Antu Biotechnology 2025 Audit Report

Audit Report of Zhengzhou Antu Bioengineering Co., Ltd.

Qinxin Shenzi [2026] No. 1440

Directory

Content pages

1. Audit report 1-5

2. Audited financial statements

1. Consolidated balance sheet 6-7 2. Balance sheet of the parent company 8-9 3. Consolidated income statement 10 4. Income statement of the parent company 11 5. Consolidated cash flow statement 12 6. Cash flow statement of the parent company 13 7. Consolidated statement of changes in owner's equity 14-15 8. Statement of changes in owner's equity of the parent company 16-17

2. Notes to Financial Statements 18-116 Zhongqin Wanxin Accounting Firm (Special General Partnership)

Address: 10th Floor, Sunshine Building, No. 112 Xizhimenwai Street, Beijing

Tel: (86-10) 68360123

Fax: (86-10) 68360123-3000

Postal code: 100044

Audit report

Qinxin Shenzi [2026] No. 1440 All shareholders of Zhengzhou Antu Bioengineering Co., Ltd.:

1. Audit opinions

We have audited the financial statements of Zhengzhou Antu Bioengineering Co., Ltd. (hereinafter referred to as "Antu Bio"), including the consolidated and parent company balance sheets on December 31, 2025, the consolidated and parent company income statements, consolidated and parent company cash flow statements, consolidated and parent company owner's equity changes statements, and relevant financial statement notes for 2025.

We believe that the attached financial statements are prepared in accordance with the Accounting Standards for Business Enterprises in all material respects and fairly reflect the consolidated and parent company's financial status of Antu Biotech on December 31, 2025, as well as the consolidated and parent company's operating results and cash flows in 2025.

2. Form the basis for audit opinions

We performed the audit work in accordance with the Chinese Certified Public Accountants Auditing Standards. Our responsibilities under these standards are further described in the "CPA's Responsibilities for the Audit of Financial Statements" section of the auditor's report. In accordance with the "Independence Standards for Chinese Certified Public Accountants No. 1 - Requirements for Independence in Financial Statement Auditing and Review Engagements" and the Chinese Code of Professional Ethics for Certified Public Accountants, we are independent from Antu Biotech and have fulfilled other responsibilities in terms of professional ethics. In our audit, we followed the independence requirements for audits of public interest entities. We believe that the audit evidence we obtained is sufficient and appropriate and provides a basis for issuing an audit opinion.

3. Key audit matters

Key audit matters are matters that, based on our professional judgment, are considered to be most important in the audit of the current period's financial statements. The response to these matters is based on the audit of the financial statements as a whole and the formation of audit opinions. We do not express opinions on these matters individually. We have determined that the following matters are key audit matters that need to be communicated in the audit report.

(1) Revenue recognition

1. Description of the matter

Antu Biotech and its subsidiaries are mainly engaged in the production and sales of in vitro diagnostic reagents and in vitro diagnostic instruments. In 2025, the revenue generated from the sales of reagents will be 3,612,541,163.91 yuan, and the revenue generated from the sales of instruments will be 520,518,330.83 yuan. Antu Bio's sales model includes distribution and direct sales, and its sales area includes domestic sales and export sales. For domestic sales, the time point for revenue recognition is when the acceptance note issued by the customer is received; for export sales, the time point for revenue recognition is when the product is declared to customs, leaves the port, and the bill of lading is obtained. Since revenue is one of Antu Biotech's key performance indicators, and the special diversity of sales models leads to relevant risks in revenue recognition, we identified revenue recognition as a key audit matter.

2. Audit response

(1) Understand and test the design rationality and operational effectiveness of the company’s internal controls related to sales and collections.

(2) Evaluate whether the company's various revenue recognitions are consistent with accounting policies and meet the requirements of accounting standards by checking relevant terms of important customer contracts and questioning management.

(3) Perform analysis procedures on revenue and costs, including: analysis of fluctuations in revenue, cost, and gross profit for each month of the current period, and comparative analysis of main products’ revenue, costs, and gross profit margins for this period and the previous period, etc.

(4) Confirm the balance of payment and current sales volume to customers.

(5) Carry out detailed tests, randomly check major customer contracts, outbound orders, sales invoices, settlement forms/acceptance orders/customs declarations/bills of lading, payment receipts, etc., to verify the authenticity of the company's income.

(6) Perform a cut-off test on operating income to confirm whether revenue recognition is recorded in the correct accounting period.

(2) Impairment of accounts receivable

1. Description of the matter

As of December 31, 2025, the book balance of accounts receivable in Antu Biotech's consolidated financial statements was RMB 1,338,546,931.30, and the book balance of bad debt provisions was RMB 176,024,761.28. The book value is relatively high, and the amount of bad debt provisions has a significant impact on the financial statements.

According to the relevant provisions of the new financial instrument standards, Antu Biotechnology's management (hereinafter referred to as the management) conducted impairment testing on accounts receivable and recognized bad debt provisions based on expected credit losses. The provision of bad debt provisions for accounts receivable requires management to identify items and objective evidence of losses that have occurred, evaluate the expected future cash flows and determine their present value. Since the provision of bad debt provisions for accounts receivable involves the management's use of significant accounting estimates and judgments, and its amount has a significant impact on the financial statements, we identify the provision of bad debt provisions for accounts receivable as a key audit matter.

2. Audit response

(1) Understand and evaluate the design and implementation effectiveness of management’s internal controls related to the provision of bad debt provisions for accounts receivable, and test the operating effectiveness of the controls.

(2) Understand Antu Biotech's credit policy, industry characteristics and credit risk characteristics, obtain the data and related information used by management to assess whether accounts receivable are impaired and confirm the expected loss rate, check the aging migration of Antu Biotech's accounts receivable, customer credit status and operating conditions, expected credit loss judgment, etc., and evaluate whether the relevant accounting policies formulated by the management are in compliance with the provisions of the Accounting Standards for Business Enterprises.

(3) Analyze the measurement model of expected credit losses of Antu Biotech's accounts receivable, and evaluate the rationality of the major assumptions and key parameters in the model and the appropriateness of the credit risk portfolio classification method based on the obtained information.

(4) Execute analysis procedures for the provision of bad debt provisions for accounts receivable, calculate the ratio between the amount of bad debt provisions and the balance of accounts receivable on the balance sheet date, compare the number of provision for bad debts in the previous period with the actual number, and analyze whether the provision for bad debt provisions for accounts receivable is sufficient.

(5) For customers with large accounts receivable balances and long aging accounts, inquire information related to the debtor through public channels to identify whether there are circumstances that affect the company's bad debt provision assessment results for accounts receivable. Communicate with management to understand the reasons for the long aging period and management’s assessment of their recoverability.

(6) Implemented the confirmation procedures for accounts receivable and checked the payment collection situation after the period, and evaluated the rationality of the provision for bad debt provisions for accounts receivable.

4. Other information

Antu Bio's management (hereinafter referred to as the management) is responsible for other information. Other information includes information covered in the 2025 Annual Report, but does not include the financial statements and our auditor's report.

Our audit opinion on the financial statements does not cover other information, nor do we express any form of assurance conclusion on other information.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the audit or otherwise appears to be materially misstated.

If we determine, based on the work we have performed, that other information is materially misstated, we should report that fact. We have nothing to report in this regard.

5. Responsibility of management and those charged with governance for financial statements

Antu Bio's management (hereinafter referred to as the management) is responsible for preparing financial statements in accordance with the provisions of the Accounting Standards for Business Enterprises to achieve fair reflection, and to design, implement and maintain necessary internal controls so that the financial statements do not contain material misstatements due to fraud or errors.

When preparing financial statements, management is responsible for assessing Antu Biotech's ability to continue as a going concern, disclosing matters related to continuing operations (if applicable), and applying the going concern assumption, unless management plans to liquidate Antu Biotech, terminate operations, or has no other realistic choice.

Those charged with governance are responsible for overseeing Antu Biotech’s financial reporting process.

6. Responsibility of certified public accountants for auditing financial statements

Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free of material misstatements due to fraud or error, and to issue an audit report containing an audit opinion. Reasonable assurance is a high level of assurance, but it does not guarantee that an audit performed in accordance with auditing standards will always detect a material misstatement when it exists. Misstatements may be due to fraud or error and are generally considered material if they are reasonably expected individually or in aggregate to affect the economic decisions made by users of financial statements based on the financial statements.

In the process of performing audit work in accordance with the auditing standards, we use professional judgment and maintain professional skepticism. At the same time, we also perform the following tasks:

(1) Identify and assess the risks of material misstatement of financial statements due to fraud or errors, design and implement audit procedures to respond to these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Because fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls, the risk of failing to detect a material misstatement resulting from fraud is higher than the risk of failing to detect a material misstatement resulting from error.

(2) Understand the internal controls related to auditing to design appropriate audit procedures.

(3) Evaluate the appropriateness of the accounting policies adopted by management and the reasonableness of accounting estimates and related disclosures.

(4) Draw conclusions on the appropriateness of management’s use of the going concern assumption. At the same time, based on the audit evidence obtained, a conclusion is drawn as to whether there are significant uncertainties in matters or conditions that may cause significant doubts about Antu Biotech's ability to continue as a going concern. If we conclude that a material uncertainty exists, auditing standards require us to include a statement in our auditor's report

Zhengzhou Antu Bioengineering Co., Ltd.

Notes to the 2025 Financial Statements

(Unless otherwise stated, the unit of amount is RMB)

1. Basic situation of the company

(1) Company profile

1. History

Zhengzhou Antu Bioengineering Co., Ltd. (hereinafter referred to as the "Company" or the "Company") was formerly known as Zhengzhou Lvke Bioengineering Co., Ltd. and was established on September 15, 1999. The registered capital at the time of establishment was 1,000,000.00 yuan. After successive capital increases and equity transfers, the company's registered capital as of September 30, 2012 was RMB 20,000,000.00.

According to the resolution of the first shareholders' meeting on November 13, 2012, the "Report on the promoters converting the book net asset value corresponding to the equity held by them in Zhengzhou Antu Lvke Bioengineering Co., Ltd. into Zhengzhou Antu Bioengineering Co., Ltd." was reviewed and approved. The company uses September 30, 2012 as the audit base date for the overall change into a joint-stock company and the overall change into a joint-stock company; it is agreed that each shareholder shall enjoy the net assets according to their existing shareholding ratio in the company, and shall enjoy the shareholding ratio of the promoters of the joint-stock company according to the existing shareholding ratio. The audited net assets of the company as of September 30, 2012 were RMB 179,929,328.63, equivalent to a registered capital (share capital) of RMB 159,000,000.00. The excess of the registered capital (share capital) was included in the capital reserve. On December 20, 2012, the industrial and commercial change registration procedures were completed at the Henan Provincial Administration for Industry and Commerce.

According to the resolution of the shareholders' meeting on April 9, 2015, it was approved that the company applied for an additional registered capital of RMB 219,000,000.00. The company used capital reserve funds and undistributed profits to transfer a total of 219,000,000.00 shares to all shareholders, with a face value of 1.00 yuan per share, and a total increase in share capital of 219,000,000.00 yuan. As of April 9, 2015, the registered capital after the change was RMB 378,000,000.00, and the accumulated paid-in capital (share capital) was RMB 378,000,000.00.

According to the resolution of the company’s 2015 Annual General Meeting of Shareholders and approved by the China Securities Regulatory Commission’s “Reply on the Approval of the Initial Public Offering of Stocks by Zhengzhou Antu Bioengineering Co., Ltd.” [CSRC License [2016] No. 1759), the company publicly issued shares with a par value of RMB 1 per share to the public. There are 42 million common shares. The company's shares were listed for trading on the Shanghai Stock Exchange on September 1, 2016. The above-mentioned capital increase business was verified by Zhongqin Wanxin Accounting Firm (Special General Partnership), and Qinxin Yanzi [2016] No. 1120 Capital Verification Report was issued on August 26, 2016. After this issuance, the company's share capital was changed to RMB 420,000,000.00.

On June 28, 2019, the company publicly issued 682.979 million yuan of convertible corporate bonds with a term of 6 years, and was listed and traded on the Shanghai Stock Exchange on July 22, 2019. According to relevant regulations and the prospectus, , can be converted into company stocks starting from January 6, 2020. According to the resolution of the 11th meeting of the company's third board of directors, the company's bonds will use February 18, 2020 as the redemption registration date, and all "Antu Convertible Bonds" registered on the redemption registration date will be redeemed. From January 6, 2020 to February 18, 2020, the company's cumulative convertible corporate bonds of RMB 679,807,000.00 have been converted into company stocks. The cumulative number of shares converted is 10,602,899.00 shares, increasing the share capital by RMB 10,602,899.00, and the registered capital after the change is RMB 430,602,899.00.

According to the resolutions of the company’s 14th meeting of the third session of the board of directors on June 15, 2020 and the first extraordinary shareholders’ meeting of 2020 on July 1, 2020, and approved by the China Securities Regulatory Commission’s “Reply on Approval of the Non-public Issuance of Stocks by Zhengzhou Antu Bioengineering Co., Ltd.” (CSRC License [2020] No. 2079), the company’s non-public issuance of no more than 43,060,289.00 new shares was approved. According to the issuance results, the company non-publicly issued 20,375,760.00 shares to 10 specific targets, with a face value of 1 yuan per share. The above-mentioned capital increase business was verified by Zhongqin Wanxin Accounting Firm (Special General Partnership), and a capital verification report No. 0063 of Qinxin Yanzi [2020] was issued on November 4, 2020. After this issuance, the company's share capital was changed to RMB 450,978,659.00.

According to the resolutions of the company at the 22nd meeting of the third session of the Board of Directors on April 21, 2021 and the 2020 Annual General Meeting of Shareholders on May 13, 2021, the company transferred 3 shares for every 10 shares to all shareholders by converting capital reserves into equity, for a total of 135,293,597.00 shares. After the transfer, the company's total share capital changed to RMB 586,272,256.00.

In accordance with the relevant provisions of laws, regulations and normative documents such as the Company Law, the Stock Listing Rules of the Shanghai Stock Exchange, the Shanghai Stock Exchange Self-Regulatory Guidelines for Listed Companies No. 7 - Repurchase of Shares, and the Articles of Association, the company will change the purpose of the shares repurchased in the 2022 repurchase plan based on changes in the capital market, as well as its own actual situation, development strategy and time limits for treasury shares. The purpose of the repurchased shares was changed from "used to implement employee stock ownership plans or equity incentives" to "used to cancel and reduce the company's registered capital". In 2024, 5,260,910 treasury shares repurchased were canceled and the company's registered capital was correspondingly reduced. The company's share capital changed after cancellation. It was RMB 581,011,346.00. On February 21, 2025, 9,586,578 treasury shares repurchased were canceled and the company's registered capital was reduced accordingly. After the cancellation, the company's share capital was changed to RMB 571,424,768.00.

2. Company registration place and headquarters address

Registration place: No. 87, Jingbei 1st Road, Zhengzhou Economic and Technological Development Zone;

Headquarters address: No. 199, Jingkai 15th Street, Zhengzhou Economic and Technological Development Zone.

3. The business nature of the enterprise

The company's industry is pharmaceutical manufacturing, and its sub-industry is the in vitro diagnostic industry.

4. Main business activities

The main business activities are: production of Class III medical devices; operation of Class III medical devices; production of Class II medical devices; leasing of Class III medical devices; road cargo transportation (excluding dangerous goods); international road cargo transportation (projects that require approval according to law can only be carried out after approval by relevant departments) Business activities, specific business projects are subject to approval documents or licenses from relevant departments) General projects: sales of Class II medical devices; production of Class I medical devices; sales of Class I medical devices; leasing of Class II medical devices; leasing of Class I medical devices; leasing of non-residential real estate; engineering and technology Technical research and experimental development; biochemical product technology research and development; experimental analysis instrument manufacturing; experimental analysis instrument sales; office equipment sales; office equipment consumables sales; computer software, hardware and auxiliary equipment retail; information system integration services; plastic product manufacturing; special chemical product manufacturing (excluding Hazardous chemicals); sales of new organic active materials; sales of new automobiles; import and export of goods; import and export of technology; technical services, technology development, technical consultation, technology exchange, technology transfer, and technology promotion (except for projects that require approval according to law, business activities can be carried out independently with a business license in accordance with the law)

5. Approval date for issuance of financial reports

This financial statement was approved by the company's board of directors on April 21, 2026.

(2) Scope of consolidated financial statements

As of December 31, 2025, the Company has a total of 13 subsidiaries included in the scope of consolidation. For details, please see Note 8. Equity in other entities.

For details of the changes in the company's consolidation scope in 2025, please refer to Note 7. Changes in the consolidation scope.

2. Basis for preparation of financial statements

1. Basics of preparation

These financial statements are prepared based on actual transactions and events and in accordance with the "Accounting Standards for Business Enterprises - Basic Standards", specific accounting standards for enterprises, application guidelines for accounting standards for enterprises, interpretations of accounting standards for enterprises and other relevant regulations promulgated by the Ministry of Finance (hereinafter collectively referred to as "Accounting Standards for Business Enterprises"), as well as the disclosure provisions of the China Securities Regulatory Commission's "Information Disclosure and Preparation Rules No. 15 of Companies that Offer Securities to the Public - General Provisions for Financial Reports".

In accordance with the relevant provisions of the Accounting Standards for Business Enterprises, the Company's accounting is based on the accrual basis. Except for certain financial instruments, these financial statements are measured on the basis of historical cost. If an asset is impaired, corresponding impairment provisions will be made in accordance with relevant regulations.

2. Continued operations

The company has evaluated the company's ability to continue operating for 12 months from the end of the reporting period, and has found no issues that affect the company's ability to continue operating. It is reasonable for the company to prepare financial statements based on going concern.

3. Important accounting policies and accounting estimates

1. Statement on compliance with corporate accounting standards

This financial statement complies with the requirements of the Accounting Standards for Business Enterprises and truly and completely reflects the company's consolidated and parent company's financial status as of December 31, 2025, as well as the consolidated and parent company's operating results and cash flows in 2025. In addition, the Company and the Company's financial statements comply in all material respects with the disclosure requirements for financial statements and their notes in the "Information Disclosure and Preparation Rules for Companies that Offer Securities to the Public No. 15 - General Provisions on Financial Reports" revised in 2023 by the China Securities Regulatory Commission.

2. Accounting period

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

3. Business cycle

The normal operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents. The company uses 12 months as an operating cycle and uses it as the liquidity classification standard for assets and liabilities.

4. Accounting standard currency

RMB is used as the standard accounting currency. Overseas subsidiaries use the currency of the main economic environment in which they operate as their accounting functional currency and convert them into RMB when preparing financial statements.

5. Determination method and selection basis of materiality criteria

Project Materiality Criteria

Important individual accounts receivable for which bad debt provisions are made, the individual amount exceeds 10 million yuan

Important receivables and bad debt provisions for the current period are recovered or transferred

The amount of a single item exceeds 10 million yuan

Rebate amount

Project Materiality Criteria

Write-off of important accounts receivable with a single amount exceeding RMB 10 million

Operating income accounts for more than 10% of the operating income in the consolidated statement or is attributed to an important non-wholly owned subsidiary of the listed company

The net profit exceeds 50 million yuan

Important joint ventures or associates whose net profit attributable to the listed company exceeds 50 million yuan

Important prepayments aged more than 1 year with a single amount exceeding 10 million yuan

Important accounts payable aged more than 1 year with a single amount exceeding 10 million yuan

Important contract liabilities aged more than 1 year with a single amount exceeding RMB 10 million

There is a significant change in the book value of contract liabilities and the individual amount exceeds 10 million yuan

Important other payables aged more than 1 year with a single amount exceeding RMB 20 million

Major financial products with a single transaction amount exceeding 100 million yuan

Cash received related to significant investing activities accounts for 5% of net asset balance

Cash paid for important investment activities accounts for 5% of the net asset balance

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

(1) Business merger under common control

The assets and liabilities acquired by the Company in a business merger are measured at the book value of the merged party in the consolidated financial statements of the ultimate controlling party on the merger date. Among them, if the accounting policies adopted by the merged party and the company before the business merger are different, the accounting policies will be unified based on the principle of importance, that is, the book value of the assets and liabilities of the merged party will be adjusted in accordance with the company's accounting policies. The assets and liabilities acquired by the merging party in the business combination (including the goodwill formed by the ultimate controlling party's acquisition of the merged party) are measured based on the book value of the merged party's assets and liabilities in the ultimate controlling party's consolidated financial statements on the merger date. The difference between the book value of the net assets acquired in the merger and the book value of the merger consideration paid (or the total face value of the shares issued) is adjusted to the equity premium in the capital reserve. If the equity premium in the capital reserve is insufficient to offset it, the retained earnings are adjusted.

(2) Business merger not under common control

If the enterprises participating in the merger are not ultimately controlled by the same party or the same parties before and after the merger, it is a business merger not under the same control. For a business combination not under common control, the party that obtains control over other companies participating in the merger on the acquisition date is the purchaser, and the other companies participating in the merger are the purchased parties. The purchase date refers to the date when the purchaser actually obtains control over the purchased party.

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.

If the deductible temporary difference obtained by the purchaser from the purchased party is not recognized on the purchase date because it does not meet the recognition conditions of deferred income tax assets, within 12 months after the purchase date, if new or further information is obtained indicating that the relevant conditions on the purchase date have already existed, it is expected that the purchased party will be able to If the economic benefits brought by offsetting the temporary differences can be realized, the relevant deferred income tax assets will be recognized, and the goodwill will be reduced at the same time. If the goodwill is insufficient to be offset, the difference will be recognized as profit and loss for the current period; except for the above circumstances, if the deferred income tax assets related to the business combination are recognized, they will be included in the profit and loss for the current period.

For business mergers not under the same control that are realized in stages through multiple transactions, it is judged whether the multiple transactions belong to a "package transaction" based on the "Notice of the Ministry of Finance on Issuing the Interpretation No. 5 of Accounting Standards for Business Enterprises" (Financial Accounting [2012] No. 19) and "Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements" regarding "package transactions". If it is a "package deal", the accounting treatment shall be carried out with reference to the descriptions in the previous paragraphs of this part and the "Long-term Equity Investment" standards in Note 3.18; if it is not a "package deal", the relevant accounting treatment shall be carried out by distinguishing between individual financial statements and consolidated financial statements:

In individual financial statements, the sum of the book value of the equity investment in the purchased party held before the purchase date and the new investment cost on the purchase date is regarded as the initial investment cost of the investment; if the equity investment in the purchased party held before the purchase date involves other comprehensive income, it will be related to it when disposing of the investment. Other comprehensive income is accounted for on the same basis as the acquiree's direct disposal of relevant assets or liabilities (that is, except for the corresponding share of the change caused by the acquiree's remeasurement of the net liabilities or net assets of the defined benefit plan calculated according to the equity method, the rest is transferred to the investment income of the current period).

In the consolidated financial statements, the equity of the purchased party held before the purchase date is remeasured according to the fair value of the equity on the purchase date, and the difference between the fair value and its book value is 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, other related Other comprehensive income shall be accounted for on the same basis as the acquiree's direct disposal of relevant assets or liabilities (that is, except for the corresponding share of changes caused by the acquiree's remeasurement of the net liabilities or net assets of the defined benefit plan calculated according to the equity method, the rest shall be converted into investment income for the current period on the purchase date).

(3) Related expenses incurred for the merger

Directly related expenses incurred for a business merger are included in the current profits and losses when incurred; transaction costs for the issuance of equity securities or debt securities for a business merger are included in the initial recognition amount of equity securities or debt securities.

7. Preparation method of consolidated financial statements

(1) Principles for determining the scope of consolidated financial statements

The scope of consolidation in consolidated financial statements is determined on the basis of control, including not only subsidiaries determined based on voting rights (or similar voting rights) alone or in combination with other arrangements, but also structured entities determined based on one or more contractual arrangements.

Control means that the company has power over the investee, enjoys variable returns by participating in the investee's relevant activities, and has the ability to use its power over the investee to affect the amount of returns. The scope of consolidation includes the company and all its subsidiaries. Subsidiaries refer to entities controlled by the company (including divisible parts of enterprises, investee units, and structured entities controlled by enterprises, etc.). Structured entities refer to entities designed without voting rights or similar rights as a decisive factor when determining their controllers (note: sometimes also called special purpose entities).

(2) Merger procedure

The company prepares consolidated financial statements based on its own and its subsidiaries' financial statements and other relevant information. The Company prepares consolidated financial statements, treating the entire enterprise group as an accounting entity, and prepares consolidated financial statements in accordance with the recognition, measurement and presentation requirements of relevant accounting standards for enterprises and in accordance with unified accounting policies to reflect the overall financial status, operating results and cash flow of the Company Group. If the accounting policies and accounting periods adopted by subsidiaries are inconsistent with those of the Company, necessary adjustments shall be made in accordance with the Company's accounting policies and accounting periods when preparing consolidated financial statements. All significant intra-company balances, transactions and unrealized profits are eliminated when preparing consolidated financial statements. If internal transactions indicate that impairment losses have occurred on related assets, the losses shall be recognized in full.

The owner's equity of subsidiaries, current net profit and loss and current comprehensive income belonging to minority shareholders are presented separately under the owner's equity item in the consolidated balance sheet, the net profit item and the total comprehensive income item in the consolidated income statement. If the current losses shared by the minority shareholders of a subsidiary exceed the minority shareholders' share of the subsidiary's opening owner's equity, the balance is offset against the minority shareholders' equity.

(3) Processing of adding subsidiaries or businesses

During the reporting period, for subsidiaries acquired through business mergers under common control and merged parties under absorption mergers, the operating results and cash flows of the subsidiaries or business combinations from the beginning of the current period to the end of the reporting period will be included in the consolidated financial statements. At the same time, the opening numbers of the consolidated financial statements and relevant items in the comparative statements will be adjusted. The post-merger reporting entity will be deemed to have existed from the time when the ultimate controlling party began to control.

If it is possible to control an investee under the same control due to additional investment or other reasons, the equity investment held before obtaining control of the merged party has recognized relevant profits and losses, other comprehensive income and other changes in net assets between the date of acquisition of the original equity and the date when the merging party and the merged party are under the same control, whichever is later, to the date of merger, and shall offset the opening retained earnings or current profits and losses of the comparative statement period respectively.

During the reporting period, if a subsidiary or business is added due to a business combination not under common control, the fair value of each identifiable asset, liability and contingent liability determined on the date of purchase will be included in the consolidated financial statements from the date of purchase.

If it is possible to exercise control over an investee not under the same control due to additional investment or other reasons, the equity of the purchased party held before the purchase date shall 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 shall be included in the investment income of the current period. Other comprehensive income related to the equity of the purchased party held before the purchase date that can be reclassified into profit and loss later, and other changes in owner's equity under equity method accounting are converted into investment income for the current period on the purchase date.

From the date when it obtains actual control over the net assets and production and operation decisions of a subsidiary, the Company begins to include them in the scope of consolidation; from the date when it loses actual control, it ceases to be included in the scope of consolidation. For subsidiaries disposed of, the operating results and cash flows before the date of disposal have been appropriately included in the consolidated income statement and consolidated cash flow statement; for subsidiaries disposed of in the current period, the opening balance of the consolidated balance sheet will not be adjusted. For subsidiaries added through business combinations not under common control, their operating results and cash flows after the acquisition date have been appropriately included in the consolidated income statement and consolidated cash flow statement, and the opening numbers and comparative numbers of the consolidated financial statements will not be adjusted.

(4) Disposal of subsidiaries

When the company loses control over its original subsidiaries due to the disposal of part of its equity investments or other reasons, the remaining equity will be remeasured according to its fair value on the date when control is lost. The difference between the sum of the consideration obtained for disposing of the equity and the fair value of the remaining equity, minus the sum of the share of the original subsidiary's net assets calculated continuously from the date of purchase or merger based on the original shareholding ratio and the sum of goodwill, shall be included in the investment income in the period when control is lost. Other comprehensive income related to the equity investment in the original subsidiary that can be reclassified into profit and loss in the future and other changes in owner's equity under equity method accounting shall be accounted for on the same basis as the purchased party's direct disposal of relevant assets or liabilities when control is lost. Thereafter, the remaining equity will be subsequently measured in accordance with relevant regulations such as "Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment" or "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments". For details, please see Note 3.18 "Long-term Equity Investment" or Note 3.11 "Financial Instruments".

If the company disposes of its equity investment in a subsidiary step by step through multiple transactions until it loses control, it needs to distinguish whether each transaction in which it disposes its equity investment in its subsidiary until it loses control is a package deal. The terms, conditions and economic impact of various transactions for the disposal of equity investments in subsidiaries meet one or more of the following circumstances, which usually indicate that multiple transactions should be accounted for as a package deal: These transactions are entered into at the same time or with consideration of each other's influence; Only these transactions as a whole can achieve a complete business result; The occurrence of a transaction depends on the occurrence of at least one other transaction; A transaction is insignificant when viewed individually.

① ②

Economical, but economical when considered together with other transactions. If it does not belong to a package deal, each of the transactions will be dealt with on a case-by-case basis.

③ ④

Do not carry out accounting treatment in accordance with the principles applicable to "partial disposal of long-term equity investment in subsidiaries without losing control" (see Note 3, 18 "Long-term equity investment" (2) of this note for details) and "loss of control over original subsidiaries due to disposal of part of equity investment or other reasons" (see the previous paragraph for details). If the various transactions involving the disposal of equity investments in subsidiaries until the loss of control belong to a package transaction, each transaction shall be

③

This transaction is accounted for as a transaction of disposing of a subsidiary and losing control; however, the difference between each disposal price and the share of the subsidiary's net assets corresponding to the disposal investment before the loss of control is recognized as other comprehensive income in the consolidated financial statements, and is transferred to the profit and loss of the current period when control is lost.

(5) Special considerations in merger elimination

① The long-term equity investment held by a subsidiary of the company shall be regarded as the company's treasury shares, and shall be listed as "less: treasury shares" under the owner's equity item in the consolidated balance sheet as a deduction from the owner's equity.

For long-term equity investments held by subsidiaries among each other, the long-term equity investment and its corresponding share of the owner's equity of the subsidiary are offset against each other in accordance with the offsetting method for the company's equity investments in subsidiaries.

② Since the "special reserves" and "general risk reserves" items are neither paid-in capital (or equity) nor capital reserves, nor are they different from retained earnings and undistributed profits, after the long-term equity investment and the subsidiary's owner's equity are offset, they will be restored according to the share attributable to the owners of the parent company.

③ If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the tax base of the taxable entity due to the offsetting of unrealized internal sales profits and losses, deferred income tax assets or deferred income tax liabilities will be recognized in the consolidated balance sheet, and the income tax expenses in the consolidated income statement will be adjusted at the same time, except for deferred income taxes related to transactions or events directly included in owner's equity and business mergers.

④ Unrealized internal transaction gains and losses arising from the company's sale of assets to subsidiaries shall be fully offset against "net profits attributable to owners of the parent company". Unrealized internal transaction profits and losses arising from the sale of assets by a subsidiary to the company shall be allocated and offset between "net profits attributable to owners of the parent company" and "minority shareholders' profits and losses" in accordance with the company's distribution ratio to the subsidiary. Unrealized internal transaction profits and losses arising from the sale of assets between subsidiaries shall be allocated and offset between "net profits attributable to owners of the parent company" and "minority shareholders' profits and losses" in accordance with the company's distribution ratio to the selling subsidiary.

⑤ If the current loss shared by the minority shareholders of a subsidiary exceeds the minority shareholders' share of the subsidiary's opening owner's equity, the balance should still be offset against the minority shareholders' equity.

(6) Accounting treatment of special transactions

①Purchase minority shareholders’ equity

The company purchases the subsidiary's equity owned by minority shareholders. In individual financial statements, the investment cost of the newly acquired long-term equity investment for the purchase of the minority equity is measured according to the fair value of the consideration paid. In the consolidated financial statements, the difference between the newly acquired long-term equity investment due to the purchase of minority equity and the share of the subsidiary's net assets calculated continuously from the date of purchase or merger based on the new shareholding ratio shall be adjusted to the capital reserve (capital premium or equity premium). If the capital reserve is insufficient to offset, the surplus reserve and undistributed profits shall be offset in sequence.

② Obtaining control of a subsidiary step by step through multiple transactions

A. Merger of enterprises under common control through multiple transactions step by step

On the merger date, the company determines the initial investment cost of the long-term equity investment in its individual financial statements based on the share of the book value of the subsidiary's net assets in the ultimate controlling party's consolidated financial statements that it will enjoy after the merger; the initial investment cost is the same as the long-term equity before the merger. The difference between the book value of the investment and the book value of the newly paid consideration for further shares acquired on the merger date is adjusted to the capital reserve (capital premium or equity premium). If the capital reserve (capital premium or equity premium) is insufficient to offset, the surplus reserve and undistributed profits are offset in sequence.

In the consolidated financial statements, the assets and liabilities of the merged party obtained by the combining party during the merger are measured according to their book value in the consolidated financial statements of the ultimate controlling party on the date of merger, except for adjustments due to different accounting policies. The difference between the book value of the investments held before the merger plus the book value of the new consideration paid on the date of merger and the book value of the net assets acquired in the merger is adjusted to the capital reserve (equity premium/capital premium). If the capital reserve is insufficient for offset, the retained earnings are adjusted.

For equity investments held by the merging party before obtaining control of the merged party and calculated according to the equity method, relevant profits and losses, other comprehensive income and other changes in owner's equity have been recognized between the date of acquisition of the original equity and the date when the merging party and the merged party are under the final control of the same party, whichever is later, to the merger date, and the opening retained earnings of the comparative statement period shall be offset respectively.

B. Merger of enterprises not under common control is realized step by step through multiple transactions.

On the merger date, in individual financial statements, the sum of the book value of the original long-term equity investment plus the new investment cost on the merger date will be regarded as the initial investment cost of the long-term equity investment on the merger date.

In the consolidated financial statements, the equity of the purchased party held before the acquisition date is remeasured according to the fair value of the equity on the acquisition date, and the difference between the fair value and its book value is included in the investment income of the current period; if the equity of the acquired party held before the acquisition date involves other comprehensive income under equity method accounting, the other comprehensive income related to it is converted into the income of the current period on the acquisition date, except for other comprehensive income generated due to the remeasurement of the net assets or net liabilities of the defined benefit plan by the merged party. The company discloses in the notes the fair value of the equity of the purchased party it held before the purchase date on the purchase date, and the amount of related gains or losses resulting from remeasurement at fair value.

③The company disposes of long-term equity investment in subsidiaries but does not lose control

If the parent company partially disposes of its long-term equity investment in a subsidiary without losing control, in the consolidated financial statements, the difference between the disposal price and the share of the subsidiary's net assets continuously calculated from the date of purchase or merger will be adjusted to the capital reserve (capital premium or equity premium). If the capital reserve is insufficient for offset, the retained earnings will be adjusted.

④The company disposes of its long-term equity investment in the subsidiary and loses control

A. One transaction disposal

If the company loses control over the investee due to disposal of part of its equity investment or other reasons, when preparing consolidated financial statements, the remaining equity will be remeasured according to its fair value on the date when control is lost. 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 in the period when control is lost.

Other comprehensive income and other changes in owner's equity related to the equity investment of the atomic company will be transferred to the current profit and loss when control is lost, except for other comprehensive income arising from the investee's remeasurement of the net liabilities or changes in net assets of the defined benefit plan. B. Step-by-step disposal of multiple transactions

In the consolidated financial statements, we should first determine whether the step-by-step transaction is a "package transaction".

If the step-by-step transaction does not belong to a "package transaction", in the individual financial statements, for each transaction before the loss of control of the subsidiary, the book value of the long-term equity investment corresponding to each equity disposal will be carried forward, and the difference between the proceeds and the book value of the long-term equity investment disposed shall be included in the investment income of the current period; in the consolidated financial statements, it shall be handled in accordance with the relevant provisions of "the parent company disposes of the long-term equity investment in the subsidiary without losing control."

If the step-by-step transaction is a "package transaction", each transaction should be accounted for as a transaction in which the subsidiary is disposed of and control is lost; in individual financial statements, 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 equity disposed is first recognized as other comprehensive income. When control is lost, it will be transferred to the profit and loss of the current period when control is lost; in the consolidated financial statements, for each transaction before the loss of control, the difference between the disposal price and the share of the subsidiary's net assets corresponding to the disposal investment should be recognized as other comprehensive income, and when control is lost, it will be transferred to the profit and loss of the current period when control is lost.

If the terms, conditions and economic impact of each transaction meet one or more of the following conditions, multiple transactions are usually accounted for as a "package transaction":

(a) The transactions were entered into simultaneously or with consideration of their influence on each other.

(b) These transactions as a whole can achieve a complete business result.

(c) The occurrence of a transaction depends on the occurrence of at least one other transaction.

(d) A transaction that is uneconomical when considered alone is economical when considered together with other transactions.

⑤ Dilution of the equity ratio owned by the parent company due to capital increase by minority shareholders of the sub-company

Other shareholders (minority shareholders) of the subsidiary increase capital in the subsidiary, thereby diluting the parent company's equity ratio in the subsidiary. In the consolidated financial statements, the share of the subsidiary's book net assets before the capital increase is calculated based on the parent company's equity ratio before the capital increase. The difference between this share and the subsidiary's share of the subsidiary's book net assets after the capital increase calculated based on the parent company's shareholding ratio after the capital increase is adjusted to the capital reserve (capital premium or equity premium). If the capital reserve (capital premium or equity premium) is insufficient to offset, the retained earnings are adjusted.

8. Classification of joint arrangements and accounting treatment of joint operations

A joint arrangement refers to an arrangement that is jointly controlled by two or more parties. The Company divides joint arrangements into joint operations and joint ventures based on the rights enjoyed and obligations assumed in the joint arrangements. Joint operation refers to a joint arrangement in which the company enjoys the relevant assets of the arrangement and assumes the relevant liabilities of the arrangement. A joint venture refers to a joint arrangement in which the Company only has rights to the net assets of the arrangement.

The Company's investment in joint ventures is accounted for using the equity method. According to Note 3.18 "Long-term Equity Investment" (2) "Equity Method

②

The accounting policy treatment described in "Accounting for Long-term Equity Investments".

The Company recognizes joint operations. The Company recognizes the following items related to its share of interests in joint operations, and performs accounting treatments in accordance with relevant accounting standards for enterprises: recognizes separately held assets, separately assumed liabilities, and recognizes jointly held assets and jointly assumed liabilities based on the Company's share; recognizes income generated from the sale of the Company's share of joint operation output; recognizes income generated by joint operations from the sale of output based on the Company's share; recognizes expenses incurred by the Company alone, and recognizes expenses incurred from joint operations based on the Company's share.

When the company invests or sells assets to a joint operation as a joint venture (the assets do not constitute a business, the same below), or purchases assets from the joint operation, before the assets are sold to a third party, the company only recognizes the portion of the profits and losses arising from the transaction that are attributable to other participants in the joint operation. If such assets suffer asset impairment losses that comply with the provisions of "Accounting Standards for Business Enterprises No. 8 - Asset Impairment" and other regulations, the company will recognize the loss in full if the company invests or sells the assets to the joint operation; if the company purchases assets from the joint operation, the company will recognize the loss based on its share.

9. Determination standards for cash and cash equivalents

When the company prepares the cash flow statement, cash refers to the company's cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments that are held with a short term (generally due within three months from the date of purchase), are highly liquid, are easily convertible into known amounts of cash, and have little risk of changes in value.

10. Foreign currency business and foreign currency statement conversion

(1) Foreign currency business

When the Company's foreign currency transactions are initially recognized, they are converted into the amount in the recording currency based on the spot exchange rate on the transaction date or an exchange rate determined in accordance with a systematic and reasonable method that is similar to the spot exchange rate on the date of the transaction. However, the company's foreign currency exchange business or transactions involving foreign currency exchange are converted into the amount in the accounting functional currency based on the actual exchange rate.

On the balance sheet date, foreign currency monetary items are translated using the spot exchange rate on the balance sheet date. Exchange differences arising from differences between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition or the previous balance sheet date are included in the current profit and loss. Foreign currency non-monetary items measured at historical cost are still measured using the amount in the recording currency converted at the spot exchange rate on the date of the transaction. Foreign currency non-monetary items measured at fair value are converted using the spot exchange rate on the date when the fair value is determined. The difference between the converted accounting currency amount and the original accounting functional currency amount is included in the current profit and loss or other comprehensive income.

(2) Conversion of foreign currency statements

Before converting the financial statements of an enterprise's overseas operations, the accounting period and accounting policies of the overseas operations must be adjusted to make them consistent with the enterprise's accounting period and accounting policies, and then financial statements in the corresponding currency (currency other than the accounting standard currency) shall be prepared based on the adjusted accounting policies and accounting periods. table, and then convert the overseas operating financial statements according to the following method: the asset and liability items in the balance sheet are converted using the spot exchange rate on the balance sheet date; shareholders' equity items, except for the "undistributed profits" item, are converted using the spot exchange rate at the time of occurrence. Income and expense items in the income statement are translated using the spot exchange rate or the approximate spot exchange rate on the date of transaction. Foreign currency cash flows and cash flows of overseas subsidiaries are translated using the spot exchange rate or the approximate spot exchange rate on the date when the cash flows occur. The impact of exchange rate changes on cash is presented separately in the cash flow statement as an adjustment item.

The undistributed profit at the beginning of the year is the undistributed profit at the end of the period after conversion of the previous year; the undistributed profit at the end of the year is calculated and presented according to the converted profit distribution items; the difference between the asset items after conversion and the total number of liability items and shareholders' equity items is regarded as the conversion difference of foreign currency statements and is recognized as other comprehensive income. The opening figures and actual figures for the previous period are presented based on the amounts after conversion of the financial statements for the previous period.

When an overseas operation is disposed of and control is lost, the translation differences of foreign currency statements listed under the shareholders' equity items in the balance sheet and related to the overseas operation shall be transferred to the current profit and loss of the disposal in full or in proportion to the disposal of the overseas operation.

When the company disposes of all the owners' equity in overseas operations or loses control of the overseas operations due to the disposal of part of the equity investment or other reasons, the translation differences of the foreign currency statements attributable to the parent company's owners' equity listed under the shareholders' equity item in the balance sheet and related to the overseas operation will all be transferred to the profits and losses for the current period of disposal.

When the proportion of overseas operating equity held is reduced due to the disposal of part of the equity investment or other reasons but the control of the overseas operation is not lost, the foreign currency statement translation difference related to the disposal of the overseas operation will be attributed to the minority shareholders' equity and will not be transferred to the current profit and loss. When disposing of part of the equity of an overseas operation that is an associate or joint venture, the translation difference of foreign currency statements related to the overseas operation shall be transferred to the current profit and loss of the disposal in proportion to the disposal of the overseas operation.

If there are foreign currency monetary items that essentially constitute a net investment in overseas operations, in the consolidated financial statements, the exchange differences arising from exchange rate changes are recognized as other comprehensive income as "foreign currency statement translation differences"; when disposing of overseas operations, they are included in the current profit and loss of disposal.

11. Financial instruments

A financial asset or financial liability is recognized when the Company becomes a party to a financial instrument contract.

(1) Classification, recognition and measurement of financial assets

Based on the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the company divides financial assets into: financial assets measured at amortized cost; financial assets measured at fair value with changes included in other comprehensive income; financial assets measured at fair value with changes included in current profits and losses.

Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value and whose changes are included in the current profit and loss, the relevant transaction costs are directly included in the current profit and loss; for other types of financial assets, the relevant transaction costs are included in the initial recognition amount. For accounts receivable or notes receivable arising from the sale of products or provision of services that do not include or take into account significant financing components, the amount of consideration that the company is expected to be entitled to receive shall be regarded as the initial recognition amount.

Financial assets measured at amortized cost

The company's business model for managing financial assets measured at amortized cost is to collect contractual cash flows as the goal, and such financial assets

①

The contractual cash flow characteristics of the asset are consistent with the underlying lending arrangement, that is, the cash flows generated on a specific date are solely payments of principal and interest on the outstanding principal amount. For such financial assets, the Company adopts the actual interest rate method and conducts subsequent measurement at amortized cost. Gains or losses arising from amortization or impairment are included in the current profits and losses.

Financial assets measured at fair value through other comprehensive income

The company's business model for managing such financial assets is to both collect contractual cash flows and sell them, and such

②

The contractual cash flow characteristics of financial assets are consistent with the underlying lending arrangements. The Company measures such financial assets at fair value and changes in them are included in other comprehensive income, but impairment losses or gains, exchange gains and losses and interest income calculated according to the effective interest method are included in the current profit and loss.

In addition, the Company designates certain investments in non-trading equity instruments as financial assets measured at fair value through other comprehensive income. The company includes the relevant dividend income of this type of financial assets in the current profit and loss, and the changes in fair value are included in other comprehensive income. When the financial asset is derecognised, the accumulated gains or losses previously included in other comprehensive income will be transferred from other comprehensive income to retained earnings and will not be included in the current profit or loss.

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

The Company includes the above-mentioned financial assets measured at amortized cost and financial assets measured at fair value with changes included in other comprehensive income.

③

Financial assets other than financial assets are classified as financial assets measured at fair value with changes included in current profits and losses. In addition, at the time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company designated some financial assets as financial assets measured at fair value and whose changes are included in current profits and losses. For such financial assets, the company uses fair value for subsequent measurement, and changes in fair value are included in the current profit and loss.

(2) Classification, recognition and measurement of financial liabilities

Financial liabilities are classified upon initial recognition into financial liabilities measured at fair value through profit or loss and other financial liabilities. For financial liabilities measured at fair value and whose changes are included in the current profit and loss, the relevant transaction costs are directly included in the current profit and loss, and the relevant transaction costs of other financial liabilities are included in their initial recognition amount.

Financial liabilities measured at fair value through profit or loss for the current period

Financial liabilities measured at fair value with changes included in current profits and losses, including trading financial liabilities (including financial liabilities)

①

Derivatives) and financial liabilities designated at initial recognition as measured at fair value with changes included in current profits and losses.

Trading financial liabilities (including derivatives belonging to financial liabilities) are subsequently measured at fair value. Except for those related to hedging accounting, changes in fair value are included in current profits and losses.

For a financial liability designated as a financial liability measured at fair value through profit or loss for the current period, changes in the fair value of this liability caused by changes in the company's own credit risk are included in other comprehensive income. When the liability is derecognised, the accumulated changes in its fair value caused by changes in its own credit risk included in other comprehensive income are transferred to retained earnings. The remaining changes in fair value are included in the current profit and loss. If handling the impact of changes in the credit risk of such financial liabilities in the above manner will cause or expand accounting mismatches in profits and losses, the company will include all gains or losses from the financial liabilities (including the amount affected by changes in the company's own credit risk) into the profits and losses of the current period.

Other financial liabilities

Except for financial liabilities and financial guarantees arising from the transfer of financial assets that do not meet the conditions for derecognition or continued involvement in the transferred financial assets.

②

Other financial liabilities outside the contract are classified as financial liabilities measured at amortized cost, and are subsequently measured at amortized cost. Gains or losses arising from derecognition or amortization are included in the current profit and loss.

(3) Derecognition of financial assets and transfer of financial assets

A financial asset that meets one of the following conditions shall be derecognised: the contractual right to receive cash flows from the financial asset terminates; the financial asset has been transferred, and substantially all the risks and rewards of ownership of the financial asset are transferred to the transferee; the financial asset is

①

② 29 ③

The assets have been transferred. Although the enterprise neither transfers nor retains substantially all the risks and rewards of ownership of the financial assets, it has given up control of the financial assets.

If an enterprise neither transfers nor retains substantially all the risks and rewards of ownership of a financial asset, and does not give up control of 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. The degree of continued involvement in the transferred financial assets refers to the level of risk faced by the enterprise due to changes in the value of the financial assets.

If the overall transfer of financial assets meets the conditions for derecognition, the difference between the book value of the transferred financial assets and the sum of the consideration received for the transfer and the cumulative amount of changes in fair value originally included in other comprehensive income will be included in the current profit and loss.

If the partial transfer of financial assets meets the conditions for derecognition, the book value of the transferred financial assets will be apportioned between the derecognized and non-derecognized parts according to their relative fair values, and the difference between the sum of the consideration received for the transfer and the cumulative amount of changes in fair value originally included in other comprehensive income that should be apportioned to the derecognized part and the apportioned aforementioned book amount shall be included in the current profit and loss.

When the company sells financial assets with recourse, or endorses and transfers financial assets it holds, it needs to determine whether substantially all the risks and rewards of ownership of the financial assets have been transferred. If almost all the risks and rewards of the ownership of the financial asset have been transferred to the transferee, the financial asset will be derecognised; if almost all the risks and rewards of the ownership of the financial asset have been retained, the recognition of the financial asset will not be deactivated; if almost all the risks and rewards of the ownership of the financial asset have neither been transferred nor retained, the company will continue to judge whether the enterprise retains control over the asset, and perform accounting treatment according to the principles described in the previous paragraphs.

(4) Derecognition of financial liabilities

If the current obligation of a financial liability (or part thereof) has been discharged, the Company shall terminate the recognition of the financial liability (or part thereof). The company (borrower) signs an agreement with the lender to replace the original financial liability by assuming a new financial liability, and if the contract terms of the new financial liability are substantially different from the original financial liability, the original financial liability will be terminated and a new financial liability will be recognized at the same time. If the company makes substantial modifications to the contract terms of the original financial liability (or part thereof), it will terminate the recognition of the original financial liability and recognize a new financial liability in accordance with the modified terms.

If a financial liability (or part thereof) is derecognised, the company will include the difference between its book value and the consideration paid (including non-cash assets transferred out or liabilities assumed) into the current profit and loss.

(5) Offset of financial assets and financial liabilities

When the company has the legal right to offset the recognized amount of financial assets and financial liabilities, and the legal right is currently enforceable, and the company plans to settle on a net basis or realize the financial assets and pay off the financial liabilities at the same time, the financial assets and financial liabilities will be listed in the balance sheet as the net amount after offsetting each other. Otherwise, financial assets and financial liabilities are presented separately in the balance sheet and are not offset against each other.

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

Fair value refers to the price that can be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. If there is an active market for a financial instrument, the company uses the quoted price in the active market to determine its fair value. Quotes in active markets refer to prices that are easily obtained from exchanges, brokers, industry associations, pricing service agencies, etc. on a regular basis, and represent the prices of market transactions that actually occur in fair transactions. If there is no active market for a financial instrument, the Company uses valuation techniques to determine its fair value. Valuation techniques include reference to prices used in recent market transactions between parties who are familiar with the situation and voluntary transactions, reference to the current fair value of other financial instruments that are substantially the same, discounted cash flow methods and option pricing models, etc. When valuing, the Company adopts valuation techniques that are applicable under the current circumstances and supported by sufficient available data and other information, selects input values ​​that are consistent with the characteristics of the assets or liabilities considered by market participants in transactions of related assets or liabilities, and gives priority to the use of relevant observable input values ​​whenever possible. Non-inputable values ​​are used when the relevant observable input values ​​cannot be obtained or are impracticable to obtain.

(7) Equity instruments

Equity instruments are contracts that evidence ownership of a residual interest in the company's assets after deducting all liabilities. The company's issuance (including refinancing), repurchase, sale or cancellation of equity instruments is treated as a change in equity, and transaction costs related to equity transactions are deducted from equity. The Company does not recognize changes in the fair value of equity instruments.

If the company's equity instruments distribute dividends (including "interest" generated by instruments classified as equity instruments) during their existence, they will be treated as profit distribution.

12. Impairment of financial assets

The financial assets that the company needs to confirm impairment losses are financial assets measured at amortized cost, debt instruments measured at fair value with changes included in other comprehensive income, and lease receivables, which mainly include notes receivable, accounts receivable, receivable financing, other receivables, debt investments, other debt investments, long-term receivables, etc. In addition, for contract assets, lease receivables and some financial guarantee contracts, impairment provisions are made and credit impairment losses are recognized in accordance with the accounting policies described in this section.

(1) Measurement of expected credit losses

Based on expected credit losses, the Company makes impairment provisions and recognizes credit impairment losses for each of the above items in accordance with its applicable expected credit loss measurement method (general method or simplified method).

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 actual interest rate, that is, the present value of all cash shortfalls. Among them, for purchased or originated financial assets that have suffered credit impairment, the company discounts them according to the credit-adjusted actual interest rate of the financial assets.

The general method of measuring expected credit losses means that the company evaluates on each balance sheet date whether the credit risk of financial assets (including contract assets and other applicable items, the same below) has increased significantly since initial recognition. If the credit risk has increased significantly since initial recognition, the company measures loss provisions at an amount equivalent to the expected credit losses during the entire duration; if the credit risk has not increased significantly since initial recognition, the company measures loss provisions at an amount equivalent to the expected credit losses within the next 12 months. The Company considers all reasonable and evidence-based information, including forward-looking information, when assessing expected credit losses.

For financial instruments with low credit risk on the balance sheet date, the Company assumes that its credit risk has not increased significantly since initial recognition, and chooses to measure loss provisions based on expected credit losses within the next 12 months.

(2) Criteria for judging whether credit risk has increased significantly since initial recognition

If the default probability of a financial asset within the expected duration determined on the balance sheet date is significantly higher than the default probability within the expected duration determined at initial recognition, it indicates that the credit risk of the financial asset has increased significantly. Except for special circumstances, the Company uses the change in default risk within the next 12 months as a reasonable estimate of the change in default risk throughout the entire duration to determine whether credit risk has increased significantly since initial recognition.

(3) Portfolio method to assess expected credit risk on a portfolio basis

The Company evaluates the credit risk of financial assets with significantly different credit risks individually, such as: accounts receivable from related parties; accounts receivable that are in dispute with the other party or involved in litigation or arbitration; accounts receivable that have obvious signs that the debtor is likely to be unable to fulfill its repayment obligations, etc.

In addition to financial assets that assess credit risk individually, the Company divides financial assets into different groups based on common risk characteristics and assesses credit risk on a combined basis.

(4) Accounting treatment method for impairment of financial assets

At the end of the period, the Company calculates the estimated credit losses of various financial assets. If the estimated credit losses are greater than the carrying amount of the current impairment provisions, the difference will be recognized as impairment losses; if it is less than the current carrying amount of the impairment provisions, the difference will be recognized as impairment 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.

If the company no longer reasonably expects that the contractual cash flows of a financial asset can be fully or partially recovered, it will directly write down the book balance of the financial asset. Such a write-down constitutes the derecognition of the relevant financial asset. This situation typically occurs when the Company determines that the debtor does not have the assets or sources of income to generate sufficient cash flow to repay the amount that will be written down.

(5) Methods for determining credit losses of various financial assets

Notes receivable

The Company measures loss provisions for notes receivable based on an amount equivalent to the expected credit losses during the entire duration. Based on notes receivable ①

According to the credit risk characteristics, they are divided into different combinations:

Project Basis for determining combination

Bank acceptance bill The acceptor is a bank with low credit risk

Commercial acceptance bills should be classified according to the credit risk of the acceptor, which should be the same as the "accounts receivable" portfolio.

For notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates expected credit losses through default risk exposure and the expected credit loss rate throughout the duration.

Accounts receivable and contract assets

For receivables and contract assets that do not contain significant financing components, the Company calculates the expected credit losses during the entire duration②

The loss amount is used to measure the loss reserve.

For receivables, contract assets and lease receivables that contain significant financing components, the Company chooses to always measure loss provisions at an amount equivalent to the expected credit losses during the duration.

In addition to accounts receivable for individual assessment of credit risk, they are divided into different combinations based on their credit risk characteristics:

Project Basis for determining combination

For receivables whose individual amounts are not significant on the balance sheet date, the accounts receivable that are not impaired are combined with the aging analysis method after individual testing and are divided into several groups based on age as similar credit risk characteristics, and then

Impairment losses are calculated and determined based on a certain proportion of the closing amounts of these receivable combinations, and bad debts are accrued.

Project Basis for determining combination

Prepare.

For accounts receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, prepares a comparison table between the aging of accounts receivable and the expected credit loss rate for the entire duration, and calculates expected credit losses.

Other receivables

③The company measures impairment losses based on whether the credit risk of other receivables has increased significantly since initial recognition, using an amount equivalent to the expected credit losses in the next 12 months or the entire duration. In addition to other receivables whose credit risk is assessed individually, they are divided into different combinations based on their credit risk characteristics:

Project Basis for determining combination

For receivables whose individual amounts are not significant on the balance sheet date, the same as after separate testing is adopted.

Receivables that are not impaired are divided into several combinations based on aging as similar credit risk characteristics, and then combined using the aging analysis method.

Impairment losses are calculated and determined based on a certain proportion of the closing amounts of these receivable combinations, and bad debts are accrued.

Prepare.

For other receivables classified into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates expected credit losses through default risk exposure and expected credit loss rate within the next 12 months or the entire duration.

Debt investment, other debt investment

④The company measures impairment losses based on whether its credit risk has increased significantly since initial recognition, using an amount equivalent to the expected credit losses in the next 12 months or the entire duration.

long-term receivables

⑤The company measures impairment losses on long-term receivables based on whether its credit risk has increased significantly since initial recognition, using an amount equivalent to the expected credit losses in the next 12 months or the entire duration.

13. Accounts receivable financing

For notes receivable and accounts receivable classified as measured at fair value with changes included in other comprehensive income, the portion with a term within one year (including one year) from the date of acquisition is listed as receivable financing; the portion with a term of more than one year from the date of acquisition is listed as other debt investments. Please refer to Note 3, 11 "Financial Instruments" and Note 3, 12 "Impairment of Financial Assets" for its relevant accounting policies.

14. Inventory

(1) Classification of inventory

Inventories refer to the finished products or commodities held by the company for sale in daily activities, products in progress during the production process, materials and supplies consumed in the production process or the provision of labor services, etc., mainly including raw materials, products in progress, turnover materials, inventory commodities, etc. (2) Valuation method for inventory acquisition and issue

Inventories are valued at actual cost when acquired, and inventory costs include purchase costs, processing costs and other costs. The price is calculated based on the weighted average method at the end of the month when it is collected and issued.

(3) Recognition of net realizable value of inventories and method of accruing provision for decline in value

Net realizable value refers to the estimated selling price of inventory in daily activities minus the estimated costs to be incurred to completion, estimated selling expenses and related taxes. When determining the net realizable value of inventories, it is based on the conclusive evidence obtained and the purpose of holding the inventories and the impact of events after the balance sheet date are also considered.

The company's finished products, materials for sale and other inventories that are directly for sale, during the normal production and operation process, determine its net realizable value based on the estimated selling price of the inventory minus the estimated sales expenses and related taxes. For inventories held for the execution of sales contracts or service contracts, the contract price is used as the measurement basis of its net realizable value; if the quantity of inventory held is greater than the quantity ordered in the sales contract, the excess net realizable value of the inventory is measured based on the general sales price. For materials used for sale, the market price is used as the measurement basis of their net realizable value. For materials inventories that need to be processed, in the normal production and operation process, the net realizable value is determined by the estimated selling price of the finished products minus the estimated costs to be incurred upon completion, estimated sales expenses and related taxes.

On the balance sheet date, inventories are measured at the lower of cost and net realizable value. When the net realizable value is lower than the cost, the inventory depreciation reserve is withdrawn. After the provision for inventory depreciation is accrued, if the factors that previously caused the inventory value to be written down have disappeared, causing the net realizable value of the inventory to be higher than its book value, the amount of the inventory depreciation provision that was originally accrued will be reversed, and the amount reversed will be included in the current profit and loss. (4) The inventory inventory system is a perpetual inventory system, which must be taken at least once a year, and the inventory gain and loss shall be included in the profit and loss of the current year. (5) Amortization method of turnover materials

Low-value consumables are amortized according to the one-time amortization method when they are used; packaging materials are amortized according to the one-time amortization method when they are used.

15. Contract assets

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between performance obligations and customer payments. The Company lists the rights of the customer that have not paid the contract consideration but that have fulfilled the performance obligations under the contract and are not unconditional (that is, only dependent on the passage of time) to receive payment from the customer as contract assets in the balance sheet. Contract assets and contract liabilities under the same contract are presented on a net basis, and contract assets and contract liabilities under different contracts are not offset.

For the determination method and accounting treatment method of expected credit losses of contract assets, please refer to Note 3.12 "Impairment of Financial Assets".

16. Contract costs

Contract costs include contract performance costs and contract acquisition costs.

If the costs incurred by the company to perform the contract do not fall within the scope of other business accounting standards other than "Accounting Standards for Business Enterprises No. 14 - Revenue (2017 Revision)" and meet the following conditions at the same time, they are recognized as an asset as contract performance costs: The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing expenses (or similar expenses),

① Clarify the costs borne by the customer and other costs incurred solely because of the contract; this cost increases the company’s future resources for fulfilling its performance obligations; this cost is expected to be recovered. The asset is based on whether its amortization period exceeds a normal operating period when it is initially recognized.

②

Periods are reported in inventories or other non-current assets.

③

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. However, if the amortization period of the asset does not exceed one year, it will be included in the current profit and loss when incurred.

Assets related to contract costs are amortized on the same basis as the commodity revenue recognition related to the asset and included in the current profit and loss.

17. Assets held for sale and disposal groups

If the company recovers its book value mainly through sale (including non-monetary asset exchange with commercial substance, the same below) rather than continuing to use a non-current asset or disposal group, it will be classified as held for sale. The specific criteria are to meet the following conditions at the same time: a certain non-current asset or disposal group can be sold immediately under the current conditions according to the practice of selling such assets or disposal groups in similar transactions; the company has made a resolution on the sales plan and obtained a firm purchase commitment; the sale is expected to be completed within one year. Among them, a disposal group refers to a group of assets that are disposed of as a whole in a transaction through sale or other means, as well as the liabilities directly related to these assets transferred in the transaction. If the asset group or asset group combination to which the disposal group belongs has allocated the goodwill acquired in the business merger in accordance with the "Accounting Standards for Business Enterprises No. 8 - Asset Impairment", the disposal group shall include the goodwill allocated to the disposal group.

When the company initially measures or remeasures and divides the assets into non-current assets and disposal groups held for sale on the balance sheet date, if its book value is higher than the net amount of the fair value minus the selling expenses, the book value will be written down to the net amount of the fair value minus the selling expenses. The amount of the write-down is recognized as an asset impairment loss and included in the current profit and loss. At the same time, a provision for impairment of the assets held for sale is made. For the disposal group, the recognized asset impairment loss is first deducted from the book value of the goodwill in the disposal group, and then deducted proportionally from the book value of various non-current assets in the disposal group that are subject to the measurement provisions of "Accounting Standards for Business Enterprises No. 42 - Non-current Assets Held for Sale, Disposal Groups and Discontinued Operations" (hereinafter referred to as the "Held for Sale Standards"). If the net amount of the fair value of the disposal group held for sale less the selling expenses increases on the subsequent balance sheet date, the previously written-down amount shall be restored and reversed within the amount of asset impairment loss recognized for non-current assets after being classified as held-for-sale and subject to the measurement provisions of the held-for-sale standards. The reversed amount shall be included in the current profit and loss, and According to the proportion of the book value of each non-current asset in the disposal group that is subject to the measurement requirements of the held-for-sale standards, except for goodwill, the book value is increased proportionally; the book value of goodwill that has been deducted, and the asset impairment losses recognized before the non-current assets are classified as held-for-sale categories are not reversed.

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.

When a non-current asset or disposal group no longer meets the classification conditions of the held-for-sale category, the company will no longer classify it as a held-for-sale category or remove the non-current assets from the held-for-sale disposal group, and measure it according to the lower of the following two: The book value before being classified as a held-for-sale category is adjusted according to the depreciation, amortization or impairment that should have been recognized if it was not classified as a held-for-sale category.

①

The adjusted amount; the recoverable amount.

18. Long-term equity investment

The Company's long-term equity investments include equity investments that control and have significant influence on the invested units, as well as equity investments in joint ventures. If the company can exert significant influence on the invested unit, it is an associate of the company.

Joint control refers to the company's shared control over an arrangement in accordance with relevant agreements, and the relevant activities of the arrangement must be decided with the unanimous consent of the participants sharing control rights. Significant influence means that the company has the power to participate in decision-making on the financial and operating policies of the investee, but it is not able to control or jointly control the formulation of these policies with other parties.

(1) Determination of investment cost

For long-term equity investments obtained through a business combination under common control, the share of the book value of the merged party's shareholders' equity/owner's equity in the ultimate controlling party's consolidated financial statements on the date of merger shall be regarded as the initial investment cost of the long-term equity investment. The difference between the initial investment cost of long-term equity investment and the cash paid, non-cash assets transferred and the book value of debts assumed shall be adjusted to the capital reserve; if the capital reserve is insufficient for offset, the retained earnings shall be adjusted. If the issuance of equity securities is used as the merger consideration, the share of the book value of the merged party's shareholders' equity/owner's equity in the final controlling party's consolidated financial statements on the merger date shall be used as the initial investment cost of the long-term equity investment, and the total face value of the issued shares shall be used as equity capital. The difference between the initial investment cost of the long-term equity investment and the total face value of the shares issued shall be adjusted to the capital reserve; if the capital reserve is insufficient for offset, the retained earnings shall be adjusted.

For long-term equity investments obtained through a business combination not under common control, the initial investment cost of the long-term equity investment shall be the merger cost on the acquisition date. The merger cost includes the sum of the assets paid by the purchaser, liabilities incurred or assumed, and the fair value of the equity securities issued.

Intermediary fees such as auditing, legal services, evaluation and consulting, and other related administrative expenses incurred by the merging party or purchaser during a business merger shall be included in the current profit and loss when incurred.

Equity investments other than long-term equity investments formed through business combinations are initially measured at cost. Depending on the way in which the long-term equity investment is acquired, the cost is determined based on the actual cash purchase price paid by the company, the fair value of the equity securities issued by the company, the value stipulated in the investment contract or agreement, the fair value or original book value of the assets exchanged in non-monetary asset exchange transactions, the fair value of the long-term equity investment itself, etc. Fees, taxes and other necessary expenses directly related to obtaining long-term equity investment are also included in the investment cost. For [additional investment] that can exert significant influence on the investee or implement joint control but does not constitute control, the long-term equity investment cost is the sum of the fair value of the original equity investment determined in accordance with the "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments" plus the cost of the new investment.

(2) Subsequent measurement and profit and loss recognition methods

Long-term equity investments that have joint control (except for joint operators) or significant influence on the investee unit are accounted for using the equity method. In addition, the company's financial statements adopt the cost method to account for long-term equity investments that can control the invested unit.

①Long-term equity investment accounted for by cost method

When accounting using the cost method, long-term equity investment is valued at the initial investment cost, and the cost of long-term equity investment is adjusted when additional investment or withdrawal of investment is made. Except for the actual price paid when acquiring the investment or the cash dividends or profits that have been declared but not yet distributed included in the consideration, the current investment income is recognized according to the cash dividends or profits declared and distributed by the investee.

②Long-term equity investment accounted for by equity method

When accounting using the equity method, if the initial investment cost of a long-term equity investment is greater than the fair value share of the investee's identifiable net assets at the time of investment, the initial investment cost of the long-term equity investment will not be adjusted; if the initial investment cost is less than the fair value share of the investee's identifiable net assets at the time of investment, the difference will be included in the current profit and loss, and the cost of the long-term equity investment will be adjusted at the same time.

When accounting using the equity method, investment income and other comprehensive income are recognized respectively according to the share of the net profit or loss and other comprehensive income realized by the investee, and the book value of the long-term equity investment is adjusted at the same time. The book value of the long-term equity investment is calculated based on the profit or cash dividend declared by the investee to be distributed, and the book value of the long-term equity investment is reduced accordingly. For other changes in the owner's equity of the invested unit other than net profits and losses, other comprehensive income and profit distribution, the book value of the long-term equity investment is adjusted and included in the owner's equity. When confirming the share of the investee's net profits and losses, the net profit of the investee is adjusted and recognized based on the fair value of the investee's identifiable assets when the investment is obtained. If the accounting policies and accounting periods adopted by the invested unit are inconsistent with those of the Company, the financial statements of the invested unit shall be adjusted in accordance with the Company's accounting policies and accounting periods, and investment income and other comprehensive income shall be recognized accordingly. Unrealized gains and losses from internal transactions between the Company and its associates and joint ventures are offset to the portion attributable to the Company calculated in proportion to the Company's share of the profits and losses, and investment gains and losses are recognized on this basis. However, if the unrealized internal transaction losses between the company and the investee are impairment losses on the transferred assets, they should be recognized in full. If the assets invested by the company into a joint venture or associated enterprise constitute a business, and the investor obtains a long-term equity investment but does not obtain control, the fair value of the invested business shall be used as the initial investment cost of the new long-term equity investment. The difference between the initial investment cost and the book value of the invested business shall be fully included in the current profit and loss. If the assets sold by the company to a joint venture or associated enterprise constitute a business, the difference between the consideration obtained and the book value of the business shall be fully included in the current profit and loss. If the assets purchased by the company from associates and joint ventures constitute a business, accounting treatment shall be carried out in accordance with the provisions of "Accounting Standards for Business Enterprises No. 20 - Business Merger", and the gains or losses related to the transaction shall be recognized in full.

When confirming the share of the net losses incurred by the investee, the book value of the long-term equity investment and other long-term interests that essentially constitute the net investment in the investee are reduced to zero. In addition, if the company has an obligation to bear additional losses to the investee, it will recognize estimated liabilities based on the estimated obligations and include them in the current investment losses. If the invested unit realizes net profit in the subsequent period, the company will resume recognition of the income sharing amount after the income sharing amount makes up for the unrecognized loss sharing amount.

For long-term equity investments in associates and joint ventures held by the Company before the first implementation of the new accounting standards, if there is any equity investment debit balance related to the investment, the amount will be included in the current profit and loss based on the straight-line amortization of the original remaining period.

③Disposal of long-term equity investments

In the consolidated financial statements, if the parent company partially disposes of the long-term equity investment in the subsidiary without losing control, the difference between the disposal price and the net assets of the subsidiary corresponding to the disposal of the long-term equity investment is included in shareholders' equity; if the parent company partially disposes of the long-term equity investment in the subsidiary, resulting in the loss of control over the subsidiary, it shall be handled in accordance with the relevant accounting policies described in Note 3.7, "Method for Preparing Consolidated Financial Statements" (4).

For the disposal of long-term equity investments under other circumstances, the difference between the book value of the disposed equity and the actual price obtained shall be included in the current profit and loss.

For long-term equity investments accounted for using the equity method, if the remaining equity after disposal is still accounted for using the equity method, the portion of other comprehensive income originally included in shareholders' equity at the time of disposal will be accounted for in proportion and on the same basis as if the investee directly disposed of relevant assets or liabilities. Owner's equity recognized due to changes in other owners' equity of the investee other than net profit and loss, other comprehensive income and profit distribution shall be carried forward to the current profit and loss on a proportional basis.

For long-term equity investments accounted for using the cost method, if the remaining equity after disposal is still accounted for using the cost method, other comprehensive income recognized by using the equity method or financial instrument recognition and measurement standards before obtaining control over the investee shall be calculated using the method directly related to the investee. Accounting treatment is carried out on the same basis as the disposal of relevant assets or liabilities, and the profits and losses of the current period are carried forward in proportion; changes in other owners' equity other than net profits and losses, other comprehensive income and profit distribution in the net assets of the investee recognized due to the use of equity method accounting are carried forward to the profits and losses of the current period in proportion.

If the company loses control over the invested unit due to the disposal of part of its equity investment, when preparing individual financial statements, if the remaining equity after disposal can jointly control or exert significant influence on the invested unit, it shall be accounted for according to the equity method instead, and the remaining equity shall be deemed to have adopted equity since the time of acquisition. If the remaining equity after disposal cannot jointly control or exert significant influence on the invested unit, the accounting treatment shall be carried out in accordance with the relevant provisions of the financial instrument recognition and measurement standards, and the difference between its fair value and book value on the date of loss of control shall be included in the current profit and loss. For other comprehensive income recognized due to the use of equity method accounting or financial instrument recognition and measurement standards before the company obtains control of the invested unit, when it loses control of the invested unit, it will be accounted on the same basis as the invested unit's direct disposal of relevant assets or liabilities. Other changes in owner's equity in the net assets of the invested unit recognized due to the use of equity method accounting, except for net profit and loss, other comprehensive income and profit distribution, will be carried forward to the current profit and loss when it loses control of the invested unit. Among them, if the remaining equity after disposal is accounted for using the equity method, other comprehensive income and other owners' equity will be carried forward in proportion; if the remaining equity after disposal is accounted for in accordance with the financial instrument recognition and measurement standards, all other comprehensive income and other owners' equity will be carried forward.

If the company loses joint control or significant influence on the investee due to the disposal of part of its equity investment, the remaining equity after disposal will be accounted for in accordance with the financial instrument recognition and measurement standards, and the difference between its fair value and book value on the date of loss of joint control or significant influence will be included in the current profit and loss. Other comprehensive income recognized due to the use of the equity method for accounting in the original equity investment will be accounted for on the same basis as the investee's direct disposal of relevant assets or liabilities when the use of the equity method is terminated. Owner's equity recognized due to changes in the investee's other owner's equity other than net profit and loss, other comprehensive income and profit distribution will all be transferred to the investment income of the current period when the use of the equity method is discontinued.

19. Investment real estate

Investment property is property held to earn rentals or for capital appreciation, or both. Including leased land use rights, land use rights held and prepared to be transferred after appreciation, leased buildings, etc.

Investment properties are initially measured at cost. Subsequent expenditures related to investment real estate shall be included in the cost of investment real estate if the economic benefits related to the asset are likely to flow in and its cost can be measured reliably. Other subsequent expenditures shall be included in the current profits and losses when incurred.

The Company adopts the cost model for subsequent measurement of investment real estate, and conducts depreciation or amortization in accordance with policies consistent with buildings or land use rights.

Please refer to Note 3, 25 "Impairment of Long-term Assets" for details on the impairment testing method and impairment provision method for investment real estate.

When self-use real estate or inventory is converted into investment real estate or investment real estate is converted into self-use real estate, the book value before conversion shall be used as the entry value after conversion.

When the purpose of investment real estate is changed to self-use, the investment real estate will be converted into fixed assets or intangible assets from the date of change. When the purpose of self-occupied real estate is changed to earn rent or capital appreciation, the fixed assets or intangible assets will be converted into investment real estate from the date of change. When a conversion occurs, if it is converted into an investment real estate measured using the cost model, the book value before conversion will be used as the entry value after the conversion; if it is converted into an investment real estate measured using the fair value model, the fair value on the date of conversion will be used as the entry value after the conversion.

When the investment real estate is disposed of or permanently withdrawn from use and no economic benefits are expected to be obtained from its disposal, the investment real estate shall be derecognized. The disposal income from the sale, transfer, scrapping or damage of investment real estate shall be included in the current profit and loss after deducting its book value and relevant taxes.

20. Fixed assets

(1) Confirmation conditions

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 only when the economic benefits related to them are likely to flow to the company and their costs can be measured reliably.

(2) Depreciation method

Depreciation is calculated using the straight-line method over the useful life of a fixed asset starting from the month after it reaches its intended usable condition. The useful lives, estimated net residual values and annual depreciation rates of various types of fixed assets are as follows:

Residual value rate Annual depreciation rate category Depreciation method Depreciation life (years)

(%) (%) Houses and buildings Average age method 10-35 5.00 9.50-2.71 Machinery and equipment Average age method 5-10 5.00 19.00-9.50 Transportation equipment Average age method 5-10 5.00 19.00-9.50 Electronic equipment and others Average age method 3-5 5.00 31.67-19.00 (3) Impairment testing method and impairment provision accrual method for fixed assets

Please refer to Note 3, 25 "Impairment of Long-term Assets" for details on the impairment testing method and impairment provision method for fixed assets.

(4) Other instructions

Fixed assets are initially measured at cost and taking into account the impact of expected disposal costs. Subsequent expenditures related to a fixed asset, if the economic benefits related to the fixed asset are likely to flow in and its cost can be measured reliably, will be included in the cost of the fixed asset, and the book value of the replaced part will be derecognized. Other subsequent expenditures other than these shall be included in the current profits and losses when incurred.

When a fixed asset is in a state of disposal or no economic benefits are expected to be generated through use or disposal, the fixed asset is derecognised. The difference between the disposal income from the sale, transfer, scrapping or damage of fixed assets after deducting their book value and relevant taxes is included in the current profit and loss.

The company will review the service life, estimated net residual value and depreciation method of fixed assets at least at the end of the year. If any changes occur, they will be treated as changes in accounting estimates.

21. Projects under construction

The cost of construction in progress is determined based on actual project expenditures, including various project expenditures incurred during the construction period, capitalized borrowing costs before the project reaches its intended usable state, and other related expenses. Construction in progress will be transferred to fixed assets after reaching the intended usable state. Fixed assets that have been constructed and have reached the intended usable state, but have not yet completed the final settlement, will be transferred to fixed assets at an estimated value based on the project budget, cost or actual project cost from the date they reach the intended usable state, and depreciation of the fixed assets will be accrued in accordance with the company's fixed asset depreciation policy. After the final settlement is processed, the original estimated value will be adjusted based on the actual cost, but the originally accrued depreciation amount will not be adjusted.

Please refer to Note 3, 25 "Impairment of Long-term Assets" for details on the impairment testing method and impairment provision accrual method for projects under construction.

22. Borrowing costs

Borrowing costs include borrowing interest, amortization of discounts or premiums, auxiliary expenses, and exchange differences arising from foreign currency borrowings. Borrowing costs directly attributable to the acquisition, construction or production of assets that meet the capitalization conditions shall be capitalized when asset expenditures have been incurred, borrowing costs have been incurred, and the acquisition, construction or production activities necessary to bring the assets to the intended usable or salable state have begun; capitalization shall cease when the assets purchased, constructed or produced that meet the capitalization conditions have reached the intended usable or salable state. The remaining borrowing costs are recognized as expenses in the current period.

The interest expenses actually incurred on special borrowings in the current period shall be capitalized after deducting the interest income from unused borrowed funds deposited in banks or investment income from temporary investments; the capitalization amount of general borrowings shall be determined based on the weighted average of asset disbursements exceeding the part of special borrowings multiplied by the capitalization rate of the occupied general borrowings. The capitalization rate is calculated and determined based on the weighted average interest rate of general borrowings.

During the capitalization period, all exchange differences on special foreign currency borrowings are capitalized; exchange differences on general foreign currency borrowings are included in the current profits and losses.

Assets that qualify for capitalization refer to fixed assets, investment real estate, inventories and other assets that require a considerable period of acquisition, construction or production activities to reach the intended usable or salable state.

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 will be suspended until the acquisition, construction or production activities of the asset are restarted.

23. Right-of-use assets

For the determination method and accounting treatment method of right-of-use assets, please refer to Note 3.35 "Leasing".

24. Intangible assets

(1) Intangible assets

Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled by the company.

Intangible assets are initially measured at cost. Expenditures related to intangible assets are included in the cost of intangible assets if the relevant economic benefits are likely to flow into the company and their costs can be measured reliably. Expenditures on other items other than these are included in the current profits and losses when incurred.

Acquired land use rights are usually accounted for as intangible assets. For self-developed and constructed factories and other buildings, the related land use right expenditures and building construction costs are accounted for as intangible assets and fixed assets respectively. In the case of outsourced houses and buildings, the relevant price will be allocated between the land use rights and the buildings. If it is difficult to reasonably distribute them, all of them will be treated as fixed assets.

From the time when an intangible asset with a limited service life becomes available for use, its original value minus the estimated net residual value and the cumulative amount of impairment reserves that have been provided are amortized evenly in installments using the straight-line method over its estimated service life. Intangible assets with indefinite useful lives are not amortized.

Among them, the useful lives and amortization methods of intangible assets with limited useful lives are as follows:

Item Estimated useful life Amortization method Basis

Land use rights 50 years average method Legal use rights

The use of non-patented technologies and proprietary technologies shall be determined with reference to the period that can bring economic benefits to the company.

5 years/10 years average method

rights lifespan

Determine the use of registration certificate with reference to the period that can bring economic benefits to the company. 5 years average method.

lifespan

Determine the royalties with reference to the period that can bring economic benefits to the company. 10 years. Average method.

lifespan

At the end of the period, the service life and amortization method of intangible assets with limited service life are reviewed, and any changes are treated as changes in accounting estimates. In addition, the service life of intangible assets with indefinite service life is also reviewed. If there is evidence that the intangible asset will bring economic benefits to the enterprise for a foreseeable period, its service life is estimated and amortized in accordance with the amortization policy for intangible assets with limited service life.

(2) Research and development expenditures

The Company's internal research and development project expenditures are divided into research stage expenditures and development stage expenditures.

Expenditures in the research stage are included in the current profits and losses when incurred.

Expenditures in the development stage that meet the following conditions at the same time are recognized as intangible assets. Expenditures in the development stage that do not meet the following conditions are included in the current profit and loss:

① It is technically feasible to complete the intangible asset so that it can be used or sold;

② Have the intention to complete the intangible asset and use or sell it;

③The way intangible assets generate economic benefits includes being able to prove that there is a market for the products produced using the intangible assets or that the intangible assets themselves have a market. If the intangible assets will be used internally, their usefulness can be proven;

④ Have sufficient technical, financial and other resource support to complete the development of the intangible assets, and have the ability to use or sell the intangible assets;

⑤ The expenditures attributable to the development stage of the intangible asset can be measured reliably.

If it is impossible to distinguish between expenditures in the research stage and expenditures in the development stage, all R&D expenditures incurred will be included in the current profit and loss.

(3) Impairment testing method and impairment provision accrual method for intangible assets

Please refer to Note 3, 25 "Impairment of Long-term Assets" for details on the impairment testing method and impairment provision method for intangible assets.

25. Impairment of long-term assets

For non-current non-financial assets such as fixed assets, projects under construction, right-of-use assets, intangible assets with limited useful lives, investment properties measured using the cost model, and long-term equity investments in subsidiaries, joint ventures, and associates, the Company determines whether there are signs of impairment on the balance sheet date. If there is any indication of impairment, the recoverable amount is estimated and an impairment test is performed. Goodwill, intangible assets with indefinite useful lives and intangible assets that have not yet reached a usable state are subject to impairment testing every year regardless of whether there are signs of impairment.

If the impairment test results show that the recoverable amount of the asset is lower than its book value, impairment provisions will be made based on the difference and included in the impairment loss. The recoverable amount is the higher of the asset's fair value less disposal costs and the present value of the asset's expected future cash flows. The fair value of an asset is determined based on the sales agreement price in a fair transaction; if there is no sales agreement but there is an active market for the asset, the fair value is determined based on the buyer's bid for the asset; if there is no sales agreement and there is an active market for the asset, the fair value of the asset is estimated based on the best information available. Disposal costs include legal fees, related taxes, transportation fees and direct costs incurred in bringing the assets to a salable condition. The present value of the estimated future cash flows of an asset is determined by selecting an appropriate discount rate to discount the estimated future cash flows generated during the continued use and final disposal of the asset. Asset impairment provisions are calculated and recognized on the basis of individual assets. If it is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs is determined. An asset group is the smallest combination of assets that can independently generate cash inflows.

For goodwill that is presented separately in the financial statements, when performing impairment testing, the book value of the goodwill is allocated to the asset group or combination of asset groups that are expected to benefit from the synergy effects of the business combination. If the test results show that the recoverable amount of an asset group or combination of asset groups containing amortized goodwill is lower than its book value, the corresponding impairment loss will be recognized. The amount of impairment loss first deducts the book value of the goodwill allocated to the asset group or asset group combination, and then deducts the book value of other assets in proportion to the proportion of the book value of other assets in the asset group or asset group combination except goodwill.

Once the above-mentioned asset impairment losses are recognized, the portion whose value has been restored will not be reversed in subsequent periods.

26. Long-term deferred expenses

Long-term deferred expenses are expenses that have been incurred but should be borne by the reporting period and subsequent periods with an amortization period of more than one year. The company's long-term deferred expenses mainly include molds, decoration and renovation fees, service fees and maintenance fees. Long-term deferred expenses are amortized on a straight-line basis over the expected benefit period.

The amortization period and amortization method of each expense are:

Item Estimated useful life Amortization method

Mold 5 years straight line method

Renovation and renovation costs 5 years Straight-line method

Service fees Amortized over the service period Straight-line method

Maintenance cost 1-5 years straight line method

27. Contract liabilities

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between performance obligations and customer payments. Contract liabilities refer to the company's obligation to transfer goods to customers for consideration it has received or receivable from customers. If the customer has paid the contract consideration or the company has obtained the unconditional right to receive payment before the company transfers the goods to the customer, the company will list the amount received or receivable as a contract liability at the earlier of the actual payment by the customer and the amount due. Contract assets and contract liabilities under the same contract are presented on a net basis, and contract assets and contract liabilities under different contracts are not offset.

28. Employee compensation

Employee compensation refers to various forms of remuneration or compensation given by the company to obtain services provided by employees or to terminate labor relations. The company's employee benefits mainly include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits. Among them:

Short-term compensation mainly includes wages, bonuses, allowances and subsidies, employee welfare fees, medical insurance premiums, maternity insurance premiums, work-related injury insurance premiums, housing provident funds, labor union funds and employee education funds, non-monetary benefits, etc. The company recognizes actual short-term employee benefits as liabilities during the accounting period when employees provide services to the company, and includes them in current profits and losses or related asset costs. Among them, non-monetary benefits are measured at fair value.

Post-employment benefits mainly include basic pension insurance, unemployment insurance and annuities. Post-employment benefit plans include defined contribution plans and defined benefit plans. If a defined contribution plan is adopted, the company will recognize the deposit amount payable calculated based on the defined contribution plan as a liability during the accounting period when employees provide services to them, and include it in the cost of relevant assets or current profits and losses.

When the company terminates the labor relationship with employees before the expiration of the employee's labor contract, or makes a proposal to provide compensation to encourage employees to voluntarily accept layoffs, when the company cannot unilaterally withdraw the dismissal benefits provided by the termination of labor relationship plan or layoff proposal, and the company confirms the costs related to the restructuring involving the payment of dismissal benefits, whichever is earlier, the employee compensation liabilities arising from the dismissal benefits are recognized and included in the current profit and loss. However, if dismissal benefits are not expected to be fully paid twelve months after the end of the annual reporting period, they will be treated as other long-term employee benefits.

Internal employee retirement plans are treated on the same principles as the above-mentioned termination benefits. The company will include the wages and social insurance premiums to be paid to early retirees from the date when the employees stop providing services to the normal retirement date, etc., when they meet the conditions for recognition of estimated liabilities, and included in the current profit and loss (dismissal benefits).

Other long-term employee benefits provided by the company to employees that comply with the defined contribution plan shall be accounted for in accordance with the defined contribution plan; otherwise, they shall be accounted for in accordance with the defined benefit plan.

29. Lease liabilities

For the determination method and accounting treatment method of lease liabilities, please refer to Note 3.35 "Lease".

30. Estimated liabilities

When obligations related to contingencies meet the following conditions at the same time, they are recognized as estimated liabilities: (1) The obligation is a current obligation assumed by the company; (2) Fulfillment of the obligation is likely to result in an outflow of economic benefits; (3) The amount of the obligation can be measured reliably.

On the balance sheet date, estimated liabilities are measured based on the best estimate of the expenditure required to fulfill the relevant current obligations, taking into account factors such as risks, uncertainties and the time value of money related to contingencies. The book value of estimated liabilities is reviewed on each balance sheet date. If there is conclusive evidence that the book value cannot reflect the current best estimate, the book value will be adjusted based on the current best estimate.

If all or part of the expenses required to settle estimated liabilities are expected to be compensated by a third party, the compensation amount will be recognized separately as an asset when it is basically certain that it will be received, and the recognized compensation amount will not exceed the book value of the estimated liabilities.

(1) Loss-making contract

Onerous contracts are contracts in which the unavoidable costs of fulfilling contractual obligations exceed the expected economic benefits. If a contract to be executed becomes a loss-making contract, and the obligations arising from the loss-making contract meet the above recognition conditions for estimated liabilities, the excess of the expected losses from the contract over the recognized impairment losses (if any) of the underlying assets of the contract shall be recognized as estimated liabilities.

(2) Reorganization obligations

For a reorganization plan that is detailed, formal and has been announced to the outside world, if the aforementioned recognition conditions for estimated liabilities are met, the amount of estimated liabilities will be determined based on the direct expenditures related to the restructuring. Regarding the restructuring obligation to sell part of the business, the obligation related to the restructuring will only be recognized when the Company commits to sell part of the business (i.e., enters into a binding sale agreement).

31. Share-based payment

(1) Accounting treatment method for share-based payment

Share-based payment is a transaction in which equity instruments are granted or liabilities determined based on equity instruments are granted in order to obtain services from employees or other parties. Share-based payment is divided into equity-settled share-based payment and cash-settled share-based payment.

① Equity-settled share-based payment

Equity-settled share-based payments in exchange for services provided by employees are measured at the fair value of the equity instruments granted to employees on the date of grant. If the amount of the fair value becomes exercisable after completing the services during the waiting period or meeting the specified performance conditions, it will be calculated on a straight-line basis and included in the relevant costs or expenses during the waiting period based on the best estimate of the number of exercisable equity instruments. If the amount becomes exercisable immediately after the grant, the amount will be included in the relevant costs or expenses on the date of grant, and the capital reserve will be increased accordingly.

On each balance sheet date during the waiting period, the Company makes its best estimate based on the latest changes in the number of vested employees and other subsequent information, and corrects the number of equity instruments expected to be vested. The impact of the above estimates is included in the relevant costs or expenses of the current period, 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 reliably measured, it will be measured based on the fair value of the equity instrument on the date of service acquisition, and will be included in relevant costs or expenses, and shareholders' equity will be increased accordingly.

②Cash-settled share-based payment

Cash-settled share-based payments are measured based on the fair value of the company's liabilities determined based on shares or other equity instruments. If the rights are exercisable immediately after grant, the relevant costs or expenses will be included on the date of grant, and the liabilities will be increased accordingly; if the rights must be completed after the services during the waiting period or the specified performance conditions are met before the rights can be exercised, on each balance sheet date of 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 will be included in the costs or expenses, and the liabilities will be increased accordingly.

On each balance sheet date and settlement date before the settlement of relevant liabilities, the fair value of the liability is remeasured, and its changes are included in the current profit and loss.

(2) Relevant accounting treatment for modifying and terminating share-based payment plans

When the company modifies the share-based payment plan, if the modification increases the fair value of the equity instruments granted, the increase in services obtained shall be recognized accordingly based on the increase in the fair value of the equity instruments. The increase in the fair value of equity instruments refers to the difference between the fair values ​​of the equity instruments before and after the modification on the modification date. If the modification reduces the total fair value of share-based payment or adopts other methods that are unfavorable to employees, the accounting treatment for the services obtained will continue, and it will be deemed that the change has never occurred, unless the company cancels some or all of the equity instruments that have been granted.

During the waiting period, if the granted equity instruments are canceled, the company will treat the cancellation of the granted equity instruments as accelerated exercise, and the amount that should be recognized during the remaining waiting period will be immediately included in the current profit and loss, and the capital reserve will be recognized at the same time. If employees or other parties can choose to meet the non-vesting conditions but fail to do so within the waiting period, the company will treat it as the cancellation of the equity instruments granted.

(3) Accounting treatment involving share-based payment transactions between the company and its shareholders or actual controllers

For share-based payment transactions involving the company and its shareholders or actual controllers, if one of the settlement enterprise and the service-receiving enterprise is within the company and the other is outside the company, accounting treatment will be carried out in the company's consolidated financial statements in accordance with the following provisions:

① If the settlement enterprise settles the transaction with its own equity instruments, the share-based payment transaction will be treated as equity-settled share-based payment; otherwise, the share-based payment transaction will be treated as cash-settled share-based payment.

If the settlement enterprise is an investor in the enterprise that receives services, it shall be recognized as a long-term equity investment in the enterprise that receives services based on the fair value of the equity instruments or the fair value of the liabilities on the date of grant, and the capital reserve (other capital reserve) or liabilities shall be recognized at the same time.

② If the service-receiving enterprise has no settlement obligation or the equity instruments granted to the employees of the enterprise are its own equity instruments, the share-based payment transaction shall be treated as equity-settled share-based payment; if the service-receiving enterprise has settlement obligations and the equity instruments granted to the employees of the enterprise are not its own equity instruments, the share-based payment transaction shall be treated as cash-settled share-based payment.

For share-based payment transactions that occur between enterprises within the company, if the service-receiving enterprise and the settlement enterprise are not the same enterprise, the recognition and measurement of the share-based payment transaction in the respective financial statements of the service-receiving enterprise and the settlement enterprise shall be handled in accordance with the above principles.

32. Income

When the contract between the company and the customer meets the following conditions at the same time, revenue is recognized when the customer obtains control of the relevant goods: the parties to the contract have approved the contract and promised to perform their respective obligations; the contract clarifies the rights and obligations of the parties to the contract related to the transferred goods or the provision of labor services; the contract has clear payment terms related to the transferred goods; the contract has commercial substance, that is, the performance of the contract will change the risk, time distribution or amount of the company's future cash flows; the consideration that the company is entitled to receive for transferring goods to the customer is likely to be recovered.

On the contract inception date, the Company identifies each individual performance obligation that exists in the contract, and allocates the transaction price to each individual performance obligation in accordance with the relative proportion of the standalone selling price of the goods promised by each individual performance obligation. When determining the transaction price, the impact of variable consideration, significant financing components in the contract, non-cash consideration, consideration payable to customers and other factors was considered.

For each individual performance obligation in the contract, if one of the following conditions is met, the company will recognize the transaction price allocated to the individual performance obligation as revenue according to the performance progress during the relevant performance period: the customer obtains and consumes the company at the same time that the company performs the contract. The economic benefits brought by the performance of the contract; the customer can control the goods under construction during the company's performance of the contract; the goods produced by the company during the performance of the contract 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. The progress of contract performance is determined using the input method or the output method according to the nature of the transferred goods. When the progress of contract performance cannot be reasonably determined and the costs incurred by the company are expected to be compensated, revenue will be recognized based on the amount of costs incurred until the progress of contract performance can be reasonably determined.

If one of the above conditions is not met, the company will recognize revenue at the transaction price allocated to the individual performance obligation at the point when the customer obtains control of the relevant goods. When judging whether the customer has obtained control of the goods, the company considers the following signs: the company has the current right to receive payment for the goods, that is, the customer has current payment obligations for the goods; the company has transferred the legal ownership of the goods to the customer, that is, the customer already has the legal ownership of the goods; the company has The commodity is physically transferred to the customer, which means that the customer has physically taken possession of the commodity; the enterprise 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; the customer has accepted the commodity; and other signs indicate that the customer has obtained control of the commodity.

The company's business of selling goods usually includes the transfer of the performance obligations of the goods. When the company ships the goods to the customer's designated location and the customer signs for receipt on the delivery note or entrusted transportation record, the control of the goods is transferred, and the company recognizes the realization of revenue at that point. For domestic sales, the time point for revenue recognition is when the acceptance note issued by the customer is received; for export sales, the time point for revenue recognition is when the product is declared to customs, leaves the port, and the bill of lading is obtained.

33. Government subsidies

Government subsidies refer to the monetary assets and non-monetary assets that the company obtains free of charge from the government, excluding capital invested by the government as an investor and enjoying corresponding owner's rights. Government subsidies are divided into asset-related government subsidies and income-related government subsidies. The company defines the government subsidies obtained for the purchase, construction or other formation of long-term assets as asset-related government subsidies; the remaining government subsidies are defined as income-related government subsidies. If the government document does not clearly stipulate the subsidy object, the following method will be used to divide the subsidy into income-related government subsidies and asset-related government subsidies: (1) If the government document clarifies the specific project for which the subsidy is targeted, the expenditure of the asset will be formed in the budget of the specific project. The amount and the relative proportion of the expenditure included in expenses shall be divided. The division proportion shall be reviewed on each balance sheet date and changed if necessary; (2) If the purpose is only a general statement in the government document and no specific project is specified, it shall be regarded as a government subsidy related to income. 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. Government subsidies measured according to the nominal amount are directly included in the current profit and loss.

The Company usually recognizes and measures government subsidies based on the actual amount received when they are actually received. However, if there is conclusive evidence at the end of the period that it can meet the relevant conditions stipulated in the financial support policy and is expected to receive financial support funds, it will be measured according to the amount receivable. Government subsidies measured based on the amount receivable shall meet the following conditions: (1) The amount of the subsidy receivable has been confirmed by a document issued by the competent government department, or can be reasonably calculated by oneself in accordance with the relevant provisions of the officially released fiscal fund management measures, and the amount is not expected to have significant uncertainty; (2) It is based on the fiscal support projects and fiscal fund management officially announced by the local financial department and proactively disclosed in accordance with the "Government Information Disclosure Regulations" The management method should be universal (any enterprise that meets the specified conditions can apply), rather than formulated specifically for specific enterprises; (3) The relevant subsidy approval documents have clearly promised the disbursement period, and the disbursement of the funds is guaranteed by the corresponding financial budget, so it can be reasonably guaranteed to be received within the specified period; (4) Other relevant conditions (if any) that should be met according to the specific circumstances of the company and the subsidy matter.

Government subsidies related to assets are recognized as deferred income and included in current profits and losses in installments in a reasonable and systematic manner within the useful life of the relevant assets. 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 and included in the current profit and loss during the period when the relevant costs, expenses or losses are recognized; if they are used to compensate for relevant costs, expenses or losses that have already occurred, they are directly included in the current profits and losses.

Government subsidies that include both asset-related parts and income-related parts are distinguished and accounted for separately. If it is difficult to distinguish, the whole is classified as income-related government subsidies.

Government subsidies related to the company's daily activities shall be included in other income or offset related costs and expenses according to the nature of the economic business; government subsidies unrelated to daily activities shall be included in non-operating income and expenses.

When a recognized government subsidy needs to be returned, if there is a relevant deferred income balance, the book balance of the relevant deferred income will be offset, and the excess will be included in the current profit and loss or (for asset-related government subsidies that offset the book value of the relevant assets at the time of initial recognition) the book value of the asset will be adjusted; in other cases, it will be directly included in the current profit and loss.

34. Deferred income tax assets/deferred income tax liabilities

Income tax includes current income tax and deferred income tax. Except for the current income tax and deferred income tax related to transactions and events recognized as other comprehensive income or directly included in shareholders' equity, which are included in other comprehensive income or shareholders' equity, and the deferred income tax arising from business combinations adjusts the book value of goodwill, the remaining current income tax and deferred income tax expenses or income are included in the current profit and loss.

(1) Current income tax

On the balance sheet date, current income tax liabilities (or assets) formed in the current and previous periods are measured based on the amount of income tax expected to be paid (or refunded) calculated in accordance with the provisions of tax laws. The taxable income based on which the income tax expense for the current period is calculated is calculated based on the relevant tax laws and regulations by making corresponding adjustments to the pre-tax accounting profit for the reporting period.

(2) Deferred income tax assets and deferred income tax liabilities

The company usually uses the balance sheet liability method to recognize and measure the impact of taxable temporary differences or deductible temporary differences on income tax as deferred income tax liabilities or deferred income tax assets based on the temporary differences between the book values and tax bases of assets and liabilities on the balance sheet date. The Company does not discount deferred income tax assets and deferred income tax liabilities.

Deferred income tax liabilities will not be recognized for taxable temporary differences related to the initial recognition of goodwill and the initial recognition of assets or liabilities arising from transactions that are neither business combinations nor affect accounting profits and taxable income (or deductible losses) at the time of occurrence. In addition, for taxable temporary differences related to investments in subsidiaries, associates and joint ventures, if the company can control the timing of the reversal of the temporary differences, and the temporary differences are likely not to be reversed in the foreseeable future, the relevant deferred income tax liabilities will not be recognized. Except for the above exceptions, the Company recognizes deferred income tax liabilities arising from all other taxable temporary differences.

Deductible temporary differences related to the initial recognition of assets or liabilities arising from transactions that are neither business combinations nor affect accounting profits and taxable income (or deductible losses) at the time of occurrence shall not be recognized as deferred income tax assets. In addition, for deductible temporary differences related to investments in subsidiaries, associates and joint ventures, if the temporary differences are not likely to be reversed in the foreseeable future, or it is not likely to be taxable income that can be used to offset the deductible temporary differences in the future, the relevant deferred income tax assets will not be recognized. Except for the above exceptions, the Company recognizes deferred income tax assets arising from other deductible temporary differences to the extent that it is likely to obtain taxable income that can be used to offset the deductible temporary differences.

For deductible losses and tax credits that can be carried forward to future years, the corresponding deferred income tax assets are recognized to the extent that it is probable that the future taxable income will be used to offset the deductible losses and tax credits.

On the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the applicable tax rate during the period when the relevant assets are expected to be recovered or the relevant liabilities are settled in accordance with the provisions of tax laws.

On the balance sheet date, the book value of the deferred tax assets is reviewed. 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.

(3) Offset of income tax

When it has the legal right to settle on a net basis and intends to settle on a net basis or acquire assets and pay off liabilities at the same time, the company's current income tax assets and current income tax liabilities are presented at the net amount after offsetting.

When you have the legal right to settle current income tax assets and current income tax liabilities on a net basis, and the deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax collection and administration department on the same taxable entity or on different taxable entities, but in the future each During the period when significant deferred income tax assets and liabilities are reversed, when the tax payer involved intends to settle the current income tax assets and liabilities on a net basis or to acquire assets and settle liabilities at the same time, the Company's deferred income tax assets and deferred income tax liabilities will be presented at the net amount after offsetting.

35. Leasing

A lease is a contract in which the Company transfers or acquires the right to control the use of one or more identified assets for a certain period of time in exchange for or payment of consideration. At the inception date of a contract, the Company evaluates whether the contract is a lease or contains a lease. If the contract contains multiple separate leases at the same time, the company will split the contract and conduct accounting treatment for each separate lease. The right to use an identified asset constitutes a separate lease in the contract if the following conditions are met at the same time: The lessee can profit from using the asset alone or using it together with other easily available resources; The asset is not highly dependent or highly related to other assets in the contract. ①

(1) The company serves as the lessee

②

The company's leased assets mainly include buildings, machinery and equipment.

①Initial measurement

On the start date of the lease period, the Company recognizes the right to use the leased asset during the lease term as a right-of-use asset, and recognizes the present value of the unpaid lease payments as a lease liability, except for short-term leases and low-value asset leases. Right-of-use assets refer to the lessee’s right to use the leased assets during the lease term. On the commencement date of the lease term, the right-of-use asset is initially measured at cost. This cost includes: the initial measurement amount of the lease liability; the lease payment amount paid on or before the start date of the lease term, and if there is a lease incentive, the amount related to the lease incentive that has been enjoyed will be deducted; the initial direct costs incurred by the lessee; the costs expected to be incurred by the lessee 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. When calculating the present value of lease payments, the company uses the interest rate implicit in the lease as the discount rate; if the interest rate implicit in the lease cannot be determined, the lessee's incremental borrowing rate is used as the discount rate.

②Subsequent measurement

The Company accrues depreciation on right-of-use assets with reference to the relevant depreciation provisions of "Accounting Standards for Business Enterprises No. 4 - Fixed Assets" (see Note 3, 20 "Fixed Assets" for details). If it is reasonably certain that the ownership of the leased asset will be obtained at the expiration of the lease term, the Company shall accrue depreciation within the remaining useful life of the leased asset. If it is not reasonably certain that the ownership of the leased asset will be obtained 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 shall be initially measured based on the present value of the unpaid lease payments at the beginning of the lease term. Lease payments include the following five items: fixed payments and substantive fixed payments, if there are lease incentives, the amount related to the lease incentives is deducted; variable lease payments that depend on the index or ratio; the exercise price of the purchase option, provided that the lessee is reasonably certain that the option will be exercised; the payment required to exercise the lease termination option, provided that the lease term reflects that the lessee will exercise the lease termination option; and the amount expected to be paid based on the residual value of the guarantee provided by the lessee. The difference between the lease payment and its present value is regarded as an unrecognized financing expense. The interest expense for each period of the lease period is calculated at a fixed periodic interest rate based on 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 or included in the cost of related assets. Variable lease payments that are not included in the measurement of lease liabilities are included in the current profit and loss or included in the cost of related assets when they actually occur.

After the start date of the lease period, when the actual fixed payment amount changes, the expected 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, the company remeasures the lease liability based on the present value of the changed lease payment amount, 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 company will include the remaining amount in the current profit and loss.

③ Impairment testing method and impairment provision accrual method for right-of-use assets

Please refer to Note 3, 25 "Impairment of Long-term Assets" for details on the impairment testing method and impairment provision method for right-of-use assets.

④Short-term leasing and low-value asset leasing

For short-term leases (leases with a lease period of no more than 12 months on the lease commencement date) and low-value asset leases, the company adopts a simplified treatment method and does not recognize right-of-use assets and lease liabilities. Instead, the lease payments are included in the relevant asset costs or current profits and losses according to the straight-line method or other systematic and reasonable methods during each period of the lease term.

(2) The company serves as the lessor

On the lease commencement date, the Company divides leases into finance leases and operating leases based on the nature of the transaction. A finance lease is a lease that transfers substantially all the risks and rewards associated with ownership of the leased asset. Operating leases refer to leases other than finance leases.

①Operating lease

The company uses the straight-line method or other systematic and reasonable amortization methods to recognize the lease receipts from operating leases as rental income for each period during the lease term. Variable lease payments related to operating leases that are not included in lease receipts are included in the current profit and loss when they actually occur.

②Financial lease

On the commencement date of the lease period, the Company recognizes the finance lease receivable and derecognizes the finance lease assets. When the Company initially measures the financial lease receivables, it takes the net lease investment as the entry value of the financial lease receivables. The net investment in a lease is the sum of the unguaranteed residual value and the present value of the lease payments that have not yet been received at the start of the lease term, discounted at the interest rate implicit in the lease. The Company calculates and recognizes interest income in each period during the lease term based on fixed periodic interest rates.

The derecognition and impairment of finance lease receivables shall be accounted for in accordance with Note 3.11 "Financial Instruments" of this Note.

Variable lease payments obtained by the Company that are not included in the measurement of net lease investment are included in the current profit and loss when actually incurred.

(3) Accounting treatment of lease changes

① Lease change as a separate lease

If a lease changes and the following conditions are met at the same time, the company will account for the lease change as a separate lease: the lease change expands the scope of the lease by increasing the right to use one or more leased assets; the increased consideration is equivalent to the amount of the individual price of the expanded part of the lease scope adjusted according to the conditions of the contract.

②The lease change is not treated as a separate lease

The Company as the lessee: On the effective date of the lease change, the Company redetermines the lease term and uses the revised discount rate to discount the changed lease payments to remeasure the lease liability. When calculating the present value of lease payments after the change, the interest rate implicit in the lease during the remaining lease period is used as the discount rate; if the interest rate implicit in the lease during the remaining lease period cannot be determined, the incremental borrowing rate on the effective date of the lease change is used as the discount rate. Regarding the impact of the above-mentioned lease liability adjustments, the following situations are distinguished for accounting treatment: if the lease change leads to the reduction of the lease scope or the shortening of the lease period, the book value of the right-of-use asset is reduced, and the relevant gains or losses from the partial or complete termination of the lease are included in the current profit and loss; for other lease changes, the book value of the right-of-use asset is adjusted accordingly.

The Company as the lessor: If an operating lease changes, the Company will account for it as a new lease from the effective date of the change, and the amount of lease receipts received in advance or receivable related to the lease before the change is regarded as the amount of receipts from the new lease. If the change in the financial lease is not accounted for as a separate lease, the company will treat the changed lease under the following circumstances: If the lease change takes effect on the lease commencement date, the lease will be classified as an operating lease, and the company will treat it as an operating lease from the effective date of the lease change. New leases are accounted for, and the net lease investment before the effective date of the lease change is used as the book value of the leased asset; if the lease change takes effect on the lease start date, the lease will be classified as a finance lease, and the company will conduct accounting treatment in accordance with the regulations on modifying or renegotiating the contract.

(4) Sale and leaseback

The company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in accordance with the provisions of Note 3.32 "Income". ①The company serves as the seller (lessee)

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 Note 3.11 "Financial Instruments". If the asset transfer 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.

②The company acts as the buyer (lessor)

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 Note 3.11 "Financial Instruments". If the asset transfer is a sale, the company will account for the asset purchase and account for the asset leasing in accordance with other applicable business accounting standards.

36. Other important accounting policies and accounting estimates

(1) Termination of operations

Discontinued operations refer to components that have been disposed of by the company or classified as held for sale and that can be separately distinguished when operating and preparing financial statements that meet one of the following conditions: The component represents an independent main business or a main operating area; the component is part of the planned disposal plan for an independent main business or a main operating area; the component

①

Some are subsidiaries acquired solely for resale.

② ③

For the accounting treatment method of discontinued operations, please refer to the relevant description in Note 3.17 "Assets held for sale and disposal groups".

The company separately lists the profit and loss from continuing operations and the profit and loss from discontinued operations in the income statement. For discontinued operations reported in the current period, the company will re-present the information originally presented as profits and losses from continuing operations as profits and losses from discontinued operations in the comparable accounting period in the current financial statements. If the discontinued operations no longer meet the conditions for classification into the held-for-sale category, the company will re-present the information originally presented as profits and losses from discontinued operations as profits and losses from continuing operations in the comparable accounting period in the current financial statements.

(2) Repurchase shares

The consideration and transaction costs paid in share repurchases reduce shareholders' equity, and no gain or loss is recognized when the company's shares are repurchased, transferred or canceled.

When treasury shares are transferred, the difference between the actual amount received and the book amount of the treasury shares will be included in the capital reserve. If the capital reserve is insufficient to offset, the surplus reserve and undistributed profits will be offset. When treasury shares are canceled, the share capital is reduced according to the face value of the stock and the number of canceled shares. The difference between the book balance and the face value of the canceled treasury shares is used to offset the capital reserve. If the capital reserve is insufficient for offset, the surplus reserve and undistributed profits are offset.

37. Changes in important accounting policies and accounting estimates

(1) Changes in accounting policies

None

(2) Changes in accounting estimates

Changes in accounting estimates at the time of capitalization of R&D expenditures

The company held the 2024 annual meeting of the Audit Committee of the fifth board of directors, the fourth meeting of the fifth board of directors, and the fourth meeting of the fifth board of supervisors on April 16, 2025, and reviewed and approved the "Proposal on Changes in Accounting Estimates" to change the estimate of the capitalization time point of R&D expenditures.

This change in accounting estimates will be implemented from January 1, 2025.

According to the relevant provisions of "Accounting Standards for Business Enterprises No. 28 - Accounting Policies, Changes in Accounting Estimates and Error Corrections", this change in accounting estimates is accounted for using the prospective application method. There is no need to make retrospective adjustments to the disclosed financial reports, and it will not have an impact on the company's financial status and operating results in previous years.

After this change in accounting estimates, the specific impact depends on the actual expenditures that occur in the future development stages of the R&D project and meet the capitalization conditions. It is not yet possible to accurately estimate the specific impact.

38. Significant accounting judgments and estimates

In the process of applying accounting policies, due to the inherent uncertainty in operating activities, the Company needs to make judgments, estimates and assumptions on the book values ​​of statement items that cannot be accurately measured. These judgments, estimates and assumptions are based on the past historical experience of the company's management and taking into account other relevant factors. These judgments, estimates and assumptions affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the balance sheet date. However, the actual results resulting from the uncertainty of these estimates may differ from the current estimates of the Company's management, resulting in significant adjustments to the carrying amounts of the assets or liabilities affected in the future.

The Company conducts regular reviews of the aforementioned judgments, estimates and assumptions on a going concern basis. If a change in accounting estimates only affects the current period of the change, the impact will be recognized in the current period of the change; if it affects both the current period of the change and future periods, the impact will be recognized in the current period of the change and future periods.

On the balance sheet date, the important areas where the company needs to make judgments, estimates and assumptions on the amounts of financial statement items are as follows: (1) Revenue recognition

As stated in Note 3.32, "Revenue", the Company's revenue recognition involves the following significant accounting judgments and estimates: identifying customer contracts; estimating the recoverability of the consideration that it is entitled to receive for transferring goods to customers; identifying performance obligations in the contract; estimating the recoverability of the contract. Changes in consideration and the amount of accumulated recognized revenue that are unlikely to be significantly reversed when the relevant uncertainty is eliminated; whether there is a significant financing component in the contract; estimate the stand-alone selling price of a single performance obligation in the contract; determine whether the performance obligation will be performed within a certain period of time or at a certain point in time.

The Company mainly relies on past experience and work to make judgments. These major judgments and changes in estimates may have an impact on the operating income, operating costs, and profits and losses of the current or subsequent periods, and may have a significant impact.

(2) Leasing

Identification of leases

When the company identifies whether a contract is a lease or contains a lease, it needs to evaluate whether there is an identified asset and the customer

①

Controls the right to use the asset for a certain period of time. When evaluating, consideration needs to be given to the nature of the asset, substantial substitution rights, and whether the customer is entitled to obtain substantially all of the economic benefits arising from the use of the asset during the period and to be able to direct the use of the asset.

②Classification of leasing

When the Company acts as a lessor, it classifies leases into operating leases and finance leases. When classifying, management needs to make analysis and judgment on whether all risks and rewards related to the ownership of the leased assets have been substantially transferred to the lessee.

③Lease liabilities

When the Company acts as a lessee, lease liabilities are initially measured based on the present value of the unpaid lease payments at the beginning of the lease term. When measuring the present value of lease payments, the Company estimates the discount rate used and the lease term of the lease contract with renewal options or termination options. When evaluating the lease term, the Company comprehensively considers all relevant facts and circumstances related to the economic benefits brought by the Company's exercise of the option, including expected changes in facts and circumstances from the start of the lease term to the date of exercise of the option. Different judgments and estimates may affect the recognition of lease liabilities and right-of-use assets, and will affect profits and losses in subsequent periods.

(3) Classification and impairment of financial assets

The Company's significant judgments involved in determining the classification of financial assets include analysis of business models and contractual cash flow characteristics.

The Company determines the business model for managing financial assets at the level of financial asset portfolios. Factors considered include the way to evaluate and report the performance of financial assets to key management personnel, the risks that affect the performance of financial assets and their management methods, and the way in which relevant business managers are remunerated.

When the company evaluates whether the contractual cash flows of financial assets are consistent with the basic lending arrangements, the following main judgments are made: whether the time distribution or amount of the principal may change during the duration due to early repayment and other reasons; whether the interest only includes the time value of money, credit risk, other basic lending risks and consideration for costs and profits. For example, whether the amount of early repayment only reflects the unpaid principal and interest based on the unpaid principal, as well as reasonable compensation paid for early termination of the contract.

The Company uses the expected credit loss model to assess the impairment of financial instruments. Applying the expected credit loss model requires significant judgments and estimates, and all reasonable and evidence-based information, including forward-looking information, must be considered. When making such judgments and estimates, the Company infers the expected changes in the debtor's credit risk based on historical data combined with changes in economic policies, macroeconomic indicators, industry risks, external market environment, technical environment, customer conditions and other factors. The Company regularly monitors and reviews assumptions related to the calculation of expected credit losses.

(4) Provision for inventory decline

According to the inventory accounting policy, the company measures the inventory at the lower of cost and net realizable value, and makes provision for inventory depreciation for inventory that has a cost higher than net realizable value and is obsolete and slow-moving. The impairment of inventories to net realizable value is based on an assessment of the inventory's salability and its net realizable value. Identification of inventory impairment requires management to make judgments and estimates based on obtaining conclusive evidence and considering factors such as the purpose of holding inventory and the impact of events after the balance sheet date. The difference between the actual results and the original estimate will affect the book value of inventories and the provision or reversal of inventory depreciation provisions in the period when the estimate is changed.

(5) Fair value of financial instruments

For financial instruments that do not have an active trading market, the Company determines their fair value through various valuation methods. These valuation methods include discounted cash flow model analysis, etc. During valuation, the company needs to estimate future cash flow, credit risk, market volatility and correlation, and select an appropriate discount rate. These relevant assumptions are uncertain and changes will have an impact on the fair value of financial instruments. If an equity instrument investment or contract has a public quotation, the Company does not use cost as the best estimate of its fair value. (6) Investment in other equity instruments

The Company's determination of whether other equity instrument investments are impaired depends to a large extent on management's judgment and assumptions to determine whether impairment losses need to be recognized in the income statement. In the process of making judgments and assumptions, the company needs to evaluate the extent and duration for which the fair value of the investment is lower than the cost, as well as the financial condition and short-term business prospects of the investee, including industry conditions, technological changes, credit ratings, default rates and counterparty risks.

(7) Provision for impairment of long-term assets

The Company determines whether there are signs of possible impairment of non-current assets other than financial assets on the balance sheet date. For intangible assets with indefinite useful lives, in addition to annual impairment testing, impairment testing is also conducted when there are signs of impairment. Other non-current assets other than financial assets are tested for impairment when there are signs that their carrying amounts are irrecoverable.

Impairment has occurred when the carrying value of an asset or asset group is greater than its recoverable amount, which is the higher of fair value less disposal costs and the present value of expected future cash flows.

The net amount of fair value less disposal expenses is determined by referring to the sales agreement price or observable market price of similar assets in an arm's length transaction, less the incremental costs directly attributable to the disposal of the asset.

When estimating the present value of future cash flows, significant judgments need to be made on the output, selling price, related operating costs, and the discount rate used in calculating the present value of the asset (or asset group). The Company will use all relevant information available when estimating the recoverable amount, including forecasts of output, selling price and related operating costs based on reasonable and supportable assumptions.

The Company tests whether goodwill is impaired at least annually. This requires estimating the present value of the future cash flows of the asset group or asset group combination to which goodwill is allocated. When estimating the present value of future cash flows, the company needs to estimate the cash flows generated by future asset groups or asset group combinations, and at the same time select an appropriate discount rate to determine the present value of future cash flows.

(8) Depreciation and amortization

The Company depreciates and amortizes investment real estate, fixed assets and intangible assets on a straight-line basis over their useful lives after taking into account their residual values. The Company regularly reviews useful lives to determine the amount of depreciation and amortization expenses to be included in each reporting period. The useful life is determined by the Company based on past experience with similar assets and combined with expected technological updates. If there are material changes to previous estimates, depreciation and amortization expenses will be adjusted in future periods.

(9) Deferred income tax assets

The Company recognizes deferred income tax assets for all unused tax losses to the extent that it is probable that there will be sufficient taxable profits to offset the losses. This requires the company's management to use a lot of judgment to estimate the time and amount of future taxable profits, combined with tax planning strategies, to determine the amount of deferred income tax assets that should be recognized.

(10) Income tax

In the company's normal operating activities, there are certain uncertainties in the final tax treatment and calculation of some transactions. Whether some items can be deducted before tax requires the approval of the tax authorities. If the final determination of these tax matters is different from the initially estimated amount, the difference will have an impact on current income tax and deferred income tax during the period of final determination.

(11) Estimated liabilities

Based on the contract terms, existing knowledge and historical experience, the company estimates and makes corresponding provisions for product quality assurance, expected contract losses, delayed delivery liquidated damages, etc. When such contingencies have formed a current obligation, and the performance of such current obligations is likely to result in the outflow of economic benefits from the Company, the Company recognizes the contingencies as estimated liabilities based on the best estimate of the expenditure required to fulfill the relevant current obligations. The recognition and measurement of estimated liabilities rely heavily on management's judgment. In the process of making judgments, the company needs to evaluate the risks, uncertainties, time value of money and other factors related to these contingencies.

Among them, the Company will commit estimated liabilities for after-sales quality maintenance provided to customers for the sale, repair and modification of the goods sold. The company's recent maintenance experience data has been taken into account when estimating liabilities, but recent maintenance experience may not reflect future maintenance conditions. Any increase or decrease in this provision may affect profits and losses in future years.

(12) Impairment of goodwill

The Company assesses whether goodwill is impaired at least annually. This requires an estimate of the value in use of the asset group to which goodwill is assigned. When estimating value in use, the company needs to estimate future cash flows from the asset group and select an appropriate discount rate to calculate the present value of future cash flows.

4. Taxes

1. Main tax types and tax rates

Tax type Tax calculation basis The tax rate is based on the sales of goods and taxable service income calculated according to the tax law. Output 13.00%, 9.00%, value-added tax

Tax amount, after deducting the input tax allowed to be deducted in the current period, the difference is the value-added tax payable 6.00%, 3.00% urban maintenance and construction tax, calculated and paid based on the actual value-added tax paid 7.00%, 5.00%

Education surcharge is calculated and paid based on the actual value-added tax paid. 3.00% Local education surcharge is calculated and paid based on the actual value-added tax paid. 2.00% 25.00%, 15.00%. Corporate income tax is calculated and paid based on taxable income 21.00%, 16.50%,

Explanation of income tax rates for different taxpayers: 9.00% and 22.00%:

Name of tax payer Income tax rate Remarks

Zhengzhou Antu Bioengineering Co., Ltd. 15.00% For details, please refer to the notes to this financial statement for tax benefits Antu Experimental Instruments (Zhengzhou) Co., Ltd. 15.00% For details, please refer to the notes to this financial statement for tax benefits Zhengzhou Imeno Biotechnology Co., Ltd. 15.00% For details, please refer to the notes to this financial statement for tax benefits Beijing Antu Bioengineering Co., Ltd. 15.00% For details, please refer to the notes to this financial statement for tax benefits Zhengzhou Biaoyuan Biotechnology Co., Ltd. 15.00% For details, please refer to the notes to this financial statement Tax Benefits AdvanBio, Inc. 21.00% [Note 1]

Shanghai Biaoyuan Biotechnology Co., Ltd. 25.00%

Zhengzhou Antu Technology Development Co., Ltd. 25.00%

Hebei Antu Jiuhe Medical Technology Co., Ltd. 25.00%

Shanghai Antu Biotechnology Co., Ltd. 25.00%

Zhengzhou Sikun Bioengineering Co., Ltd. 15.00% Please refer to the notes to this financial statement for details Tax incentives Shenzhen Antu Bioengineering Co., Ltd. 25.00%

Yunnan Antu Jiuhe Technology Development Co., Ltd. 25.00%

Qiqihar Antu Medical Laboratory Co., Ltd. 25.00%

Zhengzhou Matris Biotechnology Co., Ltd. 15.00% Please refer to the notes to this financial statement for details. Tax incentives Sanhe Baian Biotechnology Co., Ltd. 25.00%

Antu Biotechnology (Hong Kong) Co., Ltd. 16.50% [Note 1]

Antu Trading (Hong Kong) Co., Ltd. 16.50% [Note 1]

AUTOBIODIAGNOSTICS(HUNGARY)KFT 9.00% [Note 1]

Name of tax payer Income tax rate Remarks

PTAUTOBIODIAGNOSTICSINDONESIA 22.00% [Note 1]

Yunnan Antuino Technology Co., Ltd. 25.00%

Hebi Antu Medical Testing Co., Ltd. 25.00%

Zhengzhou Antu Biotechnology Co., Ltd. 25.00%

Zhengzhou Antumobi Molecular Diagnostic Technology Co., Ltd. 25.00%

Jiangxi Antu Biotechnology Co., Ltd. 25.00%

Note 1: The company's subsidiary AdvanBio, Inc. is established in the United States, and its income tax is mainly federal income tax, with a federal income tax rate of 21.00%; Advan Biotech (Hong Kong) Co., Ltd. and Advan Trading (Hong Kong) Co., Ltd. are established in Hong Kong, and its income tax is mainly profits tax, with a general tax rate of 1 6.50%; AUTOBIODIAGNOSTICS (HUNGARY) KFT is established in Hungary, its income tax rate is 9.00%; PTAUTOBIODIAGNOSTICS INDONESIA is established in Indonesia, its income tax rate is 22.00%.

2. Tax incentives and approval documents

(1) Income tax

①The company was again certified as a high-tech enterprise in Henan Province on November 22, 2023, certificate number: GR202341001511. According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China", income tax is calculated at a rate of 15% in 2023, 2024 and 2025.

② Antu Experimental Instruments (Zhengzhou) Co., Ltd., a subsidiary of the company, was again certified as a high-tech enterprise in Henan Province on November 22, 2023, with certificate number: GR202341002066. According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China", income tax is calculated at a tax rate of 15% in 2023, 2024 and 2025.

③The company's subsidiary Zhengzhou Imino Biotechnology Co., Ltd. passed the high-tech enterprise certification again on November 4, 2025, certificate number: GR202541002114. According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China", income tax is calculated at a tax rate of 15% in 2025, 2026 and 2027.

④The company’s subsidiary Beijing Antu Bioengineering Co., Ltd. passed the Beijing high-tech enterprise certification again on October 26, 2023, certificate number: GS202311000058. According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China", income tax is calculated at a tax rate of 15% in 2023, 2024 and 2025.

⑤The company’s secondary subsidiary Zhengzhou Biaoyuan Biotechnology Co., Ltd. passed the high-tech enterprise certification again on November 4, 2025, certificate number: GR202541001628. According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China", income tax is calculated at a tax rate of 15% in 2025, 2026 and 2027.

⑥The company's subsidiary Zhengzhou Matris Biotechnology Co., Ltd. passed the certification of Henan High-tech Enterprise for the first time on November 4, 2025, with certificate number: GR202541001407. According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China", income tax is calculated at a tax rate of 15% in 2025, 2026 and 2027.

⑦The company's subsidiary Zhengzhou Sikun Bioengineering Co., Ltd. passed the high-tech enterprise certification for the first time on November 4, 2025, with certificate number: GR202541001506. According to the "Enterprise Income Tax Law of the People's Republic of China" and the "Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China", income tax is calculated at a tax rate of 15% in 2025, 2026 and 2027.

(2) Value-added tax

According to the provisions of the "Notice of the Ministry of Finance and the State Administration of Taxation on Comprehensively Launching the Pilot Program of Replacing Business Tax with Value-Added Tax" (Caishui [2016] No. 36), medical services provided by medical institutions are exempt from VAT. The company's secondary subsidiary Qiqihar Antu Medical Laboratory Co., Ltd. complies with the preferential policy of value-added tax exemption from January to September this year as stipulated in the document.

According to the provisions of the "Notice of the Ministry of Finance and the State Administration of Taxation on Value-Added Tax Policies for Software Products" (Caishui [2011] No. 100), software products that meet the conditions can enjoy the VAT refund policy upon review and approval by the competent tax authorities. The company's subsidiaries, Antu Experimental Instruments (Zhengzhou) Co., Ltd. and Shanghai Biaoyuan Biotechnology Co., Ltd., complied with the policy of immediate refund of value-added tax on software products stipulated in the documents this year.

5. Notes on Consolidated Financial Statement Items

Unless otherwise specified, the beginning of the year refers to January 1, 2025, the end of the year refers to December 31, 2025, the end of the previous year refers to December 31, 2024, the current year refers to 2025, and the previous year refers to 2024.

1. Monetary funds

Item Ending balance Beginning balance

Cash on hand 153,112.01 348,166.38 Bank deposits 582,716,804.87 451,709,935.31 Other monetary funds 9,403,621.40 13,315,021.33

Total 592,273,538.28 465,373,123.02

Including: Total amount of money deposited overseas 6,456,707.59 7,256,240.11 Total amount of money with restrictions on use due to mortgage, pledge or freezing

9,402,814.67 13,314,774.21 amount

As of December 31, 2025, other monetary funds mainly include securities account funds and foreign exchange swap margins; the total amount of funds with restricted use due to mortgage, pledge or freezing is 9,402,814.67 yuan, of which the amount transferred to the vehicle The deposit amount in the ETC system is 24,408.00 yuan; the margin amount for the foreign exchange swap business of Antu Experimental Instruments (Zhengzhou) Co., Ltd. is 9,360,579.94 yuan, and other frozen amounts are 17,826.73 yuan.

2. Trading financial assets

Item Ending balance Beginning balance

Measured at fair value with changes included in current profit and loss

Financial assets of 502,095,890.45 3,609,780.75

Including: debt instrument investment - - financial products 502,095,890.45 - foreign exchange swaps - 3,609,780.75

Total 502,095,890.45 3,609,780.75

3. Notes receivable

(1) Classified presentation of notes receivable

Item Ending balance Beginning balance

Bank acceptance bill 7,253,011.95 14,585,836.00 Commercial acceptance bill 22,501,476.89 8,096,831.18

Subtotal 29,754,488.84 22,682,667.18

Less: Bad debt provision 1,579,920.94 511,101.04

Total 28,174,567.90 22,171,566.14

(2) Classified presentation according to bad debt accrual method

Year-end balance

Category Book balance Bad debt provision

book value

Amount Proportion (%) Amount Provision Proportion (%)

Notes receivable with provision for bad debts based on individual items - - - - - Notes receivable with provision for bad debts based on combinations 29,754,488.84 100.00 1,579,920.94 5.31 28,174,567.9 Including: bank acceptance bill 7,253,011.95 24.38 - - 7,253,011.95 Commercial acceptance bill 22,501,476.89 75.62 1,579,920.94 7.02 20,921,555.95

Total 29,754,488.84 100.00 1,579,920.94 5.31 28,174,567.90

(continued)

Beginning balance

Category Book balance Bad debt provision

Book value accrual ratio

Amount Ratio (%) Amount

(%)

Notes receivable with provision for bad debts based on individual items - - - - - Notes receivable with provision for bad debts based on combinations 22,682,667.18 100.00 511,101.04 2.25 22,171,566.14 Including: bank acceptance bill 14,585,836.00 64.30 - - 14,585,836.00 Commercial acceptance bill 8,096,831.18 35.70 511,101.04 6.31 7,585,730.14

Total 22,682,667.18 100.00 511,101.04 2.25 22,171,566.14

① Notes receivable with provision for bad debts individually at the end of the year

None

②In the portfolio, notes receivable for which bad debt provisions are made based on aging

Year-end balance

Project

Book balance Bad debt provision Provision ratio (%) Commercial acceptance bill 22,501,476.89 1,579,920.94 7.02

Year-end balance

Project

Book balance Bad debt provision Provision ratio (%)

Total 22,501,476.89 1,579,920.94 7.02

(3) Bad debt provisions

Amount of changes during the year

Category Beginning Balance Ending Balance

Provision Recovery or reversal Write-off or write-off Other changes

Commercial acceptance bill 511,101.04 1,068,819.90 - - - 1,579,920.94

Total 511,101.04 1,068,819.90 - - - 1,579,920.94

(4) Pledged notes receivable at the end of the year

None

(5) Notes receivable that have been endorsed or discounted at the end of the year and have not yet matured on the balance sheet date

Item Amount derecognized at the end of the year Amount not derecognized at the end of the year Bank acceptance bill - 4,775,193.64 Commercial acceptance bill - 111,901.72

Total - 4,887,095.36

(6) Notes transferred to accounts receivable due to failure of the drawer to perform at the end of the year

None

(7) Notes receivable actually written off this year

None

4. Accounts receivable

(1) Disclosure based on aging

Aging year-end balance

Within 1 year 1,014,794,778.12 1 to 2 years 197,169,677.72 2 to 3 years 52,931,259.81 More than 3 years 73,651,215.65

Subtotal 1,338,546,931.30

Less: Provision for bad debts 176,024,761.28

Total 1,162,522,170.02

(2) Classified presentation according to bad debt accrual method

Category Year-End Balance

Book balance Bad debt provision

Provision ratio Book value amount Ratio (%) Amount

(%)

Bad debt provision should be made on an individual basis

36,479,812.53 2.73 36,479,812.53 100.00 -Account collection

Bad debt provision should be made on a group basis

1,302,067,118.77 97.27 139,544,948.75 10.72 1,162,522,170.02 Account collection

Among them: combination according to credit risk characteristics

1,302,067,118.77 97.27 139,544,948.75 10.72 1,162,522,170.02 Accounts receivable with provision for bad debts

Total 1,338,546,931.30 100.00 176,024,761.28 13.15 1,162,522,170.02

(continued)

Beginning balance

Category Book balance Bad debt provision

Provision ratio Book value amount Ratio (%) Amount

(%)

Bad debt provision should be made on an individual basis

49,921,642.33 3.83 49,921,642.33 100.00 -Account collection

Bad debt provision should be made on a group basis

1,252,949,432.38 96.17 113,954,002.21 9.09 1,138,995,430.17 Account collection

Among them: Grouped by credit risk characteristics

Total accounts receivable with provision for bad debts 1,252,949,432.38 96.17 113,954,002.21 9.09 1,138,995,430.17 items

Total 1,302,871,074.71 100.00 163,875,644.54 12.58 1,138,995,430.17

①Important accounts receivable for which bad debt provisions are made individually

Balance at the beginning of the year Balance at the end of the year

Name (order

bit)

Book balance Bad debt provision Book balance Bad debt provision Provision ratio (%) Reason for provision Customer 1 25,225,618.92 25,225,618.92 25,225,618.92 25,225,618.92 100.00 Expected to be unrecoverable

Total 25,225,618.92 25,225,618.92 25,225,618.92 25,225,618.92 100.00 /

②In the portfolio, accounts receivable for which bad debt provisions are made based on the combination of credit risk characteristics

Year-end balance

Name

Book balance Bad debt provision Proportion of provision (%) Within 1 year 1,014,764,778.12 50,738,239.11 5.00 1 to 2 years 197,153,897.72 19,715,389.78 10.00 2 to 3 years 42,114,246.16 21,057,123.09 50.00 More than 3 years 48,034,196.77 48,034,196.77 100.00

Total 1,302,067,118.77 139,544,948.75 /

(3) Bad debt provisions

Amount of changes during the year

Category Beginning Balance Ending Balance

Provision Recovery or reversal Write-off or write-off Other changes

Amount of changes during the year

Category Beginning Balance Ending Balance

Provision Recovery or reversal Write-off or write-off Other changes

bad debts

163,875,644.54 23,322,784.24 11,170,844.02 2,823.48 - 176,024,761.28Preparation

Total 163,875,644.54 23,322,784.24 11,170,844.02 2,823.48 - 176,024,761.28

(4) Accounts receivable actually written off this year

Item Write-off Amount

Accounts receivable actually written off 2,823.48

(5) The top five accounts receivable at the end of the year based on debtors

Accounting for the total year-end balance of accounts receivable

Unit name Year-end balance of accounts receivable Year-end balance of bad debt provision

Proportion of counts (%)

First place 89,775,612.45 6.71 5,934,379.57 Second place 68,084,811.09 5.09 3,565,465.38 Third place 41,971,590.07 3.14 3,217,653.77 Fourth place 34,900,791.85 2.61 5,648,470.38 Fifth place 32,748,160.58 2.45 1,637,408.03

Total 267,480,966.04 20.00 20,003,377.13

The company's aggregate amount of the top five accounts receivable at the end of the year based on the debtor's party this year was 267,480,966.04 yuan, accounting for 20.00% of the total end of the year balance of accounts receivable. The corresponding aggregate amount of the year-end balance of bad debt provisions accrued was 20,003,377.13 yuan.

(6) Accounts receivable derecognized due to transfer of financial assets

None

(7) Amount of assets and liabilities formed by transferring accounts receivable and continuing to be involved

None

5. Accounts receivable financing

(1) Financing of accounts receivable

Item Ending balance Beginning balance

Notes receivable 4,572,024.40 15,933,064.72 Accounts receivable - -

Total 4,572,024.40 15,933,064.72

(2) Classified presentation according to bad debt accrual method

None

(3) Bad debt provisions

None

(4) Financing of pledged receivables at the end of the year

None

(5) Financing of receivables that have been endorsed or discounted at the end of the year and have not yet matured on the balance sheet date

Item Amount derecognized at the end of the year Amount not derecognized at the end of the year Bank acceptance bill 38,306,820.63 -

Total 38,306,820.63 -

(6) Financing of receivables actually written off this year

None

(7) Increases and decreases in receivables financing this year and changes in fair value

None

(8) Other instructions

None

6. Prepayment

(1) Prepayments are listed based on aging

Ending balance Beginning balance

Aging

Amount Proportion (%) Amount Proportion (%) Within 1 year 48,477,312.19 97.35 41,163,861.08 93.30 1 to 2 years 521,130.64 1.05 1,446,210.27 3.28 2 to 3 years 628,558.35 1.26 1,378,825.65 3.13 More than 3 years 170,662.46 0.34 129,494.57 0.29

Total 49,797,663.64 100.00 44,118,391.57 100.00

(2) Prepayments of the top five year-end balances by prepayment objects

Name of unit Relationship with the company Amount Aging Reason for non-settlement No. 1 Non-related party 5,470,179.76 Within 1 year Business in progress No. 2 Non-related party 3,743,008.86 Within 1 year Business in progress No. 3 Related party 3,246,764.36 Within 1 year Business in progress No. 4 Non-related party 2,981,341.09 Within 1 year Business in progress No. 5 Non-related party 2,822,376.90 Within 1 year Business in progress

Total / 18,263,670.97 / /

The total amount of the five prepaid accounts with the top five year-end balances collected by the company by prepayment objects is 18,263,670.97 yuan, accounting for 36.68% of the total year-end balance of prepaid accounts.

7. Other receivables

Item Ending balance Beginning balance

Interest receivable - - Dividends receivable - 194,694.60 Other receivables 21,962,287.84 79,986,096.24

Total 21,962,287.84 80,180,790.84

(1) Dividends receivable

①Classification of dividends receivable

Investee balance at the end of the year balance at the beginning of the year

Luoyang Antu Jiuhe Medical Technology Co., Ltd. 389,389.20 389,389.20

Subtotal 389,389.20 389,389.20

Less: Bad debt provision 389,389.20 194,694.60

Total - 194,694.60

② Important dividends receivable aged more than 1 year

None

③Bad debt provision accrual status

The first stage The second stage The third stage

Lifetime Expectations Letter

Bad debt provision for the next 12 months, expected credit losses for the entire duration, total use losses (credit losses incurred)

Period credit losses (no credit impairment occurred)

impairment)

Balance on January 1, 2025 194,694.60 - - 194,694.60 Balance on January 1, 2025 in this year: - - - - ——Transfer to the second stage - - - - ——Transfer to the third stage - - - - ——Transfer to the second stage - - - - ——Transfer to the first stage - - - - Provision for this year 194,694.60 - - 194,694.60 Reversal this year - - - - Write-off this year - - - - Write-off this year - - - - Other changes - - - - Balance on December 31, 2025 389,389.20 - - 389,389.20

(2) Other receivables

① Disclosure based on aging

Aging year-end balance

Within 1 year 21,954,956.45 1 to 2 years 404,005.56 2 to 3 years 1,482,948.42 More than 3 years 8,305,641.70

Subtotal 32,147,552.13

Less: Provision for bad debts 10,185,264.29

Total 21,962,287.84

②Classification by nature of payment

Nature of payment Book balance at the end of the year Book balance at the beginning of the year Guarantee and deposit 12,330,657.93 17,771,805.38 Reserve fund 2,267,261.97 1,799,933.25 Other current accounts paid in advance 7,190,663.58 7,315,289.51 Others 10,358,968.65 67,748,819.83

Subtotal 32,147,552.13 94,635,847.97

Less: Provision for bad debts 10,185,264.29 14,649,751.73

Total 21,962,287.84 79,986,096.24

③Bad debt provision accrual status

The first stage The second stage The third stage

Provision for bad debts Expectation for the entire duration Expectation for the entire duration Total

Expectations for the next 12 months

Credit losses (unused losses (credit incurred)

credit loss

credit impairment)

Balance on January 1, 2025 14,649,751.73 - - 14,649,751.73 Balance on January 1, 2025 in this year: - - - - ——Transferred to the second stage - - - - ——Transferred to the third stage -44,000.00 - 44,000.00 - ——Transferred to the second stage - - - - ——Transferred to the first stage - - - -Provision this year - - - -Reversal this year 4,464,487.44 - - 4,464,487.44 Write-off this year - - - -Write-off this year - - - -

The first stage The second stage The third stage

Bad debt provisions Expectations for the entire duration Expectations for the entire duration Total expectations for the next 12 months

Credit losses (unused losses (credit incurred)

credit loss

credit impairment)

Other changes - - - -

Balance on December 31, 2025 10,141,264.29 - 44,000.00 10,185,264.29

④ Bad debt provisions accrued, recovered or reversed this year

Amount of changes during the year

Category Beginning Balance Ending Balance

Provision Recovery or reversal Write-off or write-off Other changes

Provision for bad debts 14,649,751.73 - 4,464,487.44 - - 10,185,264.29

Total 14,649,751.73 - 4,464,487.44 - - 10,185,264.29

⑤ Other receivables actually written off this year

None

⑥ Other receivables with the top five year-end balances collected by debtors

Provision for bad debts

Accounting for the year-end balance of other receivables

Unit name Nature of payment Year-end balance Aging of accounts

Proportion of total (%)

No. 1 in balance at the end of the year Guarantee and deposit 5,400,000.003 years and above 16.80 5,400,000.00

Within 1 year, 1-2 years,

Second place margin and deposit 1,780,166.77 5.54 403,520.34

More than 3 years

Third place: Security deposit and deposit 825,000.003 years and above 2.57 825,000.00 Fourth place: Other prepaid current accounts 544,488.00 Within 1 year, 1-2 years 1.69 32,341.65 Fifth place: Security deposit and deposit 500,000.002-3 years 1.56 250,000.00

Total / 9,049,654.77/ 28.16 6,910,861.99

⑦Amounts receivable involving government subsidies

None

⑧Other receivables derecognized due to transfer of financial assets

None

⑨The amount of assets and liabilities resulting from the transfer of other receivables and continued involvement

None

8. Inventory

(1) Inventory classification

Year-end balance

Project

Inventory decline provision/contract

Book balance Book value

Provision for impairment of performance costs

Raw materials 411,015,354.90 19,332,377.13 391,682,977.77

Year-end balance

Project

Inventory decline provision/contract

Book balance Book value

Provision for impairment of performance costs

Turnover materials 4,753,779.66 1,191.15 4,752,588.51 Work in progress 177,534,250.62 52,331.53 177,481,919.09 Inventory goods 373,694,327.01 12,159,897.87 361,534,429.14

Total 966,997,712.19 31,545,797.68 935,451,914.51

(continued)

Beginning balance

Project

Inventory decline provision/contract

Book balance Book value

Provision for impairment of performance costs

Raw materials 662,618,345.13 24,311,692.56 638,306,652.57 Turnover materials 3,687,022.93 - 3,687,022.93 Products in progress 190,350,003.51 264,148.56 190,085,854.95 Goods in stock 330,021,105.49 9,011,136.67 321,009,968.82

Total 1,186,676,477.06 33,586,977.79 1,153,089,499.27

(2) Provision for inventory decline in price

Increase amount during the year Decrease amount during the year

Item Beginning balance Year-end balance

Provision Others Reversal or write-off Others

Raw materials 24,311,692.56 15,216,277.05 - 20,195,592.48 - 19,332,377.13 Turnover materials - 1,191.15 - - - 1,191.15 Work in progress 264,148.56 - - 211,817.03 - 52,331.53 Inventory goods 9,011,136.67 4,491,282.09 - 1,342,520.89 - 12,159,897.87

Total 33,586,977.79 19,708,750.29 - 21,749,930.40 - 31,545,797.68

(3) Explanation of the capitalized amount of borrowing costs included in the year-end inventory balance

None

9. Other current assets

Item Ending balance Beginning balance

Taxes to be deducted 7,640,608.89 12,736,033.25 Financial products 2,957,489,528.49 3,573,611,779.08 Maintenance costs to be amortized 2,442,834.67 2,393,368.44 Interest receivable 43,852,268.07 30,556,164.25

Total 3,011,425,240.12 3,619,297,345.02

10. Long-term equity investment

Increases and decreases during the year

Beginning balance

Investee

(Book value) Other comprehensive recognized under the equity method Additional investment in other rights Decrease in investment

Investment gains and losses, income adjustments, changes in income

1. Joint ventures - - - - - -

Subtotal - - - - - -

2. Associated Enterprises - - - - - - Zhengzhou Jiuhe Medical Laboratory Laboratory

1,273,560.21 - - -1,273,560.21 - - Chamber Co., Ltd.

Zhengzhou Gongdong Medical Equipment Co., Ltd.

10,382,487.97 7,500,000.00 - -138,559.78 - -Company

Subtotal 11,656,048.18 7,500,000.00 - -1,412,119.99 - -Total 11,656,048.18 7,500,000.00 - -1,412,119.99 - -

(continued)

Increases and decreases during the year

Year-end balance (book price, impairment provision, invested unit)

Declaration of cash dividends and provision for impairment (value) Year-end balance others

or profit preparation

1. Joint ventures - - - - -

Subtotal - - - - -

2. Associates - - - - - Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. - - - - - Zhengzhou Gongdong Medical Instruments Co., Ltd. - - - 17,743,928.19 - Subtotal - - - 17,743,928.19 - Total - - - 17,743,928.19 -

3. Investment in other equity instruments

(1) Investment in other equity instruments

Name of the items included in other comprehensive items during the year. Balance at the end of the year. Balance at the beginning of the year.

Gain on combined income Loss on income Chengdu Kerui Technology Co., Ltd. 3,000,000.00 3,000,000.00

Suzhou Jinhe Phase III Equity Investment Partnership (with

80,000,000.00 80,000,000.00 - -Limited partnership)

Guangzhou Huayinkang Medical Group Co., Ltd. 22,883,561.50 22,883,561.50 - - Shenzhen Meili Nanopore Technology Co., Ltd. 40,000,000.00 40,000,000.00 - - Renke (Shenzhen) Biotechnology Co., Ltd. 15,000,000.00 15,000,000.00 - -

Total 160,883,561.50 160,883,561.50 - -

Continued

Project name Accumulated amount at the end of the year Accumulated amount at the end of the year Recognized during the year Designated as fair price

Other comprehensive income Dividend income shall be measured at the value of other comprehensive income and the gain and loss on variable income shall be included in other comprehensive income.

Reasons for benefit Chengdu Kerui Technology Co., Ltd. - - - - Suzhou Jinhe Phase III Equity Investment Partnership (Limited Partnership) - - - - Guangzhou Huayinkang Medical Group Co., Ltd. - - 894,348.00 - Shenzhen Meili Nanopore Technology Co., Ltd. - - - - Renke (Shenzhen) Biotechnology Co., Ltd. - - - - Total - - 894,348.00 - (2) Investment in non-trading equity instruments

None

12. Investment real estate

(1) Investment real estate using cost measurement model

Projects Houses and buildings Land use rights Construction in progress Total

1. Original book value - - - -

1. Balance at the beginning of the year 23,672,813.67 - - 23,672,813.67

2. Increase this year 11,808,468.43 - - 11,808,468.43 (1) Outsourcing - - - - (2) Transfer of inventory\fixed assets\projects under construction 11,808,468.43 - - 11,808,468.43 (3) Increase from business combination - - - -

3. Decrease amount this year 5,443,997.96 - - 5,443,997.96 (1) Disposal - - - - (2) Other transfers 5,443,997.96 - - 5,443,997.96

4. Year-end balance 30,037,284.14 - - 30,037,284.14

2. Accumulated depreciation and accumulated amortization - - - -

3. Balance at the beginning of the year 499,669.00 - - 499,669.00

4. Increase this year 1,285,784.52 - - 1,285,784.52 (1) Provision or amortization 845,240.53 - - 845,240.53 (2) Transfer of inventory\fixed assets\projects under construction 440,543.99 440,543.99 (3) Other increases - - - -

5. Decrease amount this year 178,485.63 - - 178,485.63 (1) Disposal - - - - (2) Other transfers 178,485.63 - - 178,485.63

4. Year-end balance 1,606,967.89 - - 1,606,967.89

Projects Houses and buildings Land use rights Construction in progress Total

3. Impairment provision - - - -

4. Balance at the beginning of the year - - - -

5. Amount increased this year - - - - (1) Provision - - - -

6. Reduction amount this year - - - - (1) Disposal - - - - (2) Other transfers - - - -

7. Year-end balance - - - -

8. Book value - - - -

1. Book value at the end of the year 28,430,316.25 - - 28,430,316.25

2. Book value at the beginning of the year 23,173,144.67 - - 23,173,144.67 (2) Investment real estate using the fair value measurement model

None

(3) The amount and reasons of investment real estate for which the title certificate has not been obtained

None

13. Fixed assets

Item Ending balance Beginning balance

Fixed assets 3,785,453,641.28 2,963,741,984.32 Liquidation of fixed assets - -

Total 3,785,453,641.28 2,963,741,984.32

(1) Fixed assets

①Fixed assets

Items Houses and buildings Machinery and equipment Transportation Electronic equipment and others Total

1. Original book value: - - - - -

1. Opening balance 1,895,213,406.39 2,849,749,524.31 25,739,609.48 69,268,873.93 4,839,971,414.11

2. Increase the amount of money in this period

1,120,882,967.75 181,376,434.23 1,356,366.92 9,703,089.86 1,313,318,858.76

(1) Purchase - 130,900,612.61 1,356,366.92 9,703,089.86 141,960,069.39 (2) Construction in progress

1,115,438,969.79 50,475,821.62 - - 1,165,914,791.41 transferred in

(3) Investment housing

5,443,997.96 - - - 5,443,997.96 Real estate transfer

3. Reduction of funds in this period

11,808,468.43 276,474,924.82 393,126.97 7,703,815.85 296,380,336.07

(1) Dispose or report

• 276,474,924.82 393,126.97 7,703,815.85 284,571,867.64 Waste

Items Houses and buildings Machinery and equipment Transportation Electronic equipment and others Total

(2) Other decreases 11,808,468.43 - - - 11,808,468.43 4. Closing balance 3,004,287,905.71 2,754,651,033.72 26,702,849.43 71,268,147.94 5,856,909,936.80

2. Accumulated depreciation - - - - -

1. Opening balance 167,462,207.65 1,610,181,390.89 20,122,076.85 49,928,226.78 1,847,693,902.17

2. Increase the amount of money in this period

78,320,000.59 336,894,782.47 2,035,101.88 9,941,288.01 427,191,172.95

(1) Provision 78,141,514.96 336,894,782.47 2,035,101.88 9,941,288.01 427,012,687.32 (2) Other increases 178,485.63 - - - 178,485.63 3. Decrease in funds in the current period

440,543.99 204,558,413.26 246,577.18 6,135,867.00 211,381,401.43

(1) Dispose or report

• 204,558,413.26 246,577.18 6,135,867.00 210,940,857.44 Waste

(2) Other decreases 440,543.99 - - - 440,543.99 4. Closing balance 245,341,664.25 1,742,517,760.10 21,910,601.55 53,733,647.79 2,063,503,673.69

3. Impairment provision - - - - - 1. Opening balance - 28,535,527.62 - - 28,535,527.62 2. Increase in current period

• • • • -Uh

(1) Provision - - - - - 3. Decrease in funds for the current period

• 20,582,905.79 - - 20,582,905.79 amount

(1) Dispose or report

• 20,582,905.79 - - 20,582,905.79 Waste

4. Closing balance - 7,952,621.83 - - 7,952,621.83

5. Book value - - - - -

6. Book price at the end of the year

2,758,946,241.46 1,004,180,651.79 4,792,247.88 17,534,500.15 3,785,453,641.28

value

2. Book price at the beginning of the year

1,727,751,198.74 1,211,032,605.80 5,617,532.63 19,340,647.15 2,963,741,984.32

value

②Situation of temporarily idle fixed assets

None

③ Fixed assets leased through operating leases

None

④Situation of fixed assets for which property rights certificates have not been obtained

Item Book value Reasons for not completing the ownership certificate Yanjiao Factory 4,338,308.46 Processing in progress

Antu Biological In Vitro Diagnostic Industrial Park (Phase III)-Building 32# 456,382,503.94 Under processing

Antu Biological In Vitro Diagnostic Industrial Park (Phase III)-Building 33# 280,982,811.93 Under processing

Antu Biological In Vitro Diagnostic Industrial Park (Phase III)-Building 31# 353,297,867.34 is in process

Item Book value Reason for not completing the property rights certificate

Total 1,095,001,491.67 /

14. Projects under construction

Item Ending balance Beginning balance

Construction in progress 61,753,743.01 987,283,594.17 Project materials - -

Total 61,753,743.01 987,283,594.17

(1) Projects under construction

①Projects under construction

Ending balance Beginning balance

Project

Impairment allowance Impairment allowance

Book balance Book value Book balance Book value

Be prepared

Newly built factory

47,616,974.90 - 47,616,974.90 977,798,766.24 - 977,798,766.24 Cheng

Instruments and equipment 13,678,052.51 - 13,678,052.51 9,407,703.40 - 9,407,703.40 Decoration project 458,715.60 - 458,715.60 77,124.53 - 77,124.53

Total 61,753,743.01 - 61,753,743.01 987,283,594.17 - 987,283,594.17

Changes in important projects under construction this year

Transferred to fixed assets this year

Item ② Name Balance at the beginning of the year Increase in amount during the year Other decreases in the year Balance at the end of the year

Amount

New factory area

977,798,766.24 185,345,944.00 1,115,438,969.79 88,765.55 47,616,974.90 Engineering

Instruments and equipment 9,407,703.40 55,209,672.38 50,475,821.62 463,501.65 13,678,052.51 Decoration project 77,124.53 33,858,071.24 - 33,476,480.17 458,715.60

Total 987,283,594.17 274,503,913.22 1,165,914,791.41 34,118,972.97 61,753,743.01

③Provision for impairment of projects under construction this year

The company's projects under construction have not been found to be impaired and no impairment provisions have been made.

15. Right-of-use assets

Item Houses, buildings Machinery and equipment Total

1. Original book value - - -

1. Balance at the beginning of the year 50,478,285.82 2,315,931.25 52,794,217.07

2. Increased amount this year 5,072,831.30 - 5,072,831.30 (1) Increased amount this year 5,072,831.30 - 5,072,831.30

3. Reduction amount this year 22,520,896.83 2,152,280.19 24,673,177.02 (1) Lease expiry 22,520,896.83 2,152,280.19 24,673,177.02

Item Houses, buildings Machinery and equipment Total

(2) Lease changes - - -

4. Year-end balance 33,030,220.29 163,651.06 33,193,871.35

2. Accumulated depreciation - - -

1. Balance at the beginning of the year 20,626,928.92 1,233,151.12 21,860,080.04

2. Increased amount this year 8,156,164.61 283,231.56 8,439,396.17 (1) Provision 8,156,164.61 283,231.56 8,439,396.17

3. Decrease amount this year 13,228,907.05 1,412,757.98 14,641,665.03 (1) Lease expiry 13,228,907.05 1,412,757.98 14,641,665.03 (2) Lease change - - -

4. Year-end balance 15,554,186.48 103,624.70 15,657,811.18

3. Impairment provision - - -

4. Balance at the beginning of the year - - -

5. Amount increased this year - - - (1) Provision - - -

6. Reduction amount this year - - - (1) Disposal - - -

7. Year-end balance - - -

8. Book value - - -

1. Book value at the end of the year 17,476,033.81 60,026.36 17,536,060.17

2. Book value at the beginning of the year 29,851,356.90 1,082,780.13 30,934,137.03

16. Intangible assets

(1) Intangible assets

non-patented technology and

Project Land use rights Software Registration certificate Royalties Total

Patent rights

1. Original books

value

1. Balance at the beginning of the year 92,468,767.58 4,925,819.63 24,672,219.88 40,173,632.19 202,822,192.21 365,062,631.49 2. Increase this year

• 46,800,310.86 2,120,562.44 9,316,800.00 2,000,000.00 60,237,673.30 Amount

(1) Purchase - 3,000,000.00 2,120,562.44 9,316,800.00 2,000,000.00 16,437,362.44 (2) Internal research - 43,800,310.86 - - - 43,800,310.86

non-patented technology and

Project Land use rights Software Registration certificate Royalties Total

Patent rights

send

(3) Enterprise cooperation

• • • • • and

3. Decrease this year

• • 1,311,596.78 2,762,400.00 33,322,192.21 37,396,188.99 Amount

(1) Disposal - - 1,311,596.78 2,762,400.00 33,322,192.21 37,396,188.99 (2) Other decreases - - - - - - 4. Ending balance 92,468,767.58 51,726,130.49 25,481,185.54 46,728,032.19 171,500,000.00 387,904,115.80

2. Accumulated amortization

pin

1. Balance at the beginning of the year 14,490,910.35 2,808,822.57 14,963,964.66 27,790,938.35 144,860,459.09 204,915,095.02 2. Increase this year

1,849,375.44 1,979,977.30 2,764,986.45 4,537,650.90 17,050,000.20 28,181,990.29Amount

(1) Provision 1,849,375.44 1,979,977.30 2,764,986.45 4,537,650.90 17,050,000.20 28,181,990.29 3. Decrease this year

• • 1,310,579.28 2,762,400.00 9,260,459.09 13,333,438.37Amount

(1) Disposal - - 1,310,579.28 2,762,400.00 9,260,459.09 13,333,438.37 (2) Other decreases - - - - - - 4. Ending balance 16,340,285.79 4,788,799.87 16,418,371.83 29,566,189.25 152,650,000.20 219,763,646.94

3. Impairment standard

Prepare

1. Balance at the beginning of the year - - - - 24,061,733.12 24,061,733.12 2. Increase this year

• • • • • -Amount

(1) Provision - - - - - - 3. Decrease this year

• • • • 24,061,733.12 Amount of 24,061,733.12

(1) Disposal - - - - 24,061,733.12 24,061,733.12 4. Ending balance - - - - - -

non-patented technology and

Project Land use rights Software Registration certificate Royalties Total

Patent rights

4. Book price

value

1. Year-end accounts

76,128,481.79 46,937,330.62 9,062,813.71 17,161,842.94 18,849,999.80 168,140,468.86

value

2. Accounts at the beginning of the year

77,977,857.23 2,116,997.06 9,708,255.22 12,382,693.84 33,900,000.00 136,085,803.35

value

(2) Land use rights for which property rights certificates have not been obtained

None

(3) Intangible assets with indefinite service life

None

(4) Intangible assets with restricted ownership or use rights

None

17. Goodwill

(1) Original book value of goodwill

Increase this year Decrease this year

The name of the invested unit or the goodwill formed

Balance at the beginning of the year Balance at the end of the year Events of business combination

Other disposal other

Made

Zhengzhou Imino Biotechnology Co., Ltd. 32,250.99 - - - - 32,250.99 Beijing Antu Bioengineering Co., Ltd. 164,616,253.27 - - - - 164,616,253.27

Total 164,648,504.26 - - - - 164,648,504.26

(2) Goodwill impairment provision

At the end of the period, the company's goodwill impairment test is conducted in conjunction with its related asset groups or asset portfolios, including the goodwill attributable to minority shareholders' equity, adjusting the book value of the asset group, and then comparing the adjusted book value of the asset group with its recoverable amount. The recoverable amount of the asset group also uses the present value of the estimated future cash flows of the asset group. After testing, it was found that the recoverable amount of goodwill was not lower than its book value, so no impairment provision was made.

(3) Relevant information about the asset group or asset group combination where the goodwill is located

Name The composition and basis of the asset group or portfolio it belongs to The operating segment and basis it belongs to Whether it is consistent with previous years Zhengzhou Imino Biotechnology Co., Ltd.

Long-term assets related to goodwill (including fixed assets, not applicable)

Ltd.

Name The composition and basis of the asset group or combination it belongs to The operating segment it belongs to and its basis Whether it is consistent with previous years Intangible assets, long-term deferred expenses, etc.), the basis is

The smallest portfolio of assets that can generate independent cash flows

Long-term assets related to goodwill (including fixed assets,

Beijing Antu Bioengineering Co., Ltd.

intangible assets, long-term deferred expenses, etc.), based on Not applicable Yes

company

The smallest portfolio of assets that can generate independent cash flows

In 2011, the company acquired 100% of the equity of Zhengzhou Imino Biotechnology Co., Ltd., resulting in a business merger not under common control. The difference between the cost of the business combination and the fair value share of the identifiable net assets of Zhengzhou Imino Biotechnology Co., Ltd., the acquiree acquired during the merger, was included in the goodwill.

In 2017, the company acquired 75% of the equity of Beijing Antu Bioengineering Co., Ltd., resulting in a business merger not under common control. The difference between the cost of the business combination and the fair value share of the identifiable net assets of Beijing Antu Bioengineering Co., Ltd., the acquiree acquired in the merger, was included in the goodwill.

(4) Specific determination method of recoverable amount

The Company uses the present value of expected future net cash flows to estimate the recoverable amount.

According to the "Guidelines for the Application of Regulatory Rules - Accounting No. 2", the acquisition of minority shareholders' interests is an equity transaction and does not form a new business combination. The goodwill reflected in the consolidated statement is still the amount calculated based on the current shareholding ratio when control was obtained in the previous period. When an enterprise conducts a goodwill impairment test, it should first restore the goodwill in the consolidated statement to all goodwill (i.e. the goodwill corresponding to 100% equity) according to the shareholding ratio when it obtained control in the previous period, and adjust the book value of the asset group related to the goodwill, and then compare the adjusted book value of the asset group with its recoverable amount to determine whether the asset group containing goodwill is impaired. If goodwill is impaired, the company should calculate and determine the goodwill impairment loss attributable to the parent company based on the shareholding ratio when it obtained control in the previous period.

Impairment Forecast period Key parameters for the forecast period Key parameters for the stable period Key parameters for the stable period Book value Recoverable amount

The basis for determining the period of the amount

The revenue growth rate is 10.00%, the revenue growth rate is 0, and the average revenue forecast growth rate is Beijing Antu Bioengineering

440,404,975.15 468,888,680.42 - 6-year average gross profit margin 63.80%, gross profit margin 63.00%, tax 0, discount rate and forecast period Co., Ltd.

Pre-tax discount rate 12.89% Pre-tax discount rate 12.89% Consistent total in the last year 440,404,975.15 468,888,680.42 - / / / / (5) Completion of performance commitments and corresponding impairment of goodwill

None

18. Long-term deferred expenses

Item Balance at the beginning of the year Increase amount for the year Amortization amount for the year Ending balance Mold 14,496,827.76 5,846,367.41 5,013,017.23 15,330,177.94 Decoration and renovation expenses 60,210,734.97 48,696,209.13 22,484,301.17 86,422,642.93 Service fee 302,078.62 4,477,591.15 197,552.54 4,582,117.23

Total 75,009,641.35 59,020,167.69 27,694,870.94 106,334,938.10

19. Deferred income tax assets/deferred income tax liabilities

(1) Details of deferred income tax assets without offset

Ending balance Beginning balance

Project

Deductible temporary differences Deferred income tax assets Deductible temporary differences Deferred income tax assets Credit impairment provision 188,178,915.71 43,330,950.75 178,141,341.24 41,364,055.49 Unrealized profits from internal transactions 1,134,355,443.97 170,485,669.29 952,879,537.14 142,988,395.52 Deductible losses 526,834,319.02 80,716,111.22 429,563,751.35 95,195,920.86 Withheld expenses 145,243,775.29 31,657,718.28 128,158,372.96 29,211,582.17 Government subsidies 66,752,954.61 10,012,943.19 75,078,067.19 11,261,710.08 Asset impairment provision 39,498,419.51 6,530,770.41 49,324,719.35 8,254,577.48 Long-term lease 10,251,571.14 1,636,135.40 19,848,244.54 4,031,346.81 Deferred instruments 89,757,609.82 13,463,641.47 63,210,856.94 9,481,628.54 Estimated liabilities 11,576,899.02 1,736,534.85 6,693,950.07 1,004,092.51Donation expenses 100,000.00 25,000.00 3,211,085.22 802,771.31

Total 2,212,549,908.09 359,595,474.86 1,906,109,926.00 343,596,080.77

(2) Details of deferred income tax liabilities without offset

Ending balance Beginning balance

Project

Taxable temporary differences Deferred income tax liabilities Taxable temporary differences Deferred income tax liabilities Accelerated depreciation of fixed assets 1,446,858,667.29 228,548,131.67 1,701,102,266.64 271,964,830.35 Business combination not under common control

6,183,132.20 927,469.83 7,624,494.40 1,143,674.16 Added value of assets

Deferred instruments 173,865,988.16 26,079,898.22 93,892,721.80 14,083,908.27 Long-term lease 9,442,360.81 1,531,816.73 20,810,760.46 4,394,429.42 Changes in fair value 202,164.81 32,326.46 3,609,780.73 541,467.11

Total 1,636,552,313.27 257,119,642.91 1,827,040,024.03 292,128,309.31

(3) Deferred income tax assets or liabilities presented on a net basis after offsetting

Deferred income tax assets and liabilities after offset Deferred income tax assets and liabilities after offset Deferred income tax assets and liabilities after offset

Offset amount of debts at the end of the year Balance of assets or liabilities at the end of the year Offset amount of liabilities at the beginning of the year Deferred income tax assets of assets or liabilities at the beginning of the year 10,391,710.30 349,203,764.56 7,938,759.55 335,657,321.22 Deferred income tax liabilities 10,391,710.30 246,727,932.61 7,938,759.55 284,189,549.76 (4) Details of unrecognized deferred income tax assets

Item Ending balance Beginning balance

Deductible temporary differences 420.00 37,882,227.90 Deductible losses 3,070,913.18 58,251,744.93

Item Ending balance Beginning balance

Total 3,071,333.18 96,133,972.83

(5) Deductible losses that have not been recognized as deferred income tax assets will expire in the following years

Year Ending balance Beginning balance Remarks

2025-14,398,355.12/

2026 364,336.96 22,345,033.29 /

2027 183,189.41 7,124,743.63 /

2028 159,500.96 7,014,550.43 /

2029 191,790.60 7,369,062.46 /

2030 2,172,095.25 - /

Total 3,070,913.18 58,251,744.93 /

20. Other non-current assets

Ending balance Beginning balance

Project

Impairment allowance

Book balance Impairment provision Book value Book balance Book value

Prepare

Instruments to be transferred over

812,117,352.67 - 812,117,352.67 307,698,146.54 - 307,698,146.54

Contract acquisition cost - - - - - - Prepaid equity deposit 122,500,000.00 - 122,500,000.00 112,500,000.00 - 112,500,000.00 Asset prepayment 18,035,110.03 - 18,035,110.03 23,025,065.88 - 23,025,065.88

Total 952,652,462.70 - 952,652,462.70 443,223,212.42 - 443,223,212.42

21. Assets with restricted ownership or use rights

Item Year-end book value Reason for restriction

Monetary funds 9,378,406.67 Swap margin and other monetary funds 24,408.00 ETC transfer to other current assets 160,000,000.00 Large deposit certificates pledged fixed assets 1,095,001,491.67 Warrants not obtained

Total 1,264,404,306.34 /

22. Short-term borrowing

(1) Classification of short-term loans

Item Ending balance Beginning balance

Credit borrowings 38,338,715.64 232,237,174.19

Item Ending balance Beginning balance

Interest payable 2,795.83 140,803.06

Total 38,341,511.47 232,377,977.25

Note: Credit borrowings include: Construction Bank borrowings of RMB 3 million, with a loan period from June 30, 2025 to June 30, 2026; the discounted and unexpired reclassified amount of digital accounts receivable certificates is RMB 35,338,715.64.

(2) Overdue short-term borrowings that have not been repaid

As of December 31, 2025, the Company had no overdue short-term borrowings.

23. Trading financial liabilities

Item Ending balance Beginning balance

Trading financial liabilities 724,794.71 -Including: Trading bonds issued - -Foreign exchange swaps 724,794.71 -Others - -Designated as measured at fair value with changes included in the current period

Profit and loss financial liabilities

Total 724,794.71 -

24. Notes payable

Category Ending balance Beginning balance

Commercial acceptance bill - - Bank acceptance bill 725,930,000.00 354,500,000.00 Letter of credit 209,860,000.00 115,000,000.00

Total 935,790,000.00 469,500,000.00

Note: The total amount of bills payable that has expired and not been paid on December 31, 2025 is RMB 0.00.

25. Accounts payable

(1) Presentation of accounts payable

Item Ending balance Beginning balance

Within 1 year 389,269,211.56 588,738,174.93 1 to 2 years 163,587,346.77 65,638,582.01 2 to 3 years 25,143,129.72 4,382,898.26 More than 3 years 7,997,006.14 7,019,849.97

Total 585,996,694.19 665,779,505.17

(2) Important accounts payable aged more than 1 year

Item Year-end balance Reason for outstanding or carry-forward

Company 1 47,073,009.74 Business in progress

Company 2 18,083,554.64 Business in progress

Company 3 14,798,268.31 Business in progress

Company 4 15,340,872.88 Business in progress

Company 5 17,945,412.84 Business in progress

Company 6 15,194,093.73 Business in progress

Company 7 10,990,036.00 Business in progress

Total 139,425,248.14 /

26. Contract liabilities

(1) Contract liabilities

Item Ending balance Beginning balance

Contract payments received in advance 120,091,723.13 87,139,442.46

Total 120,091,723.13 87,139,442.46

(2) Amount and reasons for significant changes in book value this year

None

27. Employee compensation payable

(1) Presentation of employee benefits payable

Item Beginning balance Increase during the year Decrease during the year Ending balance

1. Short-term salary 210,125,828.38 1,205,565,557.22 1,134,317,247.93 281,374,137.67

2. Post-employment benefits - defined contribution plan 1,800.00 124,160,371.35 124,162,171.35 -

3. Dismissal benefits - 2,736,997.65 2,612,177.65 124,820.00

4. Other benefits due within one year - - - -

Total 210,127,628.38 1,332,462,926.22 1,261,091,596.93 281,498,957.67

(2) Presentation of short-term remuneration

Item Beginning balance Increase during the year Decrease during the year Ending balance

1. Salaries, bonuses, allowances and subsidies 209,071,180.20 1,018,706,873.32 947,024,517.97 280,753,535.55

2. Employee welfare expenses - 28,898,970.15 28,611,379.21 287,590.94

3. Social insurance premiums 801.50 66,254,211.52 66,255,013.02 - Of which: medical insurance premiums 764.00 57,871,871.84 57,872,635.84 -

Item Balance at the beginning of the year Increase during the year Decrease during the year Balance at the end of the year Work-related injury insurance premium - 2,900,853.62 2,900,853.62 - Maternity insurance premium 37.50 5,481,486.06 5,481,523.56 -

4. Housing provident fund - 77,515,105.27 77,515,105.27 -

5. Trade union funds and employee education funds 1,053,846.68 14,190,396.96 14,911,232.46 333,011.18

6. Short-term paid absence - - - -

7. Short-term profit sharing plan - - - -

Total 210,125,828.38 1,205,565,557.22 1,134,317,247.93 281,374,137.67

(3) Display of defined contribution plan

Item Beginning balance Increase during the year Decrease during the year Ending balance

1. Basic pension insurance 1,800.00 119,203,717.20 119,205,517.20 -

2. Unemployment insurance premium - 4,956,654.15 4,956,654.15 -

Total 1,800.00 124,160,371.35 124,162,171.35 -

28. Taxes payable

Item Ending balance Beginning balance

Value-added tax 29,568,274.26 25,063,410.08Corporate income tax 127,278,421.77 102,376,068.83Personal income tax 1,169,209.14 967,951.09Urban maintenance and construction tax 2,039,243.05 1,682,711.36 Education surcharge 881,015.86 735,007.92 Local education surcharge 587,343.91 490,005.32 Land use tax 367,058.22 367,058.26 Property tax 6,287,851.81 3,848,953.29 Stamp tax 904,074.61 845,624.61 Environmental protection tax 62.18 61.86

Total 169,082,554.81 136,376,852.62

29. Other payables

Item Ending balance Beginning balance

Interest payable - - Dividends payable - - Other payables 420,612,502.45 463,823,633.39

Item Ending balance Beginning balance

Total 420,612,502.45 463,823,633.39

(1) Interest payable

None

(2) Dividends payable

None

(3) Other payables

①Display according to nature of payment

Item Ending balance Beginning balance

Security deposits and deposits 213,520,774.98 287,139,534.43 Other current accounts payable 76,868,013.02 60,019,362.68 Loans - 7,835,887.21 Payment fees for business income rights 122,858,722.43 106,152,235.23 Others 7,364,992.02 2,676,613.84

Total 420,612,502.45 463,823,633.39

②Important other payables aged more than 1 year

None

30. Non-current liabilities due within one year

Item Ending balance Beginning balance

Estimated liabilities due within 1 year 4,239,900.58 2,440,579.00 Lease liabilities due within 1 year 6,258,067.88 8,344,219.75 Long-term borrowings due within 1 year - 285,000,000.00 Interest payable - 198,550.00

Total 10,497,968.46 295,983,348.75

31. Other current liabilities

Item Ending balance Beginning balance

Deferred maintenance premium income 55,434,027.54 78,975,392.32 Output tax to be transferred 6,343,316.31 5,376,214.63 Notes receivable that have not been terminated 4,887,095.36 8,706,056.00 Supply chain bills that have not been terminated - 5,381,300.00

Total 66,664,439.21 98,438,962.95

32. Lease liabilities

Item Ending balance Beginning balance

Lease payments 17,703,272.15 31,754,851.22 Less: Unrecognized financing costs 1,161,479.40 2,779,134.08 Less: Lease liabilities due within one year (Note V. 30) 6,258,067.88 8,344,219.75

Total 10,283,724.87 20,631,497.39

33. Estimated liabilities

Item Balance at the end of the year Balance at the beginning of the year Reason for formation

Product quality assurance 7,336,998.44 4,253,371.08 Product quality deposit accrued

Total 7,336,998.44 4,253,371.08 /

34. Deferred income

Item Balance at the beginning of the year Increase this year Decrease this year Balance at the end of the year Reasons for formation

Government subsidies 75,078,067.19 15,050,000.00 23,375,112.58 66,752,954.61 Government financial allocation

Equity method has not been realized. Downstream transactions of associates have not been realized - 62,437.87 - 62,437.87

Internal Profit and Loss Realize Internal Profit and Loss

Total 75,078,067.19 15,112,437.87 23,375,112.58 66,815,392.48/

Among them, projects involving government subsidies:

Decrease in the current year and annual increase in capital production/receipt subsidy items. Balance at the beginning of the year offset the balance at the end of the year

Amount of subsidy Included in operating expenses Included in other income-related costs Other changes

External income benefits

cost

Test result intelligence for diagnosis and treatment decisions and information policies for chronic diseases - 500,000.00 - - - - 500,000.00 Research and development of mutual recognition platform for industry-related capabilities

Capitalizing on a new generation of in vitro diagnostics

• 9,855,000.00 - 6,461,859.32 - - 3,393,140.68 Phase generation reagent

Related to the establishment and establishment of an immune evaluation system and its application in the diagnosis and treatment of major chronic diseases - 288,000.00 - - - - 288,000.00 Related to peripheral blood exosome abundance and early diagnosis of lung cancer based on omics - 2,325,000.00 - 109,025.17 - - 2,215,974.83 Production phase interruption strategy High-performance fully automatic nucleic acid Research and development of acid detection system 13,205,802.33 - - 4,230,793.35 - - 8,975,008.98 Production and industrialization Related to the sudden major news

with the National Workforce for Infectious Disease Testing

49,564,793.52 - - 2,067,314.58 - - 47,497,478.94 Innovation of Production and Process Research Center

related capacity building projects

Decrease in the current year and annual increase in capital production/receipt subsidy items. Balance at the beginning of the year offset the balance at the end of the year

Amount of subsidy Included in operating expenses Included in other income-related costs Other changes

External income benefits

cost

High-performance laboratory flow and water line fully automated system 918,001.09 1,500,000.00 - 710,980.00 - 792,000.00 915,021.09 Production-phase systematic R&D related to whole-process quality management

Inspection of capital and artificial intelligence

738,000.00 82,000.00 - 226,218.65 - - 593,781.35 Research on industry decision support system

Customs system and application

Full laboratory and capital automation system-level intelligence in 2023 5,649,450.31 - - 3,921,243.57 - - 1,728,206.74 Production phase energy analysis system project Relevant active digital microfluidics and asset control chips and instrument research and development - - - - - - - Production phase control Relevant high-performance fully automatic medical and equipment mass spectrometry detection system 4,995,991.90 - - 4,349,649.90 - - 646,342.00 Product R&D and industrialization related to self-testing new coronavirus

Viruses and viruses (2019-nCoV) resistance 6,028.04 - - 6,028.04 - - - Development of rapid detection reagents for the origin of the virus

Autoimmune diseases and core raw materials for diagnostic reagents - 500,000.00 - 375,000.00 - 125,000.00 - Development and application of phase-producing materials

Total 75,078,067.19 15,050,000.00 - 22,458,112.58 - 917,000.00 66,752,954.61 /

35. Other non-current liabilities

Item Ending balance Beginning balance

Income from deferred instruments 313,018,361.61 139,570,254.65

Total 313,018,361.61 139,570,254.65

36. Share capital

Changes in increases and decreases this year (+, -)

Items Balance at the beginning of the year Reserve balance at the end of the year

Issuance of new shares Bonus shares Financial transfer Others Subtotal

shares

Total shares

581,011,346.00 - - - -9,586,578.00 -9,586,578.00 571,424,768.00

Note: On February 20, 2025, the company submitted an application for cancellation of repurchased shares to the Shanghai Stock Exchange, applying to

9,586,578.00 shares were cancelled. China Securities Depository and Clearing Co., Ltd. will repurchase this part on February 21, 2025

The shares were cancelled, and the company's total share capital was reduced from 581,011,346.00 shares to 571,424,768.00 shares.

37. Capital reserve

Item Balance at the beginning of the year Increase during the year Decrease during the year Ending balance Equity (capital) premium 3,816,687,410.15 - 489,645,065.11 3,327,042,345.04 Other capital reserves 2,344,391.63 - - 2,344,391.63

Total 3,819,031,801.78 - 489,645,065.11 3,329,386,736.67

Note: The acquisition of Shanghai Biaoyuan's minority shareholders' equity in 2025 resulted in a decrease in capital reserve of RMB 28,740,732.83. On February 21, 2025, the company canceled the 9,586,578.00 treasury shares repurchased and reduced the registered capital, resulting in a decrease in capital reserve of RMB 460,904,332.28.

38. Treasury stocks

Item Balance at the beginning of the year Increase during the year Decrease during the year The balance at the end of the year is used to cancel and reduce the company’s registered capital

461,029,295.83 - 461,029,295.83 -The shares of the company acquired

Total 461,029,295.83 - 461,029,295.83 -

Note: On January 29, 2024, the company held the 14th meeting of the fourth board of directors, and reviewed and approved the "Proposal on the Plan to Repurchase the Company's Shares through Centralized Bidding Transactions." The company held the first extraordinary shareholders meeting of 2024 on February 20, 2024, and reviewed and approved the "Proposal on the Plan to Repurchase the Company's Shares through Centralized Bidding Transactions." As of February 19, 2025, the company completed this repurchase and has actually repurchased a total of 9,586,578.00 shares of the company through centralized bidding transactions. The company canceled 9,586,578.00 shares of the shares repurchased this time at the Shanghai Branch of China Securities Depository and Clearing Co., Ltd. on February 21, 2025. All the shares repurchased this time were used to cancel and reduce the registered capital. After the cancellation was completed, the balance of treasury shares was zero.

39. Other comprehensive income

Amount incurred at the beginning of the year Less at the end of the year: Previous

This year Less: Preliminary calculation

credited

The project will be returned to other comprehensive taxes after

Other comprehensive deductions: income attributable after tax

The balance of the total income shall be less than the balance of the total income before income tax and the tax expense of the parent company

Fixed-term transfer to remaining shareholders

Current transfer amount

savings income

Income profit and loss

1. Cannot be reclassified

Others included in profit and loss - - - - - - - - Comprehensive income

2. Reclassify into

Other comprehensive income of profit and loss 1,137,045.96 -195,065.28 - - - -195,065.28 941,980.68

Among them: under equity method

Other comprehensive income convertible to profit or loss - - - - - - -

Other debt investments

• • • • • • • Changes in fair value

Re-division of financial assets

Amounts included in other comprehensive income - - - - - -

Other debt investments

• • • • • • • Credit impairment provision

Item Amount incurred in the year at the beginning of the year Less at the end of the year: Previous Less: Previous period Less: Income After-tax attribution After-tax attribution

Balance Current year Balance

Included in other comprehensive tax expenses for the period Parent company is a small company

cash flow hedging

• • • • • • • Reserve

Foreign currency financial statements

1,137,045.96 -195,065.28 - - - -195,065.28 941,980.68 Conversion difference

other comprehensive income

1,137,045.96 -195,065.28 - - - -195,065.28 941,980.68

total

40. Surplus reserve

Item Balance at the beginning of the year Increase during the year Decrease during the year Balance at the end of the year Statutory surplus reserve 293,162,011.78 - - 293,162,011.78

Total 293,162,011.78 - - 293,162,011.78

Note: According to the provisions of the Company Law and Articles of Association, the company appropriates 10% of the net profit to the statutory surplus reserve fund. If the accumulated statutory surplus reserve is more than 50% of the company's registered capital, no further withdrawals can be made.

After withdrawing the statutory surplus reserve fund, the company may withdraw the discretionary surplus reserve fund. Upon approval, the discretionary surplus reserve fund can be used to make up for losses in previous years or to increase share capital.

41. Undistributed profits

Items this year previous year

Undistributed profits at the end of the previous period before adjustment 4,383,217,408.35 3,797,565,663.25 Total undistributed profits at the beginning of the adjustment period (increase +, decrease -) - - Undistributed profits at the beginning of the adjustment period 4,383,217,408.35 3,797,565,663.25 Add: net profit attributable to owners of the parent company for the current period 1,068,016,468.23 1,194,451,909.72 Owner's investment and reduction of capital - Others - - Increase in retained earnings from disposal of investments in non-trading equity instruments - - Less: Withdrawal of statutory surplus reserve - - Withdrawal of discretionary surplus reserve - - Withdrawal of general risk reserve - - Common stock dividends payable 719,995,207.68 608,800,164.62 Common stock dividends converted into equity - - Distribution to owners (or shareholders) - - Others - -

Undistributed profit at the end of the period 4,731,238,668.90 4,383,217,408.35

42. Operating income and operating costs

(1) Operating income and operating costs

Amount incurred this year Amount incurred last year

Project

revenue cost revenue cost

Main business 4,141,244,008.40 1,399,791,783.91 4,389,227,118.45 1,490,984,045.80 Other businesses 85,169,268.84 52,508,960.05 81,975,390.77 55,589,925.23

Total 4,226,413,277.24 1,452,300,743.96 4,471,202,509.22 1,546,573,971.03

(2) Decomposition information of operating income and operating costs

Contract classification Operating income Operating costs

1. Product type

Reagents 3,612,541,163.91 1,073,813,131.43 Instruments 520,518,330.83 322,668,504.10 Maintenance income 39,558,193.38 33,927,941.07 Others 53,795,589.12 21,891,167.36

2. Classification by business area

Domestic 3,840,113,378.48 1,236,709,920.28 Foreign 386,299,898.76 215,590,823.68

Total 4,226,413,277.24 1,452,300,743.96

43. Taxes and surcharges

Item Amount incurred this year Amount incurred last year

Urban maintenance and construction tax 21,665,246.82 16,605,828.80 Education surcharge 9,370,521.72 7,250,795.18 Local education surcharge 6,247,014.43 4,833,863.46 Property tax 20,571,662.59 14,754,472.95 Land use tax 1,472,475.04 1,472,474.59 Stamp tax 3,200,092.06 3,358,031.11 Vehicle and vessel use tax 42,839.57 40,588.47 Environmental protection tax 213.43 237.66

Total 62,570,065.66 48,316,292.22

44. Sales expenses

Item Amount incurred this year Amount incurred last year

Salaries and surcharges 479,302,578.97 414,320,036.88 Travel expenses 115,817,579.58 106,081,392.61

Item Amount incurred this year Amount incurred last year

Depreciation, amortization and leasing expenses 39,668,347.19 35,467,340.62 Transportation and insurance expenses 7,128,206.04 6,980,440.65 Business entertainment expenses 33,781,371.24 34,700,247.37 Exhibition publicity and promotion expenses 59,588,212.91 54,350,023.77 Payment fees for business income rights 27,899,884.70 38,587,363.77 Maintenance fees 30,477,159.66 25,592,896.38 Others 56,683,271.35 51,686,762.06

Total 850,346,611.64 767,766,504.11

45. Management expenses

Item Amount incurred this year Amount incurred last year

Salaries and surcharges 115,266,540.45 96,959,877.79 Depreciation and amortization expenses 58,673,430.65 44,694,124.18 Office expenses 21,998,650.66 26,491,317.91 Business entertainment expenses 6,891,068.42 8,565,873.78 Travel expenses 2,552,439.17 2,586,115.02 Rental expenses 4,220,139.21 3,802,146.67 Material consumption 17,356,749.68 15,927,773.05 Others 14,332,901.46 11,854,145.31

Total 241,291,919.70 210,881,373.71

46. Research and development expenses

Item Amount incurred this year Amount incurred last year

Salaries and surcharges 329,683,186.97 390,002,354.33 Direct investment 148,459,286.46 205,999,085.59 Depreciation, amortization and lease fees 47,889,423.23 56,563,451.08 Inspection and certification fees 16,975,329.69 55,662,091.78Office expenses 9,354,675.41 19,609,245.20Others 2,753,962.36 4,096,557.29

Total 555,115,864.12 731,932,785.27

47. Financial expenses

Item Amount incurred this year Amount incurred last year

Item Amount incurred this year Amount incurred last year

Interest expense 13,958,489.76 22,281,972.04 Including: Interest expense on lease liabilities 706,641.91 1,341,628.37 Less: Interest income 7,079,028.42 20,565,513.62 Exchange gains and losses 1,603,517.60 -628,387.69 Bank fees and others 909,720.47 591,308.85

Total 9,392,699.41 1,679,379.58

48. Other income

Items generating other income Amount incurred this year Amount incurred last year

Government subsidies 58,437,282.74 52,551,299.58 Additional deduction for value-added tax 12,781,703.45 24,424,952.91 Refund of value-added tax on software products upon collection 16,290,966.56 27,141,664.51 Refund of withheld tax handling fees 755,731.29 541,332.74 Tax reduction and exemption for key groups 1,278,650.00 625,550.00

Total 89,544,334.04 105,284,799.74

Among them, government subsidies included in other income:

Related to assets/items Amount incurred this year Amount incurred last year

Income-related R&D and industrialization of high-performance fully automatic nucleic acid detection system 4,230,793.35 4,576,002.48 Asset-related research and development financial subsidy funds 2,256,736.00 454,564.00 Income-related enterprise expansion incentives - 500,000.00 Income-related small and medium-sized project funds 10,253,000.00 1,613,700.00 Municipal reward and subsidy funds related to income - 3,500,000.00 Unemployment insurance and job stabilization subsidies related to income 87,355.61 1,092,786.95 Special funds for high-quality development related to income 546,400.00 5,000,000.00 The first batch of central foreign economic and trade development special fund projects related to income in 2025 4,993,200.00 - Talent program related to income - 1,000,000.00 Quality improvement award related to income - 2,000,000.00 Shared subsidy for scientific research facilities and instruments related to income 87,533.50 - Development and application of new generation high-throughput genetic detection and analysis system related to income - 2,400,000.00 Development of a new series of fully automatic chemiluminescent immunoassay systems related to assets - 88,792.85 Development of rapid detection test strips for new coronavirus (2019-nCoV) related to assets 6,028.04 2,045.40 Rewards for increasing production of industrial enterprises related to assets - 360,000.00 Related to income

Related to assets/items Amount incurred this year Amount incurred last year

Manufacturing equipment update project related to income 5,240,000.00 - "Bottle to tube" subsidy related to income in 2023 4,000.00 - Postdoctoral research fund subsidy related to income - 200,000.00 Development of ultra-high-throughput random fully automated chemiluminescence immunoassay system related to income - 4,972,922.59 Strategic Emerging Enterprise Cultivation Award in 2023 related to assets 250,000.00 - Local award and subsidy funds for emerging infectious disease projects related to income 3,000,000.00 - Innovation capabilities of the National Engineering Research Center for Detection of Emerging Major Infectious Diseases related to income

2,067,314.58 - Asset-related construction projects

Patent award award funds - 161,250.00 R&D and industrialization of high-performance fully automatic medical mass spectrometry detection system related to income 4,349,649.90 504,008.10 Scientific and technological innovation awards related to assets - 96,909.00 Full laboratory automation system-level intelligent analysis system project in 2023 3,921,243.57 related to income 3,921,243.57 15,545,549.69 Asset-related small and medium-sized enterprise incentive funds 2,880,000.00 - Income-related research and development of a high-performance laboratory assembly line fully automated system 710,980.00 4,639,501.49 Asset-related development of fully enclosed super multiplex pathogen nucleic acid detection kits - 369,728.74 Asset-related clinical application research of single cell identification and drug susceptibility systems in fungal infections - 80,000.00 Asset-related renovation subsidy funds - 480.00 Income-related R&D of fully automated system for high-performance laboratory assembly lines - 100,000.00 Asset-related R&D of super multiplex pathogen nucleic acid real-time detection system - 196,000.00 Asset-related innovative R&D special project - 280,000.00 Income-related export credit insurance project - 161,200.00 Income-related social insurance subsidies, job search and entrepreneurship subsidies 203,806.00 83,970.71 Income-related research and development of digital intelligent exosome extraction and detection system technology platform 109,025.17 - Asset-related development and application of core raw materials for autoimmune disease diagnostic reagents 375,000.00 - Asset-related development and development of full-process quality management and artificial intelligence inspection decision support systems

226,218.65 - Asset-related applications

Employment trainee subsidy 2,000.00 50,320.00 Income-related intellectual property patents 253,500.00 175,994.00 Income-related active digital microfluidic chip and instrument development - 117,699.79 Asset-related new generation in vitro diagnostic reagents 6,461,859.32 - Asset-related high-priced "small upgrade" - 100,000.00 Income-related Touyan Enterprise technical transformation project funds 125,000.00 - Income-related unemployment subsidy 885,164.56 957,005.25 Income-related small and micro subsidies 452,639.65 46,850.00 Income-related

Related to assets/items Amount incurred this year Amount incurred last year

Special funds for enterprise innovation guidance related to income 1,565,000.00 1,000,000.00 Employment promotion funds for income-related units 39,838.00 36,966.00 Job subsidies related to income 48,576.42 23,060.00 High-end manufacturing and advanced software subsidies related to income 799,000.00 - Incentive funds for small and medium-sized enterprises related to income 40,000.00 - Provincial awards and subsidies for high-tech enterprises related to income 150,000.00 - Market development project funds for foreign trade small and medium-sized enterprises related to income 191,300.00 - Subsidy for growing technology enterprises related to income 250,000.00 - Central fiscal employment subsidy funds related to income 1,000.00 - Development of rapid joint detection system for COVID-19/A/Flow B nucleic acid and its application in epidemic monitoring

• 63,992.54 Applications related to assets

U.S. ERC Employee Retention Tax Credit 1,374,120.42 - related to earnings

Total 58,437,282.74 52,551,299.58 /

49. Investment income

Items Amount incurred this year Investment income generated from disposal of long-term equity investment Amount incurred last year 1,787,611.99 - Income from long-term equity investment accounted for by equity method - 1,429,762.21 - 6,260,632.00 Investment income obtained from disposal of trading financial assets 1,492,951.76 12,996,712.64 Income from financial products 101,761,701.88 84,641,767.26 Investment income generated from other equity instrument investments 894,348.00 894,348.00

Total 104,506,851.42 92,272,195.90

50. Income from changes in fair value

Sources of income from changes in fair value Amount incurred this year Amount incurred last year Trading financial assets -3,495,613.67 3,609,780.75 Including: Income from changes in fair value generated by derivative financial instruments - - Foreign exchange swaps -4,334,575.46 3,609,780.75

Financial products 838,961.79 -Trading financial liabilities - -

Total -3,495,613.67 3,609,780.75

51. Credit impairment losses

Item Amount incurred this year Amount incurred last year

Bad debt losses on notes receivable -1,068,819.90 754,904.00 Bad debt losses on accounts receivable -12,151,940.22 -54,868,766.61 Bad debt losses on other receivables 4,269,792.84 -1,492,255.86

Total -8,950,967.28 -55,606,118.47

52. Asset impairment losses

Item Amount incurred this year Amount incurred last year

Loss on inventory depreciation -19,708,750.29 -10,199,948.36 Impairment provision for fixed assets - -28,692,536.08 Impairment provision for intangible assets - -24,061,733.12

Total -19,708,750.29 -62,954,217.56

53. Income from asset disposal

Item Amount incurred this year Amount incurred last year Amount included in non-recurring gains and losses for the current period Fixed asset disposal income 637,786.38 -1,169,696.21 637,786.38

Total 637,786.38 -1,169,696.21 637,786.38

54. Non-operating income

Item Amount incurred this year Amount incurred last year Amount included in non-recurring profits and losses for the current period Gains from damage and scrapping of non-current assets 124.29 162,472.77 124.29 Including: Fixed assets 124.29 162,472.77 124.29 Government subsidies unrelated to the daily activities of the enterprise - 385,000.00 - Unable to pay 575,250.65 535,508.64 575,250.65 Compensation 16,874,029.66 59,951,197.99 16,874,029.66 Others 2,572,711.63 1,756,635.75 2,572,711.63

Total 20,022,116.23 62,790,815.15 20,022,116.23

Government subsidies included in current year’s profits and losses:

Subsidy items Amount incurred this year Amount incurred last year Asset-related/Income-related Zhengzhou listed financing enterprise award and subsidy funds - 385,000.00 Income-related

Total - 385,000.00/

55. Non-operating expenses

Item Amount incurred this year Amount incurred last year Amount included in non-recurring gains and losses for the current period

Item Amount incurred this year Amount incurred last year Amount included in non-recurring gains and losses for the current period Loss from damage and scrapping of non-current assets 4,965,629.94 11,193,109.15 4,965,629.94 Including: fixed assets 4,965,629.94 11,193,109.15 4,965,629.94 Penalties, liquidated damages and late payment fees 2,133,515.67 1,055,151.71 2,133,515.67 External donations 5,088,279.11 6,894,590.35 5,088,279.11 Others 2,997,312.30 80,437.20 2,997,312.30

Total 15,184,737.02 19,223,288.41 15,184,737.02

56. Income tax expenses

(1) Income tax expense schedule

Item Amount incurred this year Amount incurred last year

Current income tax expense 187,390,231.00 124,707,788.18 Deferred income tax expense -51,008,060.49 -34,884,593.88

Total 136,382,170.51 89,823,194.30

(2) Adjustment process of accounting profits and income tax expenses

Item Amount incurred this year

Total profit 1,222,766,392.56 Income tax expenses calculated according to statutory/applicable tax rates 183,414,958.88 The impact of different tax rates applicable to subsidiaries 6,946,633.06 The impact of adjusting income tax in previous periods 5,258,744.92 The impact of non-taxable income -8,674,638.66 The impact of non-deductible costs, expenses and losses 3,809,149.43 Additional deductible expenses stipulated in the tax law - 83,320,118.46 The impact of using deductible losses of deferred income tax assets not recognized in the previous period - The impact of deductible temporary differences or deductible losses of unrecognized deferred income tax assets during the year 1,202,250.80 Changes in the balance of deferred income tax assets/liabilities at the beginning of the year due to tax rate adjustments 27,745,190.54 Income tax expenses 136,382,170.51

57. Cash flow statement items

(1) Receive other cash related to operating activities

Item Amount incurred this year Amount incurred last year

Government subsidies 50,941,636.66 103,257,074.45 Interest income 5,854,253.79 18,084,510.04 Security deposit 36,993,589.34 37,936,424.28

Item Amount incurred this year Amount incurred last year

Other amounts 101,462,743.39 22,358,025.51

Total 195,252,223.18 181,636,034.28

(2) Payment of other cash related to operating activities

Item Amount incurred this year Amount incurred last year

Cash expenses for administrative expenses and R&D expenses 125,130,455.31 192,076,592.90 Cash expenses for sales expenses 270,157,158.89 280,754,411.60 Cash expenses for financial expenses 927,985.17 1,251,338.95 Security deposit 44,788,075.69 41,042,521.97 Other cash expenses 22,120,573.32 28,625,789.33

Total 463,124,248.38 543,750,654.75

(3) Receive other cash related to investment activities

Item Amount incurred this year Amount incurred last year

Bank financial management principal 4,856,243,259.77 2,577,995,000.00 Bank financial management income 123,026,303.78 40,506,937.96 Interest income from borrowing and capital occupation - 4,345,023.53

Total 4,979,269,563.55 2,622,846,961.49

(4) Payment of other cash related to investment activities

Item Amount incurred this year Amount incurred last year

Financial products 4,773,821,435.96 3,086,618,209.92

Total 4,773,821,435.96 3,086,618,209.92

(5) Receive other cash related to financing activities

Item Amount incurred this year Amount incurred last year

Letter of credit 1,603,400,000.00 758,000,000.00 Bill discount receipt 36,109,118.12 25,955,484.92

Total 1,639,509,118.12 783,955,484.92

(6) Payment of other cash related to financing activities

Item Amount incurred this year Amount incurred last year

Capital loan 7,980,610.01 2,398,222.91 Equity acquisition amount 40,804,927.25 566,061,000.14 Lease liability 9,680,754.00 12,015,353.09 Letter of credit 1,175,005,026.19 584,000,000.00

Total 1,233,471,317.45 1,164,474,576.14

58. Supplementary information for cash flow statement

(1) Supplementary information for cash flow statement

Supplementary information Amount for the current year Amount for the previous year

1. Adjust net profit to cash flow from operating activities:

Net profit 1,086,384,222.05 1,199,233,279.89 Plus: asset impairment provision 19,708,750.29 62,954,217.56 Credit impairment loss 8,950,967.28 55,606,118.47 Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets 427,857,927.85 433,709,122.57 Depreciation of right-of-use assets 8,439,396.17 13,582,778.62 Amortization of intangible assets 30,492,330.54

28,181,990.29

Amortization of long-term deferred expenses 27,694,870.94 31,454,036.31 Losses on disposal of fixed assets, intangible assets and other long-term assets (income is represented by “-”

-637,786.38 1,169,696.21 (please fill in the list)

Losses from scrapping of fixed assets (income is listed with "-") 4,965,505.65 11,355,581.92 Loss from changes in fair value (income is listed with "-") 3,495,613.67 -3,609,780.75 Financial expenses (income is listed with "-") 15,562,007.36 21,653,584.35 Investment losses (income is listed with "-") -104,506,851.42 -92,272,195.90 Decrease in deferred income tax assets (increase is listed with "-") -13,546,443.34 -61,041,511.47 Increase in deferred income tax liabilities (decrease is listed with "-") -37,461,617.15 26,156,917.59 Decrease in inventory (increases are indicated by "-") -284,740,441.26 -365,941,785.02 Decrease in operating receivables (increases are indicated by "-") 30,432,966.6 -62,360,213.00 Increase in operating payables (decreases are listed with "-") 129,163,358.86 -36,953,893.10 Others -8,262,674.71 44,094,456.33 Net cash flow from operating activities 1,341,681,762.75 1,309,282,741.12

2. Major investments and financing activities that do not involve cash receipts and payments:

Conversion of debt into capital - - Convertible corporate bonds due within one year - - Financing leased fixed assets - -

3. Net changes in cash and cash equivalents:

Closing balance of cash 582,870,723.61 452,058,348.81 Less: Opening balance of cash 1,485,369,305.45

452,058,348.81

Add: Year-end balance of cash equivalents - - Less: Beginning balance of cash equivalents - - Net increase in cash and cash equivalents 130,812,374.80 -1,033,310,956.64

(2) Net cash paid to acquire subsidiaries this year

None

(3) Net cash received from disposal of subsidiaries this year

None

(4) Composition of cash and cash equivalents

Item Ending balance Beginning balance

1. Cash 582,870,723.61 452,058,348.81 Of which: Cash on hand 153,112.01 348,166.38 Bank deposits that can be used for payment at any time 582,716,804.87 451,709,935.31 Other monetary funds that can be used for payment at any time 806.73 247.12 Amounts deposited with the central bank that can be used for payment - - Amounts due from banks - - Amounts placed with banks - -

2. Cash equivalents - -Including: bond investments due within three months - -

3. Balance of cash and cash equivalents at the end of the year 582,870,723.61 452,058,348.81 Including: Restricted use of cash and cash equivalents by the parent company or subsidiaries within the group - - (5) Situations in which the scope of use is restricted but is still listed as cash and cash equivalents

None

(6) Monetary funds that are not cash and cash equivalents

Item Amount for the current year Amount for the previous year Reasons why it does not belong to cash and cash equivalents Swap margin 13,290,366.21 Restricted use

9,360,579.94

ETC transfer

24,408.00

24,408.00 Use restricted other frozen amounts - Use restricted 17,826.73

Total 9,402,814.67 13,314,774.21 /

59. Foreign currency monetary items

Item Year-end foreign currency balance Conversion exchange rate Year-end conversion RMB balance of monetary funds

Of which: US dollars 40,865,093.61 7.0288 287,232,569.96 Euros 331,202.32 8.2355 2,727,616.71 Japanese yen 17,229.00 0.0448 771.85 Singapore dollars 4.50 5.4586 24.56 Canadian dollars 340.00 5.1142 1,738.83

Items Foreign currency balance at the end of the year Conversion exchange rate Conversion rate into RMB at the end of the year HKD 123,736.96 0.9032 111,761.70 HUF 4,430.58 0.0213 94.54 Indonesian rupiah 293,567,168.02 0.0004 123,298.21 Accounts receivable

Including: USD 12,435,562.87 7.0288 87,407,084.34 EUR 4,000.00 8.2355 32,942.00Accounts payable

Including: USD 258,010.00 7.0288 1,813,500.69 Euro 309,830.80 8.2355 2,551,611.55 Other payables

Among them: US dollars 702,296.81 7.0288 4,936,303.82 Euros 102.55 8.2355 844.55 Saudi riyals 9,250.00 1.8680 17,279.00 Russian rubles 980,874.60 0.0881 86,415.05 Indonesian rupiah 9,236,380.95 0.0004 3,879.28 Other receivables

Of which: US dollars 153.95 7.0288 1,082.08 Euros 670.64 8.2355 5,523.06 United Arab Emirates dirhams 111,520.00 1.9071 212,679.79 Colombian pesos 0.50 0.0019 - Indonesian rupiah 19,000,000.00 0.0004 7,980.00

60. Leasing

(1) The company serves as the lessee

①Variable lease payments not included in the measurement of lease liabilities

None

② Simplified treatment of short-term leases or lease fees for low-value assets

For details of the company’s accounting policies for short-term leases and low-value asset leases, please refer to Note 3.35 “Leases” of these financial statements. The amount of simplified short-term lease or lease expenses of low-value assets included in the current profit and loss this year was RMB 11,136,126.18. ③Situations involving sale and leaseback transactions

Not applicable

(2) The company as the lessor

①Operating lease as lessor

Item Lease income Including: Income related to variable lease payments not included in lease receipts Operating lease income 1,617,900.80 -Total

1,617,900.80 -

②Financial lease as lessor

Not applicable

61. Government subsidies

(1) Government subsidies recognized according to the amount receivable at the end of the year

None

(2) Liability items involving government subsidies

New additions during the year are included in operations during the year. Transferred to other and asset/income accounting accounts during the year. Balance at the beginning of the year. Other changes during the year. Balance at the end of the year.

Amount of subsidy Amount of external income Amount of income Related deferred income 75,078,067.19 15,050,000.00 - 22,458,112.58 917,000.00 66,752,954.61 Related to assets

Total 75,078,067.19 15,050,000.00 - 22,458,112.58 917,000.00 66,752,954.61/

(3) Government subsidies included in current profits and losses

Accounting items Amount incurred this year Amount incurred last year

Other income 58,437,282.74 52,551,299.58 Non-operating income - 385,000.00 Total

58,437,282.74 52,936,299.58

6. R&D expenditures

Item Amount incurred this year Amount incurred last year

Salaries and surcharges 446,818,576.19 390,002,354.33 Direct investment 193,618,953.69 205,999,085.59 Depreciation, amortization and lease fees 68,582,565.04 56,563,451.08 Inspection and certification fees 39,736,043.43 55,662,091.78 Office expenses 15,388,030.92 19,609,245.20 Others 3,440,451.37 4,096,557.29

Total 767,584,620.64 731,932,785.27

Including: Expenditure R&D expenditure 555,115,864.12 731,932,785.27 Capitalized R&D expenditure 212,468,756.52 -

1. R&D projects that meet capitalization conditions

Increase amount during the year Decrease amount during the year

Item Balance at the beginning of the year Transferred to current loss Balance at the end of the year Internal development expenditure Others Recognized as intangible assets

benefit

Software R&D projects - 39,792,912.03 - 3,333,439.20 - 36,459,472.83 Reagent R&D projects - 106,704,870.62 - 28,619,092.00 - 78,085,778.62 Instrument R&D projects - 65,970,973.87 - 11,847,779.66 - 54,123,194.21

Total - 212,468,756.52 - 43,800,310.86 - 168,668,445.66

①Important capitalized R&D projects

None

②Provision for impairment of development expenditures

None

2. Important outsourced research projects

None

7. Changes in consolidation scope

1. Business merger not under common control

(1) Overview of business mergers not under common control that occurred this year: None

(2) Merger costs and goodwill

None

(3) The purchased party has no identifiable assets and liabilities on the purchase date.

1 Method for determining the fair value of identifiable assets and liabilities:

None

2. Contingent liabilities of the purchased party assumed in business mergers

None

(4) There is no gain or loss arising from the remeasurement of equity held before the purchase date based on fair value.

(5) Relevant explanations on the inability to reasonably determine the merger consideration or the fair value of the acquiree’s identifiable net assets and liabilities on the acquisition date or at the end of the current merger period

None

(6) Other instructions

None

2. Merger of enterprises under common control

None

3. Reverse purchase

None

4. Disposal of subsidiaries

None

5. Changes in the scope of consolidation due to other reasons

(1) Cancellation of subsidiary company

Project Place of registration Nature of business Shareholding ratio (%) Reasons for no longer becoming a subsidiary in this period Zhengzhou Antumobi Molecular Diagnostic Technology Technology Promotion and Application Services

Zhengzhou, Henan 65.00 Cancel

Limited company business

(2) Establishment of new subsidiaries

Project Equity Acquisition Method Time of Equity Acquisition Registered Capital Capital Contribution Ratio

Jiangxi Antu Biotechnology Co., Ltd. New subsidiary 2025-09-30 20,000,000.00 yuan 100%

8. Interests in other entities

1. Interests in subsidiaries

(1) Composition of enterprise groups

Shareholding ratio

Business nature (%) Name of acquirer’s subsidiary Main place of business Registration place

Interstitial direct

pick up

Antu experimental instrument same control

Zhengzhou Economic and Technological Development Zone ranks 10th in economic development Zhengzhou Economic and Technological Development Zone ranks 10th in economic development Production system

Qi (Zhengzhou) has 100.00 - Enterprise under the system

No. 199, Fifth Avenue No. 199, Fifth Avenue

Co., Ltd. Zhengzhou Antuco Henan Free Trade Pilot Zone Zhengzhou Area (opened by Henan Free Trade Pilot Zone Zhengzhou Area (opened by Tongtong Control Technology Development Co., Ltd.) No. 87 Jingbei 1st Road Production and R&D Development) No. 87 Jingbei 1st Road Production and R&D Business 100.00 - Enterprise companies under the system Central production building Central production building Business merger

Not the same Zhengzhou Imino

Sixth Street, Zhengzhou Economic and Technological Development Zone Sixth Street, Zhengzhou Economic and Technological Development Zone Production system Biotechnology under control 100.00 -

Factory Building No. 133 Factory Building No. 133 Manufactured by Enterprise Co., Ltd.

Merged with Shanghai Biaoyuansheng

No. 918 Wenshui East Road, Hongkou District, Shanghai 2 No. 918 Wenshui East Road, Hongkou District, Shanghai Technical Services Investment Equipment Technology Co., Ltd. 100.00 -

Room 108, Building No. 108, Building No. 2, Service Establishment Company

Not the same Beijing Antusheng 13 Mintai Road, Beiwu Town, Shunyi District, Beijing 13 Mintai Road, Beiwu Town, Shunyi District, Beijing

Manufacturing Control Engineering Co., Ltd. Building No. 17, Building 18, No. 1 (Technology Chuang) No. 17, Building 18, No. 1 (Science and Technology Chuang) 100.00 -

Enterprise joint venture new functional area) new functional area)

And Hebei Antujiu 509 Taihang South Street, Shijiazhuang High-tech Zone 509 Taihang South Street, Shijiazhuang High-tech Zone

Investment and Medical Technology No. A-2, Guojietang Medical Equipment Industrial Park No. A-2, Guojietang Medical Equipment Industrial Park Commerce 51.00 -

Establishment Co., Ltd. 501, West Side, 5th Floor, Tower 501, West Side, 5th Floor

Shanghai Antusheng

China (Shanghai) Pilot Free Trade Zone Harley China (Shanghai) Pilot Free Trade Zone Harley Technical Services Investment Equipment Technology Co., Ltd. 100.00 -

Rooms 302 and 303, No. 1011 Lei Road Rooms 302 and 303, No. 1011 Lei Road Service establishment company

Zhengzhou Sikunsheng Henan Pilot Free Trade Zone Zhengzhou Area (Economic Development) Henan Pilot Free Trade Zone Zhengzhou Area (Economic Development)

Production System Investment and Construction Engineering Co., Ltd. Factory No. 1, No. 133, Jingkai Sixth Street, No. 3) Factory No. 1, No. 133, Jingkai Sixth Street 100.00 -

Building No. 6, Building No. 6, Building No. 3

8717 ResearchDr.,Irvine,CA 8717 ResearchDr.,Irvine, Biological Research Investment Equipment AdvanBio,Inc. 100.00 -

92618 CA92618 Fa Li

UNIT 2508A25/FBANKOF UNIT 2508A25/FBANKOF

Antu Biotech (Xiang Investment 100.00 - Investment Design

AMERICATOWER12 AMERICATOWER12

Shareholding ratio

Business nature (%) Name of acquirer’s subsidiary Main place of business Registration place

Interstitial direct

pick up

Hong Kong) Co., Ltd. HARCOURTRDCENTRAL HARCOURTRDCENTRAL established

HONGKONG HONGKONG

Shenzhen Antusheng Azabu Society, Xixiang Street, Baoan District, Shenzhen City Azabu Society, Xixiang Street, Baoan District, Shenzhen City

Investment and Construction Engineering Co., Ltd. Qiancheng Commercial Center, No. 5 Haicheng Road, District Qiancheng Commercial Center, No. 5 Haicheng Road, District Business and Trade 100.00 -

Establishing a company 2602 2602

Yunnan Antuy is not the same

Six kilometers from Dianchi Road, Kunming City, Yunnan Province Dian, six kilometers from Dianchi Road, Kunming City, Yunnan Province

Under the control of Nuo Technology Co., Ltd.

There are 6 shops on the 1st floor in Building 2 of a group in Chikangcheng. There are 6 shops on the 1st floor in Building 2 of a group in Chikangcheng. Business 51.00

Company joint enterprise number, No. 7, attached No. 3, attached No. 3B No., No. 7, attached No. 3, attached No. 3B

• Merged with Jiangxi Antusheng Traditional Chinese Medicine in the Directly Administered Area of Ganjiang New District, Jiangxi Province Traditional Chinese Medicine in the Directly Administered Area of Ganjiang New District, Jiangxi Province

Investment Equipment Technology Co., Ltd. No. 12, No. 8 Dongyang Road, Zhouxin, Xinqi, Science and Technology City No. 12, No. 8, Dongyang Road, Zhouxin, Xinqi, Science and Technology City Business 100.00

Established Company Building 2005, 2nd Floor Building 2nd Floor, 2005

Note: The company transferred 13% of the equity of the minority shareholders of Shanghai Biaoyuan Biotechnology Co., Ltd. (hereinafter referred to as Shanghai Biaoyuan) and obtained 100% of the equity of Shanghai Biaoyuan. Shanghai Biaoyuan completed the industrial and commercial change registration procedures for the equity transfer on October 24, 2025; Zhengzhou Antumobi Molecular Diagnostic Technology Co., Ltd. was canceled on June 4, 2025.

(2) Important non-wholly owned subsidiaries

None

(3) Main financial information of important non-wholly owned subsidiaries

None

(4) Significant restrictions on the use of group assets and repayment of enterprise group debts

None

(5) Financial support or other support provided to structured entities included in the scope of consolidated financial statements

None

2. Transactions in which the ownership share of the subsidiary changes and the subsidiary is still controlled

(1) Description of changes in owner’s equity shares of subsidiaries

Subsidiary name Time of change Shareholding ratio before change Shareholding ratio after change Shanghai Biaoyuan Biotechnology Co., Ltd.

October 2025 87.00% 100.00% Company

(2) The impact of the transaction on minority shareholders’ equity and owner’s equity attributable to the parent company

Unit: Yuan

Project Shanghai Biaoyuan Biotechnology Co., Ltd. Purchase Cost

—Cash 42,851,900.00 Total purchase cost/disposal consideration 42,851,900.00 Less: Share of net assets of the subsidiary calculated based on the proportion of equity acquired/disposed 14,111,167.17 Difference 28,740,732.83 Including: Adjusted capital reserve 28,740,732.83

Item Shanghai Biaoyuan Biotechnology Co., Ltd. Adjustment of surplus reserve - Adjustment of undistributed profits - (2) Impact of transaction on minority shareholders’ equity and owner’s equity attributable to the parent company

None

3. Interests in joint ventures or associated enterprises

(1) Important joint ventures or associates

None

(2) Main financial information of important joint ventures

Not applicable

(3) Main financial information of important associates

Not applicable

(4) Summary financial information of unimportant joint ventures and associates

Items Year-end balance/Amount incurred this year Beginning balance/Amount incurred last year

Joint ventures: - - Total book value of investments - - Total of the following items based on shareholding ratio - - - Net profit - - - Other comprehensive income - - - Total comprehensive income - - Associates: - - Total book value of investments 27,000,000.00 19,500,000.00 Total amount of the following items based on shareholding - - - Net profit -6,397,899.24 -6,210,811.74 - Other comprehensive income - - - Total comprehensive income - - (5) Explanation of significant restrictions on the ability of joint ventures or associates to transfer funds to the company

Not applicable

(6) Excess losses incurred by joint ventures or associates

Unrecognized losses during the year (or accumulated unrecognized losses at the end of the year) Name of joint ventures or associates Accumulated unrecognized losses at the beginning of the year

annual shared net profit) loss

Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. - -4,575,632.16 -4,575,632.16

(7) Unconfirmed commitments related to investment in joint ventures

None

(8) Contingent liabilities related to investments in joint ventures or associates

None

4. Important joint operations

None

5. Equity in structured entities not included in the scope of consolidated financial statements

None

9. Risks related to financial instruments

The company's main financial instruments include: financial assets and liabilities, receivables, and payables measured at fair value and whose changes are included in current profits and losses. The main risks arising from the above financial instruments are as follows:

(1) Credit risk

Credit risk mainly arises from bank deposits and receivables.

The company's bank deposits are mainly deposited in state-owned banks and other large and medium-sized listed banks. The company does not expect that there will be significant credit risk in bank deposits.

For accounts receivable, the Company sets relevant policies to control credit risk exposure. The Company evaluates the debtor's credit qualifications and sets corresponding credit terms based on the debtor's financial status, external ratings, the possibility of obtaining guarantees from third parties, credit records and other factors such as current market conditions.

Debtors' payment records are regularly monitored. For non-performing debtors whose payment period exceeds the due date by 60 days, the company will use written reminders, shorten the credit period or impose interest penalties to ensure that the company's overall credit risk is within a controllable range.

(2) Liquidity risk

Liquidity risk refers to the risk of a shortage of funds when an enterprise fulfills its obligations to settle by delivering cash or other financial assets. The Company's policy is to ensure that sufficient cash is available to repay debt obligations as they fall due. Liquidity risk is centrally controlled by the Company's financial department. The Finance Department ensures that the company has sufficient funds to repay its debt under all reasonable forecasts by monitoring cash balances, readily realizable securities, and rolling forecasts of cash flows over the next 12 months.

(3) Market risk

Market risk of financial instruments refers to the risk of fluctuations in the fair value or future cash flows of financial instruments due to market price changes, mainly interest 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. Interest rate risk can arise from both recognized interest-bearing financial instruments and unrecognized financial instruments (such as certain loan commitments).

The Company pays close attention to the impact of interest rate changes on the Company's interest rate risk. The Company currently does not adopt an interest rate hedging policy. However, management is responsible for monitoring interest rate risk and will consider hedging significant interest rate risk if necessary.

10. Disclosure of fair value

1. Year-end fair value of assets and liabilities measured at fair value

year-end fair value

Project

Level 1 fair value Level 2 fair value Level 3 fair value

total

measurement value measurement measurement

1. Continuous fair value measurement

(1) Trading financial assets - 502,095,890.45 - 502,095,890.45

1. Measured at fair value and its change

Financial financing automatically included in current profits and losses - 502,095,890.45 - 502,095,890.45

(1) Debt instrument investment - - - - (2) Equity instrument investment - - - - (3) Derivative financial assets - - - (4) Financial management products - 502,095,890.45 - 502,095,890.45

2. Designated as measured at fair value

Financial assets whose changes are included in current profits and losses - - -

(1) Investment in debt instruments - - - - (2) Investment in equity instruments - - - -

(2) Financing of accounts receivable - - 4,572,024.40 4,572,024.40 (1) Financing of accounts receivable - - 4,572,024.40 4,572,024.40 (2) Accounts receivable - - - -

(3) Other debt investments - - - -

(4) Investment in other equity instruments - - 160,883,561.50 160,883,561.50

(5) Other non-current financing

• • • -Production

(6) Investment real estate - - - -

1. Leaseable land use rights - - - -

2. Buildings for rent - - - -

3. Hold and prepare to transfer after appreciation

• • • land use rights

(7) Biological assets - - - -

1. Consumable biological assets - - - -

2. Productive biological assets - - - - Assets that are continuously measured at fair value

• 502,095,890.45 165,455,585.90 667,551,476.35

Total output

(8) Trading financial liabilities - 724,794.71 - 724,794.71 Including: Trading bonds issued - - - -

Foreign exchange swaps - 724,794.71 - 724,794.71 Other trading financial liabilities - -

Designated to be measured at fair value and its

• • • • Financial changes included in current profit and loss

year-end fair value

Project

Level 1 fair value Level 2 fair value Level 3 fair value

total

measurement value measurement measurement

Liabilities

(9) Net liability of defined benefit plan

Plan assets in debt (expressed as a negative number - - - -)

Negative assets measured at fair value on an ongoing basis

• 724,794.71 - 724,794.71

Total debt

2. Non-continuous fair value measurement

• • • -Amount

(1) Assets held for sale - - - - Non-continuously measured at fair value

• • • -Total assets

Measured at fair value on a non-continuous basis

• • • -Total liabilities

2. Basis for determining the market price of continuous and non-continuous first-level fair value measurement items

None

3. Continuous and non-continuous second-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters (1) Financial management products: The fair value of financial product investments with floating income is measured based on the market value provided by the sponsoring bank; (2) Foreign exchange swaps: The fair value of foreign exchange swaps is measured based on the valuation amount of the sponsoring bank;

4. Continuous and non-continuous third-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters (1) Receivables financing are all bank acceptance bills with a higher credit rating of the acceptor, and the fair value is basically equal to the amortized cost. (2) Other equity instrument investments include the purchase or capital increase of the equity interests of Chengdu Kerui Technology Co., Ltd., Shenzhen Meili Nanopore Technology Co., Ltd., Suzhou Jinhe Phase III Equity Investment Partnership (Limited Partnership), Guangzhou Huayinkang Medical Group Co., Ltd. and Renke (Shenzhen) Biotechnology Co., Ltd. Since the equity of the invested company is not quoted in the active market, it is not feasible to use the income method or the market method to value the equity.

5. Continuous third-level fair value measurement items, reconciliation information between the beginning and end of the year book values and sensitivity analysis of unobservable parameters

Not applicable

6. For ongoing fair value measurement items, if there is a conversion between various levels during the reporting period, the reasons for the conversion and the policy for determining the time of conversion

Not applicable

7. Valuation technology changes that occurred during the reporting period and reasons for the changes

None

8. Fair value of financial assets and financial liabilities not measured at fair value

None

9. Others

None

11. Related parties and related transactions

1. Information about the company’s parent company

The proportion of voting rights held by the parent company in the company. Name of the parent company. Place of registration. Nature of business. Registered capital. Shareholding ratio of the company.

(%) (%) Zhengzhou Antu Industrial Group Henan Pilot Free Trade Zone Zhengzhou Area Industrial Investment, Medicine

12.5 million yuan 57.65 57.65 Co., Ltd. (Jingkai) No. 126 Jingbei 1st Road Research and experimental development

Note: The ultimate controller of the company is Miao Yongjun.

2. Information about the company’s subsidiaries

For details, please refer to Note 8, 1. Equity in subsidiaries.

3. The company’s joint ventures and associated enterprises

For details of the Company's important joint ventures and associates, please refer to Note 8.3, Equity in Joint Arrangements or Associates. The situation of other joint ventures or associates that had related party transactions with the company during the reporting period, or had balances from related party transactions with the company in the previous period, is as follows:

Name of joint venture or associated enterprise Relationship with the company

Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. is a joint-stock company in which the company's subsidiaries hold 45.00% of the shares

Zhengzhou Gongdong Medical Equipment Co., Ltd. is a joint-stock company in which the company holds 30.00% shares

4. Other related parties

Names of other related parties Relationship between other related parties and the company

Zhengzhou Dior Medical Technology Co., Ltd. A company where Han Mingming, a former company supervisor, serves as a director

Henan Zhengfeng Agriculture and Animal Husbandry Technology Development Co., Ltd. A holding subsidiary of the main shareholder

Xiamen Feishuo Biotechnology Co., Ltd. is a joint-stock company in which the company holds 40.00% shares in February 2026

Xiamen Feishuo Medical Testing Laboratory Co., Ltd. is a wholly-owned subsidiary of the company that holds 40.00% of the shares in February 2026

Renke (Shenzhen) Biotechnology Co., Ltd. A company where director Zhang Ruifeng serves as a director

Shenzhen Meili Nanopore Technology Co., Ltd. A company where director Zhang Ruifeng serves as a director

Zhengzhou Demai Pharmaceutical Development Co., Ltd. A subsidiary of the controlling shareholder of Antu Biotechnology

Zhengzhou Demai Pharmaceutical Co., Ltd. A subsidiary of the controlling shareholder of Antu Biotechnology

MobidiagOy is a minority shareholder holding 35.00% of the shares of its subsidiary Mobi (the subsidiary Mobi has been canceled in June 2025) Hiken Biotechnology (Suzhou) Co., Ltd. has a significant influence on it

Hiken Medical Technology (Suzhou) Co., Ltd. has a significant impact on it

5. Related party transactions

(1) Related transactions related to the purchase and sale of goods, provision and receipt of services

①Procurement of goods/receipt of services

Related parties Contents of related transactions Amount incurred this year Amount incurred last year Henan Zhengfeng Agriculture and Animal Husbandry Technology Development Co., Ltd. Food, clothing 278,445.00 494,894.20 Zhengzhou Antu Industrial Group Co., Ltd. Service fees, materials 87,528.55 26,902.65

Related parties Contents of related transactions Amount incurred this year Amount incurred last year Zhengzhou Demai Pharmaceutical Development Co., Ltd. Materials 22,818.01 164,708.41 Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. Equipment, materials, testing fees 916,683.75 1,390,172.26 Shenzhen Meili Nanopore Technology Co., Ltd. Materials 53,097.35 181,415.96 Renke (Shenzhen) Biotechnology Co., Ltd. Outsourced R&D - 3,000,000.00 Hiken Biotechnology (Suzhou) Co., Ltd. Reagents 11,485,570.69 7,438,727.51 Hiken Medical Technology (Suzhou) Co., Ltd. Materials and equipment 255,929.20 12,053.10 Xiamen Feishuo Biotechnology Co., Ltd. Software service fee, testing fee 19,592.45 - ②Sales of goods/provision of services

Related parties Contents of related transactions Amount incurred this year Amount incurred last year

Comprehensive service fees, reagents, equipment,

Zhengzhou Antu Industrial Group Co., Ltd. 4,386,809.32 470,236.88 Materials, etc.

Comprehensive service fees, consumables, reagents,

Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. 1,285,425.00 1,538,319.32

Instruments, etc.

Zhengzhou Demai Pharmaceutical Development Co., Ltd. Reagents 195,373.87 232,741.95 Zhengzhou Demai Pharmaceutical Co., Ltd. Equipment 29,844.61 64,938.28 Hiken Biotechnology (Suzhou) Co., Ltd. Service fees, reagents, etc. 11,033,088.56 11,349,618.10 Hiken Medical Technology (Suzhou) Co., Ltd. Service fees, instruments, etc. 691,623.32 251,598.25 Xiamen Feisuo Biotechnology Co., Ltd. Reagents, technical services 74,202.38 - Xiamen Feisuo Medical Testing Laboratory Co., Ltd. Reagents 190,265.50 - (2) Related entrusted management/contracting and entrusted management/outsourcing

None

(3) Related leasing situation

①The company acts as the lessor

Name of lessee Type of leased assets Lease income recognized this year Lease income recognized last year Zhengzhou Dior Medical Technology Co., Ltd. House rental - 17,339.45 Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. House rental 738,534.70 894,336.35 Zhengzhou Antu Industrial Group Co., Ltd. House rental 277,102.09 24,003.12 Zhengzhou Demai Pharmaceutical Development Co., Ltd. House rental 225,750.33 71,175.96 ②The company serves as the lessee

None

(4) Related guarantees

①The company serves as the guarantor

None

②The company serves as the guaranteed party

None

(5) Fund lending by related parties

None

(6) Asset transfer and debt restructuring of related parties

None

(7) Remuneration of key management personnel

Item Amount incurred this year Amount incurred last year

Remuneration of key management personnel 5,833,600.00 9,511,100.00 (8) Other related transactions

None

6. Accounts receivable and payable from related parties

(1) Items receivable

Ending balance Beginning balance

Project name Related parties

Book balance Bad debt provision Book balance Bad debt provision Accounts receivable Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. 439,632.05 171,350.64 439,632.05 38,514.80 Accounts receivable Zhengzhou Demai Pharmaceutical Co., Ltd. 1,544.88 77.24 682.44 34.12 Accounts receivable Xiamen Feishuo Biotechnology Co., Ltd. 20,700.00 1,035.00 - - Other receivables Hiken Biotechnology (Suzhou) Co., Ltd. 170,000.00 31,500.00 640,000.00 38,000.00 Prepaid accounts Hiken Biotechnology (Suzhou) Co., Ltd. 3,246,764.36 - 5,685,394.38 - Prepaid accounts Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. 2,792.85 - 85,006.54 - Other receivables MobidiagOy - - 57,507,200.00 2,875,360.00 Other non-current

Xiamen Feishuo Biotechnology Co., Ltd. 10,000,000.00 - - -Assets

(2) Payable items

Project name Related party Ending balance Beginning balance

Contract liabilities MobidiagOy - 11,860.86 Contract liabilities Hiken Biotechnology (Suzhou) Co., Ltd. 1,126,231.43 1,037,735.85 Contract liabilities Hiken Medical Technology (Suzhou) Co., Ltd. 419,135.70 6,303.84 Contract liabilities Zhengzhou Antu Industrial Group Co., Ltd. 88,495.58 - Contract liabilities Zhengzhou Demai Pharmaceutical Development Co., Ltd. 32,856.20 - Accounts payable Hiken Biotechnology (Suzhou) Co., Ltd. 166,989.44 51,582.81 Accounts payable Hiken Medical Technology (Suzhou) Co., Ltd. 10,261.97 6,061.97 Accounts payable Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. 19,589.38 - Accounts payable Zhengzhou Demai Pharmaceutical Development Co., Ltd. 11,195.04 -

Project name Related party Ending balance Beginning balance

Other payables Zhengzhou Jiuhe Medical Testing Laboratory Co., Ltd. 142,766.32 102,915.30 Other payables Zhengzhou Demai Pharmaceutical Development Co., Ltd. 89,112.00 98,139.00 Other payables Zhengzhou Antu Industrial Group Co., Ltd. 1,003,881.00 272,272.00

7. Related party commitments

None

12. Share-based payment

There is no share-based payment this year.

13. Commitments and contingencies

1. Important commitments

None

2. Contingent matters

None

3. Others

None

14. Events after the balance sheet date

1. Important non-adjustment matters

None

2. Profit distribution

The 2025 profit distribution plan reviewed and approved at the 11th meeting of the fifth board of directors of the company: audited by Zhongqin Wanxin Accounting Firm (Special General Partnership), as of December 31, 2025, the final undistributed profit in the company's parent company's accounting statements was RMB 3,296,495,508.10. The company plans to distribute a cash dividend of 1.31 yuan (including tax) per share to all shareholders. As of April 21, 2026, the company's total share capital was 571,424,768 shares. Based on this calculation, the total planned cash dividend is 748,566,446.08 yuan (including tax).

The company's total cash dividends this year were 748,566,446.08 yuan; the amount of share repurchases implemented this year using cash as consideration and centralized bidding was 9,123,256.92 yuan (including transaction costs). The total amount of cash dividends and repurchases was 757,689,703.00 yuan, accounting for 70.94% of the net profit attributable to shareholders of listed companies this year. Among them, the repurchase amount of shares repurchased and canceled using centralized bidding method with cash as consideration (hereinafter referred to as repurchase and cancellation) was 9,123,256.92 yuan (including transaction costs), and the total amount of cash dividends and repurchase and cancellation was 757,689,703.00 yuan, accounting for 70.94% of the net profit attributable to shareholders of listed companies this year.

3. Description of other post-balance sheet events

In September 2025, a cooperation intention agreement was signed with Xiamen Feisuo Biotechnology Co., Ltd. (hereinafter referred to as Xiamen Feisuo) and its actual controller, and a cooperation intention fee of 10,000,000.00 yuan was paid. In December 2025, the text of the equity transfer agreement investment agreement was signed with Xiamen Feishuo and its shareholders, and the initial deposit of RMB 10,000,000.00 was converted into the first phase of capital increase.

In February 2026, Xiamen Feishuo completed the industrial and commercial registration procedures for share transfer and capital increase. After the registration was completed, our company’s shareholding ratio was 40.006%.

15. Other important matters

None

16. Notes on main items of the parent company’s financial statements

1. Accounts receivable

(1) Disclosure based on aging

Aging year-end balance

Within 1 year 522,333,041.06 1 to 2 years 9,398,413.98 2 to 3 years 1,340,830.99 More than 3 years -

Subtotal 533,072,286.03

Less: Provision for bad debts 27,788,409.12

Total 505,283,876.91

(2) Classified presentation according to bad debt accrual method

Year-end balance

Category Book balance Bad debt provision

Book value accrual ratio

Amount Ratio (%) Amount

(%)

Accounts receivable with provision for bad debts based on individual items 96,000.00 0.02 96,000.00 100.00 - Accounts receivable with provision for bad debts based on combinations 532,976,286.03 99.98 27,692,409.12 5.20 505,283,876.91 of which: Provision based on combination of credit risk characteristics

532,976,286.03 99.98 27,692,409.12 5.20 505,283,876.91 Accounts receivable for bad debt provisions

Total 533,072,286.03 100.00 27,788,409.12 5.21 505,283,876.91

(continued)

Beginning balance

Category Book balance Bad debt provision

Book value accrual ratio

Amount Ratio (%) Amount

(%)

Provision for bad debts on an individual basis

accounts receivable

Provision for bad debts on a portfolio basis

Accounts receivable 582,931,827.91 100.00 29,321,187.49 5.03 553,610,640.42

Among them: According to credit risk characteristics

Group provision for bad debts 582,931,827.91 100.00 29,321,187.49 5.03 553,610,640.42 Accounts receivable

Total 582,931,827.91 100.00 29,321,187.49 5.03 553,610,640.42

①Important accounts receivable for which bad debt provisions are made individually

None

②In the portfolio, the accounts receivable for which bad debt provisions are made based on the combination of credit risk characteristics

Year-end balance

Name

Book balance Bad debt provision Proportion of provision (%) Within 1 year 522,303,041.06 26,115,152.22 5.00 1 to 2 years 9,398,413.98 939,841.40 10.00 2 to 3 years 1,274,830.99 637,415.50 50.00 Over 3 years - - 100.00

Total 532,976,286.03 27,692,409.12 /

(3) Bad debt provisions

Amount of changes during the year

Category Beginning Balance Ending Balance

Provision Recovery or reversal Write-off or write-off Other changes

Provision for bad debts 29,321,187.49 - 1,532,778.37 - - 27,788,409.12

Total 29,321,187.49 - 1,532,778.37 - - 27,788,409.12

(4) Accounts receivable actually written off this year

None

(5) The top five accounts receivable at the end of the year based on debtors

Accounting for the total year-end balance of accounts receivable

Unit name Year-end balance of accounts receivable Year-end balance of bad debt provision

Proportion of counts (%)

First place 38,855,570.92 7.29 1,942,778.55 Second place 34,727,264.01 6.51 1,736,363.20 Third place 26,482,739.37 4.97 1,324,136.97 Fourth place 20,036,813.95 3.76 1,001,840.70 Fifth place 16,033,647.85 3.01 801,682.39

Total 136,136,036.10 25.54 6,806,801.81

(6) Accounts receivable derecognized due to transfer of financial assets

None

(7) Amount of assets and liabilities formed by transferring accounts receivable and continuing to be involved

None

2. Other receivables

Item Ending balance Beginning balance

Interest receivable - - Dividends receivable - - Other receivables 584,551,349.67 683,774,895.23

Total 584,551,349.67 683,774,895.23

(1) Other receivables

Disclosure by age

Aging year-end balance

①

Within 1 year 320,737,094.74 1 to 2 years 192,779,354.38 2 to 3 years 212,699,381.47 More than 3 years 229,150,689.55

Subtotal 955,366,520.14

Less: Bad debt provision 370,815,170.47

Total 584,551,349.67

Classification by nature of payment

Nature of payment Book balance at the end of the year Book balance at the beginning of the year

②

Security deposits and deposits 4,792,518.10 9,709,463.15 Reserve funds 2,119,490.28 1,505,685.40 Other current accounts paid in advance 19,714,205.77 28,744,529.78 Loans 921,811,971.52 823,335,707.67 Others 6,928,334.47 50,801,614.92

Subtotal 955,366,520.14 914,097,000.92

Less: Bad debt provision 370,815,170.47 230,322,105.69

Total 584,551,349.67 683,774,895.23

③Bad debt provision accrual status

The first stage The second stage The third stage

entire duration

Provision for bad debts Expected throughout the lifetime Total

Expected credit losses over the next 12 months

Credit losses (occurred

Loss of use (no credit has occurred)

credit impairment)

with impairment)

Balance on January 1, 2025 230,322,105.69 - - 230,322,105.69 Balance on January 1, 2025 in this year: - - - - ——Transfer to the second stage - - - -

The first stage The second stage The third stage

entire duration

Provision for bad debts Expected throughout the lifetime Total

Expected credit losses over the next 12 months

Credit losses (occurred

Loss of use (no credit has occurred)

credit impairment)

with impairment)

——Transfer to the third stage - - - - ——Transfer to the second stage - - - - ——Transfer to the first stage - - - - Provision for this year 140,493,064.78 - - 140,493,064.78 Transfer this year - - - - Write-off this year - - - - Write-off this year - - - - Other changes - - - -

Balance on December 31, 2025 370,815,170.47 - - 370,815,170.47

④ Bad debt provisions accrued, recovered or reversed this year

Amount of changes during the year

Category Balance at the beginning of the year Balance at the end of the year Recovery or write-off or approval Other changes

Provision

Turn back pin

Bad debt losses 230,322,105.69 140,493,064.78 - - - 370,815,170.47

Total 230,322,105.69 140,493,064.78 - - - 370,815,170.47

⑤ Other receivables actually written off this year

None

⑥ Other receivables with the top five year-end balances collected by debtors

Account for other receivables

Balance at the end of the year. Name of the bad debt provision unit. Nature of the payment. Balance at the end of the year. Aging of the account.

Ratio of total balance at year-end (%)

borrow, advance

First place 423,631,098.011 years, 1-2 years, 2-3 years, more than 3 years 44.34 277,149,939.37 Other current funds

borrow, advance

Second place 236,857,410. Within 291 years, 1-2 years, 2-3 years, more than 3 years 24.79 67,807,933.17 Other current funds

borrow, advance

Third place 184,399,146.081 years, 1-2 years 19.30 11,611,067.36 Other current funds

borrow, advance

Fourth place 74,673,760. Within 201 years, 1-2 years, 2-3 years 7.82 8,409,805.88 Other current funds

borrow, advance

Fifth place 11,525,636. Within 201 years 1.21 576,281.81 Other current funds

Total / 931,087,050.78 / 97.46 365,555,027.59

⑦Amounts receivable involving government subsidies

None

⑧Other receivables derecognized due to transfer of financial assets

None

⑨The amount of assets and liabilities resulting from the transfer of other receivables and continued involvement

None

3. Long-term equity investment

(1) Classification of long-term equity investments

Ending balance Beginning balance

Project

Book balance Impairment provision Book value Book balance Impairment provision Book value

Investment in subsidiaries 580,030,871.24 - 580,030,871.24 596,018,578.84 - 596,018,578.84 Investment in associates and joint ventures

17,743,928.19 - 17,743,928.19 10,382,487.97 - 10,382,487.97Enterprise investment

Total 597,774,799.43 - 597,774,799.43 606,401,066.81 - 606,401,066.81

(2) Investment in subsidiaries

Changes in increases and decreases during the year Impairment The balance at the beginning of the year (book value) The balance at the end of the year (book value) Provisions made by the investee

Value) Value) Increase during the year at the end of the year Decrease during the year Impairment Others

balance

Prepare

Antu experimental instruments

53,161,335.15 - - - - 53,161,335.15 - (Zhengzhou) Co., Ltd.

Zhengzhou Antu Technology

51,461,641.06 - - - - 51,461,641.06 - Development Co., Ltd.

Zhengzhou Eminosun

Materials Technology Co., Ltd. 4,990,983.05 - - - - 4,990,983.05 - Company

Shanghai Biaoyuan Biotechnology

8,700,000.00 42,851,900.00 - - - 51,551,900.00 -Technology Co., Ltd.

Hebei Antu Jiuhe

Medical Technology Co., Ltd. 23,460,000.00 - - - - 23,460,000.00 -Company

Beijing Antu Biotechnology

337,500,000.00 - - - - 337,500,000.00 - Engineering Co., Ltd.

Zhengzhou Antumobi

Molecular diagnostic technology 62,731,581.00 - 62,731,581.00 - - - - Co., Ltd.

Shanghai Antu Biotechnology

11,200,000.00 - - - - 11,200,000.00 - Technology Co., Ltd.

Zhengzhou Sikun Biology

10,000,000.00 - - - - 10,000,000.00 - Engineering Co., Ltd.

AdvanBio,Inc. 13,335,360.00 - - - - 13,335,360.00 -Shenzhen Antu Biotechnology

2,000,000.00 3,000,000.00 - - - 5,000,000.00 - Engineering Co., Ltd.

Yunnan Antuino

17,340,000.00 - - - 17,340,000.00 - Technology Co., Ltd.

Antu Biotech (Hong Kong)

137,678.58 891,973.40 - - - 1,029,651.98 -Co., Ltd.

Total 596,018,578.84 46,743,873.40 62,731,581.00 - - 580,030,871.24 -

(2) Investment in associates and joint ventures

Increases and decreases during the year

Balance at the beginning of the year Impairment provision

Investee

(Book value) Balance at the beginning of the year Investment recognized under the equity method Additional investment in other comprehensive income Decrease in investment

Capital gains and losses adjustment

1. Joint ventures - - - - - -

Subtotal - - - - - -

2. Associated Enterprises - - - - - - Zhengzhou Gongdong Medical Equipment Co., Ltd.

10,382,487.97 7,500,000.00 -138,559.78

• • • Co., Ltd.

Subtotal 10,382,487.97 - 7,500,000.00 - -138,559.78 -Total 10,382,487.97 - 7,500,000.00 - -138,559.78 -

(continued)

Increases and decreases during the year

Year-end balance Impairment provision invested unit

Declaration of cash dividends (book value) Year-end balance Other changes in equity Provision for impairment Others

or profit

1. Joint ventures - - - - - -

Subtotal - - - - - -

2. Associates - - - - - - Zhengzhou Gongdong Medical Equipment Co., Ltd. - - - - -

17,743,928.19

Ltd.

Subtotal - - - - 17,743,928.19 -Total - - - - 17,743,928.19 -

4. Operating income and operating costs

(1) Operating income and operating costs

Amount incurred this year Amount incurred last year

Project

revenue cost revenue cost

Main business 3,302,049,317.69 1,473,348,833.87 3,511,410,907.90 1,461,039,360.75 Other businesses 137,774,798.72 103,646,490.36 125,164,502.01 105,983,368.35

Total 3,439,824,116.41 1,576,995,324.23 3,636,575,409.91 1,567,022,729.10

(3) Income generated from contracts this year

Contract classification Operating income Operating costs

1. Product type

Reagents 2,912,874,732.82 1,033,468,370.99 Instruments 389,169,328.21 439,005,735.58

Maintenance income 45,328,909.53 38,877,320.72

Contract classification Operating income Operating costs

Others 92,451,145.85 65,643,896.94

2. Classification by business area

Domestic 3,088,611,565.49 1,347,542,295.22 Foreign 351,212,550.92 229,453,029.01

Total 3,439,824,116.41 1,576,995,324.23

5. Investment income

Items Amount incurred this year Income from long-term equity investment calculated by cost method Amount incurred last year 113,213,752.00 2,009,400.00 Income from long-term equity investment calculated using equity method -138,559.78 -117,512.03 Investment income generated from disposal of long-term equity investment -58,093,703.05 -3,818,363.33 Investment income from the disposal of held-to-maturity investments - - Investment income from the disposal of trading financial assets 1,045,403.11 12,996,712.64 Investment income from holding trading financial assets - - Investment income from other equity instrument investments 894,348.00 894,348.00 Financial management income 92,351,031.42 78,396,949.87

Total 149,272,271.70 90,361,535.15

17. Supplementary information

1. Detailed statement of non-recurring profits and losses for the current period

Item Amount Description Profit and loss from disposal of non-current assets -4,327,719.27 /

Government subsidies included in current profits and losses (closely related to the company’s normal business operations and in compliance with national policies and regulations)

59,715,932.74/

Except for government subsidies that are defined, enjoyed according to determined standards, and have a lasting impact on the company's profits and losses)

In addition to effective hedging business related to the company's normal operating business, non-financial enterprises hold financial

Gains and losses arising from changes in fair value of assets and financial liabilities, as well as gains and losses arising from the disposal of financial assets and financial liabilities 3,674,429.27 /

profit and loss

Fund occupation fees charged to non-financial enterprises included in current profits and losses - /

Profit and loss from entrusting others to invest or manage assets - /

Profit and loss from external entrusted loans - /

Provision for impairment of various assets due to force majeure factors, such as natural disasters - /

Reversal of impairment provision for accounts receivable subject to separate impairment test 11,170,844.02/

The investment cost of an enterprise in acquiring subsidiaries, associated enterprises and joint ventures is less than the amount of the investment it should enjoy when acquiring the investment.

-/

Income generated from the fair value of the identifiable net assets of the investment unit

Net profit and loss for the current period from the beginning of the year to the date of merger of subsidiaries resulting from business combinations under common control - /

Gains and losses on non-monetary asset exchanges - /