary funds

Unit: Yuan

Item Ending balance Beginning balance

Cash on hand 25,375.43 Bank deposits 1,754,663,317.38 1,561,043,476.85 Other monetary funds 75,972,162.15 68,255,726.89 Total 1,830,635,479.53 1,629,324,579.17 Of which: total amount deposited abroad 247,703,306.04 262,048,038.45

Note: For details on restrictions on monetary funds, please refer to Section 8 Financial Report, 7. Notes on Consolidated Financial Statement Items, 25. Assets with restricted ownership or use rights.

Trading financial assets

Unit: Yuan

Item Ending balance Beginning balance

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Measured at fair value with changes included in current profit and loss

591,072,254.55 393,000,772.96 beneficial financial assets

Among them:

Structured deposits 591,072,254.55 391,089,532.19

Contingent consideration 1,911,240.77 is designated to be measured at fair value and its changes are included in the current period.

financial assets with period profits and losses

Total 591,072,254.55 393,000,772.96

Derivative financial assets: None
Accounts receivable

(1) Disclosure based on aging

Unit: Yuan

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year (including 1 year) 2,634,198,566.19 1,909,184,016.08 1 to 2 years 81,913,360.30 7,803,922.99 2 to 3 years 1,656,146.99 8,728,547.06 More than 3 years 5,194,266.41 5,090,000.48 3 to 4 years 879,040.55

More than 5 years 4,315,225.86 5,090,000.48 Total 2,722,962,339.89 1,930,806,486.61

(2) Classified disclosure according to bad debt accrual method

Unit: Yuan Ending balance Beginning balance

Book balance Provision for bad debts Book balance Provision for bad debts

Category Book price Book price provision ratio Provision ratio

Amount Ratio Amount Value Amount Ratio Amount Value

Example Example

By item

bad provision

5,069,1 1,333,8 3,735,2 6,036,6 1,526,6 4,510,0Account provision 0.19% 26.31% 0.31% 25.29%

25.59 99.73 25.86 08.42 07.94 00.48 receivables

Accounts

by combination

Bad provision 2,717,8 2,616,5 1,924,7 1,851,4

101,324 73,278,

Account provision 93,214. 99.81% 3.73% 69,084. 69,878. 99.69% 3.81% 91,128.

,129.95 749.63

Accounts receivable 30 35 19 56

2,722,9 2,620,3 1,930,8 1,856,0

102,658 74,805,

Total 62,339. 100.00% 3.77% 04,310. 06,486. 100.00% 3.87% 01,129. ,029.68 357.57

89 21 61 04 1) Provision for bad debts on an individual basis

Unit: Yuan

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Beginning balance Closing balance

Name

Book balance Bad debt provision Book balance Bad debt provision Provision ratio Reason for provision Customer LZX 4,510,000.48 3,735,225.86 0.00% Note other customers 1,526,607.94 1,526,607.94 1,333,899.73 1,333,899.73 100.00%

Total 6,036,608.42 1,526,607.94 5,069,125.59 1,333,899.73

Note: Due to customer LZX’s financial difficulties, as of the end of June 2026, after recovering part of the payment, the overdue payment balance was 3.7352 million yuan, taking into account the current value of the collateral.

After 8.0753 million yuan, there was no bad debt provision balance at the end of the period.

Provision for bad debts on a portfolio basis

Unit: Yuan

Ending balance

Name

Book balance Bad debt provision Provision ratio

Portfolio 1: Portfolio without collateral or credit insurance 1,398,034,551.96 83,396,390.24 5.97% Portfolio 2: Portfolio with collateral or credit insurance 1,319,858,662.34 17,927,739.71 1.36% Total 2,717,893,214.30 101,324,129.95 3.73%

(3) Bad debt provisions accrued, recovered or reversed in the current period

Unit: Yuan

Amount of changes in the current period

Category Opening balance Recover the amount in the previous period Less: exchange difference Provision for closing balance Recover or reverse

Write-off adjustment

Single provision for bad debts

1,526,607.94 245,846.78 53,138.57 1,333,899.73Preparation

Bad provision based on combination

73,278,749.63 28,808,965.39 763,585.07 101,324,129.95 Account preparation

Total 74,805,357.57 28,808,965.39 245,846.78 53,138.57 763,585.07 102,658,029.68

Among them, the amount of bad debt provision recovery or reversal in the current period is important: None

(4) Accounts receivable actually written off in this period: None

(5) Accounts receivable and contract assets with the top five closing balances collected by debtors

Unit: Yuan accounted for accounts receivable and combined accounts receivable bad debts quasi accounts receivable and contracts

Unit name Closing balance of accounts receivable Closing balance of contract assets Closing balance of same assets Provisions and contract assets minus closing balance of assets

Proportion of the total number of value reserves at the end of the period No. 1 193,418,896.68 193,418,896.68 7.09% 5,173,909.11 No. 2 138,738,610.72 138,738,610.72 5.09% 6,936,930.54 No. 3 119,006,180.07 119,006,180.07 4.36% 2,142,111.25 Fourth place 115,623,410.20 115,623,410.20 4.24% 8,129,506.39 Fifth place 107,804,867.33 107,804,867.33 3.95% 5,719,011.89 Total 674,591,965.00 674,591,965.00 24.73% 28,101,469.18

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Accounts receivable financing

(1) Classified presentation of financing receivables

Unit: Yuan

Item Ending balance Beginning balance

Bank acceptance bill 989,263,103.98 1,273,283,292.72 Total 989,263,103.98 1,273,283,292.72

(2) Classified disclosure according to bad debt accrual method

Unit: Yuan Ending balance Beginning balance

Book balance Provision for bad debts Book balance Provision for bad debts

Category Book price Book price provision ratio Provision ratio

Amount Ratio Amount Value Amount Ratio Amount Value

Example Example

By item

bad provision

Account preparation

By combination 1,273,2 1,273,2

989,263 989,263

Provision for bad debts 100.00% 83,292. 100.00% 83,292.

,103.98 ,103.98

Account provision 72 72 of which: 1,273,2 1,273,2

989,263 989,263

Bank commitment 100.00% 83,292. 100.00% 83,292.

,103.98 ,103.98

Money exchange 72 72 1,273,2 1,273,2

989,263 989,263

Total 100.00% 83,292. 100.00% 83,292. ,103.98 ,103.98

72 72 Accounts receivable financing using collective provision for impairment

Unit: Yuan ending balance

Name

Book balance Bad debt provision Provision ratio

Bank acceptance bill portfolio 989,263,103.98

Total 989,263,103.98

(3) Financing of receivables pledged by the company at the end of the period: None

(4) Financing of receivables that have been endorsed or discounted by the company at the end of the period and have not yet matured on the balance sheet date

Unit: Yuan

Item Amount derecognized at the end of the period Amount not derecognized at the end of the period

Bank acceptance draft 572,080,222.29

Total 572,080,222.29

The acceptor of the bank acceptance bill is a commercial bank with higher credit, and the possibility of the bank acceptance bill being accepted by it not being paid when due is low, so the company

Such bank acceptance bills that have been endorsed or discounted will be derecognized. However, if the bills are not paid when due, the company will still

Bear joint and several liability to the ticket holder.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(5) Financing of receivables actually written off in this period: None

Prepayment

(1) Prepayments are listed based on aging

Unit: Yuan Ending balance Beginning balance

Aging

Amount Ratio Amount Ratio

Within 1 year 69,203,481.71 87.67% 66,930,976.59 83.08% 1 to 2 years 6,436,334.59 8.15% 9,659,045.86 11.99% 2 to 3 years 2,203,069.30 2.79% 3,213,456.00 3.99% More than 3 years 1,100,019.82 1.39% 759,404.81 0.94% Total 78,942,905.42 100.00% 80,562,883.26 100.00%

(2) Explanation of reasons why important prepayments aged more than 1 year were not settled in time: None

(3) Prepayments with the top five ending balances by prepayment objects

Unit: Yuan

Unit name Closing balance Proportion of total closing balance of prepayments (%) First place 10,000,000.00 12.67

Second place 3,995,673.60 5.06

Third place 2,409,400.75 3.05

Fourth place 1,784,933.60 2.26

Fifth place 1,472,804.14 1.87

Total 19,662,812.09 24.91

Other receivables

Unit: Yuan

Item Ending balance Beginning balance

Interest receivable 705.00 466,333.32 Dividends receivable 2,471,100.00 2,471,100.00 Other receivables 67,964,943.26 64,564,322.18 Total 70,436,748.26 67,501,755.50

(1) Interest receivable

Classification of interest receivable

Unit: Yuan

Item Ending balance Beginning balance

Factoring interest 705.00

Loan interest 466,333.32

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total 705.00 466,333.32

Important overdue interest: None
Bad debt provision accrual status

Unit: Yuan Phase 1 Phase 2 Phase 3

Bad debt provision Expected credit loss for the next 12 months Expected credit loss for the entire duration Expected credit loss for the entire duration Total

Loss of use Loss (no credit impairment occurred) Loss (credit impairment occurred)

Opening balance 3,432,000.00 3,432,000.00 Opening balance in the current period

--Transfer to the second stage

--Transfer to the third stage

--Return to the second stage

--Return to the first stage

Provision for this period

Withdraw or transfer in this period

Write-off in this period

Other changes

Closing balance 3,432,000.00 3,432,000.00

Interest receivable actually written off in this period: None

(2) Dividends receivable

Classification of dividends receivable

Unit: Yuan

Project (or invested unit) Closing balance Opening balance

Aerospace Shenzhou Aircraft Co., Ltd. 2,471,100.00 2,471,100.00 Total 2,471,100.00 2,471,100.00

Important dividends receivable aged more than 1 year: None
Bad debt provision accrual: None
Dividends receivable actually written off in this period: None

(3) Other receivables

Classification of other receivables according to nature of payment

Unit: Yuan

Nature of payment Book balance at the end of the period Book balance at the beginning of the period

Mold and other deposits 53,194,388.38 41,234,431.17

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Other current accounts 21,121,724.11 32,009,562.08 Personal loans and payments 4,406,383.23 976,280.94 Total 78,722,495.72 74,220,274.19

Disclosure based on aging

Unit: Yuan

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year (including 1 year) 52,090,401.08 52,783,910.85 1 to 2 years 14,637,478.30 9,114,136.60 2 to 3 years 3,616,714.62 3,704,173.19 More than 3 years 8,377,901.72 8,618,053.55 3 to 4 years 3,452,440.64 5,318,985.10 4 to 5 years 2,120,381.95 728,674.86

More than 5 years 2,805,079.13 2,570,393.59 Total 78,722,495.72 74,220,274.19

Classified disclosure according to bad debt accrual method

Unit: Yuan Ending balance Beginning balance

Book balance Provision for bad debts Book balance Provision for bad debts

Category Book price Book price provision ratio Provision ratio

Amount Ratio Amount Value Amount Ratio Amount Value

Example Example

By item

92,867. 92,867. 92,867. 92,867.

Bad provision 0.12% 100.00% 0.00 0.13% 100.00% 0.00

34 34 34 34

Account preparation

by combination

78,629, 10,664, 67,964, 74,127, 9,563,0 64,564, bad provision 99.88% 13.56% 99.87% 12.90%

628.38 685.12 943.26 406.85 84.67 322.18Account preparation

78,722, 10,757, 67,964, 74,220, 9,655,9 64,564, total 100.00% 13.67% 100.00% 13.01%

495.72 552.46 943.26 274.19 52.01 322.18 1 Name of bad debt provision category by group:

Unit: Yuan ending balance

Name

Book balance Bad debt provision Provision ratio

Portfolio 1: Aging portfolio 78,629,628.38 10,664,685.12 13.56% of which: Within 1 year 52,090,401.08 2,604,520.13 5.00% 1-2 years 14,544,610.96 1,454,461.12 10.00% 2-3 years 3,616,714.62 723,342.93 20.00% 3-4 years 3,452,440.64 1,380,976.26 40.00% More than 4 years 4,925,461.08 4,501,384.68 91.39%Total 78,629,628.38 10,664,685.12 13.56%

Provision for bad debts based on the general expected credit loss model

Unit: Yuan

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The first stage The second stage The third stage

Bad debt provisions Expected credit in the next 12 months Expected credit losses throughout the entire duration Expected credit losses throughout the duration Total

Loss Loss (no credit impairment occurred) Loss (credit impairment occurred)

Opening balance 9,563,084.67 92,867.34 9,655,952.01 Opening balance in the current period

--Transfer to the second stage

--Transfer to the third stage

--Return to the second stage

--Return to the first stage

Provision in this period 1,126,543.35 1,126,543.35 Received or transferred back in this period

Write-off in this period

Recovery in this period has been written off in the previous period

Other changes -24,942.90 -24,942.90 Closing balance 10,664,685.12 92,867.34 10,757,552.46

Bad debt provisions accrued, recovered or reversed in the current period

Unit: Yuan Amount of changes in the current period

Category Opening balance Closing balance Recovered in the previous period Less: exchange difference

Provision Consolidated increase Recovery or transfer Write-off in the current period

Write-off amount adjustment

Provision for bad debts 9,655,952.01 1,126,543.35 24,942.90

10,757,552.46 Total 9,655,952.01 1,126,543.35 24,942.90

10,757,552.46

Among them, the amount of bad debt provision for the current period that is reversed or recovered is important: None

Other receivables actually written off in this period: None
Other receivables with the top five closing balances based on debtors

Unit: Yuan as a share of other receivables at the end of the period Bad debt provision at the end of the period Name of the unit Nature of the payment Closing balance Aging

Proportion of total balance Balance Nancai International Co., Ltd. Rental security deposit 8,368,341.90 Within 1 year, 1-2 years 10.63% 497,187.66 Phylion Power Supply (Chuzhou) Yes

Material deposit 4,004,480.00 Within 1 year 5.09% 200,224.00 Co., Ltd.

Huizhou Huayang Intelligent Technology

Equipment deposit 3,540,000.00 Within 1 year 4.50% 177,000.00 Co., Ltd.

Zongshen Piaggio Foshan Motorcycle

Mold equipment, etc. 3,332,410.00 1-4 years 4.23% 1,140,265.00 Tow Truck Enterprise Co., Ltd.

Chongqing Xinxinquan Automobile Parts

Compensation 3,167,228.32 Within 1 year 4.02% 158,361.42 Co., Ltd.

Total 22,412,460.22 28.47% 2,173,038.08

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

During the reporting period, the company had no receivables involving government subsidies.
Presented in other receivables due to centralized management of funds: None

Inventory

(1) Inventory classification

Unit: Yuan Ending balance Beginning balance

Provision for inventory decline Provision for inventory decline

Project

Book balance or contract performance costs Book value Book balance or contract performance costs Book value

This impairment provision This impairment provision

395,297,135. 388,625,400. 346,977,154. 341,288,033. Raw materials 6,671,735.02 5,689,121.68

42 40 76 08 44,069,947.8 44,069,947.8 52,222,044.7 52,222,044.7Product in progress

5 5 8 8 662,435,297. 14,622,212.6 647,813,084. 500,288,435. 15,533,304.8 484,755,131. Inventory goods

43 8 75 86 3 03 15,044,065.3 15,044,065.3 19,190,778.8 19,190,778.8 Contract performance costs

0 0 6 6 122,052,698. 121,863,973. 174,908,147. 174,908,147. Shipment of goods 188,724.90

35 45 59 59 12,007,261.7 10,738,874.6 12,110,278.7 10,620,348.4 Low-value consumables 1,268,387.10 1,489,930.29

3 3 1 2 Commissioned processing materials 789,686.50 789,686.50 1,318,642.96 1,318,642.96 1,251,696,09 22,751,059.7 1,228,945,03 1,107,015,48 22,712,356.8 1,084,303,12 total

2.58 0 2.88 3.52 0 6.72

(2) Provision for inventory depreciation and provision for impairment of contract performance costs

Details

Unit: Yuan

Increase amount in this period Decrease amount in this period

Item Beginning balance Closing balance

Provision Others Reversal or write-off Others

Raw materials 5,689,121.68 3,547,884.46 2,499,541.62 65,729.50 6,671,735.02 Inventory goods 15,533,304.83 7,780,900.15 8,640,408.05 51,584.25 14,622,212.68 Low-value consumables 1,489,930.29 190,147.49 411,690.68 1,268,387.10 Shipped goods 188,724.90 188,724.90 Total 22,712,356.80 11,707,657.00 11,551,640.35 117,313.75 22,751,059.70

The specific basis for determining the net realizable value and the reasons for the reversal or write-off of inventory depreciation reserves in the current period.

Item Specific basis for determining net realizable value Reasons for writing off inventory depreciation provisions

The estimated selling price of relevant finished products minus the estimated costs to be incurred until completion, the estimated inventory consumption/inventory that has been provided for inventory depreciation in the current period

The net realizable value is determined by the amount after accounting for sales expenses and related taxes. Sold

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(3) Capitalization of borrowing costs: None

Contract assets

(1) List of contract assets

Unit: Yuan Ending balance Beginning balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Contract assets 2,628,083.55 357,454.18 2,270,629.37 2,191,043.30 339,547.16 1,851,496.14

Total 2,628,083.55 357,454.18 2,270,629.37 2,191,043.30 339,547.16 1,851,496.14

(2) The book value of contract assets has not changed significantly during the current period.

(3) Classified disclosure according to bad debt accrual method

Unit: Yuan ending balance

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Provision for bad debts on an individual basis

Provision for bad debts by combination 2,628,083.55 100.00 357,454.18 13.60 2,270,629.37 Total 2,628,083.55 100.00 357,454.18 13.60 2,270,629.37 (continued)

Opening balance

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Provision for bad debts on an individual basis

Provision for bad debts by combination 2,191,043.30 100.00 339,547.16 15.50 1,851,496.14 Total 2,191,043.30 100.00 339,547.16 15.50 1,851,496.14 1 Provision for bad debts on a portfolio basis

Unit: Yuan ending balance

Name

Book balance Bad debt provision Provision ratio (%) Portfolio 1: Portfolio without collateral or credit guarantee 2,628,083.55 357,454.18 13.60

Total 2,628,083.55 357,454.18 13.60

(4) Bad debt provisions accrued, recovered or reversed in the current period

Amount of changes in the current period

Item Beginning balance Closing balance

Provision Recovery or transfer Write-off/write-off Others

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Amount of changes in the current period

Item Beginning balance Closing balance

Provision Recovery or transfer Write-off/write-off Others

Provision for bad debts 339,547.16 17,907.02 357,454.18

Total 339,547.16 17,907.02 357,454.18

(5) Contract assets actually written off in this period: None

Non-current assets due within one year

Unit: Yuan Ending balance Beginning balance

Project

Book balance Bad debt provision Book value Book balance Bad debt provision Book value Finance receivables due within one year

38,746,256.10 12,021,432.13 26,724,823.97 89,957,236.06 12,382,333.02 77,574,903.04 Capital lease payments

Including: finance lease receivable

40,223,972.46 12,021,432.13 28,202,540.33 93,214,715.08 12,382,333.02 80,832,382.06

Unrealized financing revenue

1,477,716.36 1,477,716.36 3,257,479.02 3,257,479.02 profit

Total 38,746,256.10 12,021,432.13 26,724,823.97 89,957,236.06 12,382,333.02 77,574,903.04

Other current assets

Unit: Yuan

Item Ending balance Beginning balance

Input tax reserved for deduction of value-added tax 69,793,738.26 122,028,100.06 Corporate income tax prepaid 11,393.03

Total 69,805,131.29 122,028,100.06

Grant of loans and advances

(1) Details

Unit: Yuan

Item Ending balance Beginning balance

Loans 607,833,531.81 816,063,865.14 Including: credit loans

Guaranteed loan 5,595,832.65 95,595,832.65 Mortgage loan 590,944,432.25 709,114,765.58

Pledge loan 11,293,266.91 11,353,266.91 Factoring financing 57,360,786.71 137,000,710.83 Total 665,194,318.52 953,064,575.97 Loan loss provision:

Loan 121,104,085.98 124,222,465.98

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Among them: credit loan

Guaranteed loans 5,595,832.65 6,945,832.65 Mortgage loans 104,451,386.42 106,218,866.42

Pledge loan 11,056,866.91 11,057,766.91 Factoring financing 21,872,779.07 23,066,516.90 Total 142,976,865.05 147,288,982.88 Book value 522,217,453.47 805,775,593.09

(2) Provision for bad debt provisions for loans and factoring financing

Unit: Yuan Phase 1 Phase 2 Phase 3

Bad debt provisions Expected in the next 12 months Expected credit losses throughout the entire duration Expected credit losses throughout the duration Total

Credit loss Loss (no credit impairment has occurred) Loss (credit impairment has occurred)

Balance at the beginning of the period 7,986,730.02 69,789,000.00 69,513,252.86 147,288,982.88 The balance at the beginning of the period is transferred to the second stage in this period —— —— —— ——

--Transfer to the third stage

--Return to the second stage

--Return to the first stage

Provision for this period

Received or transferred back in the current period 4,312,117.83 4,312,117.83 Write-off in the current period

Other changes

Closing balance 3,674,612.19 69,789,000.00 69,513,252.86 142,976,865.05

Long-term receivables

(1) Long-term receivables

Unit: Yuan Ending balance Beginning balance Discount rate area item

Book balance Bad debt provision Book value Book balance Bad debt provision Book value Inter-finance lease payment 3,287,948.41 16,390.40 3,271,558.01 10,509,049.99 52,390.16 10,456,659.83

Among them: receivables

3,418,827.26 16,390.40 3,402,436.86 10,960,030.88 52,390.16 10,907,640.72

Capital lease payments

Not implemented

130,878.85 130,878.85 450,980.89 450,980.89

financing income

Total 3,287,948.41 16,390.40 3,271,558.01 10,509,049.99 52,390.16 10,456,659.83

(2) Classified disclosure according to bad debt accrual method

Unit: Yuan Ending balance Beginning balance

1. Joint ventures

2. Joint ventures

Aerospace Shenzhou aircraft

126,663,934.85 55,229,927.91 -5,921,600.00

Ltd.

Chongqing Maxim's Wing Shenji

115,209,098.21 14,675,619.48 193,311.80 1,563.25 -1,858,663.01 Machinery Co., Ltd.

Chongqing Zongshen New Intelligent Manufacturing

911,382,842.31 97,780,344.02 -640,202.39 -29,918,809.04 Technology Co., Ltd.

Total 1,153,255,875.37 55,229,927.91 14,675,619.48 92,052,055.82 -638,639.14 -31,777,472.05

(continued)

Increases and decreases during the year Ending balance

Investee declares cash dividends

Provision for impairment Others Book value Impairment provision

or profit

1. Joint ventures

2. Joint ventures

Aerospace Shenzhou Aircraft Co., Ltd. 120,742,334.85 55,229,927.91 Chongqing Maxim Yishen Machinery Co., Ltd. 1,121,288.40 97,748,402.37

Chongqing Zongshen New Intelligent Manufacturing Technology Co., Ltd. 978,604,174.90

Total 1,121,288.40 1,197,094,912.12 55,229,927.91

Investment real estate

(1) Investment real estate using cost measurement model

Unit: Yuan

Projects Houses and buildings Land use rights Construction in progress Total

1. Original book value

Balance at the beginning of the period 103,703,094.54 103,703,094.54 2. Increase in the current period

(1) Outsourcing

(2) Inventory\

Fixed assets\Construction in progress\

Transfer of other non-current assets

(3) Enterprise cooperation

and increase

Reduction amount in the current period 2,012,248.55 2,012,248.55 (1) Disposal 2,012,248.55 2,012,248.55

(2) Transfer to solid

fixed assets

Ending balance 101,690,845.99 101,690,845.99

2. Accumulated depreciation and accumulation

Amortization

Opening balance 17,435,810.11 17,435,810.11

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Increased amount in this period 1,816,729.36 1,816,729.36 (1) Provision or

1,816,729.36 1,816,729.36 Amortization

(2) Fixed capital

transfer of property

(3) Enterprise cooperation

and increase

Reduction amount in the current period 354,559.18 354,559.18 (1) Disposal 354,559.18 354,559.18

(2) Transfer to solid

fixed assets

Ending balance 18,897,980.29 18,897,980.29

3. Impairment provision

Opening balance 3,927,519.43 3,927,519.43 2. Increase in the current period

(1) Inventory\

Fixed assets\Construction in progress\

Transfer of other non-current assets

(2) Provision

Reduction amount in this period

(1) Disposal

(2) Other transfers

out

Closing balance 3,927,519.43 3,927,519.43

4. Book value

Book value at the end of the period 78,865,346.27 78,865,346.27 2. Book value at the beginning of the period 82,339,765.00 82,339,765.00

(2) Investment real estate for which title certificates have not been obtained: None

Fixed assets

Unit: Yuan

Item Ending balance Beginning balance

Fixed assets 1,620,043,479.82 1,682,207,978.49 Liquidation of fixed assets

Total 1,620,043,479.82 1,682,207,978.49

(1) Fixed assets

Unit: Yuan

Items Houses and buildings Special equipment General equipment Transportation equipment Total

1. Original book value:

1,592,761,840.3

Opening balance 957,127,232.18 128,466,264.99 42,774,972.41 2,721,130,309.89 2. Increase in this period 6,158,626.33 34,445,552.25 5,817,423.52 195,120.15 46,616,722.25

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Amount

(1) Purchase

2,292,535.88 3,511,991.30 5,152,174.90 195,120.15 11,151,822.23

(2) in

3,866,090.45 30,933,560.95 665,248.62 35,464,900.02 Transfer of construction project

(3) Transfer of investment real estate (4) Increase in business mergers

(5) Others

Reduction in this period

1,858,354.48 27,219,574.26 2,733,456.28 1,867,166.96 33,678,551.98 Amount

(1) place

548,346.22 13,393,647.82 2,593,819.41 1,695,721.12 18,231,534.57 Disposal or scrapping

(2) turn

10,047,714.89 10,047,714.89 into projects under construction

(3) Transfer to investment real estate (4)

1,310,008.26 3,778,211.55 139,636.87 171,445.84 5,399,302.52 currency conversion difference

(5) Others

1,599,987,818.3 4. Closing balance 961,427,504.03 131,550,232.23 41,102,925.60 2,734,068,480.16

2. Accumulated depreciation

Opening balance 234,721,256.97 698,280,479.45 74,666,597.99 28,947,869.69 1,036,616,204.10 2. Increase in this period

15,817,758.97 65,288,658.71 8,327,951.70 2,242,502.14 91,676,871.52Amount

(1) Count

15,817,758.97 65,288,658.71 8,327,951.70 2,242,502.14 91,676,871.52

(2) Transfer of investment real estate (3) Foreign currency conversion differences

(4) Others

Reduction in this period

533,056.65 11,966,162.67 2,156,285.76 1,918,697.50 16,574,202.58 Amount

(1) place

130,697.03 10,236,105.86 2,085,957.37 1,814,451.86 14,267,212.12 Disposal or scrapping

(2) Transfer to construction in progress

(3) Transfer to investment real estate (4)

402,359.62 1,730,056.81 70,328.39 104,245.64 2,306,990.46 Currency conversion difference

(5) Others

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Closing balance 250,005,959.29 751,602,975.49 80,838,263.93 29,271,674.33 1,111,718,873.04

3. Impairment provision

Opening balance 2,260,943.69 21,943.53 23,240.08 2,306,127.30

2.Increase in this issue

Amount

(1) Count

mention

(2) Enterprise

Increase in business mergers

Reduction in this period

Amount

(1) place

dispose or scrap

(2) its

him

Closing balance 2,260,943.69 21,943.53 23,240.08 2,306,127.30

4. Book value

Closing accounts

711,421,544.74 846,123,899.12 50,690,024.77 11,808,011.19 1,620,043,479.82 Value

Opening accounts

722,405,975.21 892,220,417.17 53,777,723.47 13,803,862.64 1,682,207,978.49 Value

(2) Temporarily idle fixed assets: None

(3) Fixed assets leased through operating leases

Unit: Yuan

Item Closing book value

Houses and buildings 146,013.94 Machinery and equipment 170,344.76 Total 316,358.70

(4) Fixed assets whose property rights certificates have not been obtained

Unit: Yuan

Item Book Value Reason for Not Obtaining Property Certificate 202 Real Estate Certificate 2013 No. 034419

32,333,230.50 Note

houses buildings

Total 32,333,230.50

Note: In June 2024, the Huaxi Subdistrict Office of the Banan District People's Government of Chongqing signed a "Negotiated Relocation Agreement" with the company's subsidiary Chongqing Zongshen General Power Machinery Co., Ltd. Due to the construction of the second phase of the New Yanweishan Tunnel, it is necessary to occupy the location owned by Chongqing Zongshen General Power Machinery Co., Ltd. There is 7,697 square meters of land and above-ground buildings in Building 11 at No. 126 Yunan Avenue, Banan District; in July 2025, Chongqing Zongshen General Power Machinery Co., Ltd. delivered the above-mentioned land to the construction party CCCC Aviation Second Engineering Bureau; the above-mentioned divided land and properties have not yet obtained new rights certificates.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Projects under construction

Unit: Yuan

Item Ending balance Beginning balance

Construction in progress 352,988,131.59 191,138,777.02

Engineering supplies

Total 352,988,131.59 191,138,777.02

(1) Projects under construction

Unit: Yuan

Ending balance Beginning balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value New energy smart equipment and outdoor

245,827,619.92 245,827,619.92 112,242,044.03 112,242,044.03 Equipment production R&D base project

New energy intelligent warehousing and engineering

36,099,385.81 36,099,385.81 18,034,042.34 18,034,042.34 Experimental base reconstruction project

Lithium Smart Company Production Line Project 22,499,866.07 22,499,866.07 10,845,043.28 10,845,043.28 Engine Intelligent Painting Line Project 12,635,503.79 12,635,503.79 11,946,123.26 11,946,123.26Vietnam engine equipment and production

7,955,890.89 7,955,890.89 11,691,982.73 11,691,982.73 line projects

High-end parts smart factory project

5,091,584.08 5,091,584.08 4,377,212.41 4,377,212.41 items (equipment group)

Aviation engine smart factory project

2,483,628.32 2,483,628.32 6,307,964.61 6,307,964.61 items (equipment group)

Machine processing projects 2,314,295.58 2,314,295.58 961,646.02 961,646.02Dajiang production line equipment renovation project

1,166,471.19 1,166,471.19 113,575.22 113,575.22 items

Other items 16,913,885.94 16,913,885.94 14,619,143.12 14,619,143.12Total 352,988,131.59 352,988,131.59 191,138,777.02 191,138,777.02

(2) Changes in important projects under construction during the current period

Unit: Yuan

Projects transferred in this period are exhausted

Budget number: Interest capital for the current period, including: Capital and interest for the current period

Project name Beginning balance Increase in fixed period Ending balance Total investment in project capital (10,000) Decrease in capital accumulated period interest interest capital

Amount Added Amount Asset Amount Accounting for Budget (Source Yuan) Amount Calculated Amount Cost Amount Cost Ratio

amount ratio

new energy

Smart decoration

Preparatory households 112,24 133,58 245,82

43,360 Owned peripheral equipment 2,044. 5,575. 7,619. 57% 57%

.80 Capital production research 03 89 92

Development base

Project

new energy

Smart warehouse

18,034 18,065 36,099

Storage and engineering 6,400. Owned

,042.3 ,343.4 ,385.8 56% 56%

Cheng Experiment 54 Funding

4 7 1

base change

construction project

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

130,27 151,65 281,92

49,761

Total 6,086. 0,919. 7,005.

.34

37 36 73

Right-of-use assets

(1) Right-of-use assets

Unit: Yuan

Item Houses and Buildings General Equipment Total

1. Original book value

Opening balance 166,214,388.52 166,214,388.52 2. Increase in current period 88,814,727.09 88,814,727.09 (1) New lease 88,814,727.09 88,814,727.09 (2) Foreign currency translation difference

(3) Increase in business mergers

Reduction amount in the current period 13,473,768.97 13,473,768.97 (1) Reduction in lease 8,633,854.53 8,633,854.53

(2) Foreign currency translation differences 4,839,914.44 4,839,914.44 4. Closing balance 241,555,346.64 241,555,346.64

2. Accumulated depreciation

Opening balance 46,222,398.35 46,222,398.35 2. Increase in current period 20,766,646.20 20,766,646.20 (1) Provision 20,766,646.20 20,766,646.20 (2) Foreign currency translation difference

(3) Increase in business mergers

Reduction amount in the current period 7,168,954.09 7,168,954.09 (1) Reduction in lease 6,006,279.88 6,006,279.88

(2) Foreign currency translation differences 1,162,674.21 1,162,674.21 4. Closing balance 59,820,090.46 59,820,090.46

3. Impairment provision

Opening balance
Increase amount in this period

(1) Provision

Reduction amount in this period
Ending balance

4. Book value

Book value at the end of the period 181,735,256.18 181,735,256.18 2. Book value at the beginning of the period 119,991,990.17 119,991,990.17
Intangible assets

(1) Intangible assets

Unit: Yuan

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Project Land use rights Patent rights Non-patented technology Software Total

1. Original book value

Opening balance 307,628,707.28 213,462,558.04 92,169,467.10 613,260,732.42 2. Increase in this period

12,750,010.38 Amount of 12,750,010.38

(1) Purchase

12,750,010.38 12,750,010.38

(2) Outside

Currency Conversion Difference

(3) Within

Increase in departmental R&D

(4) Enterprise

Increase in business mergers

Reduction in this period

39,410.57 28,268.40 67,678.97Amount

(1) place

dispose or scrap

(2) Outside

39,410.57 28,268.40 67,678.97 currency conversion difference

Ending balance 307,589,296.71 213,462,558.04 104,891,209.08 625,943,063.83

2. Accumulated amortization

Opening balance 82,763,587.79 142,861,718.83 67,157,515.59 292,782,822.21 2. Increase in this period

3,331,710.83 13,187,962.66 9,285,919.97 25,805,593.46 Amount

(1) Count

3,331,710.83 13,187,962.66 9,285,919.97 25,805,593.46

(2) Outside

Currency Conversion Difference

(3) Enterprise

Increase in business mergers

Reduction in this period

17,348.08 5,387.80 22,735.88 Amount

(1) place

dispose or scrap

(2) Outside

17,348.08 5,387.80 22,735.88 currency conversion difference

Closing balance 86,077,950.54 156,049,681.49 76,438,047.76 318,565,679.79

3. Impairment provision

Opening balance 6,000,000.00 6,000,000.00 2. Increase in this period

Amount

(1) Count

mention

Reduction in this period

Amount

(1) place

set

(2) its

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

him

Closing balance 6,000,000.00 6,000,000.00

4. Book value

Closing accounts

221,511,346.17 51,412,876.55 28,453,161.32 301,377,384.04Value

Opening accounts

224,865,119.49 64,600,839.21 25,011,951.51 314,477,910.21Value

At the end of the period, the intangible assets formed through the company's internal research and development accounted for 11.98% of the balance of intangible assets.

(2) Land use rights for which property rights certificates have not been obtained

Unit: Yuan

Item Book value Reasons for not completing the property rights certificate

202 Real estate certificate 2013 word No. 034419 corresponds

18,333,423.96 Note

land

Total 18,333,423.96

Note: For details, please refer to Section 8 Financial Report, 7. Notes on Consolidated Financial Statement Items, 16. Fixed Assets, (4) Status of Fixed Assets with Uncertain Title Certificates,

Note.

Development expenditure: none
Goodwill

(1) Details

Unit: Yuan ending balance

Name of the invested unit or matters forming goodwill

Book balance Impairment provision Book value Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. 844,789,448.42 844,789,448.42 Dongguan Lithium Smart Energy Co., Ltd. 277,656,927.08 31,304,045.78 246,352,881.30 Total 1,122,446,375.50 31,304,045.78 1,091,142,329.72 (continued)

Opening balance

Name of the invested unit or matters forming goodwill

(2) Original book value of goodwill

Unit: yuan Enterprise in this period Decrease in this period

Name of the invested unit or events that formed goodwill. Beginning balance. Closing balance.

Merger Formation Disposal Other

Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. 844,789,448.42 844,789,448.42 Dongguan Lithium Smart Energy Co., Ltd. 277,656,927.08 277,656,927.08

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Enterprises in this period decreased in this period

Name of the invested unit or events that formed goodwill. Beginning balance. Closing balance.

Merger Formation Disposal Other

Total 1,122,446,375.50 1,122,446,375.50

(3) Goodwill impairment provision

Unit: Yuan Increase in this period Decrease in this period

Name of the invested unit or events that formed goodwill. Beginning balance. Closing balance.

Provision Other Disposal Other

Dongguan Lithium Smart Energy Co., Ltd. 31,304,045.78 31,304,045.78 Total 31,304,045.78 31,304,045.78

(4) Relevant information about the asset group or asset group combination where the goodwill is located

Asset group or asset group combination

Whether the asset group or combination of asset groups is related to the purchase of the asset group or combination of asset groups

The composition and basis of the asset group or asset group combination. The operating segment and basis to which it belongs. The name of the goodwill impairment test in the current and previous years.

The determined asset group or asset group combination is consistent

The asset group includes fixed assets, construction in progress, and

Chongqing Dajiang Power Equipment Manufacturing General Machinery Business Division, mainly

Tangible assets, long-term prepaid expenses, rights of use Yes

Manufacturing Co., Ltd.'s business is general machinery products

property, other non-current assets

Dongguan Lithium Smart Energy's assets group includes fixed assets, projects under construction, and non-new energy operating segments.

Yes

Co., Ltd. has tangible assets and long-term prepaid expenses. Its operating business is new energy products.

Long-term deferred expenses

Unit: Yuan

Item Beginning balance Increase in the current period Amortization amount in the current period Other decreases Ending balance Mold fee 28,466,383.78 8,048,634.08 8,711,153.60 184,401.30 27,619,462.96 Decoration fee 10,383,180.51 13,388,522.52 4,737,656.53 110,641.26 18,923,405.24 Infrastructure costs 8,375,931.19 7,684,626.03 3,391,051.95 55,301.95 12,614,203.32 Equipment fee 6,015,354.24 1,391,163.56 1,654,999.84 155,526.71 5,595,991.25 New product development prototype 6,600,375.99 1,650,094.02 4,950,281.97 Total 59,841,225.71 30,512,946.19 20,144,955.94 505,871.22 69,703,344.74

Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets without offset

Unit: Yuan Ending balance Beginning balance

Project

Deductible temporary differences Deferred income tax assets Deductible temporary differences Deferred income tax assets Asset impairment provision 314,973,067.02 53,349,028.30 285,881,553.61 48,751,484.52 Unrealized profits from internal transactions 55,692,534.54 8,948,659.39 45,614,794.87 6,842,219.23 Deductible losses 239,039,924.46 46,028,761.66 269,842,851.42 50,533,372.84 Deferred income 140,039,544.42 30,150,342.23 134,122,436.34 29,350,295.63 Valuation of trading financial liabilities

Advances subject to tax 103,650.45 25,912.61 229,795.49 57,448.87

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Share-based payment 1,105,460.00 165,819.00 1,105,460.00 165,819.00 Lease liabilities 141,396,712.38 25,347,423.27 74,629,841.13 14,226,749.06 Estimated liabilities 33,949,162.37 5,092,374.35 31,707,566.39 4,756,134.97 Difference in income tax of overseas companies

9,453,527.24 1,890,705.45 9,095,021.97 1,819,004.39 different

Total 935,753,582.88 170,999,026.26 852,229,321.22 156,502,528.51

(2) Deferred income tax liabilities without offset

Unit: Yuan Ending balance Beginning balance

Project

Taxable temporary differences, deferred income tax liabilities, taxable temporary differences, deferred income tax liabilities due to business combinations not under common control

10,080,141.32 2,520,035.33 13,440,188.48 2,016,028.24 Asset appraisal value added

Valuation of trading financial assets 1,072,254.55 160,838.19 3,000,772.96 641,240.02 Accelerated depreciation of fixed assets 308,709,423.77 55,747,206.85 309,659,230.78 56,018,467.23 Right-of-use assets 139,322,449.20 25,012,385.96 74,422,322.68 14,146,353.64 Total 459,184,268.84 83,440,466.33 400,522,514.90 72,822,089.13

(3) Details of differences in unrecognized deferred income tax assets

Unit: Yuan

Item Ending balance Beginning balance

Deductible temporary differences 123,565,509.77 108,680,749.82 Deductible losses 274,983,390.41 261,617,590.99 Total 398,548,900.18 370,298,340.81

(4) Deductible losses that have not been recognized as deferred income tax assets will expire in the following years

Unit: Yuan

Year Ending amount Beginning amount Remarks

2026 7,226,901.38 7,226,901.38

2027 2,291,129.19 2,291,129.19

2028 18,623,556.70 18,654,650.64

2029 14,320,312.45 14,320,312.45

2030 and beyond 232,521,490.69 219,124,597.33

Total 274,983,390.41 261,617,590.99

Other non-current assets

(1) Details

Unit: Yuan Ending balance Beginning balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Contract assets 1,437,460.66 117,692.65 1,319,768.01 1,697,993.11 104,534.19 1,593,458.92 Repossessed assets 124,759,836.71 31,382,636.71 93,377,200.00 124,759,836.71 31,382,636.71 93,377,200.00 Prepaid equipment payment 54,614,541.28 54,614,541.28 35,283,169.17 35,283,169.17

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total 180,811,838.65 31,500,329.36 149,311,509.29 161,740,998.99 31,487,170.90 130,253,828.09

(2) Contract assets

Details

Unit: Yuan Ending balance Beginning balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value Quality deposit receivable 1,437,460.66 117,692.65 1,319,768.01 1,697,993.11 104,534.19 1,593,458.92 Total 1,437,460.66 117,692.65 1,319,768.01 1,697,993.11 104,534.19 1,593,458.92

The book value of contract assets did not change significantly during the period.
Classified disclosure according to bad debt accrual method

Unit: Yuan ending balance

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Provision for bad debts on an individual basis

Provision for bad debts by combination 1,437,460.66 100.00 117,692.65 8.19 1,319,768.01 Total 1,437,460.66 100.00 117,692.65 8.19 1,319,768.01 (continued)

Opening balance

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Provision for bad debts on an individual basis

Provision for bad debts by combination 1,697,993.11 100.00 104,534.19 6.16 1,593,458.92 Total 1,697,993.11 100.00 104,534.19 6.16 1,593,458.92 1 Provision for bad debts on a portfolio basis

Unit: Yuan ending balance

Name

Book balance Bad debt provision Provision ratio (%) Portfolio 1: Portfolio without collateral or credit guarantee 1,437,460.66 117,692.65 8.19

Total 1,437,460.66 117,692.65 8.19

(3) Bad debt provisions accrued, recovered or reversed in the current period

Unit: Yuan Amount of changes in the current period

Item Beginning balance Closing balance

Provision Recovery or transfer Write-off/write-off Others

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Amount of changes in the current period

Item Beginning balance Closing balance

Provision Recovery or transfer Write-off/write-off Others

Provision for bad debts 104,534.19 13,158.46 117,692.65

Total 104,534.19 13,158.46 117,692.65

Assets whose ownership or use rights are restricted

Unit: End of Yuan period Beginning of period

Project

Book balance Book value Restriction type Restriction situation Book balance Book value Restriction type Restriction situation Letter of guarantee Guarantee

63,777,766 63,777,766 67,296,958 67,296,958 Margin, frozen

Monetary funds, margins, third-party deposits, frozen funds, etc. 12.12.35.35

Security deposit, etc.

63,777,766 63,777,766 67,296,958 67,296,958

total

.12 .12 .35 .35

Short-term borrowing

(1) Classification of short-term loans

Unit: Yuan

Item Ending balance Beginning balance

Guaranteed loans 60,040,000.00 342,271.76 Mortgage loans

Credit loan 300,193,333.33 300,220,000.00 Pledge loan

Total 360,233,333.33 300,562,271.76

(2) There were no overdue short-term loans at the end of the period.

Derivative financial liabilities: None
Notes payable

Unit: Yuan

Category Ending balance Beginning balance

Bank acceptance bill 761,627,025.46 587,083,648.54 Commercial acceptance bill

Letter of credit 60,000,000.00 60,000,000.00 Total 821,627,025.46 647,083,648.54

There were no bills payable that were due and unpaid at the end of this period.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Accounts payable

(1) Presentation of accounts payable

Unit: Yuan

Item Ending balance Beginning balance

Accounts payable 2,322,001,029.96 1,730,639,384.86 Total 2,322,001,029.96 1,730,639,384.86 (2) Important accounts payable aged more than 1 year or overdue: None

Advance payments

(1) Presentation of advance receipts

Unit: Yuan

Item Ending balance Beginning balance

Accounts received in advance 1,146,396.19 9,737,321.42 Total 1,146,396.19 9,737,321.42 (2) Important accounts received in advance aged more than 1 year or overdue: None

Contract liabilities

(1) Presentation of contract liabilities

Unit: Yuan

Item Ending balance Beginning balance

Advance payment for goods 108,469,899.25 109,245,829.92 Advance payment for molds 10,742,107.43 13,905,597.07Total 119,212,006.68 123,151,426.99 (2) Important contract liabilities aged more than one year: None

(3) The book value of contract liabilities has not changed significantly during the current period.

Employee compensation payable

(1) Presentation of employee benefits payable

Unit: Yuan

Item Opening balance Increase in the current period Decrease in the current period Ending balance

Short-term salary 174,168,469.23 511,854,987.87 567,098,237.57 118,925,219.53

2. Post-employment benefits-settings

40,354,344.78 40,354,344.78

Contribution plan

3. Dismissal benefits 2,321,346.06 2,321,346.06

4. Others due within one year

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

his welfare

Total 174,168,469.23 554,530,678.71 609,773,928.41 118,925,219.53

(2) Presentation of short-term remuneration

Unit: Yuan

Item Opening balance Increase in the current period Decrease in the current period Ending balance

Salaries, bonuses, allowances and

172,904,950.08 452,136,434.43 506,954,484.75 118,086,899.76 Subsidy

Employee welfare fees 24,822,746.55 24,822,746.55
Social insurance premiums 25,523,120.42 25,523,120.42

Including: medical insurance premium 21,724,507.89 21,724,507.89

Work injury insurance premium 2,446,260.12 2,446,260.12

Other insurance premiums 1,352,352.41 1,352,352.41

Housing provident fund 6,367,447.20 6,367,447.20
Union funds and employee education

984,352.45 1,637,030.66 2,045,563.35 575,819.76 Funding

Short-term paid absences
Short-term profit sharing plan
Non-monetary benefits
Others 279,166.70 1,368,208.61 1,384,875.30 262,500.01 Total 174,168,469.23 511,854,987.87 567,098,237.57 118,925,219.53

(3) Display of defined contribution plan

Unit: Yuan

Item Opening balance Increase in the current period Decrease in the current period Ending balance

Basic pension insurance 39,014,835.03 39,014,835.03
Unemployment insurance premium 1,339,509.75 1,339,509.75
Enterprise annuity payment

Total 40,354,344.78 40,354,344.78

Taxes payable

Unit: Yuan

Item Ending balance Beginning balance

Value-added tax 3,004,225.17 7,927,646.67 Corporate income tax 49,977,660.26 56,292,586.96 Urban maintenance and construction tax 769,898.69 1,002,791.53 Personal income tax withheld 1,363,129.06 6,301,435.87 Education surcharge 336,747.03 429,767.79 Local education surcharge 224,498.02 286,511.86 Stamp tax 2,422,031.21 2,845,482.31 Environmental protection tax 39,778.22 42,931.86 Withheld income tax 1,272.60

Property tax 592.46 Total 58,139,240.26 75,129,747.31

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Other payables

Unit: Yuan

Item Ending balance Beginning balance

interest payable

Dividends payable

Other payables 364,512,394.02 343,408,205.44 Total 364,512,394.02 343,408,205.44

(1) Interest payable: None

(2) Dividends payable: None

(3) Other payables

List other payables according to the nature of the payment

Unit: Yuan

Item Ending balance Beginning balance

Engineering equipment payment 160,320,424.02 119,491,881.64 Accrued expenses 63,845,668.66 77,659,932.37 Equity purchase payment (note) 49,400,000.00 49,400,000.00 Deposit and security deposit 18,821,387.67 27,229,579.68 Mold payment 23,340,362.05 17,877,923.69 Financial lease deposit 321,690.00 891,690.00 Pending litigation settlement losses 14,057,600.00 14,057,600.00 Other amounts 34,405,261.62 36,799,598.06 Total 364,512,394.02 343,408,205.44

Note: Mainly due to the unpaid balance of RMB 48.6 million for the company’s acquisition of 60% equity of Dongguan Lithium Smart Energy Co., Ltd.

Important other payables aged more than 1 year

Unit: Yuan

Item Closing balance Reason for outstanding or carried forward

The final payment due to the original shareholders for Lithium Wisdom’s equity acquisition is 48,600,000.00, which has not yet been paid.

Total 48,600,000.00

Overdue important other payables: None

Non-current liabilities due within one year

(1) Non-current liabilities due within one year

Unit: Yuan

Item Ending balance Beginning balance

Long-term borrowings due within one year 1,221,804,822.32 842,223,193.47

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Lease liabilities due within one year 40,520,218.40 31,132,684.82 Estimated liabilities due within one year 1,751,681.23 2,544,153.81 Total 1,264,076,721.95 875,900,032.10

(2) Long-term borrowings due within one year

Unit: Yuan

Item Ending balance Beginning balance

Credit loans 797,735,761.11 346,581,863.19 Mortgage loans

Guaranteed loans 424,069,061.21 495,641,330.28 Pledge loans

Total 1,221,804,822.32 842,223,193.47

Other current liabilities

Unit: Yuan

Item Ending balance Beginning balance

Output tax to be transferred 6,996,139.57 6,728,310.33 Total 6,996,139.57 6,728,310.33

Long-term borrowing

Unit: Yuan

Item Ending balance Beginning balance

Guaranteed loans 368,156,942.97 898,483,839.34 Mortgage loans

Credit loan 752,800,000.00 820,700,000.00 Pledge loan

Total 1,120,956,942.97 1,719,183,839.34

Note: The long-term borrowing interest rate range is 1.30%-2.70%.

Lease liabilities

Unit: Yuan

Item Ending balance Beginning balance

Principal of lease liabilities 198,841,087.10 131,365,636.58 Less: Unrecognized financing expenses 14,419,847.14 11,020,795.42

Lease liabilities due within one year 40,520,218.40 31,132,684.82 Total 143,901,021.56 89,212,156.34

Long-term payables

Unit: Yuan

Item Ending balance Beginning balance

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Long-term payables 295,955,884.86 231,007,530.74 Special payables

Total 295,955,884.86 231,007,530.74

(1) List long-term payables according to the nature of the payment

Unit: Yuan

Item Ending balance Beginning balance

Aviation development strategic investment and estimated interest (note) 295,786,604.10 230,666,301.34 Output tax payable on finance leases 169,280.76 341,229.40 Total 295,955,884.86 231,007,530.74

Note: The "Supplementary Agreement to the Capital Increase Agreement" signed between the company and the strategic investor of Chongqing Zongshen Aero Engine Manufacturing Co., Ltd. stipulates that the company has equity repurchase obligations to the strategic investor under potentially adverse conditions. Therefore, the company recognizes the strategic investor's capital contribution as a financial liability - long-term payable at the merger level. As of June 30, 2026, the company's confirmed principal balance of long-term payables was 232.15 million yuan, and the accrued interest balance was 63.6366 million yuan.

Estimated liabilities

Unit: Yuan

Item Ending balance Beginning balance Reason for formation

Product quality guarantee 9,910,776.03 8,195,743.12 Product quality guarantee deposit

Contingencies 3,233,248.00 3,233,248.00 Estimated compensation

Total 13,144,024.03 11,428,991.12

Deferred income

Unit: Yuan

Item Beginning balance Increase in the current period Decrease in the current period Ending balance Causes Government subsidies 158,777,503.45 36,804,520.77 13,614,645.82 181,967,378.40 Total project subsidies 158,777,503.45 36,804,520.77 13,614,645.82 181,967,378.40

Other non-current liabilities: None
Share capital

Unit: Yuan Increase or decrease in this change (+, -)

Balance at the beginning of the period Balance at the end of the period Issuance of new shares Bonus shares Conversion of public reserve funds Others Subtotal

1,145,026, total number of shares 1,145,026,920.00

920.00

Capital reserve

Unit: Yuan

Item Opening balance Increase in the current period Decrease in the current period Ending balance

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Equity premium 541,793,241.51 541,793,241.51 Others (note) 5,454,976.76 3,352,609.58 32,374,535.07 -23,566,948.73Total 547,248,218.27 3,352,609.58 32,374,535.07 518,226,292.78

Note: Other changes in capital reserve are mainly due to other changes in equity of associates accounted for using the equity method, as well as changes in the subsidiary company Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd.

Due to the impact of the company's implementation of equity incentives.

Other comprehensive income

Unit: Yuan Amount incurred in the current period

Less: in the previous period Less: in the earlier period

Item Beginning balance Income tax for the current period Into other comprehensive Into other comprehensive Less: Income tax Attributable after tax Attributable after tax Amount incurred before the closing balance Income transferred in the current period Income transferred in the current period Expenses Parent company Minority shareholders

To Profit and Loss To Retained Earnings

1. Can’t be heavy

Classify into profit and loss

137,496.56 137,496.56 Other comprehensive

income

Among them: Others 137,496.56 137,496.56

2. Divide again

- - - similar to profit and loss -

59,072,096 18,359,815 153,809.14 17,818,770 76,890,867 Other comprehensive income 694,854.10

.59 .53 .57 .16 benefit

Among them: equity

Convertible loss under the law - - -

108,259.45 153,809.14

Other comprehensive income 638,639.14 792,448.28 684,188.83

Foreign Currency - - - -

Conversion of financial statements 59,180,356 17,721,176 17,026,322 76,206,678

694,854.10

Difference .04 .39 .29 .33

- - -Other comprehensive income -

58,934,600 18,359,815 153,809.14 17,818,770 76,753,370 Total profit 694,854.10

.03 .53 .57 .60

Surplus reserve

Unit: Yuan

Item Opening balance Increase in the current period Decrease in the current period Ending balance

Statutory surplus reserve 608,917,333.35 608,917,333.35 Discretionary surplus reserve

Total 608,917,333.35 608,917,333.35

General risk preparation

Unit: Yuan

Item Opening balance Increase in the current period Decrease in the current period Ending balance

General risk reserve 21,237,173.27 21,237,173.27

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total 21,237,173.27 21,237,173.27

Undistributed profits

Unit: Yuan

Items for this period and previous year

Undistributed profits at the end of the previous period before adjustment 3,129,318,273.07 2,693,047,827.19 Total undistributed profits at the beginning of the period before adjustment (adjustment +,

Adjustment -)

Adjusted opening undistributed profit 3,129,318,273.07 2,693,047,827.19 plus: net profit attributable to owners of the parent company for the period

418,579,820.35 665,514,760.18 profit

Investment income from disposal of other equity instruments

Share reform increases undistributed profits

Less: Withdrawal from statutory surplus reserve

Withdraw discretionary surplus reserve

Withdrawal of general risk reserve 238,930.30 Common stock dividends payable 229,005,384.00 229,005,384.00

Dividends on common shares converted into equity capital

Undistributed profit at the end of the period 3,318,892,709.42 3,129,318,273.07

Operating income and operating costs

(1) Operating income and operating costs

Unit: Yuan Amount of current period Amount of previous period

Project

revenue cost revenue cost

Main business 6,519,124,678.11 5,615,180,770.88 6,586,484,855.37 5,651,891,668.68 Other businesses 45,649,874.76 42,734,655.84 68,418,980.01 59,502,653.93 Total 6,564,774,552.87 5,657,915,426.72 6,654,903,835.38 5,711,394,322.61 Among them: with customers

6,558,760,833.38 5,653,464,877.10 6,641,378,721.76 5,701,064,700.42 Income generated from contracts

Note: The revenue generated from contracts with customers is recognized at a certain point in time.

Breakdown information of operating income and operating costs:

Unit: Yuan Division 1 Total

Contract classification

Operating income Operating cost Operating income Operating cost Business type

Among them:

Machinery manufacturing industry 6,305,037,216.09 5,468,176,072.77 6,305,037,216.09 5,468,176,072.77 Others 259,737,336.78 189,739,353.95 259,737,336.78 189,739,353.95 Classified by business area

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Among them:

Domestic sales 3,605,282,086.65 3,142,845,237.21 3,605,282,086.65 3,142,845,237.21 Export sales 2,959,492,466.22 2,515,070,189.51 2,959,492,466.22 2,515,070,189.51 Classified by sales channel

Among them:

Direct sales 3,621,319,881.15 3,164,771,377.50 3,621,319,881.15 3,164,771,377.50 Distribution 2,943,454,671.72 2,493,144,049.22 2,943,454,671.72 2,493,144,049.22Total 6,564,774,552.87 5,657,915,426.72 6,564,774,552.87 5,657,915,426.72Information related to performance obligations:

The Company's sales of goods are performance obligations performed at a certain point in time.

Domestic sales business: If the factory picks up the goods, revenue will be recognized when the customer picks up the goods; if the company is responsible for transportation, revenue will be recognized when the goods are transported to the customer and the customer signs the receipt; if the goods are stored in the customer's warehouse and the customer confirms the purchase with actual receipt, revenue will be recognized when the quantity is checked every month.

Foreign sales business includes FOB, EXW, CFR, CIF, DAP and DDP. In FOB, revenue is recognized when customs declaration procedures are completed and loaded on the vehicle; in EXW, revenue is recognized when the factory ships the goods; in CFR and CIF, revenue is recognized when it arrives at the port of destination; in DAP, the goods are mainly stored in a third-party warehouse, and revenue is recognized when the customer picks up the goods; in DDP, revenue is recognized when the customer signs for receipt.

Information related to the transaction price allocated to the remaining performance obligations:

At the end of the reporting period, the amount of income corresponding to the performance obligations that have been signed but have not been performed or have not been completed is RMB 119,212,006.68.

(2) Operating income and operating costs (by industry)

Unit: Yuan Amount of current period Amount of previous period

Industry name

Operating income Operating costs Operating income Operating costs

Machinery manufacturing industry 6,305,037,216.09 5,468,176,072.77 6,516,225,615.06 5,585,326,229.15 Others 259,737,336.78 189,739,353.95 138,678,220.32 126,068,093.46 Total 6,564,774,552.87 5,657,915,426.72 6,654,903,835.38 5,711,394,322.61

(3) Operating income and operating costs (by product)

Unit: Yuan Amount of current period Amount of previous period

Product name

Operating income Operating costs Operating income Operating costs

General machinery 2,939,760,837.03 2,488,738,301.28 3,643,919,510.42 3,042,001,635.06 Engine 2,525,803,883.13 2,261,684,994.84 2,323,936,137.65 2,070,329,390.29 Product parts and components 247,905,050.01 209,951,573.10 286,458,353.45 238,637,593.65 New energy 591,567,445.92 507,801,203.55 261,911,613.54 234,357,610.15 Others 259,737,336.78 189,739,353.95 138,678,220.32 126,068,093.46

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total 6,564,774,552.87 5,657,915,426.72 6,654,903,835.38 5,711,394,322.61

(4) Operating income and operating costs (by region)

Unit: Yuan Amount of current period Amount of previous period

area name

Operating income Operating cost Operating income Operating cost Domestic sales 3,605,282,086.65 3,142,845,237.21 3,342,600,355.85 2,896,636,724.30 Export sales 2,959,492,466.22 2,515,070,189.51 3,312,303,479.53 2,814,757,598.31 Total 6,564,774,552.87 5,657,915,426.72 6,654,903,835.38 5,711,394,322.61

(5) Operating income (by sales model)

Unit: Yuan Amount of current period Amount of previous period

sales model

Operating income Operating cost Operating income Operating cost Direct sales 3,621,319,881.15 3,164,771,377.50 3,557,701,943.26 3,025,496,285.35 Distribution 2,943,454,671.72 2,493,144,049.22 3,097,201,892.12 2,685,898,037.26 Total 6,564,774,552.87 5,657,915,426.72 6,654,903,835.38 5,711,394,322.61

(6) Operating income of the company’s top five customers

Unit: Yuan

Customer name Operating income Proportion of total operating income of the company (%) No. 1 374,439,301.12 5.70

Second place 347,119,822.68 5.29

Third place 278,522,395.50 4.24

Fourth place 209,802,877.82 3.20

Fifth place 169,028,334.88 2.57

Total 1,378,912,732.00 21.00

Interest income, interest expenses, handling fees and commission income, handling fees and commission expenses

Unit: Yuan

Item Amount for the current period Amount for the previous period

Interest income (note) 22,659,455.56 37,634,892.78 Interest expense

Fee and commission income

Handling fees and commission expenses

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Note: Interest income comes from loans and factoring issued by the holding subsidiaries Chongqing Liangjiang New District Zongshen Small Loan Co., Ltd. and Chongqing Zongshen Commercial Factoring Co., Ltd.

Interest income recognized on financing loans, and interest income on finance leases recognized by its holding subsidiary Chongqing Zongshen Financial Leasing Co., Ltd.

Taxes and surcharges

Unit: Yuan

Item Amount for the current period Amount for the previous period

Urban maintenance and construction tax 8,789,660.83 8,091,063.75 Education surcharge 3,879,270.84 3,524,659.95 Property tax 5,231,569.53 5,090,219.30 Land use tax 2,960,916.69 2,958,140.69 Vehicle and vessel use tax 31,129.90 34,809.68 Stamp tax 5,351,239.21 4,280,396.14 Local education surcharge 2,586,180.58 2,349,773.26 Environmental protection tax 71,876.90 55,375.25 Land value-added tax 9,961.55 34,305.71 Total 28,911,806.03 26,418,743.73

Management expenses

Unit: Yuan

Item Amount for the current period Amount for the previous period

Employee compensation 77,731,509.55 76,976,923.98 Depreciation and amortization 25,769,073.72 24,775,061.35 Agency fees 15,394,932.46 5,102,040.20 Property management fees, cleaning, greening and security fees 4,248,322.75 5,840,691.39 Business entertainment expenses 2,500,441.40 7,061,232.14 Share-based payment 2,062,211.62 962,988.94 Water and electricity 1,824,031.28 1,577,255.83 Repair expenses 1,527,881.61 1,331,188.24Office expenses 1,215,988.80 2,332,086.11Others 9,964,197.44 5,727,736.52Total 142,238,590.63 131,687,204.70

Sales expenses

Unit: Yuan

Item Amount for the current period Amount for the previous period

Employee compensation 56,970,536.09 66,078,940.59 Intermediary agency fees 17,701,919.93 7,622,088.13 Export fees 16,029,052.15 14,913,901.32 Advertising fees 7,882,838.94 17,354,930.28 Travel expenses 4,920,904.92 4,176,193.25 Business entertainment expenses 4,722,148.54 15,654,296.84 Rental expenses 1,935,574.64 814,067.53 Depreciation expenses 1,606,536.57 2,480,929.21 Insurance premium 1,122,285.11 1,098,158.95 Others 5,828,513.53 5,089,292.58

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total 118,720,310.42 135,282,798.68

Research and development expenses

Unit: Yuan

Item Amount for the current period Amount for the previous period

Employee compensation 103,399,972.15 114,591,128.06 Depreciation and amortization 12,730,020.02 12,560,323.05 Raw materials and finished products used 9,583,019.99 13,593,623.51 Oil 6,844,592.56 5,851,910.36 Outsourcing development fee 5,104,954.21 30,000.00 Low-value consumables 3,332,373.94 5,101,896.68 Others 17,271,669.47 13,484,829.59 Total 158,266,602.34 165,213,711.25

Financial expenses

Unit: Yuan

Item Amount for the current period Amount for the previous period

Interest expense 41,703,144.00 50,846,855.50 Less: Interest income 3,832,001.42 9,739,135.64 Exchange gains and losses 57,055,946.54 -33,021,431.71 Others (note) 2,541,817.54 6,502,491.89 Total 97,468,906.66 14,588,780.04

Note: Others mainly include bill discount interest expenses and handling fee expenses.

Other income

Unit: Yuan

Sources of other income Amount incurred in the current period Amount incurred in the previous period

Government subsidies related to assets 11,897,860.11 7,868,036.76 Government subsidies related to income 24,618,646.66 11,280,830.20 Others (note) 5,387,142.90 21,040,545.23 Total 41,903,649.67 40,189,412.19

Note: Others mainly include additional VAT deductions and refund of tax withholding fees.

Investment income

Unit: Yuan

Item Amount for the current period Amount for the previous period

Income from long-term equity investments accounted for using the equity method 92,052,055.82 61,814,727.73 Investment income from disposal of long-term equity investments 13,117,646.54

Investment income from trading financial assets during the holding period

Investment income from the disposal of trading financial assets 5,231,275.81 3,477,972.32 Investment income from the disposal of derivative financial instruments 1,425,930.00 -2,172,381.00 Dividend income from other equity instrument investments during the holding period

After losing control, the remaining equity is remeasured at fair value.

Profit generated

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Interest income earned from debt investments during the holding period

Interest income earned from other debt investments during the holding period

Investment income from disposal of other debt investments

Gains from derecognition of financial assets measured at amortized cost

Others

Total 111,826,908.17 63,120,319.05

Income from changes in fair value

Unit: Yuan

Sources of income from changes in fair value Amount incurred in the current period Amount incurred in the previous period

Trading financial assets -1,928,518.41 -754,658.33 Including: fair value generated by derivative financial instruments

151,777.41 Income from changes in value

Changes in fair value of structured deposits -17,277.64 -906,435.74

Gains and losses from changes in fair value of contingent consideration -1,911,240.77

Trading financial liabilities 2,418,957.92 Including: fair value generated by derivative financial instruments

2,418,957.92 Variable income

Others

Total -1,928,518.41 1,664,299.59

Credit impairment losses

Unit: Yuan

Item Amount for the current period Amount for the previous period

Bad debt losses on accounts receivable -28,563,118.61 -6,248,864.09 Bad debt losses on other receivables -1,126,543.35 -927,420.60 Impairment losses on debt investments

Impairment losses on other debt investments

Bad debt losses on long-term receivables 396,900.65 62,854.12 Loan impairment losses 4,312,117.83 -2,862,804.45 Impairment losses on interest receivable -2,700,000.00 Total -24,980,643.48 -12,676,235.02

Asset impairment losses

Unit: Yuan

Item Amount for the current period Amount for the previous period

1. Inventory depreciation losses and contract performance cost deductions

-11,707,657.00 -12,405,149.53 value loss

2. Impairment losses on long-term equity investments

3. Impairment losses on investment real estate

4. Impairment losses on fixed assets

5. Impairment losses of engineering materials

6. Impairment losses on projects under construction

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

7. Impairment losses on productive biological assets

8. Impairment losses on oil and gas assets

9. Impairment losses on intangible assets

10. Goodwill impairment loss

Impairment losses on contract assets -31,065.48 50,997.17

12. Impairment losses on repossessed assets

13. Others

Total -11,738,722.48 -12,354,152.36

Income from asset disposal

Unit: Yuan

Source of asset disposal income Amount incurred in the current period Amount incurred in the previous period

Profit and loss from disposal of non-current assets 329,448.11 122,745.05 Profit and loss from disposal of assets held for sale

Total 329,448.11 122,745.05

Non-operating income

Unit: Yuan

Item Amount incurred in the current period Amount incurred in the previous period Amount included in non-recurring gains and losses for the current period Amounts that do not need to be paid 953,985.33 159,994.42 953,985.33 Liquidated damages and penalty income 652,635.20 553,541.66 652,635.20 Others 56,127.76 7,966,654.93 56,127.76 Total 1,662,748.29 8,680,191.01 1,662,748.29

Non-operating expenses

Unit: Yuan

Item Amount incurred in the current period Amount incurred in the previous period Amount included in non-recurring gains and losses for the current period Loss from damage and scrapping of non-current assets 1,304,109.83 796,493.93 1,304,109.83 Liquidated damages and fines 157,888.06 15,268.79 157,888.06 Public welfare donation expenses 1,044,395.00

Others 162,209.36 267,519.20 162,209.36 Total 1,624,207.25 2,123,676.92 1,624,207.25

Income tax expenses

(1) Income tax expense schedule

Unit: Yuan

Item Amount for the current period Amount for the previous period

Current income tax expense 69,977,531.61 89,035,510.97 Deferred income tax expense -3,878,120.55 -5,766,838.17 Total 66,099,411.06 83,268,672.80

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(2) Adjustment process of accounting profits and income tax expenses

Unit: Yuan

Item Amount incurred in this period

Total profit 499,363,028.25 Income tax expense calculated according to statutory/applicable tax rates 124,840,757.06 Impact of different tax rates applicable to subsidiaries -38,661,401.17 Impact of adjusting income tax in previous periods 4,577,233.64 Impact of non-taxable income -19,376,562.43 Impact of non-deductible costs, expenses and losses 4,501,591.99 Impact of using deductible losses that have not been recognized as deferred income tax assets in the previous period -6,218.79 Deductible temporary differences or deductible losses that have not been recognized as deferred income tax assets in the current period

4,070,253.13 Impact of loss

Tax incentives -15,342,803.10 Tax on the difference in dividends from overseas subsidiaries

Impact of tax rate changes on deferred income tax 257,103.90 Others 1,239,456.83 Income tax expense 66,099,411.06

Other comprehensive income

For details, please refer to Section 8 Financial Report, 7. Notes to Consolidated Financial Statement Items, 45. Other Comprehensive Income.

Cash flow statement items

(1) Cash related to operating activities

Other cash received related to operating activities

Unit: Yuan

Item Amount for the current period Amount for the previous period

Government subsidies 59,706,381.72 15,180,875.08Deposit and security deposit 5,780,176.29 9,238,840.79Interest income 3,837,576.05 9,721,862.93 Rental income 3,682,854.82 2,750,353.68 Collection and payment items 3,165,789.21 758,563.30 Personal loan repayment 1,823,394.57 1,005,218.49 Recovery of frozen funds 1,500,000.00

Non-operating income 160,651.33 6,454,723.72 Others 2,106,558.55 2,480,932.95 Total 81,763,382.54 47,591,370.94

Other cash paid related to operating activities

Unit: Yuan

Item Amount for the current period Amount for the previous period

Payment of management, R&D and sales expenses 126,696,833.22 120,251,411.99 Deposits and deposits, personal loans, etc. 20,784,845.39 12,327,157.35

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Others 1,390,105.02 9,018,338.31 Total 148,871,783.63 141,596,907.65

(2) Cash related to investing activities

Other cash received related to investment activities

Unit: Yuan

Item Amount for the current period Amount for the previous period

Performance compensation received from the original shareholders of Lithium Wisdom 1,911,240.77

Total 1,911,240.77

Significant cash received related to investing activities

Unit: Yuan

Item Amount for the current period Amount for the previous period

Recovery of structured deposits upon maturity 850,000,000.00 405,000,000.00 Total 850,000,000.00 405,000,000.00

Other cash paid related to investment activities: None
Important cash payments related to investment activities

Unit: Yuan

Item Amount for the current period Amount for the previous period

Purchase of structured deposits 1,050,000,000.00 425,000,000.00 Purchase and construction of fixed assets, intangible assets and other long-term

195,406,944.87 146,383,882.99 Cash paid for assets

Total 1,245,406,944.87 571,383,882.99

(3) Cash related to financing activities

Other cash received related to financing activities

Unit: Yuan

Item Amount for the current period Amount for the previous period

Received loans from related entities 165,000,000.00

Received investment from Hangfa strategic investors 82,850,000.00

Total 247,850,000.00

Other cash paid related to financing activities

Unit: Yuan

Item Amount for the current period Amount for the previous period

Return of loans from related entities 165,000,000.00

Payment for repurchasing the equity of Hangfa strategic investment 25,446,849.32 194,784,710.95 Payment of lease rent 21,384,194.97 23,246,547.57 Payment of bill financing 100,000,000.00

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total 211,831,044.29 318,031,258.52

Changes in liabilities related to financing activities

Unit: Yuan Increase in this period

Item Opening Balance

Cash changes Non-cash changes Short-term borrowings 300,562,271.76 160,000,000.00 3,871,017.96 Long-term borrowings (including long-term borrowings due within one year) 2,561,407,032.81 619,414,559.62 27,285,100.70 Lease liabilities (including lease liabilities due within one year) 120,344,841.16 88,315,007.31 Other payables - borrowings from external related entities 165,000,000.00

Dividends payable 229,005,384.00 Long-term payables - aviation development investment and accrued interest 230,666,301.34 82,850,000.00 7,717,152.08 Total 3,212,980,447.07 1,027,264,559.62 356,193,662.05 (continued)

Decrease in this period

Item Closing balance

Cash changes Non-cash changes

Short-term borrowings 104,199,956.39 360,233,333.33 Long-term borrowings (including long-term borrowings due within one year) 865,344,927.84 2,342,761,765.29 Lease liabilities (including lease liabilities due within one year) 20,460,338.51 3,778,270.00 184,421,239.96 Other payables-loans from external related entities 165,000,000.00

Dividends payable 229,005,384.00

Long-term payables - aviation development investment and accrued interest 25,446,849.32 295,786,604.10 Total 1,409,457,456.06 3,778,270.00 3,183,202,942.68

Supplementary information for cash flow statement

(1) Supplementary information for cash flow statement

Unit: Yuan

Supplementary information Amount for the current period Amount for the previous period

1． Adjust net profit to cash flow from operating activities

Quantity:

Net profit 433,263,617.19 511,307,396.94 plus: asset impairment provision 36,719,365.96 25,030,387.38

Fixed asset depreciation, investment real estate

Depreciation, depreciation of oil and gas assets, production depreciation of biological materials 93,493,600.88 86,797,355.12

Depreciation of right-of-use assets 20,766,646.20 20,279,893.30 Amortization of intangible assets 25,500,084.08 24,259,978.37

Amortization of long-term deferred expenses 20,144,955.94 23,796,932.57

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Disposal of fixed assets, intangible assets and other

Loss of other long-term assets (income is listed with "-" sign -329,448.11 -122,745.05)

Loss on scrapping of fixed assets (income based on

1,304,109.83 792,396.24 (Fill in “-”)

Loss from change in fair value (gain based on

1,928,518.41 -1,664,299.59 (Fill in “-”)

Financial expenses (revenues are filled in with "-"

56,822,282.25 27,000,648.33 columns)

Investment losses (income is filled in with "-"

-111,826,908.17 -63,120,319.05 columns)

Deferred tax assets decreased (increased by

-14,496,497.75 -7,888,744.33 Fill in the column with “-” sign)

Deferred tax liabilities increased (decreased by

10,618,377.20 2,121,906.16 (Fill in “-”)

Decrease in inventory (increase marked with "-"

-170,690,003.30 -82,462,217.43 fill in the column)

Decrease in operating receivables (increase in

-170,633,184.00 -382,042,986.09 (please fill in the list with "-")

Increase (decrease) in operating payables

720,838,732.05 380,742,206.08 (please fill in with "-")

Others

Net cash flow generated from operating activities 953,424,248.66 564,827,788.95 2. Major investments and financing that do not involve cash receipts or payments

Activities:

debt to capital

Convertible corporate bonds due within one year

Financing leased fixed assets

Net changes in cash and cash equivalents:

Closing balance of cash 1,766,857,713.41 1,540,249,032.28 Less: Opening balance of cash 1,562,027,620.82 1,227,457,579.58 Add: Closing balance of cash equivalents

Less: Opening balance of cash equivalents

Net increase in cash and cash equivalents 204,830,092.59 312,791,452.70

(2) Net cash paid to acquire subsidiaries in this period: None

(3) Net cash received from disposal of subsidiaries in this period: None

(4) Composition of cash and cash equivalents

Details

Unit: Yuan

Item Ending balance Beginning balance

Cash 1,766,857,713.41 1,562,027,620.82

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Including: Cash on hand 25,375.43 Bank deposits that can be used for payment at any time 1,754,663,317.38 1,561,043,476.85 Other monetary funds that can be used for payment at any time 12,194,396.03 958,768.54 Central bank deposits that can be used for payment

Deposit funds from other banks

Funds placed with other banks

2. Cash equivalents

Including: Bond investments due within three months

Balance of cash and cash equivalents at the end of the period 1,766,857,713.41 1,562,027,620.82 Among them: restricted use by the parent company or subsidiaries within the group

cash and cash equivalents

Situations where the scope of use is limited but still classified as cash and cash equivalents: None
Monetary funds that are not cash and cash equivalents

Unit: Yuan Items that are not cash and cash equivalents Ending amount Beginning amount

Reason

Guarantee deposit 63,584,654.97 65,603,518.90 Not available for payment at any time

Third-party deposit 193,111.15 193,439.45 Not available for payment at any time

Frozen funds 1,500,000.00 cannot be used for payment at any time

Total 63,777,766.12 67,296,958.35

(5) Major operating activities not involving cash receipts and payments: The company transferred the bank acceptance bill endorsement received from the sale of goods to the supplier, with an amount of 742,594,857.23 yuan, which was mainly used to pay for goods and purchase equipment.

Foreign currency monetary items

(1) Foreign currency monetary items

Unit: Yuan

Items Foreign currency balance at the end of the period Conversion exchange rate RMB conversion balance at the end of the period

Monetary funds 435,093,294.04 Including: US dollars 52,470,939.63 6.8109 353,549,533.57 Euros 1,991,976.67 7.7671 15,471,881.99

Vietnamese dong 260,785,704,379.00 0.0003 66,071,878.48 Accounts receivable 1,524,908,821.76 Including: US dollars (note) 197,036,427.77 6.9916 1,377,599,390.79 Euro 18,043,788.76 7.7671 140,147,651.78 VND 5,083,860,327.00 0.0003 1,288,031.50

British pounds 651,588.85 9.0145 5,873,747.69 Other receivables 12,669,556.56 Including: US dollars 11,494.87 6.8109 77,643.99

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Items Foreign currency balance at the end of the period Conversion exchange rate RMB conversion balance at the end of the period

Euro 11,906.50 7.7671 92,478.98

Vietnamese Dong 49,335,264,451.00 0.0003 12,499,433.59 Other current assets 11,701,888.62 Including: Euro 21,121.22 7.7671 164,050.62

Vietnamese Dong 45,539,846,628.45 0.0003 11,537,838.00 Accounts payable 171,987,649.72 Including: USD 16,415,371.21 6.8109 109,366,468.56 Euro 54,997.30 7.6408 420,223.54

Vietnamese Dong 245,507,179,788.00 0.0003 62,200,957.62 Other payables 40,311,376.97 Including: USD 3,507,937.59 6.8109 23,404,595.95 Euro 95,997.27 7.7671 745,620.40

Vietnamese Dong 63,788,100,915.71 0.0003 16,161,160.62 Employee benefits payable 5,611,582.89 Including: Euro 1,200.00 7.7671 9,320.52

Vietnamese Dong 22,112,129,611.20 0.0003 5,602,262.37 Taxes and fees payable 13,495,017.64 Including: Euro 70,629.63 7.7671 548,587.40

Vietnamese Dong 51,099,560,182.72 0.0003 12,946,430.24 Lease liabilities 99,798,478.61 Including: Vietnamese Dong 393,904,595,090.72 0.0003 99,798,478.61 Non-current liabilities due within one year 27,407,907.27 Including: Vietnamese Dong 108,179,009,991.00 0.0003 27,407,907.27

Note: Some of the company's customer receivables are converted into RMB at the end of the period according to the contract locked exchange rate.

(2) Description of overseas operating entities

Name of the unit Main overseas business place Accounting standard currency Changes in accounting standard currency Zongshen Vietnam General Power Machinery Co., Ltd. Hanoi, Vietnam Vietnamese Dong (VND) None

Zongshen Vietnam Engine Technology Co., Ltd. Hanoi, Vietnam Vietnamese Dong (VND) None

DUCAR Technology Co., Ltd. Vietnam Haiphong Vietnamese Dong (VND) None

SPLM Co., Ltd. North Point, Hong Kong Renminbi (RMB) None

Zongshen German Lithium Intelligence Co., Ltd. Germany Euro (EUR) None

Lithium Smart Energy Vietnam Co., Ltd. Haiphong, Vietnam Vietnamese Dong (VND) None

Leasing

(1) The company serves as the lessee

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

For detailed information on right-of-use assets, please refer to Section 8 Financial Report, 7. Notes to Consolidated Financial Statement Items, 18. Right-of-Use Assets.
The company’s accounting policies for short-term leases and low-value asset leases are detailed in Section 8 Financial Report, V. Important Accounting Policies and Accounting Estimates, 31. Leasing. The amount of short-term lease expenses and low-value asset lease expenses included in the current profit and loss is as follows:

Unit: Yuan

Item Amount incurred in the current period Amount incurred in the previous period Short-term lease expenses 7,183,840.08 5,096,352.50 Low-value asset lease expenses (except short-term lease)

Total 7,183,840.08 5,096,352.50

Current profits and losses and cash flow related to leasing

Unit: Yuan

Item Amount incurred in the current period Interest expense on lease liabilities Amount incurred in the previous period 2,634,965.72 3,084,598.90 Variable lease payments included in the current profit and loss and not included in the measurement of lease liabilities

Income from subletting right-of-use assets 675,271.47 435,058.30 Total cash outflows related to leasing 25,551,735.51 25,347,018.09 Related gains and losses arising from sale and leaseback transactions

(2) The company as the lessor

Operating lease

①Lease income

Unit: Yuan

Item Amount incurred in the current period Amount incurred in the previous period Lease income 3,888,303.91 2,941,387.03 Including: income related to variable lease payments not included in the measurement of lease receipts

②Operating lease assets

Unit: Yuan

Item Book value at the end of the period Book value at the beginning of the period Fixed assets 316,358.70 1,691,873.07 Investment real estate 78,865,346.27 82,339,765.00 Debt-repaired assets 2,527,418.69 3,831,037.83 Intangible assets 991,838.24 1,008,097.88 Subtotal 82,700,961.90 88,870,773.78 ③According to the lease contract signed with the lessee, the undiscounted lease receipts that will be received in the future for irrevocable leases

Unit: Yuan

Item Ending balance Beginning balance

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Item Ending balance Beginning balance

Within 1 year 1,246,368.81 2,236,700.17 1-2 years 733,778.89 1,293,089.97 2-3 years 633,905.50 569,700.00 3-4 years 581,400.00 581,400.00 4-5 years 592,500.00 592,500.00 After 5 years 2,653,500.00 2,653,500.00 Total 6,441,453.20 7,926,890.14

Financial leasing

① Current profits and losses related to finance leases

Unit: Yuan

Item Amount for the current period Amount for the previous period Sales profit and loss

Among them: sales revenue

cost of sales

Financing income from net lease investment 2,517,975.09 5,997,335.96 Income related to variable lease payments not included in net lease investment

② Reconciliation statement between undiscounted lease receipts and net lease investment

Unit: Yuan

Item Closing amount of the previous year Undiscounted lease receipts 43,642,799.72 104,174,745.96 Less: Unrealized financing income related to lease receipts 1,608,595.21 3,708,459.91 Add: Present value of unguaranteed residual value

Net lease investment 42,034,204.51 100,466,286.05 ③According to the lease contract signed with the lessee, the undiscounted lease receipts to be received in the future for irrevocable leases

Unit: Yuan Item Ending balance Beginning balance

Within 1 year 40,223,972.46 93,214,715.08 1-2 years 3,215,248.52 9,748,815.92 2-3 years 203,578.74 1,211,214.96 3-4 years

4-5 years

5 years later

Total 43,642,799.72 104,174,745.96

Supplier financing arrangements

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(1) Terms and conditions of supplier financing arrangements

Supplier Financing Arrangement Types Terms and Conditions

The subsidiary Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. applied to the bank for a letter of credit. The term of the letter of credit is 1 year.

Guaranteed by our company.

(2) Liabilities related to supplier financing arrangements

Book value of related liabilities

Unit: Yuan

Item Ending amount Beginning amount

Notes payable 60,000,000.00 60,000,000.00 Including: Suppliers have received payments 60,000,000.00 60,000,000.00 Subtotal 60,000,000.00 60,000,000.00

Non-cash changes in related liabilities

Unit: Yuan

Type of non-cash change Amount for the current period

Transferred from accounts payable to notes payable 30,000,000.00

8. R&D expenditures

R&D expenditure

Unit: Yuan

Item Amount for the current period Amount for the previous period

Employee compensation 103,399,972.15 116,289,834.11 Depreciation and amortization 12,730,020.02 12,560,323.05 Raw materials and finished products used 9,583,019.99 13,685,253.49 Oil 6,844,592.56 5,851,910.36 Outsourcing development fee 5,104,954.21 30,000.00 Low-value consumables 3,332,373.94 5,101,896.68 Others 17,271,669.47 13,484,829.59 Total 158,266,602.34 167,004,047.28 Including: Expenditure R&D expenditure 158,266,602.34 165,213,711.25

Capitalized R&D expenditure 0.00 1,790,336.03

Development expenditure

Increase this year Decrease this year

Item Opening balance Ending balance Internal development expenditure Others Confirmed as intangible assets Transferred to current profit and loss

None

total

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

9. Changes in consolidation scope

The company's scope of consolidation this year increased by one company compared with the previous year, and it was included in the scope of consolidation from the date of establishment or investment. For details on subsidiaries, please refer to Section 8 Financial Reports.

10. Rights and interests in other entities.

Business merger not under common control

During the reporting period, the Company had no mergers involving enterprises under common control.

Merger of enterprises under common control

During the reporting period, the Company had no mergers of enterprises under common control.

Disposal of subsidiaries

During the reporting period, the Company did not dispose of any subsidiaries.

Changes in the scope of consolidation due to other reasons

(1) Increase in consolidation scope

Company name Equity acquisition method Time of equity acquisition Registered capital Shareholding ratio (%) Zongshen Vietnam Engine Technology Co., Ltd. Established 2026.4.1 US$4 million 100.00

(2) Reduction in consolidation scope: None

10. Interests in other entities

Interests in subsidiaries

(1) Composition of enterprise groups

Registered capital Shareholding ratio

Subsidiary name Main place of business Registration place Nature of business How to obtain

(10,000 yuan) Direct Indirect

Chongqing Zongshen Engine Manufacturing Co., Ltd. 74,371.02 Chongqing City Chongqing City Manufacturing 100.00% Establishment of Zongshen Vietnam Engine Technology Co., Ltd. USD 4 million Hanoi, Vietnam Hanoi, Vietnam Manufacturing 100.00% Establishment of Chongqing Ruixinda Power Machinery Co., Ltd. 1,100.00 Chongqing City Chongqing City Sales 100.00% Establishment

Chongqing Zongshen General Power Machinery Co., Ltd. under common control 25,827.03 Chongqing City Chongqing City Manufacturing 100.00%

Business merger Chongqing Benoda Import and Export Trading Co., Ltd. 500.00 Chongqing City Chongqing City Sales 100.00% Established Zongshen Vietnam General Power Machinery Co., Ltd.

US$7.89 million Hanoi, Vietnam Hanoi, Vietnam Manufacturing 100.00% Establishment (Note 1)

Chongqing Tuoyuan Power Machinery Co., Ltd. 1,000.00 Chongqing City Chongqing City Sales 100.00% Establishment Chongqing Liangjiang New District Zongshen Small Loan Co., Ltd. 51,000.00 Chongqing City Chongqing City Finance 71.96% Establishment

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Responsible company

Shenzhen Qianhai Zongshen Asset Management Co., Ltd. 7,688.00 Shenzhen City Shenzhen City Finance 71.96% Establishment of Chongqing Qijiang District Qihui Machinery Manufacturing Co., Ltd.

100.00 Chongqing City Chongqing City Manufacturing 71.96% Company establishment

Yibin Jiawang Real Estate Co., Ltd. 100.00 Chongqing Chongqing Real estate 71.96% Establishment of Chongqing Zongshen Commercial Factoring Co., Ltd. 5,000.00 Chongqing Chongqing Finance 85.16% Establishment of Chongqing Chenyu Technology Co., Ltd. 7,118.70 Chongqing Chongqing Technical services 100.00% Established Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd.

12,190.00 Chongqing City Chongqing City Manufacturing 95.1644% Establishment of a limited company (Note 2)

Chongqing Small and Medium-sized Aviation Power Research Institute has

2,000.00 Chongqing City Chongqing City Technical Services 95.1644% Establishment of a limited company

Chongqing Chenguang Aviation Technology Co., Ltd. 1.00 Chongqing City Chongqing City Technical services 100.00% Establishment of Chongqing Zongshen New Energy Development Co., Ltd. 13,000.00 Chongqing City Chongqing City Manufacturing 100.00% Establishment of Chongqing Zongshen Hydrogen Energy Power Technology Co., Ltd.

6,000.00 Chongqing City Chongqing City Manufacturing 66.67% 33.33% Establishment of the company

Chongqing Zongshen Jiyan Mechanical and Electrical Technology Co., Ltd. 5,300.00 Chongqing City Chongqing City Manufacturing 100.00% Established

Chongqing Zongshen Continuously Variable Transmission Co., Ltd. under common control 2,000.00 Chongqing City Chongqing City Manufacturing 75.00%

Business merger Chongqing Zongshen Electric Power Technology Co., Ltd. 4,500.00 Chongqing City Chongqing City Manufacturing 78.035%

Chongqing Zongshen Financial Leasing Co., Ltd. 20,000.00 Chongqing City Chongqing City Lease 70.00% Establishment

Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. not under common control 1,200.00 Chongqing City Chongqing City Manufacturing 100.00%

Merged with DUCAR Technology Co., Ltd. USD 5 million Haiphong, Vietnam Haiphong, Vietnam Manufacturing 100.00% Established Chongqing Ducar Shenrui International Trade Co., Ltd. 500.00 Chongqing Chongqing Sales 100.00% Established Chengdu Zongshen Machinery Parts Manufacturing Co., Ltd.

200.00 Chengdu City Chengdu City Manufacturing 100.00% Establishment Division

Non-common control Dongguan Lithium Smart Energy Co., Ltd. 6,200.00 Dongguan City Dongguan City Manufacturing 60.00%

Next business merger Shenzhen Ligu Technology Co., Ltd. 799.00 Shenzhen City Shenzhen City Sales 60.00%

Jiangsu Haibode Energy Technology Co., Ltd. 1,000.00 Nanjing City Nanjing City Technical Services 60.00%

SPM Co., Ltd. HKD 10,000 Hong Kong Hong Kong Trade 60.00%

Zongshen German Lithium Smart Energy Co., Ltd. 25,000 Euros Germany Germany Trade 60.00% Establish Lithium Smart Energy Vietnam Co., Ltd. 6.5 million US dollars Vietnam Haiphong Vietnam Haiphong Manufacturing 60.00% Establishment

Note 1: On January 1, 2026, Chongqing Zongshen General Power Machinery Co., Ltd. (hereinafter referred to as "General Machinery Company") purchased Chongqing Zongshen Engine Manufacturing Co., Ltd.

The company (hereinafter referred to as the "Engine Company") holds 100% equity of Zongshen Vietnam Engine Manufacturing Co., Ltd. So far, Zongshen Vietnam Engine Manufacturing Co., Ltd. has

The wholly-owned subsidiary of Engine Company became a wholly-owned subsidiary of General Machinery Company. On June 12, 2026, Zongshen Vietnam Engine Manufacturing Co., Ltd. was renamed Zongshen Vietnam Tong

Yong Power Machinery Co., Ltd.

Note 2: During the reporting period, in order to meet the company’s strategic planning and business development needs, Zongdong’s wholly-owned subsidiary Chongqing Chenyu Technology Co., Ltd. (hereinafter referred to as

"Chenyu Technology") issued shares to Zongdong, Shenzhen Jiaxing No. 1 Investment Partnership (Limited Partnership), Shenzhen Jiaxing No. 3 Investment Partnership

(Limited Partnership), Shaanxi Kongtian Yunhai Venture Capital Fund Partnership (Limited Partnership), Jiaxing Kongtian Hanyu Equity Investment Partnership (Limited Partnership), Jiaxing Sheng

Hangzhou Equity Investment Partnership (Limited Partnership), Shenzhen Shengda Investment Co., Ltd., and Chongqing Juqu Enterprise Management Consulting Partnership (Limited Partnership), a total of 8 shareholders

East, to acquire its 58.3975% stake in Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd. (hereinafter referred to as "Zongshen Aviation"). This transaction is for the group

The internal equity structure was adjusted. After the transaction was completed, Zongshen Aviation was changed from a Zongdong subsidiary to a Chenyu Technology subsidiary.

In the first half of 2026, the company, four strategic investors of Zongshen Aviation Development Co., Ltd. and the company’s wholly-owned subsidiary Chongqing Tuoyuan Power Machinery Co., Ltd. (hereinafter referred to as “Tuoyuan Company”)

Company") signed a "Share Repurchase Agreement", stipulating that Tuoyuan Company will repurchase the equity of Zongshen Aviation Development Company held by strategic investors, and the repurchase price will be the investment cost plus mortgage investment

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The interest on the funds is calculated based on the number of days. During the reporting period, Tuoyuan Company completed the repurchase of 1.0501 million shares of Zongshen Aviation Development Company held by strategic investors; at the same time, Tuoyuan Company signed a "Share Transfer Agreement" with two strategic investors, transferring a total of 4.1425 million shares of Zongshen Aviation Development Company to them. According to the accounting standards, the company treats the investment of strategic investors as long-term payables at the consolidated statement level, and the shareholding ratio of strategic investors is included in the company's shareholding ratio statistics of Zongshen Aviation Development Company at the consolidated level.

After the completion of the above-mentioned equity transaction, Tuoyuan Company holds 25.9746% of the equity of Zongshen Aviation Development Company, and the company’s total shareholding in Zongshen Aviation Development Company remains at 95.1644%.

① Basis for holding half or less of the voting rights but still controlling the invested unit, and holding more than half of the voting rights but not controlling the invested unit: None

(2) Important non-wholly owned subsidiaries

Unit: Yuan This period belongs to minority shareholders. This period announces to minority shareholders.

Subsidiary name Shareholding ratio of minority shareholders Balance of minority shareholders’ equity at the end of the period

Profit and loss Dividends declared

Chongqing Zongshen Aviation Engine

4.8356% 2,053,282.72 39,746,915.80 Manufacturing Co., Ltd.

(3) Main financial information of important non-wholly owned subsidiaries

Unit: Yuan Ending balance Beginning balance

Subsidiaries

Current capital, non-current assets, current liabilities, non-current liabilities, total current assets, non-current assets, current liabilities, non-current liabilities, total name.

Property Assets Debt Liabilities Property Assets Debt Liabilities Chongqing Zong

Shen Airlines

836,96 363,09 1,200, 137,11 64,513 725,38 372,94 1,098, 96,527 47,907

Engine 201,626 144,434

0,578. 2,750. 053,32 2,402. ,896.5 8,390. 9,089. 337,48 ,383.3 ,077.0

Manufacturing stocks,298.93,460.36

55 09 8.64 34 9 25 79 0.04 2 4

Limited copies

company

Unit: Yuan Amount of current period Amount of previous period

Subsidiary name Total comprehensive income Current operating activities Total comprehensive income Current operating income Operating income Net profit Operating income Net profit

Amount of cash flow Amount of cash flow Chongqing Zongshenhang

- -Air engine mechanism 214,405,24 42,461,798 42,461,798 153,004,46 70,341,532

37,004,818 37,004,818 33,655,311 Co., Ltd. 6.04 .41 .41 3.36 .91

.10 .10 .28Company

Note: The above company financial information is consolidated data.

Transactions in which the ownership share of the subsidiary changes and the subsidiary is still controlled: None
Interests in joint ventures or associated enterprises

(1) Important joint ventures or associates

Name of joint venture or associated enterprise Main business place of registration Nature of business Shareholding ratio of joint venture or associated enterprise

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Camp Direct Indirect Investment Accounting Treatment Chongqing Zongshen New Intelligent Manufacturing Technology Co., Ltd.

Chongqing Banan District, Chongqing Commercial Services 48.2910% Equity method accounting company

(2) Main financial information of important associates

Unit: Yuan

Ending balance/amount of the current period Beginning balance/amount of the previous period

Current assets 14,002,505,007.10 13,826,198,974.66 Non-current assets 5,572,700,563.92 5,778,732,954.81 Total assets 19,575,205,571.02 19,604,931,929.47 Current liabilities 7,895,633,740.22 7,332,204,360.32 Non-current liabilities 1,855,922,960.92 2,166,830,251.72 Total liabilities 9,751,556,701.14 9,499,034,612.04

Minority shareholders’ equity 7,797,176,278.67 8,218,625,265.87 Equity attributable to shareholders of the parent company 2,026,472,591.21 1,887,272,051.56 Share of net assets calculated based on shareholding ratio 978,604,174.90 911,382,842.31 Adjustment matters

--Goodwill

--Unrealized profits from internal transactions

--Others

Book value of equity investments in associates 978,604,174.90 911,382,842.31 Equity investments in associates with publicly quoted prices

fair value

Operating income 9,775,242,695.13 9,751,952,970.07 Net profit 912,077,497.52 863,012,445.33 Net profit from discontinued operations

Other comprehensive income -5,420,481.00 8,017,023.87 Total comprehensive income 906,657,016.52 871,029,469.20

Dividends received from associates during the year

(3) Summary financial information of unimportant joint ventures and associates

Unit: Yuan

Ending balance/amount of the current period Beginning balance/amount of the previous period

Associates:

Total book value of investments 218,490,737.22 241,873,033.06 Total of the following items calculated based on shareholding ratio

--Net profit -5,728,288.20 -1,506,201.91 --Other comprehensive income 1,563.25 572,432.11

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd. - Total comprehensive income -5,726,724.95 -933,769.80

11. Government subsidies

Liability items involving government subsidies

Unit: Yuan

The newly added subsidy in this period is included in the business in this period and transferred to other income in this period. It is related to the assets/receipt accounting account in this period. The opening balance of the period. The ending balance of the period.

Amount of additional income Amount of gain Other changes Benefit-related deferred income 157,060,717.74 36,804,520.77 11,897,860.11 181,967,378.40 Asset-related deferred income 1,716,785.71 1,716,785.71 Total income-related 158,777,503.45 36,804,520.77 13,614,645.82 181,967,378.40

Government subsidies included in current profits and losses

Unit: Yuan

Accounting accounts Amount for the current period Amount for the previous period

Other income 36,516,506.77 19,148,866.96 Non-operating income

financial charges

Total 36,516,506.77 19,148,866.96

Government subsidies recognized according to the amount receivable at the end of the reporting period: None

12. Risks related to financial instruments

For detailed descriptions of various financial instruments of the Company, please see Section 8 Financial Report, 7. Notes on Consolidated Financial Statement Items and Relevant Items. The risks associated with these financial instruments, and the risk management policies adopted by the Company to mitigate these risks, are described below. The company's management manages and monitors these risk exposures to ensure that the above risks are controlled within limited limits.

Risk management objectives and policies

The company's goal in risk management is to achieve an appropriate balance between risks and returns, reduce the negative impact of risks on the company's operating performance to a minimum, and maximize the interests of shareholders and other equity investors. Based on this risk management objective, the company's basic risk management strategy is to determine and analyze the various risks faced by the company, establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliable manner to control risks within a limited range.

Various risks and management

(1) Credit risk

The maximum credit risk exposure that may cause the company's financial losses mainly comes from the loss of the company's financial assets caused by the failure of the other party to perform its obligations and the financial guarantees undertaken by the company, specifically including: the carrying amount of financial assets recognized in the consolidated balance sheet; for financial assets measured at fair value.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

For financial instruments, the book value reflects its risk exposure, but it is not the maximum risk exposure. Its maximum risk exposure will change with changes in fair value in the future. The financial guarantees undertaken by the Company are mainly guarantees for subsidiaries, so the guarantee risk is low.

The Company's working capital is deposited in banks with higher credit ratings, so the credit risk of working capital is lower.

The company's notes receivable are all bank acceptance bills, and the credit risk is also low.

The scope of the company's financial management business is mainly financial products with low market risks, and the investment risks are controllable. At the same time, the company strengthens supervision in terms of internal review processes, internal reporting procedures, fund usage, responsible departments and responsible persons, to prevent investment risks.

The book value of accounts receivable, other receivables, loans and long-term receivables in the consolidated balance sheet is the largest credit risk that the company may face. For quantitative data on the Company's credit risk exposure arising from accounts receivable, other receivables, loans and long-term receivables, please refer to Section 8 Financial Reports, 7. Notes to Consolidated Financial Statement Items, 4. Accounts Receivable, 7. Other Receivables, 12. Loans and Advances, and 13. Long-term Receivables.

Among accounts receivable, the ones with greater risk are foreign currency receivables. Among them, the total closing balance of foreign currency receivables of the Company, Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. and its subsidiaries, Chongqing Zongshen General Power Machinery Co., Ltd. and its subsidiaries, Chongqing Zongshen Engine Manufacturing Co., Ltd. and its subsidiaries, Dongguan Lithium Smart Energy Co., Ltd. and its subsidiaries is 152, 4.9088 million yuan, accounting for 56% of the accounts receivable at the end of the period; according to the short-term export credit insurance comprehensive insurance signed by the company and its subsidiaries with export business and China Export and Credit Insurance Corporation, the accounts receivable of the company's export customers will be compensated at a rate of 70%-90% within the limits of different regions. Therefore, the company's management believes that the credit risk borne by the company has been greatly reduced; in terms of domestic accounts receivable, the company stipulates credit sales limits and credit sales cycles in the contract based on the customer's comprehensive credit rating, and monitors them. For customers who violate regulations, the company will suspend shipments, write reminders, and cancel credit sales limits to ensure that the company's overall credit risk is within control.

Loan and financial leasing business: For the company's loan business and financial leasing business, the company comprehensively implements differentiated and standardized management models. By establishing an industry access mechanism, risk control is front-loaded, whole-process risk control is introduced, key risk identification mechanisms and corresponding risk control standards are established, and exit channel design and post-loan (post-lease) management are strengthened to improve the company's risk control capabilities.

Significant credit concentration risk: Among the company's accounts receivable, the accounts receivable of the top five customers in arrears account for 24.77% of the company's total accounts receivable. Mainly in accordance with the provisions of the short-term export credit insurance comprehensive insurance signed by the aforementioned company, the compensation ratio can reach 70%-90%. Therefore, the Company's significant credit concentration risk has also been greatly reduced.

(2) Liquidity risk

Liquidity risk is the risk that the company cannot fulfill its financial obligations on the maturity date.

In order to ensure that there is sufficient liquidity to fulfill maturing debts without causing unacceptable losses or damage to corporate reputation, the company regularly analyzes the structure and maturity of liabilities, maintains cash and cash equivalents that management deems sufficient and monitors them to ensure that there are sufficient funds to meet the company's operating needs and reduce the impact of cash flow fluctuations. At the same time, the Company manages its liquidity risk by maintaining a balance between funding continuity and flexibility through the use of bank borrowings and debt.

The Company monitors the use of bank borrowings to ensure compliance with loan agreements and actively conducts financing negotiations with financial institutions to maintain a certain credit limit and reduce liquidity risks.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(3) Market risk

Market risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market prices. Market risks mainly include interest rate risk and foreign exchange risk.

①Interest rate risk

Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market interest rates. The Company's risk of changes in cash flows of financial instruments due to changes in interest rates is mainly related to bank borrowings.

By establishing a good bank-enterprise relationship, the company rationally designs credit lines, credit types and credit periods to ensure that bank credit lines are sufficient to meet the company's various short-term financing needs. At the same time, interest rate risk control is achieved by implementing a loan portfolio strategy: if the interest rate is at a high level, low-interest financing will be used to raise funds; if the interest rate is in the transition period from high to low, floating interest rates will be used to raise funds. The company has carried out a variety of financing businesses including bill pool financing, which not only accelerates the ability to realize bills, but also minimizes financing costs.

Sensitivity analysis:

Unit: Yuan

Item Basis point increase/decrease (%) Net profit Stockholders’ equity

Borrowing interest rate 25 -5,064,934.50 -5,064,934.50 Borrowing interest rate -25 5,064,934.50 5,064,934.50 On June 30, 2026, with other variables unchanged, assuming that the interest rate decreases (increases) by 25 basis points, the company's net profit and shareholders' equity will increase (decrease) by RMB 5,064,934.50.

For floating rate non-derivative instruments held on the balance sheet date that expose the Company to cash flow interest rate risk, the impact on net profit and shareholders' equity in the above sensitivity analysis is the after-tax impact of the above interest rate changes on the annual estimated interest expense or income.

②Foreign exchange risk

Foreign exchange risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in foreign exchange rates. The risk of exchange rate changes faced by the Company is mainly related to the US dollar and the Euro. Except that some business activities of the Company, Engine Company, General Machinery Company, Dajiang Power Company, Dongguan Lithium Intelligence Company and other companies are denominated and settled in the above currencies, the Company's other main business activities are denominated and settled in RMB. As of June 30, 2026, for details of the Company's foreign currency asset and liability items, please see Section 8 Financial Report, 7. Notes on Consolidated Financial Statement Items, 68. Foreign Currency Monetary Items.

The Company controls foreign exchange risks by locking exchange rates and forward settlement. For important customers, the company protects the company's interests by locking the exchange rate; at the same time, the company also signs remote settlement agreements with banks based on exchange rate changes to avoid the risk of exchange rate changes and ensure reasonable returns on sales orders.

Sensitivity analysis: Assuming that other risk variables other than the exchange rate remain unchanged, a 5% increase (decrease) in the company's exchange rate of US dollars, euros and other foreign currencies against the RMB on June 30, 2026 will lead to an increase (decrease) in shareholders' equity and net profit as follows:

Unit: Yuan

Item Exchange rate increase/decrease (%) Net profit Shareholders’ equity

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Appreciation of the US dollar against the RMB 5 67,934,358.91 67,934,358.91 Depreciation of the US dollar against the RMB -5 -67,934,358.91 -67,934,358.91 Appreciation of the euro against the RMB 5 6,551,473.24 6,551,473.24 Depreciation of the euro against the RMB -5 -6,551,473.24 -6,551,473.24 Appreciation of GBP against RMB 5 249,634.28 249,634.28 Depreciation of GBP against RMB -5 -249,634.28 -249,634.28 Note: This impact is converted into RMB based on the spot exchange rate on the balance sheet date.

The above sensitivity analysis is based on the assumption that the exchange rate changes on the balance sheet date, and the financial instruments that are exposed to exchange rate risk held by the company on the balance sheet date are remeasured based on the changed exchange rate. The above analysis does not include translation differences in foreign currency statements.

Transfer of financial assets

(1) Basic information on financial asset transfer

Transfer method Nature of financial assets transferred Amount of financial assets transferred Termination of recognition Determination of recognition is based on bill discounting Receivables financing 90,062,882.88 Termination of recognition Almost all its risks and rewards have been transferred

Endorsement of notes Receivables financing 482,017,339.41 Derecognition Subtotal has transferred almost all of its risks and rewards 572,080,222.29

(2) Financial assets derecognized due to transfer

Unit: Yuan

Item Financial assets transfer method Amount of financial assets derecognized Gains or losses related to derecognition Receivables financing Discount 90,062,882.88 -176,272.29 Receivables financing Endorsement 482,017,339.41

Subtotal 572,080,222.29 -176,272.29

13. Disclosure of fair value

Closing fair value of assets and liabilities measured at fair value

Unit: Yuan Ending Fair Value

Item Level 1 fair value Level 2 fair value Level 3 fair value

total

Measurement Measurement Measurement

1. Continuous fair value measurement -- -- -- --

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

(1) Trading financial assets 591,072,254.55 591,072,254.55 1. Measured at fair value and its changes

591,072,254.55 591,072,254.55 Financial assets included in current profits and losses

(1) Investment in debt instruments 591,072,254.55 591,072,254.55 (2) Investment in equity instruments

(3) Derivative financial assets

Designated as measured at fair value and its

Financial assets whose changes are included in current profits and losses

(1) Debt instrument investment

(2) Equity instrument investment

(2) Other debt investments

(3) Investment in other equity instruments

(4) Investment real estate

(5) Biological assets

(6) Receivables financing 989,263,103.98 989,263,103.98 Total assets continuously measured at fair value

591,072,254.55 989,263,103.98 1,580,335,358.53 amount

(7) Trading financial liabilities

Including: trading bonds issued

Derivative financial liabilities

Others

(8) Designated as measured at fair value

and the changes are included in the financial liabilities of the current period’s profits and losses

debt

Total liabilities measured at fair value on an ongoing basis

Non-continuous fair value measurement -- -- -- --

(1) Assets held for sale

Assets measured at fair value on an ongoing basis

total amount

Liabilities measured at fair value on an ongoing basis

total amount

Continuous and non-continuous second-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters

The second-level fair value measurement items held by the Company are structured deposits, which are regarded as fair values based on the valuation provided by the bank.

Continuous and non-continuous third-level fair value measurement projects, valuation techniques used and qualitative and quantitative information on important parameters

The third level fair value measurement receivable financing held by the Company is bank acceptance bill receivable, which has low credit risk and short remaining term.

The company determines its fair value based on its par balance.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

14. Related parties and related transactions

Information about the parent company of this enterprise

Registered capital Parent company to this enterprise Parent company to this enterprise Parent company name Place of registration Nature of business

(RMB 10,000) Shareholding ratio Voting rights ratio Chongqing Zongshen High-Speed Boat Development Co., Ltd. Chongqing Manufacturing 60,000.00 20.10% 20.10%

Chongqing Zongshen High-speed Boat Development Co., Ltd. (hereinafter referred to as "Zongshen High-speed Boat Company") was established on December 29, 1997. Zongshen Industrial Group Co., Ltd.

Holds 80% of the equity of Zongshen High-Speed Boat Company. The legal representative is Hu Xianyuan. The registered address is: No. 73 Wangjiaba, Huaxi Town, Banan District. It is mainly engaged in boat outboard engines.

Development, manufacturing, manufacturing and sales of series of yachts, speedboats and fiberglass reinforced plastic (fiber reinforced plastic) products.

The actual controller of the company is Zuo Zongshen.

Information about the company’s subsidiaries

For details of the company's subsidiaries, please refer to Section 8 Financial Report, 10. Related content on interests in other entities.

Information on joint ventures and associated enterprises of the enterprise

The situation of other joint ventures or associates that have related party transactions with the company in the current period, or related party transactions with the company in previous periods that resulted in balances is as follows:

Name of joint venture or associated enterprise Relationship with this enterprise

Aerospace Shenzhou Aircraft Co., Ltd. Associate Enterprise

Chongqing Maxim’s Yishen Machinery Co., Ltd. Associate Company

Chongqing Zongshen New Intelligent Manufacturing Technology Co., Ltd. Associate Company

Other related parties

Names of other related parties Relationship between other related parties and the company Chongqing Sekeron Motorcycle Manufacturing Co., Ltd. Jiangsu Zongshen Motorcycle Industry Co., Ltd., a legal person indirectly controlled by the actual controller of the company Chongqing Zongshen Motorcycle Industrial Manufacturing Co., Ltd., a legal person indirectly controlled by the actual controller of the company Chongqing Zongshen Vehicle Co., Ltd., a legal person indirectly controlled by the actual controller of the company Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd., a legal person indirectly controlled by the actual controller of the company Zongshen Piaggio Foshan Motorcycle Enterprise Co., Ltd., a legal person indirectly controlled by the actual controller of the company Henan Loncin Locomotive Co., Ltd., a legal person indirectly controlled by the actual controller of the company Longyue General Electric Power Technology Co., Ltd., a legal person indirectly controlled by the actual controller of the company Chongqing Loncin Die-casting Co., Ltd., a legal person indirectly controlled by the actual controller of the company Zuo Master Chain Sales Service Co., Ltd., a legal person indirectly controlled by the actual controller of the company Guangzhou Weineng Mechanical and Electrical Co., Ltd. Chongqing Jinlong Titanium Motorcycle Industry Co., Ltd., a legal person indirectly controlled by the actual controller of the company Chongqing Dadong Longteng Automotive and Motorcycle Valve Manufacturing Co., Ltd., a legal person indirectly controlled by the actual controller of the company. Chongqing Zongshen Innovation Technology Research Institute Co., a legal person indirectly controlled by the actual controller of the company. Zongshen Industrial Group Co., Ltd., a legal person indirectly controlled by the actual controller of the company. Chongqing Zongshen Automobile Air Intake System Manufacturing Co., Ltd., a legal person directly controlled by the actual controller of the company. Loncin General Dynamics Co., Ltd., a legal person indirectly controlled by the actual controller of the company. Chongqing Xin Loncin Mechanical and Electrical Co., Ltd., a legal person indirectly controlled by the actual controller of the company. Chongqing Zongshen Logistics Management Co., Ltd., a legal person indirectly controlled by the actual controller of the company. Chongqing Loncin Locomotive Co., Ltd., a legal person indirectly controlled by the actual controller of the company. Legal person indirectly controlled by the actual controller of the company.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Xuzhou Zongshen Electric Vehicle Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Tianjin Zongshen Electric Vehicle Technology Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Xundianda Digital Energy Technology Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Zongshen Tianrun Real Estate Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Zongshen Group Import and Export Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Humi Industrial Design Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Humi Network Technology Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing General Chamber of Commerce Investment Guarantee Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Digital Gravity Network Technology Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Motoyun Network Technology Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Zongshen Motorcycle Sales Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Zongshen Aviation Sports Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Foshan Zongde Investment Development Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Tianjin Tianbo Keda Technology Co., Ltd. A legal person in which the company’s independent directors serve as directors

Zongshen (Thailand) Machinery Manufacturing Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Chongqing Jingcaiduoduo Supply Chain Technology Co., Ltd. A legal person indirectly controlled by the actual controller of the company

Related transactions

(1) Related transactions related to the purchase and sale of goods, provision and receipt of services

Procurement of goods/service acceptance form

Unit: Yuan

Whether it exceeds

Related parties Related party transaction content Amount incurred in the current period Approved transaction quota Amount incurred in the previous period

Transaction limit

Chongqing Maxim Yishen Machinery Co., Ltd. Raw materials 26,320,642.68 55,000,000.00 No 37,157,253.90 Chongqing Dadong Longteng Automobile and Motorcycle Valve Manufacturing Co., Ltd.

Raw materials 20,812,687.78 41,150,000.00 No 21,675,620.95 Company

Loncin General Power Co., Ltd. Raw materials 3,738,276.01 354,791.49 Master Zuo Chain Sales Service Co., Ltd. Raw materials 2,418,590.36 3,414,530.53 Chongqing Xin Loncin Mechanical and Electrical Co., Ltd. Raw materials 369,477.81

Chongqing Loncin Die Casting Co., Ltd. Raw materials 280,761.08

Chongqing Zongshen Innovation Technology Research Institute Co., Ltd. Raw materials 144,250.21 235,438.73 Chongqing Zongshen Locomotive Industrial Manufacturing Co., Ltd. Raw materials 66,836.29 535,014.34 Chongqing Zongshen Logistics Management Co., Ltd. Raw materials 2,303.77 12,600,000.00 No 71,698.11 Chongqing Jinlong Titanium Motorcycle Industry Co., Ltd. Raw materials 24,148.94

Chongqing Loncin Locomotive Co., Ltd. Raw materials 6,637.17

Xuzhou Zongshen Electric Vehicle Co., Ltd. Raw materials 159.29

Tianjin Zongshen Electric Vehicle Technology Co., Ltd. Raw materials 126.55 12,389.38 Chongqing Zongshen Automobile Air Intake System Manufacturing Co., Ltd. Raw materials 3,592.19 Chongqing Xundianda Digital Energy Technology Co., Ltd. Raw materials 130,379.42 Chongqing Zongshen Logistics Management Co., Ltd. Fees paid 12,892,403.41 30,650,000.00 No 5,245,119.79 Chongqing Zongshen Tianrun Real Estate Co., Ltd. Fees paid 455,000.00 59,056.60 Chongqing Zongshen Group Import and Export Co., Ltd. Fees paid 202,211.62 81,752.80 Chongqing Zongshen Automobile Air Intake System Manufacturing Co., Ltd. Fees paid 96,307.62 79,240.88

11,600,000.00 No

Chongqing Zongshen Innovation Technology Research Institute Co., Ltd. Fees paid 66,789.62 53,095.28 Zongshen Piaggio Foshan Motorcycle Enterprise Co., Ltd. Fees paid 5,188.72 6,162.25 Zongshen Industrial Group Co., Ltd. Fees paid 3,382.27 3,885,138.64 Chongqing Dadong Longteng Automobile Motorcycle Valve Manufacturing Co., Ltd.

Fees paid of 4,424.78 were 8,849.56 company

Chongqing Maxim Yishen Machinery Co., Ltd. Fees paid 99,557.52 Chongqing Humi Industrial Design Co., Ltd. Fees paid 73,584.90 Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. Fees paid 35,577.68 Chongqing Humi Network Technology Co., Ltd. Fees paid 14,537.15

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

List of goods sold/services provided

Unit: Yuan

Related parties Related party transaction content Amount incurred in the current period Amount incurred in the previous period

Chongqing Seikelong Motorcycle Manufacturing Co., Ltd. Complete machine and accessories 347,119,822.68 309,208,061.89 Jiangsu Zongshen Motorcycle Industry Co., Ltd. Complete machine and accessories 278,522,395.50 238,734,047.68 Chongqing Zongshen Motorcycle Industrial Manufacturing Co., Ltd. Complete machine and accessories 97,347,906.41 62,946,863.66 Chongqing Zongshen Vehicle Co., Ltd. Complete machine and accessories 41,092,603.01 45,022,303.29 Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. Complete machine and accessories 26,916,133.41 21,262,203.33 Zongshen Piaggio Foshan Motorcycle Enterprise Co., Ltd. Complete machine and accessories 11,488,104.59 23,267,001.24 Henan Loncin Locomotive Co., Ltd. Complete machine and accessories 2,937,588.12 5,480.54 Longyue General Electric Power Technology Co., Ltd. Complete machine and accessories 2,550,146.39 17,548.03 Chongqing Maxim Yishen Machinery Co., Ltd. Complete machine and accessories 1,498,629.86 1,566,224.31 Chongqing Loncin Die Casting Co., Ltd. Complete machine and accessories 750,725.10

Master Zuo Chain Sales and Service Co., Ltd. Complete machine and accessories 104,836.30

Guangzhou Weineng Mechanical and Electrical Co., Ltd. Complete machine and accessories 89,628.31 Aerospace Shenzhou Aircraft Co., Ltd. Complete machine and accessories 70,353.98 Chongqing Jinlong Titanium Motorcycle Industry Co., Ltd. Complete machine and accessories 3,101.02 Chongqing Dadong Longteng Automobile and Motorcycle Valve Manufacturing Co., Ltd.

Complete machine and accessories 672.57 company

Zongshen Piaggio Foshan Motorcycle Enterprise Co., Ltd. Processing and service fees 1,501,981.13

Chongqing Zongshen Innovation Technology Research Institute Co., Ltd. Processing and service fees 156,872.96 141,780.10 Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. Processing and service fees 15,683.45 10,323.56 Chongqing Zongshen Motorcycle Industrial Manufacturing Co., Ltd. Processing and service fees 11,604.72 5,112.27 Zongshen Industrial Group Co., Ltd. Processing and service fees 1,589.63 16,834.90 Chongqing Dadong Longteng Automobile and Motorcycle Valve Manufacturing Co., Ltd.

Processing and service fees 1,410.39 858.50 Company

Chongqing Maxim Yishen Machinery Co., Ltd. Processing and service fee 1,099.06 1,207.56 Chongqing Zongshen Automobile Air Intake System Manufacturing Co., Ltd. Processing and service fee 3,406.60

(2) Related entrusted management/contracting and entrusted management/contracting: None

(3) Related leasing situation

① As the lessor, our company:

Unit: Yuan

Name of the lessee Type of leased assets Lease income recognized in the current period Lease income recognized in the previous period Chongqing Zongshen Innovation Technology Research Institute Co., Ltd. House or equipment 2,059,444.32 1,612,870.98 Chongqing Zongshen Automobile Air Intake System Manufacturing Co., Ltd. House or equipment 78,821.76

Chongqing Zongshen High-Speed Boat Development Co., Ltd. House or equipment 48,741.48 38,172.30 Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. House or equipment 15,929.19 10,619.46

2 The company as the lessee:

Unit: Yuan

Simplified processing of short-term rentals

Not included in lease liabilities

Lease liabilities and interest on low-value asset leases

Amount of variable lease payments Rent paid Increase in the name of the lessor of the right-of-use asset The rental expense of the lease (such as interest expense

Amount (if applicable)

Weighing product type (applicable)

Posted in this issue Posted in the previous issue Posted in this issue Posted in the previous issue Posted in this issue Posted in the previous issue Posted in this issue Posted in the previous issue Posted in this issue Posted in the previous issue

Student quota Student quota Student quota Student quota Student quota Student quota Student quota Student quota Zongshen Industry

House or 1,083,6 3,476,6 5,580,2 228,920 244,844 14,516, 3,059,9 Group Co., Ltd.

Equipment 87.64 80.50 60.94 .53 .11 326.04 93.87Company

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Chongqing Municipal Headquarters

Chamber of Commerce Investment House or 1,010,3 1,010,3 61,185. 49,543. 4,025,0

Limited Warranty Equipment 77.98 77.98 73 11 01.91

company

Chongqing SECCO

Dragon Motorcycles Houses or 227,064 227,064

Manufacturing Limited Equipment .21 .21

company

(4) Related guarantees

① The company serves as the guarantor: None

② The company as the guaranteed party: None

(5) Fund lending from related parties

Unit: Yuan

Related parties Borrowing amount Start date Maturity date Description

dismantle

Zongshen Industrial Group Co., Ltd. 165,000,000.00 February 25, 2026 February 27, 2026 Returned and dismantled on February 27, 2026

None

(6) Transfer of equipment to related parties

Unit: Yuan

Related parties Contents of related transactions Amount for the current period Amount for the previous period Chongqing Humi Network Technology Co., Ltd. Purchase of assets 4,720,662.03 1,058,463.85 Chongqing Shuzi Gravity Network Technology Co., Ltd. Purchase of assets 1,351,792.46

Chongqing Motoyun Network Technology Co., Ltd. Purchased assets 366,981.13

Chongqing Humi Industrial Design Co., Ltd. Purchased assets 183,962.26

Chongqing Zongshen Vehicle Co., Ltd. Purchased assets 21,238.94

(7) Remuneration of key management personnel

Unit: Yuan

Item Amount for the current period Amount for the previous period

Remuneration of key management personnel 2,787,301.63 5,301,198.49

(8) Collection and payment by related parties

Unit: Yuan

Related parties Related party transaction content Amount incurred during the period

Chongqing Zongshen Innovation Technology Research Institute Co., Ltd. paid for water and electricity on behalf of the company 211,904.34 Chongqing Zongshen Locomotive Industrial Manufacturing Co., Ltd. paid for water and electricity on behalf of 105,857.50

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. Water and Electrical on behalf of 114,386.96 Chongqing Zongshen Logistics Management Co., Ltd. Water and Electrical on behalf of 96,330.75 Zongshen Industrial Group Co., Ltd. Water and Electrical on behalf of 46,767.09 Chongqing Shuzi Gravity Network Technology Co., Ltd. Water and Electrical on behalf of 25,733.95 Chongqing Zongshen Automobile Air Intake System Manufacturing Co., Ltd. Water and Electrical on behalf of 16,719.48 Chongqing Zongshen Group Import and Export Co., Ltd. Procures water and electricity on behalf of the company 12,076.89 Chongqing Zongshen Aviation Sports Co., Ltd. Procures water and electricity on behalf of 1,702.93 Chongqing Zongshen High-speed Boat Development Co., Ltd. Procures water and electricity on behalf of 3,029.15 Chongqing Seikelong Motorcycle Manufacturing Co., Ltd. Procures water and electricity 113,354.37 Zongshen Industrial Group Co., Ltd. Purchase of water and electricity 8,138.29

Note: Collection and payment of water, electricity and water by related parties shall be based on government pricing.

(9) Related loans

Loan amount Interest income Ending balance (10,000 Impaired related parties at the end of the period Starting date Maturity date Guarantee method

(Ten thousand yuan) (Yuan) Yuan) Preparation (Ten thousand yuan) Foshan Zongde Investment Development

5,000.00 2024/12/4 2026/12/3 Guaranteed 1,153,039.82

exhibition co., ltd.

Note: Foshan Zongde Investment Development Co., Ltd. has settled the loan in advance on April 20, 2026.

(10) Related financial lease

finance lease

Interest income Long-term receivables Non-current due within one year Impairment at the end of the period Related parties Lease contract Start date Maturity date

(yuan) Balance (yuan) Live assets (yuan) Reserves (yuan)

(10,000 yuan)

Foshan Zongde Investment Development

3,000.00 2024/1/3 2027/1/3 446,635.22

exhibition co., ltd.

Note: Foshan Zongde Investment Development Co., Ltd. has settled the financial lease payment in advance on March 11, 2026.

(11) Other related transactions

①Trademark License Agreement

According to the supplementary agreement on the "Trademark License Agreement" signed with Zongshen Industrial Group Co., Ltd., which was reviewed and approved at the 2004 Annual General Meeting of Shareholders, Zongshen Industrial Group Co., Ltd. agreed to license the company and its subsidiary Chongqing Zongshen Engine Manufacturing Co., Ltd. (hereinafter referred to as "Trademark License Agreement") after the expiration of the "Trademark License Agreement" in September 2005. (called "Engine Company") shall be used without limit and free of charge during the registration period of the trademark (specifically including the registered trademarks listed under the "Trademark Registration Certificate" No. 1767201, No. 1767202, No. 1767247, No. 1613961, and No. 1487149 issued by the Trademark Office of the State Administration for Industry and Commerce), and

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

This license is unconditional and irrevocable.

② Equity transfer and investment: None

③Others

In 2025, the company’s controlled subsidiary Chongqing Zongshen Commercial Factoring Co., Ltd. (hereinafter referred to as Zongshen Factoring Company) and Shenzhen Yutaite Technology Co., Ltd., etc. 8

Enterprises (hereinafter referred to as factoring business customers) signed the "Domestic Factoring Business Contract" to treat Zuo Shifu Chain Sales Service Co., Ltd. (hereinafter referred to as Zuo Shifu Company)

With the accounts receivable of Chongqing Jingcai Duoduo Supply Chain Technology Co., Ltd. (hereinafter referred to as Jingcai Duoduo Company) as the subject matter, we applied to Zongshen Factoring Company for the application of a country with recourse rights.

Internal factoring business. According to the contract, Master Zuo Company and Jingcai Duoduo Company will pay the amounts payable to factoring business customers to Zongshen Factoring Company for the purpose of repaying the guarantees.

The total amount of factoring financing principal, interest and other related expenses of factoring business customers from Zongshen Factoring Company. Since the relevant contracts have not yet expired, Zuo Shifu Company and Jingcai in this issue

Duoduo Company paid RMB 73,884.34 and RMB 345,407.28 respectively to Zongshen Factoring Company, totaling RMB 419,291.62, to reimburse Zongshen Factoring customers for their

Interest on factoring financing generated by the factoring company.

Accounts receivable and payable from related parties

(1) Items receivable

Unit: Yuan

Ending balance Beginning balance

Project name Related parties

Book balance Bad debt provision Book balance Bad debt provision Accounts receivable Chongqing Sekelon Motorcycle Manufacturing Co., Ltd. 138,738,610.72 6,936,930.54 114,276,733.87 5,713,836.69 Accounts receivable Chongqing Zongshen Motorcycle Industrial Manufacturing Co., Ltd. 47,942,685.14 2,397,134.26 25,751,025.39 1,546,521.59 Accounts receivable Jiangsu Zongshen Automobile Industry Co., Ltd. 26,594,746.25 1,329,737.32 20,399,943.31 1,021,389.32 Accounts receivable Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. 13,439,685.09 671,984.26 9,156,218.11 562,409.37 Accounts receivable Chongqing Zongshen Vehicle Co., Ltd. 12,924,671.00 646,233.55 1,398,448.65 69,922.43

Zongshen Piaggio Foshan Motorcycle Enterprise Co., Ltd.

Accounts receivable 5,591,280.86 279,564.04 10,908,485.90 654,509.15

Division

Accounts receivable Henan Loncin Locomotive Co., Ltd. 1,821,348.36 91,067.42 107,023.00 6,421.38 Accounts receivable Longyue General Electric Power Technology Co., Ltd. 1,037,086.26 51,854.31 1,795,776.07 89,788.80 Accounts receivable Master Zuo Chain Sales Service Co., Ltd. 15,865.00 793.25

Accounts receivable Chongqing Loncin Die Casting Co., Ltd. 1,827,397.64 91,369.88 Accounts receivable Chongqing Jinlong Titanium Locomotive Industry Co., Ltd. 27,288.30 1,364.42 Accounts receivable Chongqing Loncin Locomotive Co., Ltd. 7,500.00 375.00 Accounts receivable Aerospace Shenzhou Aircraft Co., Ltd. 6,492.80 389.57 Accounts receivable Xuzhou Zongshen Electric Vehicle Co., Ltd. 180.00 9.00 Accounts receivable Tianjin Zongshen Electric Vehicle Technology Co., Ltd. 143.00 7.15 Subtotal 248,105,978.68 12,405,298.95 185,662,656.04 9,758,313.75

Zongshen Piaggio Foshan Motorcycle Enterprise Co., Ltd.

Other receivables 3,332,410.00 1,140,265.00 3,332,410.00 1,120,588.50

Division

Other receivables Chongqing Maxim Yishen Machinery Co., Ltd. 25,000.00 25,000.00 25,000.00 25,000.00 Other receivables Chongqing Zongshen Logistics Management Co., Ltd. 18,932.65 946.63

Subtotal 3,376,342.65 1,166,211.63 3,357,410.00 1,145,588.50 Receivables Financing Chongqing Seikelong Motorcycle Manufacturing Co., Ltd. 219,920,947.95 175,243,660.00

Receivables Financing Jiangsu Zongshen Automobile Industry Co., Ltd. 171,000,000.00 110,000,000.00

Receivables Financing Chongqing Zongshen Vehicle Co., Ltd. 18,130,000.00 45,100,000.00

Subtotal 409,050,947.95 330,343,660.00

Dividends receivable Aerospace Shenzhou Aircraft Co., Ltd. 2,471,100.00 2,471,100.00

Subtotal 2,471,100.00 2,471,100.00

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Prepaid accounts Chongqing Maxim Yishen Machinery Co., Ltd. 7,964.60 7,964.60

Chongqing Dadong Longteng Automotive and Motorcycle Valve Manufacturing Co., Ltd.

Prepaid accounts 4,424.78 8,849.56

Ltd.

Prepaid accounts Chongqing Zongshen Motorcycle Industrial Manufacturing Co., Ltd. 22,657.50

Subtotal 12,389.38 39,471.66

Other non-current funds

Chongqing Humi Network Technology Co., Ltd. 1,524,253.01 1,826,124.85

produce

Other non-current funds

Chongqing Digital Gravity Network Technology Co., Ltd. 946,254.72

produce

Other non-current funds

Chongqing Humi Industrial Design Co., Ltd. 73,584.90

produce

Subtotal 1,524,253.01 2,845,964.47

(2) Items payable

Unit: Yuan

Project name Related party Book balance at the end of the period Book balance at the beginning of the period Accounts payable Chongqing Maxim Yishen Machinery Co., Ltd. 10,696,080.46 8,108,532.88 Accounts payable Chongqing Dadong Longteng Automobile and Motorcycle Valve Manufacturing Co., Ltd. 9,237,639.42 5,129,893.63 Accounts payable Loncin General Power Co., Ltd. 1,082,200.00 1,212,955.50 Accounts payable Master Zuo Chain Sales Service Co., Ltd. 1,265,548.88 880,162.65 Accounts payable Chongqing Xin Loncin Mechanical and Electrical Co., Ltd. 318,855.52

Accounts payable Chongqing Loncin Die Casting Co., Ltd. 255,977.97

Accounts payable Chongqing Xundianda Digital Energy Technology Co., Ltd. 16,515.84 Subtotal 22,856,302.25 15,348,060.50 Other payables Chongqing Humi Network Technology Co., Ltd. 2,318,440.00 341,150.00 Other payables Chongqing Zongshen Motorcycle Industrial Manufacturing Co., Ltd. 1,251,623.16 1,220,150.00 Other payables Zongshen Industrial Group Co., Ltd. 804,003.94 1,238,570.00 Other payables Chongqing Zongshen Tianrun Real Estate Co., Ltd. 362,264.16

Other payables Chongqing Digital Gravity Network Technology Co., Ltd. 143,290.00

Other payables Tianjin Tianbo Keda Technology Co., Ltd. 117,990.00 129,990.00 Other payables Chongqing Humi Industrial Design Co., Ltd. 97,120.00 114,620.00 Other payables Zuo Shifu Chain Sales Service Co., Ltd. 50,000.00 50,000.00 Other payables Chongqing Zongshen Logistics Management Co., Ltd. 40,927.88

Other payables Chongqing Motoyun Network Technology Co., Ltd. 38,900.00

Other payables Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. 28,500.00 28,500.00 Other payables Chongqing Seikelong Motorcycle Manufacturing Co., Ltd. 21,557.72

Other payables Chongqing Zongshen Innovation Technology Research Institute Co., Ltd. 7,832.00

Subtotal 5,282,448.86 3,122,980.00 Contract liabilities Chongqing Zongshen Motorcycle Industrial Manufacturing Co., Ltd. 165,486.73 165,486.73 Contract liabilities Chongqing Zongshen Innovation Technology Research Institute Co., Ltd. 112,836.95

Contract liabilities Chongqing Zongshen Electric Vehicle Manufacturing Co., Ltd. 74,091.90 74,091.90 Contract liabilities Zongshen Piaggio Foshan Motorcycle Enterprise Co., Ltd. 10,500.00 3,010,500.00 Contract liabilities Zongshen (Thailand) Machinery Manufacturing Co., Ltd. 47,030.00 Subtotal 362,915.58 3,297,108.63 Notes payable Chongqing Maxim Yishen Machinery Co., Ltd. 8,262,349.28 2,680,000.00 Notes payable Chongqing Dadong Longteng Automobile and Motorcycle Valve Manufacturing Co., Ltd. 1,114,433.96

Notes payable Zuo Shifu Chain Sales Service Co., Ltd. 132,394.37

Subtotal 9,509,177.61 2,680,000.00 Lease liabilities Zongshen Industrial Group Co., Ltd. 12,891,581.93 3,414,649.63 Lease liabilities Chongqing General Chamber of Commerce Investment Guarantee Co., Ltd. 1,975,277.83 45,667.50 Subtotal 14,866,859.76 3,460,317.13 Non-current liabilities due within one year Zongshen Industrial Group Co., Ltd. 4,441,598.92 1,767,600.18 Non-current liabilities due within one year Chongqing General Chamber of Commerce Investment Guarantee Co., Ltd. 1,768,138.41 621,939.08 Subtotal 6,209,737.33 2,389,539.26

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Related party commitments

(1) Commitment on share reduction

The company’s controlling shareholder Chongqing Zongshen High-Speed Boat Development Co., Ltd. promised in July 2008:

① The shares of the company held by him, which will be lifted from listing on January 25, 2009, will be voluntarily locked for three years starting from January 26, 2009.

② If the stock price of Zongshen Power in the secondary market is lower than 10.34 yuan/share (after the company implemented the profit distribution plan from 2008 to 2023, the original promised price of “30 yuan/share” was ex-rights treated accordingly), it will not reduce its holdings through the secondary market.

As of the disclosure date of this report, the company has not received a notice from its controlling shareholder, Chongqing Zongshen High-Speed Boat Development Co., Ltd., regarding entrusting the company to handle the lifting of restricted shares. 2) The share commitments held by Mr. Zuo Zongshen, the actual controller and chairman of the company, are as follows:

① Mr. Zuo Zongshen made a commitment on October 19, 2010: to extend the lock-up period of 22.1 million restricted tradable shares to October 17, 2011. On May 2, 2013, it made a second additional commitment: it promised to voluntarily continue to lock the 22.1 million restricted shares it held that could be released from the market on October 17, 2011. The lock-in period is three years, and the lock-in period is extended to May 2, 2016.

② If the secondary market price of the company's stock is lower than 7.49 yuan/share (after the company implemented the profit distribution plan from 2012 to 2023, the original promised price of "10 yuan/share" was ex-rights treated accordingly), the shareholding will not be reduced through the secondary market.

As of the disclosure date of this report, the company has not received a notice from the actual controller and chairman Mr. Zuo Zongshen regarding entrusting the company to handle the lifting of the restricted shares after the IPO.

(2) Commitment to solve the problem of horizontal competition

Mr. Zuo Zongshen, the actual controller and chairman of the company, Chongqing Zongshen Investment Co., Ltd., the controlling shareholder of the company's joint-stock company Chongqing Zongshen New Intelligent Manufacturing Technology Co., Ltd., and Chongqing Zongshen New Intelligent Manufacturing Technology Co., Ltd. have made the following commitments to resolve the horizontal competition issues between Loncin General and Zongshen Power:

The committed party will, in accordance with applicable laws, regulations and regulatory rules, and with the consent of the relevant securities regulatory authorities, in line with the principle of conducive to the development of Zongshen Power and safeguarding the interests of shareholders, especially the interests of small and medium-sized shareholders, and within 30 months from the date when the committed party obtains control of Loncin General, comprehensively use asset restructuring or other legal methods to steadily resolve the horizontal competition problems existing between Loncin General and Zongshen Power.
Before the horizontal competition between other subsidiaries controlled by the committed party and Zongshen Power is eliminated, the committed party will strictly abide by the relevant laws, regulations and normative documents as well as the provisions of the listed company's articles of association and other internal management systems, exercise shareholder rights in accordance with the law through equity relationships, properly handle matters involving the interests of the listed company, not use the control position to seek improper benefits or transfer interests, and will not engage in any behavior that damages the legitimate rights and interests of the listed company and its small and medium-sized shareholders.
The commitment letter will continue to be effective while the committing party has control of the listed company. The committed party promises to compensate the listed company for any losses or expenses suffered or incurred due to the committed party's violation of any terms of this commitment.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

15. Share-based payment

Overall situation of share-based payment

Unit: Share, Yuan Grant object Granted in this period Exercise in this period Unlocked in this period Expired in this period

Category Quantity Amount Quantity Amount Quantity Amount Quantity Amount R&D personnel

salesperson

Managerial staff 237,962 1,815,871.82

Total 237,962 1,815,871.82

Note: In the first half of 2026, two employees of Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd. (hereinafter referred to as "Aviation Development Company") resigned, and Aviation Development Company retained the employees.

For the equity of two resigned employees, their original equity will be recognized as a one-time payment for the remaining shares at the time of resignation. The total amount of equity instruments exercised in this period is 1,815,871.82 yuan.

Equity-settled share-based payment

Applicable □Not applicable

Unit: Yuan The method for determining the fair value of equity instruments on the date of grant refers to the valuation amount of the recent capital increase of Zongshen Aviation Development Company

Important parameters of fair value of equity instruments on grant date Not applicable

On each balance sheet date during the waiting period, the enterprise shall make the best estimate based on the latest obtained determination basis for the number of exercisable equity instruments, changes in the number of exercisable employees and other subsequent information, and revise the estimated exercisable equity instruments.

The number of equity instruments exercised.

Reasons for significant differences between the current period’s estimate and the previous period’s estimate None

The cumulative amount of equity-settled share-based payment included in capital reserves 9,456,993.52 Total expenses recognized for equity-settled share-based payment in the current period 2,062,211.62

Share-based payment settled in cash: None
Share-based payment expenses for this period

Unit: Yuan

Category of Granted Object Equity-settled share-based payment expenses Cash-settled share-based payment expenses to managers 1,846,477.06

Sales staff 57,286.40

R&D personnel 91,335.71

Production staff 67,112.45

Total 2,062,211.62

Modification and termination of share-based payment: None

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

16. Commitments and contingencies

Important commitments

According to the signed lease contract, the company's commitments related to the minimum lease payment payable after the balance sheet date are detailed in Section 8 Financial Report, 7. Notes to Consolidated Financial Statement Items, 35. Non-current liabilities due within one year and 38. Lease liabilities. As of the balance sheet date, except for the above matters, the Company has no other important commitments that should be disclosed but have not been disclosed.

Contingent matters

As of the balance sheet date, the Company has no undisclosed important contingencies that should be disclosed.

17. Events after the balance sheet date

Important non-adjustment matters

As of the date of this report, the Company has no post-balance sheet non-adjustment events that should be disclosed but have not been disclosed.

18. Other important matters

Correction of accounting errors in the previous period

(1) Retrospective restatement method

There were no previous accounting errors that required adjustment using the retrospective restatement method during the reporting period.

(2) Future applicable law

There were no prior accounting errors that required adjustment using the prospective application method during the reporting period.

Branch information

(1) Determination basis and accounting policies of reporting segments

The company determines its operating segments based on its internal organizational structure, management requirements, and internal reporting system. A company's operating segments refer to components that simultaneously meet the following conditions:

① This component can generate income and incur expenses in daily activities;

② The management can regularly evaluate the operating results of the component to decide to allocate resources to it and evaluate its performance; ③ Can obtain relevant accounting information such as the financial status, operating results and cash flow of the component.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

The company determines reporting segments based on operating segments, and operating segments that meet one of the following conditions are determined as reporting segments:

① The segment revenue of this operating segment accounts for 10% or more of the total revenue of all segments;

② The absolute amount of segment profits (losses) of the segment accounts for 10% or more of the greater of the absolute amount of the total profits of all profitable segments or the absolute amount of the total losses of all loss-making segments;

③The segment assets of this segment account for 10% or more of the total assets of all segments;

④ If the operating segment does not meet the above 10% importance judgment standard, if the management believes that the disclosure of the operating segment information is useful to users of accounting information, it will also be determined as a reporting segment.

The accounting policies used in segment reporting are consistent with those used in preparing the company's financial statements.

(2) Financial information of reporting segments

Unit: Yuan

Projects Engine General machinery Parent company and product parts Industrial chain finance Main business income 2,527,970,355.27 2,958,204,481.95 461,241,187.81

Main business costs 2,256,752,214.31 2,504,397,090.10 438,585,400.66

Loan interest income 15,951,034.99Total profit 159,836,556.96 202,279,231.06 158,566,621.78 7,286,764.95Net profit 137,248,498.85 170,588,847.68 157,648,347.63 6,160,723.05 Total assets 2,545,765,276.60 3,901,837,833.48 7,459,524,418.08 853,321,944.60 Total liabilities 984,336,867.95 3,033,004,937.26 3,076,428,343.86 11,483,481.72 (continued)

Item Aviation New energy Financial leasing Inter-segment offset Total main business income 214,087,462.02 629,003,488.99 -271,382,297.93 6,519,124,678.11 Main business costs 147,004,698.11 545,221,810.79 -276,780,443.09 5,615,180,770.88 Loan interest income 6,708,420.57 22,659,455.56 Total profit 48,324,183.21 8,552,616.03 6,997,428.25 -92,480,373.99 499,363,028.25Net profit 42,032,600.62 5,858,272.93 5,247,085.19 -91,520,758.76 433,263,617.19Total assets 1,199,704,591.62 1,075,494,580.06 269,135,232.49 -4,057,633,725.96 13,247,150,150.97 Total liabilities 201,696,761.21 790,858,214.92 2,253,495.59 -823,826,877.41 7,276,235,225.10

Share pledge

(1) Pledge of shares of Chongqing Zongshen High-speed Boat Development Co., Ltd.

On February 9, 2023, Chongqing Zongshen High-speed Boat Development Co., Ltd. will hold 90,000,000 pre-IPO restricted shares of the company (accounting for 7.86% of the company’s total share capital) and completed the share pledge registration at the Shenzhen Branch of Zhongdeng Company According to the formalities, the above-mentioned shares are pledged to the Chongqing Branch of the Export-Import Bank of China. The starting date of the pledge is February 9, 2023. The pledge period starts from the date of registration of the share pledge and ends on the date when the pledgee handles the cancellation registration procedures with the Shenzhen Branch of Zhongdeng Company.

As of the disclosure date of this report, Chongqing Zongshen High-Speed Boat Development Co., Ltd. holds 230,192,114 pre-IPO restricted shares of the company (accounting for 10% of the company’s total share capital).

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

20.10%), of which the cumulative number of pledged shares is 90,000,000 shares (accounting for 7.86% of the company’s total share capital). Apart from this, there are no other situations such as share freezes.

(2) Pledge of shares of Tibet Guolong Trading Services Co., Ltd.

On March 12, 2021, Tibet Guolong Trading Services Co., Ltd. (formerly known as: Tibet Guolong Technology Co., Ltd.) transferred its 84,000 unrestricted tradable shares of the company to ,000 shares (accounting for 7.34% of the company's total share capital) have gone through the share pledge registration procedures at the Shenzhen Branch of Zhongdeng Company. The above shares are pledged to the Chongqing Branch of the Export-Import Bank of China. The starting date of the pledge is March 12, 2021. The pledge period starts from the date of registration of the share pledge and ends on the date when the pledgee handles the cancellation registration procedures with the Shenzhen Branch of Zhongdeng Company.

On January 29, 2026, Tibet Guolong Trading Services Co., Ltd. completed the pledge registration procedures for the above-mentioned shares, and released 30,000,000 pledged shares of the company held by it, accounting for 16.09% of the company's shares held by it and 2.62% of the company's total share capital.

As of the disclosure date of this report, Tibet Guolong Trading Services Co., Ltd. holds 186,445,000 shares of the company (accounting for 16.28% of the company's total share capital), of which the cumulative number of pledged shares is 54,000,000 shares (accounting for 4.72% of the company's total share capital). Apart from this, there are no other situations such as share freezes.

(3) Pledge of Gao Shaoheng’s shares

On June 18, 2024, Gao Shaoheng, the original shareholder of Dongguan Lithium Smart Energy Co., Ltd., completed the share pledge registration procedure at the Shenzhen Branch of Zhongdeng Company for his 1,282,800 unrestricted tradable shares of the company (accounting for 0.11% of the company’s total share capital). Continued, the above-mentioned shares are pledged to the company's subsidiary Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. The starting date of the pledge is June 18, 2024, and the pledge period is from the date of registration of the share pledge to the date when the pledgee handles the cancellation registration procedures with the Shenzhen Branch of Zhongdeng Company.

On July 11, 2025, Gao Shaoheng, the original shareholder of Dongguan Lithium Smart Energy Co., Ltd., completed the share pledge registration procedures at the Shenzhen Branch of Zhongdeng Company for his 453,300 unrestricted tradable shares of the company (accounting for 0.04% of the company’s total share capital). , the above-mentioned shares are pledged to the company's subsidiary Chongqing Dajiang Power Equipment Manufacturing Co., Ltd., the pledge starting date is July 14, 2025, and the pledge period is from the date of share pledge registration to the date when the pledgee handles the cancellation registration procedures with Zhongdeng Company Shenzhen Branch.

On June 17, 2026, Gao Shaoheng completed the pledge registration procedures for all the above-mentioned shares, and released 1,736,100 of the company's pledged shares, accounting for 100% of the company's shares held by him and 0.15% of the company's total share capital.

19. Notes on main items of the parent company’s financial statements

Accounts receivable

(1) Disclosure based on aging

Unit: Yuan

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year (including 1 year) 201,587,234.67 200,833,015.68

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

1 to 2 years 47,456.12 112,389.05 2 to 3 years 61,389.45 3 to 4 years

4 to 5 years

More than 5 years

Total 201,634,690.79 201,006,794.18

(2) Classified disclosure according to bad debt accrual method

Unit: Yuan Ending balance Beginning balance

Category Book balance Bad debt provision Book balance Bad debt provision

book value book value

Amount Proportion Amount Provision proportion Amount Proportion Amount Provision proportion

Provision based on individual items

Provision for bad debts

Provisions based on combination 201,634, 4,715,39 196,919, 201,006, 6,218,45 194,788,

100.00% 2.34% 100.00% 3.09%

Provision for bad debts 690.79 1.84 298.95 794.18 5.98 338.20

201,634, 4,715,39 196,919, 201,006, 6,218,45 194,788, total 100.00% 2.34% 100.00% 3.09%

690.79 1.84 298.95 794.18 5.98 338.20 1) Provision for bad debts on an individual basis: None

Provision for bad debts on a portfolio basis

Unit: Yuan ending balance

Name

Book balance Bad debt provision Provision ratio

Portfolio 1: Portfolio without collateral or credit insurance 85,131,934.75 4,256,693.66 5.00% Portfolio 2: Portfolio with collateral or credit insurance 52,239,209.25 458,698.18 0.88% Portfolio 3: Portfolio of companies within the scope of consolidation 64,263,546.79

Total 201,634,690.79 4,715,391.84 2.34%

(3) Bad debt provisions accrued, recovered or reversed in the current period

Unit: Yuan Amount of changes in the current period

Category Beginning Balance Ending Balance

Provision Recovery or transfer Write-off Others

Provision for bad debts 6,218,455.98 1,503,064.14 4,715,391.84 Total 6,218,455.98 1,503,064.14 4,715,391.84

Among them, the amount of bad debt provision recovery or reversal in the current period is important: None

(4) Accounts receivable actually written off in this period: None

(5) Accounts receivable and contract assets with the top five closing balances collected by debtors

Unit: Yuan Contract assets at the end of the period Accounts receivable and contracts account for the sum of accounts receivable Accounts receivable and bad debts Quasi unit name Accounts receivable at the end of the period

Balance Ending balance of assets Ending balance of same assets Reserves and contract assets minus

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Proportion of total number No. 1 in the closing balance of value preparation 54,947,412.70 54,947,412.70 27.25%

Second place 52,239,209.25 52,239,209.25 25.91% 458,698.18 Third place 40,755,576.91 40,755,576.91 20.21% 2,037,778.85 Fourth place 10,528,159.36 10,528,159.36 5.22% 526,407.97Fifth place 10,517,305.67 10,517,305.67 5.22% 525,865.29Total 168,987,663.89 168,987,663.89 83.81% 3,548,750.29

Other receivables

Unit: Yuan

Item Ending balance Beginning balance

interest receivable

Dividends receivable 2,471,100.00 2,471,100.00 Other receivables 674,497,645.54 821,006,854.55 Total 676,968,745.54 823,477,954.55

(1) Interest receivable: None

(2) Dividends receivable

Classification of dividends receivable

Unit: Yuan

Project (or invested unit) Closing balance Opening balance

Aerospace Shenzhou Aircraft Co., Ltd. 2,471,100.00 2,471,100.00 Total 2,471,100.00 2,471,100.00

Important dividends receivable aged more than 1 year: None
Bad debt provision accrual: None

(3) Other receivables

Classification of other receivables according to nature of payment

Unit: Yuan

Nature of payment Book balance at the end of the period Book balance at the beginning of the period

Unit borrowings within the scope of consolidation 673,050,000.00 818,930,000.00Deposit 300,000.00 300,000.00Other current accounts 1,193,916.45 1,880,362.77Total 674,543,916.45 821,110,362.77

Disclosure based on aging

Unit: Yuan

Aging Book balance at the end of the period Book balance at the beginning of the period

Within 1 year (including 1 year) 674,536,910.79 821,110,362.77

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

1 to 2 years 7,005.66

2 to 3 years

3 to 4 years

4 to 5 years

More than 5 years

Total 674,543,916.45 821,110,362.77

Classified disclosure according to bad debt accrual method

Unit: Yuan Ending balance Beginning balance

Category Book balance Bad debt provision Book balance Bad debt provision

book value book value

Amount Proportion Amount Provision proportion Amount Proportion Amount Provision proportion

Provision based on individual items

Provision for bad debts

Provision based on combination 674,543, 46,270 674,497,6 821,110, 103,508. 821,006,

100.00% 0.01% 100.00% 0.01%

Bad debt provision 916.45 .91 45.54 362.77 22 854.55

674,543, 46,270 674,497,6 821,110, 103,508. 821,006, total 100.00% 0.01% 100.00% 0.01%

916.45 .91 45.54 362.77 22 854.55 ① Provision for bad debts by group:

Unit: Yuan ending balance

Name

Book balance Bad debt provision Provision ratio

Portfolio 1: Aging portfolio 918,412.45 46,270.91 5.04% of which: Within 1 year 911,406.79 45,570.34 5.00% 1-2 years 7,005.66 700.57 10.00% 2-3 years

3-4 years

Portfolio 2: Portfolio of companies within the scope of consolidation 673,625,504.00 0.00 0.00% Total 674,543,916.45 46,270.91 0.01%

Provision for bad debts based on the general expected credit loss model

Unit: Yuan Phase 1 Phase 2 Phase 3

Bad debt provisions Expected credit in the next 12 months Expected credit losses throughout the entire duration Expected credit losses throughout the duration Total

Loss Loss (no credit impairment occurred) Loss (credit impairment occurred)

Opening balance 103,508.22 103,508.22 Opening balance in the current period

--Transfer to the second stage

--Transfer to the third stage

--Return to the second stage

--Return to the first stage

Provision for this period

Received or transferred back in the current period 57,237.31 57,237.31 Write-off in the current period

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Recovery in this period has been written off in the previous period

Other changes

Closing balance 46,270.91 46,270.91

Bad debt provisions accrued, recovered or reversed in the current period

Unit: Yuan Amount of changes in the current period

Category Beginning Balance Ending Balance

Provision, recovery or transfer, written off in the previous period of recovery, others

Bad debt provision 103,508.22 57,237.31 46,270.91 Total 103,508.22 57,237.31 46,270.91

Among them, the amount of bad debt provision for the current period that is reversed or recovered is important: None

Other receivables actually written off in this period: None
Other receivables with the top five closing balances based on debtors

Unit: Yuan accounted for other receivables at the end of the period

Unit name Nature of payment Closing balance Account age Closing balance of bad debt provision

Proportion of total balance

Chongqing Tuoyuan Power Machinery Co., Ltd. Internal unit loan 573,050,000.00 Within 1 year 84.95%

Chongqing Dajiang Power Equipment Manufacturing Co., Ltd. Internal unit loan 100,000,000.00 Within 1 year 14.82%

Chongqing Zongshen Engine Manufacturing Co., Ltd. Mold 561,004.00 Within 1 year 0.08%

Chongqing Banan Natural Gas Co., Ltd. Security deposit 250,000.00 Within 1 year 0.04% 12,500.00 Li Shuang Reserve loan 200,000.00 Within 1 year 0.03% 10,000.00 Total 674,061,004.00 99.92% 22,500.00

The company has no receivables involving government subsidies during the reporting period

Long-term equity investment

(1) Classification of long-term equity investments

Unit: Yuan Ending balance Beginning balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value

3,455,963,321. 3,424,659,275. 3,445,963,321. 3,414,659,275. Investment in subsidiaries 31,304,045.78 31,304,045.78

09 31 09 31

1,251,740,736. 1,196,510,808. 1,207,901,699. 1,152,671,772. Investment in associates 55,229,927.91 55,229,927.91

73 82 98 07

4,707,704,057. 4,621,170,084. 4,653,865,021. 4,567,331,047. Total 86,533,973.69 86,533,973.69

82 13 07 38

(2) Investment in subsidiaries

Unit: Yuan

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Balance at the beginning of the period (account for impairment losses) Increase or decrease in the current period Balance at the end of the period (account for impairment provisions for invested units)

(face value) Opening balance Additional investment Decrease in investment Provision for impairment Other decreases (face value) Closing balance Chongqing Zongshenfa

753,154,355.9 753,154,355.Motor manufacturing has

5 95 Co., Ltd.

Chongqing Zongshentong

341,433,465.1 341,433,465. Powered machinery

4 14 Ltd.

Chongqing Tuoyuandong

10,000,000.0 Li Machinery Co., Ltd. 10,000,000.00

company

Chongqing Liangjiang New

Ou Zongshen Small Amount 433,773,600.0 433,773,600. Loan Co., Ltd. 0 00 Ren Company

Chongqing Zongshenshang

42,580,000.0 Industrial Factoring Co., Ltd. 42,580,000.00

company

Chongqing Zongshenhang

Air engine mechanism 293,000,000.0 293,000,00

Co., Ltd. 0 0.00

Company (Note)

Chongqing Zongshenxin

116,011,900.0 116,011,900. Energy development has

0 00 Co., Ltd.

Chongqing Zongshen Hydrogen

10,000,000 20,000,000.0 Energy and Power Division 10,000,000.00

.00 0 TECHNOLOGY CO., LTD.

Chongqing Zongshenrong

140,000,000.0 140,000,000. Capital Leasing Co., Ltd.

0 00Company

Chongqing river movement

950,000,000.0 950,000,000. Force equipment manufacturing

0 00 Co., Ltd.

Chengdu Zongshen Machinery

Mechanical parts manufacturing 2,000,000.00 2,000,000.00 Manufacturing Co., Ltd.

Dongguan Lizhi

322,695,954.2 31,304,0 322,695,954. 31,304,0 Hui Energy Co., Ltd.

2 45.78 22 45.78Company

Chongqing Chenyuke -

293,010,000. Technology Co., Ltd. 10,000.00 293,000,00

Company (Note) 0.00

3,414,659,275 31,304,0 10,000,000 3,424,659,27 31,304,0Total 0.00

.31 45.78 .00 5.31 45.78

Note: During the reporting period, Chongqing Zongshen Aviation Engine Manufacturing Co., Ltd. was changed from a subsidiary of Zongdong to a subsidiary of Chongqing Chenyu Technology Co., Ltd.

For details, see Section 8 Financial Report, 10. Equity in other entities, 1. Equity in subsidiaries, (1) Composition of the enterprise group, Note 2.

(3) Investment in associates and joint ventures

Unit: Yuan

Investee's opening balance Increase or decrease during the year

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Addition Decrease Recognized under equity method Other comprehensive income

Book value Impairment provisions Other changes in equity

Investment Investment Gains and Losses Adjustments

1. Joint ventures

2. Joint ventures

55,229,9

Aerospace Shenzhou Aircraft Co., Ltd. 126,663,934.85 -5,921,600.00

27.91

14,675,6

Chongqing Maxim Yishen Machinery Co., Ltd. 114,624,994.91 193,311.80 1,563.25 -1,858,663.01

19.48

Chongqing Zongshen New Intelligent Manufacturing Technology Co., Ltd. 911,382,842.31 97,780,344.02 -640,202.39 -29,918,809.04 55,229,9 14,675,6

Total 1,152,671,772.07 92,052,055.82 -638,639.14 -31,777,472.05 27.91 19.48

(continued)

Increases and decreases during the year Ending balance

Investee

Declaration of cash dividends or profits Provision for impairment Others Book value Impairment provision

1. Joint ventures

2. Joint ventures

Aerospace Shenzhou Aircraft Co., Ltd. 120,742,334.85 55,229,927.91 Chongqing Maxim Yishen Machinery Co., Ltd. 1,121,288.40 97,164,299.07

Chongqing Zongshen New Intelligent Manufacturing Technology Co., Ltd. 978,604,174.90

Total 1,121,288.40 1,196,510,808.82 55,229,927.91

(4) Impairment testing of long-term equity investments: Not applicable

Operating income and operating costs

(1) Operating income and operating costs

Unit: Yuan Amount of current period Amount of previous period

Project

Revenue Cost Revenue Cost Main business 459,751,882.81 437,379,548.33 479,329,849.12 440,221,042.24 Other business 45,514,043.15 32,940,832.62 58,777,316.52 48,126,007.74 Total 505,265,925.96 470,320,380.95 538,107,165.64 488,347,049.98 Including: Contracts with customers

495,520,577.91 466,812,364.43 529,521,845.85 484,019,669.44Income generated by the same period

(2) Operating income of the top five customers

Unit: Yuan

Customer name Total operating income Proportion of total operating income of the company %

First place 187,947,671.20 37.20

Second place 111,099,462.78 21.99

Third place 43,504,616.04 8.61

Fourth place 35,426,654.65 7.01

Fifth place 31,465,079.78 6.23

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Total 409,443,484.45 81.04

Investment income

Unit: Yuan

Item Amount incurred in the current period Amount incurred in the previous period Income from long-term equity investment accounted for by the cost method 85,000,000.00 27,677,199.26 Income from long-term equity investment accounted for by the equity method 92,052,055.82 61,814,727.73 Investment income generated from the disposal of long-term equity investment 13,117,646.54

Disposals are measured at fair value and changes in

Investment income from financial assets with period profits and losses

Investment income from trading financial assets during the holding period

benefit

Investment income from disposal of trading financial assets 1,911,240.77

Investment income from disposal of derivative financial instruments 147,420.00 -164,610.00 Other equity instrument investments obtained during the holding period

dividend income

Investment income from held-to-maturity investments

Investments in available-for-sale financial assets during the holding period

income

Investment income from disposal of available-for-sale financial assets

benefit

After losing control, the remaining equity is measured at fair value

Gains from remeasurement

Interest income earned from debt investments during the holding period

Others

Total 192,228,363.13 89,327,316.99

20. Supplementary information

Detailed statement of non-recurring profits and losses for the current period

Unit: Yuan

Item Amount Explanation of gains and losses from disposal of non-current assets 12,142,984.82 Government subsidies included in current profits and losses (closely related to the company’s normal operating business and consistent with

Except for government subsidies that comply with national policies and regulations, are enjoyed in accordance with determined standards, and have a lasting impact on the company’s profits and losses 24,618,646.66)

In addition to effective hedging business related to the company's normal business operations, non-financial enterprises

Gains and losses from changes in fair value of financial assets and financial liabilities held by the enterprise and gains and losses from disposal of financial assets and financial liabilities 4,728,687.40

Fund occupation fees charged to non-financial enterprises included in current profits and losses

Gains and losses from entrusting others to invest or manage assets

Profit and loss from external entrusted loans

Loss of various assets due to force majeure factors, such as natural disasters

The impairment provision for receivables that are individually tested for impairment is reversed 232,285.05. The investment cost of the enterprise in acquiring subsidiaries, associates and joint ventures is less than the investment cost.

The investor should enjoy the income generated from the fair value of the identifiable net assets of the investee.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Net profit and loss for the current period from the beginning of the period to the date of merger of subsidiaries resulting from business combinations under common control

Gains and losses on non-monetary asset exchanges

Debt restructuring gains and losses

One-time expenses incurred by the enterprise due to the discontinuation of relevant business activities, such as job placement

labor expenses, etc.

The one-time impact on the current profit and loss due to adjustments in taxation, accounting and other laws and regulations

ring

One-time confirmation of share-based payment expenses due to cancellation or modification of equity incentive plan

For cash-settled share-based payment, after the vesting date, employee benefits payable

Gains and losses arising from changes in fair value

Changes in the fair value of investment real estate using the fair value model for subsequent measurement

Profit and loss incurred

Gains from transactions where the transaction price appears to be unfair

Profit and loss arising from contingencies unrelated to the company's normal business operations

Custody fee income from entrusted operations

Other non-operating income and expenses other than the above items 1,342,650.87

Other profit and loss items that meet the definition of non-recurring profits and losses

Subtotal 43,065,254.80

Less: Impact on income tax 4,917,669.55

Amount of impact on minority shareholders’ equity (after tax) 1,838,102.75

Net non-recurring gains and losses attributable to owners of the parent company 36,309,482.50 --

Return on net assets and earnings per share

earnings per share

Profit for the reporting period Weighted average return on equity

Basic earnings per share (yuan/share) Diluted earnings per share (yuan/share) Net profit attributable to the company’s ordinary shareholders 7.50% 0.3656 0.3656 Attributable to the company after deducting non-recurring gains and losses

6.85% 0.3339 0.3339 Net profit of ordinary shareholders

Explanation of abnormal situations and reasons for the company’s main accounting statement items (unit: 10,000 yuan)

Ending amount/ Beginning amount/

Item Change amount Change range Reason explanation

Number of current period Number of previous period

Trading financial assets 59,107.23 39,300.08 19,807.15 50.40% Mainly due to the increase in financial management products purchased during the period.

Accounts receivable 262,030.43 185,600.11 76,430.32 41.18% Mainly due to the increase in accounts receivable that has not yet reached the settlement period in this period. Non-current due within one year

2,672.48 7,757.49 -5,085.01 -65.55% Mainly due to the recovery of finance lease payments in the current period. Live assets

Other current assets 6,980.51 12,202.81 -5,222.30 -42.80% Mainly due to the decrease in value-added tax credits at the end of the period compared with the beginning of the year.

Loans and advances issued 52,221.75 80,577.56 -28,355.81 -35.19% Mainly due to the company's reduction in loan scale in order to control risks.

Construction in progress 35,298.81 19,113.88 16,184.93 84.68% Mainly due to the increase in investment in the construction of the company's new factory project. Right-of-use assets 18,173.53 11,999.20 6,174.33 51.46% Mainly due to the increase in leased properties in the current period.

Full text of 2026 semi-annual report of Chongqing Zongshen Power Machinery Co., Ltd.

Accounts payable 232,200.10 173,063.94 59,136.16 34.17% Mainly due to the increase in the balance of supporting payment in the current period that has not yet reached the settlement period. Employee benefits payable 11,892.52 17,416.85 -5,524.33 -31.72% Mainly due to the payment of the salary accrued at the end of the previous year in this period. Non-current due within one year

126,407.67 87,590.00 38,817.67 44.32% Mainly due to the reclassification of long-term loans due within one year. Liquid liabilities

Mainly due to repayment of long-term borrowings in the current period and reclassification to non-long-term borrowings due within one year 112,095.69 171,918.38 -59,822.69 -34.80%

Due to current liabilities.

Lease liabilities 14,390.10 8,921.22 5,468.88 61.30% Mainly due to new leased properties in the current period.

Other comprehensive income -7,675.34 -5,893.46 -1,781.88 -30.23% Mainly due to the impact of the translation difference of foreign currency statements in the current period. Interest income 2,265.95 3,763.49 -1,497.54 -39.79% Mainly due to the year-on-year decrease in the scale of the company's financial business.

Financial expenses mainly due to exchange losses caused by fluctuations in the exchange rate of the US dollar against the RMB during the current period 9,746.89 1,458.88 8,288.01 568.11%

Due to the year-on-year increase.

Credit impairment losses -2,498.06 -1,267.62 -1,230.44 -97.07% Mainly due to the increase in bad debt provisions for accounts receivable in the current period. Investment income 11,182.69 6,312.03 4,870.66 77.16% Mainly due to the increase in investment income from the company’s associate units. Profit and loss of minority shareholders 1,468.38 567.14 901.24 158.91% Mainly due to the increase in profits of the controlled subsidiaries for the current period.

The cash generated from operating activities is mainly due to the recovery of loan and lease payments by Zongshen Small Loan Company and Financial Leasing Company.

95,342.42 56,482.78 38,859.64 68.80%

Net cash flow is due.

The cash generated from investment activities was mainly due to the year-on-year increase in cash paid for the purchase of bank financial products.

-35,608.99 -14,798.31 -20,810.68 -140.63%

Net cash flow is due.

Cash generated from financing activities

-38,311.68 -13,698.93 -24,612.75 -179.67% Mainly due to the year-on-year increase in cash paid to repay bank borrowings. Net cash flow

Exchange rate changes on cash and

-938.75 3,293.60 -4,232.35 -128.50% Mainly due to the impact of fluctuations in the exchange rate of the US dollar against the RMB during the current period. Impact of cash equivalents

Cash and cash equivalents Mainly due to the year-on-year decrease in net cash flows generated from financing and investing activities

20,483.01 31,279.15 -10,796.14 -34.52%

The net increase is small.

Full text of Chongqing Zongshen Power Machinery Co., Ltd.'s 2026 semi-annual report (no text on this page)

Legal representative of the company: Huang Peiguo Person in charge of accounting work: Liu Yuanhong Person in charge of the company’s accounting department: Xia Dan August 29, 2026