Berry Gene: 2025 Annual Audit Report

Audit Report of Chengdu Berry and Kang Gene Technology Co., Ltd.

Shanghuishi Baozi (2026) No. 8691

Shanghui Accounting Firm (Special General Partnership)

Shanghai, China

Audit report

Shanghuishi Baozi (2026) No. 8691

All shareholders of Chengdu Berry and Kang Gene Technology Co., Ltd.:

1. Audit opinions

We have audited the financial statements of Chengdu Berry and Kang Gene Technology Co., Ltd. (hereinafter referred to as "Berry Gene" or the "Company"), including the consolidated and company balance sheets on December 31, 2025, the consolidated and company income statements for 2025, the consolidated and company cash flow statements, the consolidated and company statements of changes in owner's equity, and relevant financial statement notes.

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 company financial status of Chengdu Berry and Kang Gene Technology Co., Ltd. on December 31, 2025, as well as the consolidated and company operating results and cash flows in 2025.

2. The basis for forming 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 Berry Genetics and have fulfilled other responsibilities in 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 we, based on our professional judgment, consider 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. The key audit matters identified in our audit are as follows:

1. Revenue recognition

(1) Description of the matter

As stated in Note 4.23 and Note 6.38 of the financial statements, Berry Gene's main business is basic scientific research services, testing services and sales of equipment and reagents. Berry Gene's main business income in 2025 was RMB 919.2795 million. Revenue from basic scientific research services and testing services is recognized when the service has been completed and the economic benefits related to the service are likely to flow into Berry Genetics; revenue from equipment and reagent sales is recognized when the goods are delivered to the buyer in accordance with the provisions of the agreement or contract, and the revenue is recognized after the buyer signs or checks.

Since revenue is one of Berry Gene's key performance indicators and there is an inherent risk that management will manipulate the timing of revenue recognition in order to achieve specific goals or expectations, we identified Berry Gene's revenue recognition as a key audit matter.

(2) Audit response

① Understand and evaluate the effectiveness of internal control design related to revenue recognition matters, and test the effectiveness of key control execution;

② Through sampling inspections of sales and service contracts and interviews with management, analyze and evaluate the timing of transfer of control and cost measurement related to revenue recognition, and then evaluate Berry Gene's revenue recognition policy;

③ Carry out analytical review procedures on revenue, and consider the impact of the relationship between revenue and inventory, accounts receivable and other relevant data to determine whether the changes in revenue and gross profit margin for the current period are reasonable;

④ For basic scientific research services and testing services, we randomly checked the service contracts signed with customers, sample collection records, test reports, data release paths, settlement statements, sales invoices, payment receipts and other information; for equipment and reagent sales, we randomly checked the sales contracts, delivery orders, logistics orders, acceptance orders, sales invoices, payment receipts and other information signed with customers to evaluate whether Berry Gene's revenue recognition is consistent with the disclosed accounting policies and is consistently applied in each period;

⑤ Perform analytical procedures on revenue and costs, including analysis of fluctuations in revenue, costs, and gross profit margins by month for the current period, comparative analysis of major products’ revenue, costs, gross profit margins for the current period, and the previous period, etc., to check the accuracy of confirmed revenue;

⑥ Perform a cut-off test on revenue, select samples for revenue transactions recorded before and after the balance sheet date, and check the outgoing documents, settlement documents and other supporting documents to evaluate whether Berry Gene's revenue is recorded in the appropriate accounting period;

⑦ Based on the characteristics and nature of customer transactions, we select samples to perform correspondence and interview procedures to confirm the income amount and accounts receivable balance.

2. Impairment of accounts receivable

(1) Description of the matter

As stated in Note 6.4 of the financial statements, the book balance of Berry Gene's accounts receivable was RMB 1,180.6969 million, the bad debt provision was RMB 644.6280 million, and the book value was RMB 536.0689 million, accounting for 23.47% of the total assets at the end of the period.

Based on the credit risk characteristics of each account receivable, the management measures its loss provisions based on an amount equivalent to the expected credit losses during the entire duration, based on a single account receivable or a combination of accounts receivable. For accounts receivable that are subject to impairment testing on an individual basis, the management comprehensively considers reasonable and well-founded information about past events, current conditions, and forecasts of future economic conditions, estimates the cash flow expected to be collected, and determines the bad debt provisions that should be accrued based on this; Accounts receivable are based on the basic measurement of expected credit losses. The management divides the portfolios based on the age of accounts. With reference to historical credit loss experience, combined with current conditions and predictions of future economic conditions, the management prepares a comparison table between the aging of accounts receivable and the default loss rate, and determines the bad debt provisions that should be accrued accordingly.

Due to the significant amount of accounts receivable and the impairment of accounts receivable involving significant management judgment, we identified the impairment of accounts receivable as a key audit matter.

(2) Audit response

① Understand the key internal controls related to the impairment of accounts receivable, evaluate the design of these controls, determine whether they are implemented, and test the operational effectiveness of relevant internal controls;

② Test the key basic data used by management in the expected credit loss model, evaluate the rationality of the selection of the historical reference period, and verify the reliability of the key data used in the calculation of historical default rates;

③ For accounts receivable for which bad debt provisions are individually made, we understand the customer background and credit evaluation, check objective evidence that the accounts receivable has been impaired or the impairment has been restored, evaluate the appropriateness of the management's estimate of the customer's credit history, future operating conditions and repayment ability, and examine the recovery of payments from the balance sheet date to the reporting date;

④ For accounts receivable for which bad debt provisions are made based on combinations of credit risk characteristics, we used a sampling method to check the accuracy of the aging schedule of accounts receivable prepared by the management; combined with factors such as customer payment status and market conditions, evaluated the appropriateness of the management's method of dividing accounts receivable into combinations; checked historical collection and bad debt data, and evaluated the appropriateness of historical loss rate estimates; combined with forward-looking information, evaluated the rationality of the management's use of the expected credit loss model to make bad debt provisions for accounts receivable; examined the collection of payments from the balance sheet date to the reporting date;

⑤ Review the adequacy and completeness of relevant disclosures in the notes to the financial statements.

4. Other information

Berry Genetics' management is responsible for other information. Other information includes the information covered in the 2025 Annual Report of Chengdu Berry and Kang Gene Technology Co., Ltd., 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

The management of Berry Gene 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 are free of material misstatements due to fraud or error.

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

Those charged with governance are responsible for overseeing Berry Genetics' financial reporting processes.

6. Responsibilities 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 about events or conditions that may cast significant doubt on Berry Gene's ability to continue as a going concern. If we conclude that significant uncertainty exists, auditing standards require us to draw the attention of users to the relevant disclosures in the financial statements in our audit report; if the disclosures are insufficient, we should issue a qualified opinion. Our conclusions are based on information available as of the date of the auditor's report. However, future events or conditions may cause Berry Genetics to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content (including disclosures) of the financial statements, and evaluate whether the financial statements fairly reflect relevant transactions and events.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities in Berry Gene to express an audit opinion on the financial statements. We are responsible for directing, supervising and performing group audits and take full responsibility for our audit opinions.

We communicate with those charged with governance regarding, among other matters, the planned audit scope, timing and significant audit findings, including communication of significant internal control deficiencies identified during our audit.

We also provide statements to those charged with governance that we have complied with ethical requirements related to independence and communicate with those charged with governance all relationships and other matters that may reasonably be considered to affect our independence, and related safeguards, if applicable.

From the matters communicated with those charged with governance, we determine which matters are most significant to the audit of the current period's financial statements and therefore constitute key audit matters. We describe these matters in our auditor's report unless laws or regulations prohibit public disclosure of the matter or, in rare circumstances, we determine that the matter should not be communicated in our auditor's report if the adverse consequences of communicating the matter in the auditor's report are reasonably expected to outweigh the benefits in the public interest.

Shanghui Accounting Firm (Special General Partnership) Chinese Certified Public Accountants

Chinese Certified Public Accountant

Shanghai, China April 27, 2026

1. Basic situation of the company

Chengdu Berry Hekang Gene Technology Co., Ltd. (hereinafter referred to as the "Company" or the "Company") was formerly known as Chengdu Tianxing Instrument Co., Ltd. (hereinafter referred to as "Tianxing Instrument"). On December 20, 2016, Tianxing Instrument held the second extraordinary shareholders' meeting of 2016 to review and approve Tianxing Instrument's plan to issue shares to purchase assets and major asset sales and related transactions. According to the plan, Tianxing Instrument plans to implement a major asset reorganization and plans to purchase 100% of the equity of Berry Hekang through a non-public issuance of A shares to all shareholders of Beijing Berry and Kang Biotechnology Co., Ltd. (hereinafter referred to as "Berry and Kang"); at the same time, Tianxing Instrument will close the review period. The assets and liabilities excluding monetary funds, notes receivable, short-term loans, notes payable, and long-term loans on the valuation base date (June 30, 2016) were sold to Chengdu Tongyu Auto Parts Products Co., Ltd. (hereinafter referred to as "Tongyu Parts"). Tongyu Parts paid the consideration in cash.

According to the Qingtian Pingbao Zi [2016] No. QDV1108 appraisal report issued by Qingdao Tianhe Asset Appraisal Co., Ltd., as of the appraisal base date, the appraised value of 100% equity of the assets that Tianxing Instrument plans to purchase is 4,305,902,900 yuan. Based on this appraised value, and determined through negotiation between the parties to the transaction, the transaction price of the assets to be purchased in this transaction is 4,300,000,000 yuan. The base date for the pricing of assets purchased through this issuance of shares is the announcement date of the resolution of the 12th extraordinary meeting of the seventh board of directors of Tianxing Instrument. The issuance price of the assets purchased through this issuance of shares is 21.14 yuan per share, which is not less than 90% of the average price of Tianxing Instrument's stock in the 20 trading days before the pricing base date. Based on this calculation, the total number of shares issued by Tianxing Instrument to all shareholders of Berry Hekang Co., Ltd. is 203,405,865.00 shares.

On April 14, 2017, Tianxing Instrument held the 14th extraordinary meeting of the seventh board of directors. In accordance with the authorization of the second extraordinary general meeting of shareholders of Tianxing Instrument in 2016, the board of directors reviewed and approved the "Proposal on Adjusting the Company's Plan for Issuing Shares to Purchase Assets and Major Asset Sales and Related Transactions", the "Proposal on the Company and Junlian Maolin and other relevant parties to sign a conditionally effective "Agreement"" and other proposals related to this plan adjustment, and agreed to adjust this transaction plan.

On April 26, 2017, the 19th meeting of the 2017 M&A and Reorganization Review Committee of the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission") approved the transaction.

On May 27, 2017, the China Securities Regulatory Commission issued the "Reply on Approving the Major Asset Reorganization of Chengdu Tianxing Instrument Co., Ltd. and the Issuance of Shares to Purchase Assets from Gao Yang and Others" No. 811 of the Securities Regulatory Commission [2017], approving this major asset reorganization.

On June 9, 2017, the nature of Berry Gene shares was changed from "joint stock limited company (unlisted, natural person investment or holding)" to "other limited liability company". After the change, the name of Berry Gene shares was changed to Beijing Berry Gene Biotechnology Co., Ltd. (hereinafter referred to as "Berry Gene").

On June 15, 2017, Berry Hekang completed the industrial and commercial change registration procedures for its 100% equity registration under the name of Tianxing Instrument.

On July 20, 2017, Tianxing Instrument held the first extraordinary general meeting of shareholders in 2017, which reviewed and approved the "Proposal on Amending the Articles of Association", "The Proposal on Changing the Company's Business Scope", "The Proposal on Changing the Company's Name and Securities Abbreviation" and "The Proposal on Increasing the Company's Registered Capital", etc.

On August 9, 2017, Tianxing Instrument completed the industrial and commercial change registration procedures and obtained the "Business License" renewed by the Chengdu Administration for Industry and Commerce. The changed unified social credit code number is 91510112633134930L. The name of Tianxing Instrument was changed from "Chengdu Tianxing Instrument Co., Ltd." to "Chengdu Berry and Kang Gene Technology Co., Ltd." The company's registered capital was changed from 151,200,000.00 yuan to 354,605,865.00 yuan, and Gao Yang and other Berry and Kangyuan shareholders became shareholders of the company.

On August 10, 2017, the company issued the "Issuance of Shares to Purchase Assets and Major Asset Sales and Related Transaction Implementation Status and New Share Listing Report", announcing the company's issuance of shares to purchase assets, major asset sales, and new share listings. The implementation of this major asset restructuring was completed.

The company's stock abbreviation was changed from "*ST Tianyi" to "Berry Gene" on August 28, 2017, and the stock code remained "000710".

After the completion of this transaction, Gao Yang became the company's controlling shareholder and actual controller.

This financial statement has been approved for issuance by the company's board of directors on April 27, 2026.

2. Basis for preparation of financial statements

1. Basics of preparation

The company uses going concern as the basis for the preparation of financial statements and the accrual basis as the accounting basis. The company generally uses historical cost to measure accounting elements, and uses replacement cost, net realizable value, present value and fair value for measurement on the premise of ensuring that the determined amount of accounting elements can be obtained and measured reliably.

2. Continued operations

The company has the ability to continue operating for at least 12 months from the end of this reporting period, and there are no major events that affect its ability to continue operating.

3. Statement on compliance with accounting standards for enterprises

The company's financial statements and notes are prepared in accordance with the "Accounting Standards for Businesses" promulgated by the Ministry of Finance, the Interpretations of Accounting Standards for Business Enterprises, the "Information Disclosure Preparation Rules No. 15 of Companies that Offer Securities to the Public - General Provisions on Financial Reports [2023 Revision]" issued by the China Securities Regulatory Commission and relevant regulations. They truly and completely reflect the company's financial status, operating results, changes in shareholders' equity, cash flows and other relevant information.

4. Important accounting policies and accounting estimates

1. Accounting period

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

2. Business cycle

The normal operating cycle is the period from when a company purchases assets for processing to when it realizes 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.

3. Accounting standard currency

The Company adopts RMB as the standard accounting currency.

4. Determination method and selection basis of importance standards

The Company prepares and discloses financial statements in compliance with the principle of materiality. The matters disclosed in the notes to the financial statements involve matters judged by materiality standards and their materiality standards. The materiality standards involved in the Company's relevant disclosure matters are as follows:

Items in the notes to the financial statements Determination method and basis for selection of materiality criteria

disclosure location

Note 6, 4, (2), ① Important individual provision for bad debts accounts for more than 5% of the balance of accounts receivable, or has a significant impact on the company's accounts receivable

Important projects under construction Note 6, 14, (1), ② Accounting for more than 5% of the balance of construction in progress, or capitalized R&D projects that have a significant impact on the company Note 7, 2, (1) Accounting for more than 5% of the balance of capitalized R&D projects, or non-wholly-owned subsidiaries that have a significant impact on the company Note 9, 1, (2) The net profit of the subsidiary accounts for more than 1% of the company's net profit at the end of the period, or has a significant impact on the company

Joint ventures or associates with significant influence Note 9.2 The closing book value of a single investee’s long-term equity investment accounts for the Company’s

More than 1% of total assets at the end of the period

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

Business merger refers to a transaction or event that combines two or more separate enterprises to form a reporting entity. Business mergers are divided into business combinations under the same control and business combinations not under the same control.

(1) Business combination under common control

The enterprises participating in the merger are ultimately controlled by the same party or the same parties before and after the merger, and the control is not temporary. It is a business merger under the same control. In the case of a business merger under the same control, the party that obtains control over other companies participating in the merger on the merger date is the merging party, and the other companies participating in the merger are the merged parties. The merger date refers to the date when the merging party actually obtains control over the merged party.

The assets and liabilities acquired by the merging party are measured according to their book value on the date of merger. The difference between the book value of the net assets obtained by the merging party and the book value of the merger consideration paid (or the total face value of the shares issued) is adjusted to the capital reserve (share premium); if the capital reserve (share premium) is insufficient to offset it, the retained earnings are adjusted.

All direct expenses incurred by the merging party for the business combination shall be included in the current profits and losses when incurred.

(2) Business combination 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.

For business combinations not under common control, the cost of the combination includes the assets paid by the purchaser on the acquisition date to obtain control of the purchased party, liabilities incurred or assumed, and the fair value of equity securities issued. Intermediary fees such as auditing, legal services, evaluation consulting, and other management fees incurred for the business combination are included in the current profits and losses when incurred. The transaction costs of equity securities or debt securities issued by the purchaser as consideration for the merger are included in the initial recognition amount of the equity securities or debt securities. The contingent consideration involved is included in the merger cost based on its fair value on the purchase date. If new or further evidence of the existing conditions on the purchase date arises within 12 months after the purchase date and the contingent consideration needs to be adjusted, the consolidated goodwill will be adjusted accordingly. The merger costs incurred by the purchaser and the identifiable net assets obtained in the merger are measured at the fair value on the acquisition date. The difference between the merger cost and the fair value of the acquiree's identifiable net assets on the acquisition date is recognized as goodwill. If the merger cost is less than the fair value share of the acquiree's identifiable net assets obtained in the merger, the fair value of the acquiree's identifiable assets, liabilities and contingent liabilities acquired and the measurement of the merger costs are first reviewed. After the 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 shall be 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 about 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 offset, the difference will be recognized as current profit and loss; except for the above circumstances, if the deferred income tax assets related to the business combination are recognized, they will be included in the current profit and loss.

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 [2012] No. 19" and "Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements" regarding the judgment criteria of "package transactions" (see Note 4.6 "Judgment Standards of Control and Preparation Method of Consolidated Financial Statements"). If it is a "package transaction", refer to the descriptions in the previous paragraphs of this section and perform accounting treatment; if it is not a "package transaction", separate individual financial statements and consolidated financial statements for relevant accounting treatment: 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 used as the initial investment cost of the investment; before the purchase date If the equity held by the acquiree involves other comprehensive income, when the investment is disposed of, the other comprehensive income related to it will 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 the 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 will be 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).

6. Control judgment standards and preparation methods of consolidated financial statements

(1) Judgment criteria for control

The scope of consolidation in consolidated financial statements is determined on the basis of control. 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. Among them, the company's current rights enable the company to dominate the relevant activities of the investee, regardless of whether the company actually exercises the right, it is deemed to have power over the investee; if the returns obtained by the company from the investee may change with the performance of the investee, it is deemed to enjoy variable returns; if the company exercises decision-making power as the main responsible person, it is deemed that the company 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.

The Company makes a judgment on whether to control the investee based on comprehensive consideration of all relevant facts and circumstances. Relevant facts and circumstances mainly include: the purpose of the establishment of the investee; the relevant activities of the investee and how to make decisions on related activities; whether the rights enjoyed by the company currently enable the company to dominate the relevant activities of the investee; whether the company enjoys variable returns by participating in the relevant activities of the investee; whether the company has the ability to use its power over the investee to affect the amount of its returns; the relationship between the company and other parties, etc. Once changes in relevant facts and circumstances lead to changes in the relevant elements involved in the above definition of control, the company will reassess.

(2) Method of preparing consolidated financial statements

The Company begins to include the subsidiary in the scope of consolidation from the date it obtains actual control over the net assets and production and operation decisions of the subsidiary; it ceases to be included in the scope of consolidation from the date it loses actual control. 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. For subsidiaries added through business mergers under common control and merged parties under absorption mergers, their operating results and cash flows from the beginning of the current period to the date of merger have been appropriately included in the consolidated income statement and consolidated cash flow statement, and the comparative figures of the consolidated financial statements have been adjusted at the same time. When preparing consolidated financial statements, if the accounting policies or accounting periods adopted by a subsidiary and the Company are inconsistent, necessary adjustments will be made to the financial statements of the subsidiary in accordance with the Company's accounting policies and accounting periods. For subsidiaries acquired through business combinations not under common control, their financial statements will be adjusted based on the fair value of the identifiable net assets on the date of acquisition.

All significant intra-group balances, transactions and unrealized profits are eliminated when preparing the consolidated financial statements.

The portion of the subsidiary's shareholders' equity and net profit and loss for the current period that is not owned by the company is separately presented as minority shareholders' equity and minority shareholders' profit and loss in the consolidated financial statements under shareholders' equity and net profit. The share of minority shareholders' equity in the current period's net profits and losses of a subsidiary is listed as "minority shareholders' profits and losses" under the net profit item in the consolidated income statement. If the losses of a subsidiary shared by minority shareholders exceed the minority shareholders' share of the subsidiary's opening shareholders' equity, the minority shareholders' equity will still be offset.

When control over an original subsidiary is lost due to the disposal of part of the equity investment or other reasons, the remaining equity is remeasured according to its fair value on the date of loss of control. The difference between the sum of the consideration obtained for disposing of the equity and the fair value of the remaining equity, minus the share of the original subsidiary's net assets calculated continuously from the date of purchase based on the original shareholding ratio, 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 will be accounted for on the same basis as the subsidiary'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, see Note 4.12 "Long-term Equity Investment" or Note 4.10 "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. If the terms, conditions and economic impact of various transactions related to the disposal of equity investments in subsidiaries meet one or more of the following circumstances, it usually indicates that multiple transactions should be accounted for as a package deal:

1 These transactions were entered into simultaneously or with consideration of mutual effects;

2 These transactions as a whole can achieve a complete business result;

3 The occurrence of one transaction depends on the occurrence of at least one other transaction;

4 A transaction that is uneconomical on its own is economical when considered together with other transactions.

If it does not belong to a package deal, each transaction will be accounted for in accordance with the applicable principles of "partial disposal of long-term equity investment in a subsidiary without losing control" (see Note 4.12 "Long-term equity investment" for details) and "loss of control over the original subsidiary due to disposal of part of the equity investment or other reasons" (see the previous paragraph for details). If the various transactions involving the disposal of equity investments in a subsidiary until the loss of control belong to a package transaction, each transaction will be accounted for as a transaction in which the subsidiary is disposed of and control is lost; however, the difference between the price of each disposal and the share of the net assets of the subsidiary 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.

7. Classification of joint arrangements and accounting treatment methods for joint operations

A joint arrangement refers to an arrangement that is jointly controlled by two or more parties. The company divides the joint venture arrangement into joint operations and joint ventures based on the rights it enjoys and the obligations it assumes in the joint venture arrangement. A 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 and is handled in accordance with the accounting policies described in Note 4, 12 "Long-term Equity Investment" (2) ② "Long-term Equity Investment Accounted for by the Equity Method".

For joint operations, the company as a joint venture party recognizes the assets held separately by the company and the liabilities assumed separately, as well as the assets held jointly and the liabilities assumed jointly according to the company's share; the income generated from the sale of the company's share of the joint operation output is recognized; the income generated by the joint operation from the sale of output is recognized according to the company's share; the expenses incurred by the company alone are recognized, and the expenses incurred by the joint operation are recognized according to 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 provisions, 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.

8. Determination standards for cash and cash equivalents

Cash refers to cash on hand and deposits that can be used for payment at any time. Cash equivalents refer to investments held by the company that have 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 value changes.

9. Foreign currency business and foreign currency statement conversion

(1) Method for determining the conversion exchange rate when foreign currency transactions occur

When a foreign currency transaction is initially recognized, the foreign currency amount is converted into RMB using the central parity rate of the RMB foreign exchange rate announced by the People's Bank of China on the day of the transaction.

(2) On the balance sheet date, foreign currency monetary items and foreign currency non-monetary items are processed according to the following methods:

① Foreign currency monetary items are converted using the central parity rate of the RMB and foreign exchange rates announced by the People's Bank of China 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 on initial recognition or the previous balance sheet date shall be included in the current profit and loss.

② Foreign currency non-monetary items measured at historical cost are still converted using the spot exchange rate on the date of the transaction, without changing the accounting functional currency amount; 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 functional currency amount and the original accounting functional currency amount is treated as a change in fair value (including exchange rate changes), and is included in the current profit and loss or other comprehensive income according to the nature of the non-monetary item.

Monetary items refer to the monetary funds held by the company and the assets to be collected or liabilities to be paid in fixed or determinable amounts. Non-monetary items refer to items other than monetary items.

(3) Conversion method for foreign currency financial statements of overseas operating entities:

1. Assets and liability items in the balance sheet are translated using the spot exchange rate on the balance sheet date. Owner's equity items, except for the "undistributed profits" items, are translated using the spot exchange rate at the time of occurrence;

2. Income and expense items in the income statement are converted using the spot exchange rate on the date of the transaction (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);

3 The translation difference of foreign currency financial statements resulting from the above ① and ② conversion shall be presented separately under the owner's equity item in the balance sheet.

4 The company converts the financial statements of overseas operations in a hyperinflationary economy according to the following methods:

Balance sheet items are restated using the general price index, income statement items are restated using changes in the general price index, and then converted according to the spot exchange rate on the latest balance sheet date.

When overseas operations are no longer in a hyperinflationary economy, the restatement will cease and the restated financial statements will be converted at the price level on the date of cessation.

5. When the company disposes of an overseas operation, the translation difference of the foreign currency financial statements listed under the owner's equity item in the balance sheet and related to the overseas operation will be transferred from the owner's equity item to the current profit and loss of the disposal; if the overseas operation is partially disposed of, the translation difference of the foreign currency financial statement of the disposal part will be calculated based on the proportion of disposal and transferred to the current profit and loss of the disposal.

6. Financial instruments

A financial instrument refers to a contract that forms a financial asset of one party and a financial liability or equity instrument of another party. When the company becomes a party to a financial instrument contract, the relevant financial assets or financial liabilities are recognized.

(1) Financial assets

1 Classification and initial measurement

Based on the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the company divides financial assets into:

1. 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 the contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements, that is, the cash flows generated on a specific date are only payments of principal and interest based 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.

2. Financial assets measured at fair value and changes included in other comprehensive income

The company's business model for managing such financial assets aims at both collecting contractual cash flows and selling them, and the contractual cash flow characteristics of such financial assets are consistent with the basic 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. Among them:

<1> Debt instrument investments measured at fair value and changes included in other comprehensive income

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

<2> Equity instrument investments measured at fair value and changes included in other comprehensive income

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

For investments in non-trading equity instruments, the company may irrevocably designate them as financial assets at fair value through other comprehensive income upon initial recognition. This designation is made on an individual investment basis and the underlying investment meets the definition of an equity instrument from the issuer's perspective.

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

The company classifies financial assets other than the above-mentioned financial assets measured at amortized cost and financial assets measured at fair value through other comprehensive income as financial assets measured at fair value through profit or loss for the current period. 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.

The company will measure equity instrument investments over which it has no control, joint control or significant influence at fair value and include changes in current profits and losses, and list them as trading financial assets; if they are expected to be held for more than one year from the balance sheet date, they will be listed as other non-current financial assets.

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 contain 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.

2 Impairment of financial assets

1. Recognition method of impairment provision

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).

Credit loss refers to the difference between all contractual cash flows receivable under the contract and all cash flows expected to be received by the company, discounted at the original effective interest rate, that is, the present value of all cash shortfalls. Among them, 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 the initial recognition. If the credit risk has increased significantly since the initial recognition, the company measures the loss provisions at an amount equivalent to the expected credit losses during the entire duration; if the credit risk has not increased significantly since the initial recognition, the company measures the loss provisions at an amount equivalent to the expected credit losses in the next 12 months. For purchased or originated financial assets that have suffered credit impairment, the company will only recognize the cumulative change in expected credit losses during the entire duration since initial recognition as loss provisions on the balance sheet date. The Company considers all reasonable and evidence-based information, including forward-looking information, when assessing expected credit losses.

For receivables and contract assets that are formed by transactions regulated by "Accounting Standards for Business Enterprises No. 14 - Revenue" and do not contain significant financing components or the company does not consider the financing components in contracts that do not exceed one year, the company uses simplified measurement methods and measures loss provisions based on an amount equivalent to the expected credit losses during the entire duration.

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

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

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

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

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

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 approach 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: receivables that are in dispute with the other party or involved in litigation or arbitration; receivables 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 current carrying amount of impairment provisions, the difference will be recognized as impairment losses; if it is less than the current carrying amount of impairment provisions, the difference will be recognized as impairment gains.

5. Methods for determining credit losses of various financial assets

Recognition standards and accrual methods for bad debt provisions for receivables such as notes receivable, accounts receivable, receivables financing, and other receivables. If bad debt provisions are made for accounts receivable based on a combination of credit risk characteristics, the combination category and basis for determination should be disclosed. If the combination of credit risk characteristics is confirmed based on aging, the aging calculation method should be disclosed. If bad debt provisions are made for accounts receivable on an individual basis, the judgment on determining the individual provision should be disclosed.

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, long-term receivables, etc. In addition, for contract assets 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> Accounts receivable with expected credit losses based on combination of credit risk characteristics

Accounts receivable portfolio:

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.

For accounts receivable divided into individual items, the company refers to historical credit loss experience, combines 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.

Other receivables portfolio:

Current and advance social security and provident fund payments

Deposit, security deposit, reserve fund

Export tax refund

For other receivables classified into portfolios, the company refers to historical credit loss experience, combines 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. No provision for bad debts is required for deposits, margins, reserves in other receivable portfolios and other receivables from related parties within the scope of consolidation. In order to reflect changes in the credit risk of financial instruments since initial recognition, the company and its subsidiaries re-measure expected credit losses on each balance sheet date, and the resulting increase or reversal of loss provisions shall be included in the current profits and losses as impairment losses or gains. For financial assets measured at amortized cost, the loss provision is deducted from the book value of the financial asset listed in the balance sheet; for debt investments measured at fair value with changes included in other comprehensive income, the company and its subsidiaries recognize their loss provisions in other comprehensive income and do not deduct the book value of the financial asset.

<2> Comparison table of aging and expected credit loss rate of aging portfolio

Aging Expected credit loss rate of accounts receivable as of the end of the period Expected credit loss rate of other receivables as of the end of the period within 1 year (inclusive, the same below) 10.73% 10.73% 1-2 years 29.15% 29.15% 2-3 years 48.42% 48.42% 3-4 years 68.66% 68.66% 4-5 years 99.92% 99.92% Aging Expected credit loss rate of accounts receivable as of the end of the period Expected credit loss rate of other receivables as of the end of the period More than 5 years 100.00% 100.00% The aging of accounts receivable and other receivables is calculated from the month when the payment is actually incurred.

Notes receivable and accounts receivable measured at fair value and whose changes are included in other comprehensive income have a maturity period within one year (including one year) from the initial recognition date, and are reported as receivable financing. The company measures impairment losses based on the amount of expected credit losses throughout the entire duration.

For lease receivables, receivables and contract assets formed from transactions regulated by "Accounting Standards for Business Enterprises No. 14 - Revenue" and do not contain significant financing components or the company does not consider the financing components in contracts that do not exceed one year, the company uses simplified measurement methods and measures loss provisions based on an amount equivalent to the expected credit losses during the entire duration.

<3> Recognition standards for accounts receivable and contract assets for which expected credit losses are accrued individually

For receivables and contract assets whose credit risk is significantly different from the combined credit risk, the company accrues expected credit losses on an individual basis.

3 Recognition basis and measurement method for derecognition of financial asset transfers

Financial assets shall be derecognized if they meet one of the following conditions:

1. The contractual right to receive cash flows from the financial asset terminates;

2. The financial asset has been transferred, and the company transfers substantially all risks and rewards of ownership of the financial asset to the transferee;

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

When other equity instrument investments are derecognised, the difference between their book value and the sum of the consideration received and the cumulative amount of changes in fair value that were originally directly included in other comprehensive income is included in retained earnings; when the remaining financial assets are derecognised, the difference between their book value and the sum of the consideration received and the cumulative amount of changes in fair value that was originally directly included in other comprehensive income is included in the current profit and loss.

If the company 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-deactivated parts according to their relative fair values, and the difference between the sum of the consideration received due to 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 a company sells a financial asset with recourse, or endorses and transfers a financial asset it holds, it needs to determine whether substantially all the risks and rewards of ownership of the financial asset 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 write-off

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 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. However, financial assets that are written down may still be affected by enforcement activities in accordance with the company's procedures for recovering amounts due.

If a financial asset that has been written down is later recovered, the reversal of the impairment loss will be included in the profit and loss of the current period of recovery.

(2) Financial liabilities

Upon initial recognition, financial liabilities are classified into financial liabilities measured at amortized cost and financial liabilities measured at fair value through profit or loss for the current period.

The Company classifies financial liabilities as financial liabilities measured at amortized cost except for the following:

1 Financial liabilities measured at fair value through profit or loss for the current period include trading financial liabilities (including derivatives that are financial liabilities) and financial liabilities designated as measured at fair value through profit or loss for the current period.

2 The transfer of financial assets does not meet the conditions for derecognition or the financial liabilities formed by continued involvement in the transferred financial assets.

3. Financial guarantee contracts that do not fall under the circumstances of item ① or ② of this article, and loan commitments at lower than market interest rates that do not fall under the circumstances of item ① of this article. In a business combination not under common control, if the contingent consideration recognized by the company as the purchaser forms a financial liability, the financial liability shall be accounted for at fair value with changes included in current profits and losses.

At the time of initial recognition, in order to provide more relevant accounting information, the company can designate financial liabilities as financial liabilities measured at fair value with changes included in current profits and losses, and this designation meets one of the following conditions:

1. Ability to eliminate or significantly reduce accounting mismatches.

2. Manage and evaluate the performance of a portfolio of financial liabilities or a portfolio of financial assets and financial liabilities based on fair value in accordance with the enterprise risk management or investment strategy stated in formal written documents, and report to key management personnel on this basis within the company. This designation, once made, cannot be revoked.

The company's financial liabilities are mainly financial liabilities measured at amortized cost, including notes and accounts payable, other payables, loans and bonds payable, etc. Such financial liabilities are initially measured based on their fair value minus transaction costs, and are subsequently measured using the effective interest method. Those with a maturity of less than one year (including one year) are listed as current liabilities; those with a maturity of more than one year but due within one year (including one year) from the balance sheet date are listed as non-current liabilities due within one year; the rest are listed as non-current liabilities. When the current obligation of a financial liability has been discharged in whole or in part, the company shall terminate the recognition of the financial liability or the discharged part of the obligation. The difference between the book value of the derecognized part and the consideration paid shall be included in the current profit and loss.

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).

(3) Determination of fair value of financial instruments

For financial instruments with an active market, their fair value is determined based on the quoted price in the active market. For financial instruments for which there is no active market, valuation techniques are used to determine their fair value. The company divides the input values used in the valuation technology into the following levels and uses them in sequence:

1 The first-level input value is the unadjusted quoted price in the active market for the same asset or liability that can be obtained on the measurement date; 2 The second-level input value is the directly or indirectly observable input value of the relevant asset or liability in addition to the first-level input value, including: the quoted price of similar assets or liabilities in the active market; the quoted price of the same or similar asset or liability in the inactive market; other observable input values other than quoted prices, such as interest rates and yield curves that can be observed during the normal quotation interval; market verification input values, etc.; 3 The third level of input values are unobservable input values of related assets or liabilities, including interest rates that cannot be directly observed or cannot be verified by observable market data, stock volatility, future cash flows of disposal obligations assumed in business combinations, financial forecasts made using its own data, etc.

(4) Subsequent measurement

After initial recognition, the company conducts subsequent measurement of different types of financial assets at amortized cost, at fair value with changes included in other comprehensive income, or at fair value with changes included in current profits and losses.

After initial recognition, the company will measure different types of financial liabilities at amortized cost, at fair value with changes included in current profits and losses, or by other appropriate methods for subsequent measurement.

The amortized cost of a financial asset or financial liability is determined by adjusting the initial recognition amount of the financial asset or financial liability as follows:

1 Less principal repaid.

2 Plus or minus the accumulated amortization amount formed by amortizing the difference between the initial recognition amount and the maturity amount using the effective interest method.

3 Deduct accumulated loss provisions (only applicable to financial assets).

The company recognizes interest income based on the effective interest rate method. Interest income is calculated and determined based on the book balance of the financial asset multiplied by the actual interest rate, except for the following circumstances:

1. For purchased or originated financial assets that have suffered credit impairment, the company will calculate and determine its interest income based on the amortized cost of the financial asset and the credit-adjusted actual interest rate from the initial recognition.

2. For purchased or originated financial assets that are not credit-impaired but become credit-impaired in subsequent periods, the company will calculate and determine its interest income based on the amortized cost and actual interest rate of the financial assets in subsequent periods. If the company uses the actual interest rate method to calculate interest income on the amortized cost of financial assets in accordance with the above policies, if the financial instrument no longer has credit impairment due to its credit risk improvement in the subsequent period, and this improvement can be objectively linked to an event that occurs after the application of the above policies (such as the credit rating of the debtor being upgraded), the company will calculate and determine interest income based on the actual interest rate multiplied by the book balance of the financial asset.

(5) Equity instruments

An equity instrument is a contract that provides evidence of ownership of a residual interest in a 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 a 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.

11. Inventory

(1) Classification of inventory

Inventories include raw materials, work in progress, goods in stock, goods shipped, etc.

(2) Valuation method for issued inventory

Inventories are valued using the weighted average method when shipped.

(3) Basis for determining net realizable value of inventories and method of accruing inventory depreciation reserves

On the balance sheet date, inventories are measured at the lower of cost and net realizable value. If the cost of the inventory is higher than its net realizable value, a provision for inventory depreciation should be made and included in the current profit and loss. Net realizable value refers to the estimated selling price of inventory in daily activities minus the estimated costs to be incurred upon completion, estimated sales expenses and related taxes.

The basis for determining the net realizable value of various types of inventories is as follows:

1. For inventory of goods directly for sale, such as goods in stock, goods shipped and materials for sale, during the normal production and operation process, the net realizable value is determined by the estimated selling price of the inventory minus the estimated sales expenses and related taxes.

2. For materials inventories that need to be processed, in the normal production and operation process, the net realizable value is determined based on the estimated selling price of the finished products minus the estimated costs to be incurred upon completion, estimated sales expenses and related taxes.

3. On the balance sheet date, if part of the same inventory has a contract price and other parts do not have a contract price, its net realizable value shall be determined separately and compared with its corresponding cost to determine the amount of provision or reversal of inventory depreciation reserves.

Inventory depreciation provisions are accrued on a single inventory item (or inventory category). For inventories that are related to product series produced and sold in the same region, have the same or similar end use or purpose, and are difficult to measure separately from other items, inventory depreciation provisions are made on a consolidated basis.

(4) Inventory inventory system

The inventory system of inventories adopts the perpetual inventory system.

(5) Amortization method for low-value consumables and packaging materials

Low-value consumables are amortized using the one-time write-off method.

The packaging materials are amortized using the one-time write-off method.

12. Long-term equity investment

The long-term equity investment referred to in this section refers to the long-term equity investment in which the company has control, joint control or significant influence on the investee unit. Long-term equity investments that the company does not have control, joint control or significant influence over the investee are accounted for as financial assets measured at fair value with changes included in current profits and losses. If they are non-trading, the company may choose to designate them as financial assets measured at fair value with changes included in other comprehensive income at the time of initial recognition. For details of its accounting policies, see Note 4, 10 "Financial Instruments".

Joint control refers to the company’s shared control over an arrangement in accordance with relevant agreements, and decisions related to the arrangement must be made with the unanimous consent of the parties 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 initial investment cost of the long-term equity investment shall be the share of the combined party's book value in the consolidated financial statements of the ultimate controlling party on the date of merger. 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 shareholders' equity of the merged party in the consolidated financial statements of the ultimate controlling party 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 shares issued shall be regarded as the share 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 by business combinations are initially measured at cost. Depending on the way the long-term equity investment is obtained, 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.

(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.

1 Long-term equity investment calculated using the 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.

2 Long-term equity investments accounted for using the 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 invested unit, 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 investee other than net profit or loss, other comprehensive income and profit distribution, the book value of the long-term equity investment is adjusted and included in the capital reserve. 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. For transactions between the company and associates and joint ventures, if the assets invested or sold do not constitute business, the unrealized internal transaction profits and losses shall be offset according to the proportion attributable to the company, and investment profits and losses shall be 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 will not be offset. 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 profits in the subsequent period, the company will resume recognizing the income sharing amount after the income sharing amount makes up for the unrecognized loss sharing amount.

3 Acquisition of minority stakes

When preparing consolidated financial statements, the capital reserve will be adjusted for the difference between the new long-term equity investment due to the purchase of minority equity and the share of the subsidiary's net assets calculated continuously from the purchase date (or merger date) based on the new shareholding ratio. If the capital reserve is insufficient for offset, the retained earnings will be adjusted.

4 Disposal 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 4.6, "Judgment Standards for Control and Preparation Method of Consolidated Financial Statements" (2).

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 the investee's direct disposal 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.

For details on the recognition standards and accrual methods of long-term equity investment impairment provisions, please refer to Note 4, 17 "Impairment of Long-term Assets".

13. Fixed assets

(1) Fixed assets recognition conditions

Fixed assets refer to tangible assets held for the purpose of producing goods, providing labor services, leasing or operating management, and whose useful life exceeds one accounting year. Fixed assets can only be recognized if they meet the following conditions at the same time:

1. The economic benefits related to the fixed asset are likely to flow into the enterprise;

2 The cost of the fixed asset can be measured reliably.

(2) Depreciation methods of various fixed assets

All types of fixed assets use the straight-line method and are depreciated according to the following useful lives, estimated net residual value rates and depreciation rates:

Category Depreciation method Service life Estimated net salvage value rate Annual depreciation rate Houses and buildings Straight-line method 20 years to 40 years 5% 4.750%-2.375% Houses and buildings - decoration Straight-line method 10 years 5% 9.500% Machinery and equipment Straight-line method 5 years-8 years 5% 19.000%-11.875% Electronics and office equipment Straight-line method 5 years 5% 19.000% Transportation equipment Average life method 5 years 5% 19.000%

(3) For details on the impairment testing method and accrual method of fixed asset impairment provisions, please refer to Note 4, 17 "Impairment of Long-term Assets".

14. 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.

Please refer to Note 4, 17 "Impairment of Long-term Assets" for details on the impairment testing method and impairment provision accrual method for projects under construction.

15. Borrowing costs

(1) If the borrowing costs incurred by the company can be directly attributed to the acquisition, construction or production of assets that meet the capitalization conditions, they shall be capitalized and included in the cost of the relevant assets. Assets that meet the conditions for capitalization refer to fixed assets, investment real estate, inventories and other assets that require a considerable period of time (usually one year or more) to reach the intended usable and salable state through acquisition, construction or production activities. Other borrowing costs shall be recognized as expenses based on the amount incurred when incurred and included in the current profits and losses. Borrowing costs include borrowing interest, amortization of discounts or premiums, auxiliary expenses, and exchange differences arising from foreign currency borrowings.

(2) Borrowing costs will be capitalized if they meet the following conditions at the same time:

1 Asset expenditures have occurred. Asset expenditures include cash paid for the acquisition, construction or production of assets that meet capitalization conditions, expenditures in the form of transfers of non-cash assets or the assumption of interest-bearing debts;

2 Borrowing costs have been incurred;

3. The purchase, construction or production activities necessary to bring the asset to its intended usable or salable state have begun.

When the acquisition, construction or production of assets that meet the capitalization conditions reaches the intended usable or salable state, the capitalization of borrowing costs ceases. 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. Borrowing costs incurred during the interruption period are recognized as expenses and included in the current profit and loss until the acquisition, construction or production activities of the assets restart. If the interruption is a necessary procedure for the acquired, constructed or produced assets that qualify for capitalization to reach the intended usable or salable state, the capitalization of borrowing costs will continue.

(3) During the capitalization period, the capitalized amount of interest (including amortization of discounts or premiums) for each accounting period shall be determined in accordance with the following provisions:

1. If a special loan is borrowed for the purpose of purchasing, constructing or producing assets that meet the capitalization conditions, the amount shall be determined based on the actual interest expense incurred on the special loan in the current period, minus the interest income obtained from depositing the unused borrowed funds in the bank or the investment income obtained from temporary investment.

2. If general borrowings are occupied for the purpose of purchasing, constructing or producing assets that meet the capitalization conditions, the amount of interest that should be capitalized on the general borrowings shall be calculated and determined based on the weighted average of the asset disbursements exceeding the part of the special borrowings multiplied by the capitalization rate of the general borrowings occupied. The capitalization rate is determined based on the weighted average interest rate on general borrowings.

If there is a discount or premium on the loan, the amount of the corresponding amortization of the discount or premium for each accounting period shall be determined according to the actual interest rate method, and the interest amount of each period shall be adjusted.

During the capitalization period, the amount of interest capitalized in each accounting period shall not exceed the actual amount of interest incurred on the relevant borrowings in the current period.

(4) Ancillary expenses incurred by special borrowings, which occur before the assets that are purchased, constructed or produced that meet the capitalization conditions reach the intended usable or salable state, shall be capitalized according to the amount incurred when incurred and included in the cost of the assets that qualify for capitalization; if the auxiliary expenses incurred after the assets that meet the capitalization conditions that are purchased, constructed or produced reach the intended usable or salable state, shall be recognized as expenses based on the amount incurred when incurred and included in the current profits and losses. Ancillary expenses incurred for general borrowings are recognized as expenses based on the amount incurred when incurred and included in the current profit and loss.

16. Intangible assets

(1) Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled by an enterprise. Intangible assets are initially measured at cost. Analyze and judge the useful life of intangible assets when acquiring them.

(2) Factors that companies usually consider when determining the useful life of intangible assets:

1. The usual life cycle of the products produced using the asset and the available information on the service life of similar assets;

2. The current situation of technology, process, etc. and estimates of future development trends;

3. Market demand for products produced or services provided with the asset;

4 Anticipated actions by current or potential competitors;

5. Expected maintenance expenses to maintain the asset’s ability to bring economic benefits, and the company’s expected ability to pay related expenses; 6. Relevant legal provisions or similar restrictions on the control period of the asset, such as franchise period, lease period, etc.;

7 Correlation with the service life of other assets held by the enterprise, etc.

If the period during which an intangible asset can bring economic benefits to the company cannot be foreseen, it is regarded as an intangible asset with an indefinite useful life.

(3) Intangible assets with limited service life are amortized according to the straight-line method. At the end of each year, the company reviews the service life and amortization method of intangible assets with limited service life. If the useful life and amortization method of intangible assets are different from previous estimates, the amortization period and amortization method will be changed.

For intangible assets with limited service life, when calculating amortization using the straight-line method, the service life and estimated net residual value rate of each intangible asset are as follows:

Name Service life Estimated net residual value rate Land use rights 50 years 0.00% Medical device manufacturing enterprise license 5 years 0.00% Medical device registration certificate 10 years 0.00% Patent licensing fee 10 years - 20 years 0.00% Software 3 years - 10 years 0.00% For details on the impairment test method and impairment provision accrual method for intangible assets with limited service life, please refer to Note 4, 17 "Impairment of long-term assets".

(4) Internal research and development

1 Expenditures on internal research and development projects, including research phase expenditures and development phase expenditures, including:

1. Research refers to original planned investigation conducted to obtain and understand new scientific or technical knowledge.

2. Development refers to the application of research results or other knowledge to a plan or design before commercial production or use to produce new or substantially improved materials, devices, products, etc.

2 Expenditures on internal research and development projects in the research phase are included in the current profits and losses when incurred; expenditures in the development phase are recognized as intangible assets if they meet the following conditions:

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

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

3. The way intangible assets generate economic benefits, including 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 should 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. Expenditures attributable to the development stage of the intangible asset can be measured reliably.

17. Impairment of long-term assets

For non-current non-financial assets such as fixed assets, construction in progress, right-of-use assets, intangible assets with limited useful lives, 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.

As far as the impairment test of goodwill is concerned, the book value of goodwill formed due to a business combination shall be allocated to the relevant asset groups in a reasonable manner from the date of purchase; if it is difficult to allocate it to the relevant asset groups, it shall be allocated to the relevant asset group combinations. The relevant asset group or combination of asset groups is an asset group or combination of asset groups that can benefit from the synergistic effects of the business combination, and is no larger than the reporting segment determined by the company.

When conducting an impairment test on a relevant asset group or combination of asset groups that contains goodwill, if there are signs of impairment in the asset group or combination of asset groups that are related to goodwill, first conduct an impairment test on the asset group or combination of asset groups that does not contain goodwill, calculate the recoverable amount, and recognize the corresponding impairment loss. Then conduct an impairment test on the asset group or asset group combination that contains goodwill, and compare its book value with the recoverable amount. If the recoverable amount is lower than the book value, the amount of impairment loss will first be deducted from the book value of the goodwill allocated to the asset group or asset group combination, and then based on other assets other than goodwill in the asset group or asset group combination. The book value of the asset shall be deducted from the book value of other assets in proportion, but the book value of each asset after deduction shall not be lower than the net amount of the asset's fair value minus disposal costs (if it can be determined) and the present value of the asset's expected future cash flows (if it can be determined), whichever is higher, and shall not be lower than zero.

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

18. Long-term deferred expenses

Long-term deferred expenses are various expenses that have been incurred by the company but should be borne by the current and subsequent periods with an amortization period of more than 1 year (excluding 1 year). Long-term deferred expenses are amortized evenly during the benefit period. If the long-term deferred expenses cannot benefit future accounting periods, all the amortized value that has not yet been amortized will be transferred to the current profit and loss.

Long-term deferred expenses are amortized on an average basis (straight-line method), and the amortization period is as follows:

Name Amortization period decoration fee 4-10 years/remaining lease contract period

19. Contract liabilities

Contract liabilities reflect consideration received or receivable from customers in connection with obligations to transfer goods to customers. Before transferring the goods to the customer, if the customer has paid the contract consideration or has obtained the unconditional right to receive the contract consideration, the contract liability shall be recognized according to the amount received or receivable 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.

20. Employee compensation

(1) Scope of employee remuneration

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. Employee compensation includes short-term compensation, post-employment benefits, termination benefits and other long-term employee benefits. Benefits provided by the company to employees' spouses, children, dependents, survivors of deceased employees and other beneficiaries are also employee benefits.

(2) Short-term compensation refers to the employee compensation that the company needs to pay in full within twelve months after the end of the annual reporting period in which employees provide relevant services.

Short-term compensation includes employee wages, bonuses, allowances and subsidies, social insurance premiums such as employee welfare fees, medical insurance premiums, work-related injury insurance premiums and maternity insurance premiums, housing provident funds, labor union funds and employee education funds, short-term paid absences, short-term profit sharing plans, non-monetary benefits and other short-term compensation.

Short-term compensation During the accounting period when employees provide services to the company, actual short-term compensation is recognized as a liability and included in the current profit and loss or related asset costs.

(3) Post-employment benefits refer to various forms of remuneration and benefits provided by the company in order to obtain the services provided by the employees after the employees retire or terminate the labor relationship with the company, excluding short-term remuneration and dismissal benefits.

Post-employment benefit plans include defined contribution plans and defined benefit plans. Among them, a defined contribution plan refers to a post-employment benefit plan in which the company no longer bears further payment obligations after paying a fixed fee to an independent fund; a defined benefit plan refers to a post-employment benefit plan other than a defined contribution plan.

Defined contribution plans include basic pension insurance, unemployment insurance, etc. During the accounting period when employees provide services, the deposit amount payable calculated according to the defined contribution plan is recognized as a liability and included in the current profit and loss or related asset costs.

At the end of the reporting period, the employee compensation costs generated by the defined benefit plan are recognized as the following components:

1 Service costs include current service costs, past service costs and settlement gains or losses.

2. The net interest on the net liabilities or net assets of a defined benefit plan, including interest income on plan assets, interest expenses on defined benefit plan obligations, and interest affected by the asset ceiling.

3 Changes resulting from remeasurement of net liabilities or net assets of defined benefit plans.

Unless other accounting standards require or allow employee benefit costs to be included in asset costs, items ① and ② above should be included in current profits and losses; item ③ should be included in other comprehensive income and are not allowed to be transferred back to profit or loss in subsequent accounting periods, but these amounts recognized in other comprehensive income can be transferred within the scope of equity.

Under a defined benefit plan, past service costs are recognized as current expenses on the earliest of the following dates:

1. When modifying the defined benefit plan.

2. When the enterprise confirms relevant restructuring expenses or dismissal benefits.

When a defined benefit plan is settled, a settlement gain or loss is recognized.

(4) Termination benefits refer to the compensation given to employees by the company to terminate the labor relationship with employees before the employee's labor contract expires, or to encourage employees to voluntarily accept layoffs.

If the company provides dismissal benefits to employees, the employee compensation liabilities arising from the dismissal benefits will be recognized and included in the current profit and loss at the earliest of the following two situations: when the company cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor relations plan or layoff proposal; when the company recognizes the costs or expenses related to the restructuring involving the payment of dismissal benefits.

(5) Other long-term employee benefits refer to all employee benefits except short-term salary, post-employment benefits, and termination benefits, including long-term paid absences, long-term disability benefits, long-term profit sharing plans, etc.

Other long-term employee benefits provided by the company to employees that meet the conditions of the defined contribution plan shall be processed in accordance with the relevant provisions of the defined contribution plan mentioned above.

Except for situations where the conditions for a defined contribution plan are met, other long-term employee welfare net liabilities or net assets are recognized and measured in accordance with the relevant provisions of the defined benefit plan. At the end of the reporting period, the enterprise shall recognize the employee compensation costs generated by other long-term employee benefits as the following components:

1 Service cost.

2. Net interest on other long-term employee benefits net liabilities or net assets.

3 Changes resulting from remeasurement of other long-term employee benefits net liabilities or net assets.

In order to simplify the relevant accounting treatment, the total net amount of the above items is included in the current profit and loss or related asset costs.

21. Estimated liabilities

If 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 borne by the enterprise;

(2) Fulfilling this obligation is likely to result in the outflow of economic benefits from the enterprise;

(3) The amount of the obligation can be measured reliably.

Estimated liabilities should be initially measured based on the best estimate of the expenditure required to fulfill the relevant current obligations.

22. 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.

2 Cash-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 right becomes exercisable immediately after grant, the relevant costs or expenses will be included on the date of grant, and liabilities will be increased accordingly; if the right is exercisable only after services within the waiting period are completed or specified performance conditions are met, on each balance sheet date of the waiting period, based on the best estimate of the exercitation situation and the fair value of the liability borne by the company, the services obtained in the current period will be included in costs or expenses, and 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 will continue to be performed on the services obtained, as if 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.

23. Income

(1) Principles of revenue recognition

When a contract with a customer meets both of the following conditions, revenue will be recognized when the customer obtains control of the relevant goods:

1. All parties to the contract have approved the contract and promised to perform their respective obligations;

2. The contract clarifies the rights and obligations of the parties to the contract related to the transferred goods or provision of services;

3. The contract has clear payment terms related to the transferred goods;

4. 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; 5. The consideration to which the company is entitled for transferring goods to customers is likely to be recovered.

Evaluate the contract on the contract inception date, identify each individual performance obligation contained in the contract, and allocate the transaction price to each individual performance obligation in accordance with the relative proportion of the stand-alone 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. Then determine whether each individual performance obligation is performed within a certain period of time or at a certain point in time, and revenue is recognized when each individual performance obligation is fulfilled.

If one of the following conditions is met, the performance obligation is performed within a certain period of time; otherwise, the performance obligation is performed at a certain point in time:

1. When the enterprise performs the contract, the customer obtains and consumes the economic benefits brought by the enterprise's performance;

2. The customer can control the goods under construction during the company's performance of the contract;

3. The goods produced by the enterprise during the performance of the contract have irreplaceable uses, and the enterprise has the right to collect payment for the cumulative performance part completed so far during the entire contract period.

For performance obligations performed within a certain period of time, revenue is recognized based on the performance progress within that period. The progress of contract performance is determined using the input method or the output method based on the nature of the transferred goods. When the progress of contract performance cannot be reasonably determined and the costs incurred 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, revenue will be recognized 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 following signs should be considered:

<1> The enterprise has the current right to receive payment for the product, that is, the customer has the current payment obligation for the product;

<2> The enterprise has transferred the legal ownership of the goods to the customer, that is, the customer already has the legal ownership of the goods;

<3> The enterprise has physically transferred the commodity to the customer, that is, the customer has physically taken possession of the commodity;

<4> 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;

<5> The customer has accepted the product;

<6> Other indications that the customer has obtained control of the goods.

(2) Specific method of revenue recognition:

For performance business performed at a certain point in time, the company recognizes revenue at the point when the customer obtains control of the relevant goods or services. The specific confirmation method is as follows:

1 Service income: Service income from testing services and basic scientific research services is recognized when the service has been completed and the economic benefits related to the service are likely to flow into the company;

2 Revenue from equipment sales (including smart bodies): Revenue is recognized after the goods are shipped to the agreed delivery location in accordance with the agreement or contract and accepted by the buyer;

3 Revenue from reagent sales: The goods are delivered to the buyer in accordance with the provisions of the agreement or contract, and the revenue is recognized after the buyer signs or checks; 4 Medical technical services: The revenue is recognized based on the work nodes specified in the contract and the confirmation order actually obtained from the customer, and the completion progress is confirmed based on the workload.

24. Government subsidies

(1) Government subsidies are monetary assets and non-monetary assets that the company obtains free of charge from the government. It is divided into asset-related government subsidies and income-related government subsidies.

(2) Judgment basis and accounting treatment method for government subsidies related to assets

Asset-related government subsidies refer to government subsidies obtained by the company and used to purchase, construct or otherwise form long-term assets. Government subsidies related to assets should be recognized as deferred income. If government subsidies related to assets are recognized as deferred income, they shall be included in profits and losses in installments according to a reasonable and systematic method within the useful life of the relevant assets. Government subsidies measured according to the nominal amount are directly included in the current profit and loss.

If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the undistributed balance of relevant deferred income shall be transferred to the profits and losses of the current period of asset disposal.

Government subsidies related to the company's daily activities should be included in other income based on the economic and business essence. Government subsidies that have nothing to do with the company's daily activities should be included in non-operating income and expenses.

(3) Judgment basis and accounting treatment method for government subsidies related to income

Government subsidies related to income refer to government subsidies other than government subsidies related to assets.

For government subsidies for comprehensive projects, the company needs to decompose them into asset-related parts and income-related parts, and conduct accounting treatment separately; if it is difficult to distinguish, they should be classified as income-related government subsidies as a whole.

If government subsidies related to income are used to compensate the enterprise for relevant expenses or losses in the future period, they are recognized as deferred income when they are obtained, and are included in the current profits and losses during the period when the relevant costs, expenses or losses are recognized; if they are used to compensate the enterprise for relevant expenses or losses that have already occurred, they are directly included in the current profits and losses.

Government subsidies related to the company's daily activities should be included in other income based on the economic and business essence. Government subsidies that have nothing to do with the company's daily activities should be included in non-operating income and expenses.

When an enterprise obtains policy-based preferential loan interest discounts, it shall distinguish between two situations where the government allocates interest discount funds to the lending bank and the government directly allocates interest discount funds to the enterprise:

If the finance department allocates interest discount funds to lending banks, and the lending banks provide loans to enterprises at policy preferential interest rates, enterprises can choose one of the following methods for accounting treatment:

1 The actual amount of the loan received is used as the recorded value of the loan, and the relevant borrowing costs are calculated based on the loan principal and the policy preferential interest rate.

2. The fair value of the borrowing is used as the book value of the borrowing and the borrowing costs are calculated according to the actual interest rate method. The difference between the actual amount received and the fair value of the borrowing is recognized as deferred income. Deferred income is amortized using the effective interest rate method over the duration of the loan to offset related borrowing costs.

The finance department will directly allocate interest discount funds to enterprises, and enterprises should use the corresponding interest discounts to offset related borrowing costs.

(4) Confirmation time of government subsidies

If the government subsidy is a monetary asset, it shall be measured according to the amount received. Government subsidies measured according to the amount receivable shall be recognized at the end of the period when there is conclusive evidence that the relevant conditions stipulated in the fiscal support policy can be met and fiscal support funds are expected to be received; if the government subsidy is a non-monetary asset, the realization of the government subsidy shall be recognized when the risks and rewards of ownership of the non-monetary asset are transferred. Among them, non-monetary assets are measured at fair value; if the fair value cannot be obtained reliably, they are measured at nominal amount. When confirmed government subsidies need 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; if there is no relevant deferred income, it will be directly included in the current profit and loss.

25. Deferred income tax assets/deferred income tax liabilities

Income taxes are accounted for using the balance sheet liability method. On the balance sheet date, analyze and compare the book values ​​of assets and liabilities with their tax basis. If there is a difference between the two, deferred income tax assets, deferred income tax liabilities and corresponding deferred income tax expenses (or income) are recognized.

On the basis of calculating and determining current income tax (i.e. income tax payable for the current period) and deferred income tax expense (or income), the sum of the two is recognized as income tax expense (or income) in the income statement, but does not include the income tax impact of transactions or events that are directly included in owner's equity.

On the balance sheet date, the book value of deferred income tax assets is reviewed. If it is probable that sufficient taxable income will not be available in the future to offset the benefits of deferred tax assets, the carrying amount of the deferred tax assets should be written down.

26. Leasing

A lease is a contract in which a 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 a consideration. At the inception date of a contract, the Company evaluates whether the contract is a lease or contains a lease.

(1) The company serves as the lessee

The main categories of leased assets are houses and buildings.

1 Initial measurement

On the start date of the lease period, the company recognizes the right to use the leased asset during the lease period 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. When calculating the present value of lease payments, the interest rate implicit in the lease is used as the discount rate; if the interest rate implicit in the lease cannot be determined, the company uses the lessee's incremental borrowing rate as the discount rate.

2 Subsequent measurement

The company accrues depreciation for right-of-use assets with reference to the relevant depreciation provisions of "Accounting Standards for Business Enterprises No. 4 - Fixed Assets". If it can reasonably determine that it will obtain ownership of the leased asset at the expiration of the lease term, it will 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, depreciation will be accrued during the shorter of the lease term and the remaining useful life of the leased asset.

For details on the impairment testing method and impairment provision accrual method for right-of-use assets, please refer to Note 4, 17 "Impairment of Long-term Assets" in this note.

For lease liabilities, the interest expense for each period during the lease term is calculated based on a fixed periodic interest rate, 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 related asset costs when actually incurred.

After the start date of the lease term, 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 will remeasure the lease liability based on the present value of the changed lease payment amount, and adjust the book value of the right-of-use asset accordingly. If the book value of the right-of-use asset has been reduced to zero, but the lease liability still needs to be further reduced, the remaining amount will be included in the current profit and loss.

3 Short-term leases and leasing of low-value assets

For short-term leases (leases with a lease period not exceeding 12 months on the lease start 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 period.

(2) The company acts as lessor

On the lease commencement date, leases are divided into finance leases and operating leases based on the nature of the transaction. Finance lease refers to 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.

1 Operating lease

Lease receipts from operating leases are recognized as rental income for each period during the lease term using the straight-line method. 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.

2 Financial lease

On the start date of the lease period, the finance lease receivable is recognized and the finance lease assets are derecognised. Financing lease receivables are initially measured based on the net lease investment (the sum of the unguaranteed residual value and the present value of the lease payments not yet received at the beginning of the lease period discounted at the interest rate implicit in the lease), and interest income during the lease period is calculated and recognized based on a fixed periodic interest rate. The variable lease payments obtained that are not included in the measurement of the net lease investment are included in the current profit and loss when they actually occur.

27. Changes in important accounting policies and accounting estimates

(1) Changes in important accounting policies

There were no changes in accounting policies that had a significant impact on the financial statements this year.

(2) Changes in important accounting estimates

There were no changes in accounting estimates that had a significant impact on the financial statements this year.

28. 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, actual results resulting from the uncertainty of these estimates may differ from the company's management's current estimates, 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 4.23, "Revenue", the following significant accounting judgments and estimates are involved in revenue recognition:

Identify the customer contract; estimate the recoverability of the consideration that you are entitled to receive for transferring goods to the customer; identify the performance obligations in the contract; estimate the variable consideration in the contract and the amount of cumulative recognized revenue that is 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 or at a certain point in time; determine the progress of performance, etc.

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 for the current or subsequent periods, and may have a significant impact.

(2) Significant accounting judgments and estimates related to leases

1 Identification of lease

When a company identifies whether a contract is a lease or contains a lease, it needs to assess whether there is an identified asset and the customer 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 has the right to receive 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.

2 Classification of leasing

When a 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.

3 Lease liabilities

When the company acts as a lessee, the lease liability is 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 where a renewal option or termination option exists. When evaluating the lease term, the company comprehensively considers all relevant facts and circumstances that will bring about economic benefits from the 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) Impairment of financial instruments

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 repayment data combined with economic policies, macroeconomic indicators, industry risks and other factors.

(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 accrues inventory depreciation reserves 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) Provision for impairment of long-term assets

On the balance sheet date, the company determines whether there are signs of possible impairment of non-current assets other than financial assets. 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, major 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.

(6) Goodwill impairment provision

When a company conducts an impairment test on goodwill, it needs to calculate the present value of the expected future cash flows of the relevant asset group containing goodwill, estimate the future cash flows of the asset group or asset group combination, and determine a pre-tax interest rate that appropriately reflects the current market time value of money and asset-specific risks.

(7) Depreciation and amortization

The company's fixed assets, right-of-use assets and intangible assets are depreciated and amortized on a straight-line basis over their useful lives after taking into account their residual values. The Company periodically reviews useful lives to determine the amount of depreciation and amortization expenses to be included in each reporting period. Useful lives are determined by the Company based on past experience with similar assets, combined with anticipated technological updates. If there are material changes to previous estimates, depreciation and amortization expenses will be adjusted in future periods.

(8) Development expenses

When determining the amount of capitalization, the company's management needs to make assumptions about the estimated future cash flows of the assets, the applicable discount rate and the expected benefit period.

The company's management believes that the prospects and current development of this business are good, and the market's response to the products produced with this intangible asset has also confirmed management's previous estimate of the expected revenue from this project. But increasing competition has also caused management to reconsider assumptions about market share and expected gross profits for related products. After a comprehensive review, the company's management believes that the full book value can still be recovered even if the product return rate is reduced. The company will continue to closely review the relevant situation and if there are signs that it is necessary to adjust the assumptions of relevant accounting estimates, the company will make adjustments in the period when the relevant signs occur.

(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 sufficient taxable profits will be available against which the losses can be utilised. 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 business 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.

5. Taxes

1. Main tax types and tax rates

Tax type Tax calculation basis Tax rate Value-added tax Taxable value-added amount 5%, 6%, 13% Urban maintenance and construction tax Turnover tax 5%, 7% Tax type Tax calculation basis Tax rate Education fee surcharge Turnover tax 3% Local education fee surcharge Turnover tax 2% Corporate income tax Taxable income 15%, 16.5%, 25% Local water conservancy construction fund Turnover tax 0.09%

Explanation of taxpayers with different corporate income tax rates:

Name of taxpayer Abbreviation Income tax rate Chengdu Berry and Kang Gene Technology Co., Ltd. Berry Gene 25.00% Fujian Berry and Kang Gene Technology Co., Ltd. Fujian Berry Gene 25.00% Fujian Berry and Kang Gene Diagnostic Technology Co., Ltd. Fujian Gene Diagnostics 25.00% Beijing Berry and Kang Biotechnology Co., Ltd. Beijing Berry and Kang 15.00% Fujian Berry and Kang Biotechnology Co., Ltd. Fujian Biotechnology 25% 25.00% Beijing Berry and Kang Medical Laboratory Co., Ltd. Beijing Laboratory 15.00% Shanghai Berry and Kang Medical Laboratory Co., Ltd. Shanghai Laboratory 25.00% Chengdu Berry and Kang Medical Laboratory Co., Ltd. Chengdu Laboratory 25.00% Hong Kong Berry and Kang Biotechnology Co., Ltd. Hong Kong Berry 16.50% Yashin Gene Technology Co., Ltd. Yaskin 16.50% Beijing Berry and Kang Gene Diagnostic Technology Co., Ltd. Beijing Gene Diagnostics 25.00% Fuzhou Berry and Kang Management Consulting Co., Ltd. Fuzhou Management Consulting 25.00% Fujian Berry and Kang Industrial Incubator Co., Ltd. Fujian Incubator 25.00% Fujian Berry Technology Co., Ltd. Fujian Berry Technology 25.00% Henan Yuanmeng Kangtong Gene Technology Co., Ltd. Henan Yuanmeng 25.00%

2. Tax incentives and approvals

(1) Beijing Berry and Kang obtained the "High-tech Enterprise Certificate" (certificate number GS202411000076) jointly issued by the Beijing Municipal Science and Technology Commission, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau on December 19, 2024. It is valid for three years. Beijing Berry and Kang enjoys a reduced corporate income tax rate of 15% from 2024 to 2027.

(2) Hangzhou Berry obtained the "High-tech Enterprise Certificate" (certificate number GR202433012579) jointly issued by the Zhejiang Provincial Department of Economy and Information Technology, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Taxation Bureau on December 6, 2024. It is valid for three years. Hangzhou Berry enjoys a reduced corporate income tax rate of 15% from 2024 to 2027.

(3) The Beijing Inspection Institute obtained the "High-tech Enterprise Certificate" (certificate number GR202311004937) jointly issued by the Beijing Municipal Science and Technology Commission, Beijing Municipal Finance Bureau, and Beijing Municipal Taxation Bureau on November 30, 2023. It is valid for three years. The Beijing Inspection Institute enjoys a reduced corporate income tax rate of 15% from 2023 to 2026.

(4) According to the "Notice of the Ministry of Science and Technology on Improving the Pre-tax Super Deduction Policy for Research and Development Expenses" (Caishui (2015) No. 119 of the Ministry of Finance and the State Administration of Taxation), except for the tobacco manufacturing industry, accommodation and catering industry, wholesale and retail industry, real estate industry, leasing and business service industry, entertainment industry, etc., enterprises in other industries can enjoy the super deduction of R&D expenses. According to the "Announcement of the Ministry of Finance and the State Administration of Taxation on Further Improving the Pre-tax Super Deduction Policy for R&D Expenses" (No. 7, 2023), the R&D expenses actually incurred by the enterprise in carrying out R&D activities and which have not formed intangible assets and are included in the current profits and losses shall be calculated in accordance with the regulations. On the basis of actual deductions, starting from January 1, 2023, 100% of the actual amount will be deducted before tax; if intangible assets are formed, starting from January 1, 2023, 200% of the cost of the intangible assets will be amortized before tax.

(5) According to the "Announcement of the Ministry of Finance and the State Administration of Taxation on Preferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and Commercial Households" (Announcement No. 6 of the Ministry of Finance and the State Administration of Taxation of 2023), from January 1, 2023 to December 31, 2024, the annual taxable income of small and low-profit enterprises does not exceed 1 million yuan, a reduced rate of 25% will be included in the taxable income, and the corporate income tax will be paid at a tax rate of 20%. According to the "Announcement of the Ministry of Finance and the State Administration of Taxation on Further Implementing Preferential Income Tax Policies for Small and Micro Enterprises" (Announcement No. 13 of the Ministry of Finance and the State Administration of Taxation in 2022), from January 1, 2022 to December 31, 2024, the annual taxable income of small and low-profit enterprises exceeds 1 million yuan but does not exceed 3 million yuan, a reduced rate of 25% will be included in the taxable income, and the corporate income tax will be paid at a tax rate of 20%.

According to the "Announcement on Relevant Tax Policies to Further Support the Development of Small and Micro Enterprises and Individual Industrial and Commercial Households" (Announcement No. 12 of the Ministry of Finance and the State Administration of Taxation in 2023), small and low-profit enterprises will calculate taxable income at a reduced rate of 25% and pay corporate income tax at a rate of 20%. This policy will continue to be implemented until December 31, 2027.

6. Notes to main items of consolidated financial statements

Unless otherwise specified, the following note items (including notes to the company's financial statements) refer to the "beginning of the period" as of January 1, 2025, the "end of the period" as of December 31, 2025, the "end of the previous period" as of December 31, 2024, the "current period" as of 2025, and the "previous period" as of 2024.

1. Monetary funds

Item Closing balance Opening balance Cash on hand 97,036.11 5,111.61 Bank deposits 371,633,386.3 357,381,661.09

Other monetary funds 7,781,190.03 25,685,091.65 Total 379,511,612.5 383,071,864.35

Including: Total amount deposited abroad 110,081,981.6 101,981,454.01

Total amount of funds with restrictions on use due to mortgage, pledge or freeze 7,307,026.77 24,759,050.21

Note:

(1) The funds deposited overseas are monetary funds held by overseas subsidiaries;

(2) The restricted amount of monetary funds at the end of the current period is RMB 7,307,026.77, which is bill deposit, quality guarantee deposit, litigation frozen deposit, etc.

2. Trading financial assets

(1) Classification of trading financial assets

Item Closing balance Opening balance Financial assets measured at fair value with changes included in current profits and losses 2,821,047.91 17,032,640.72 Including: Equity instrument investment 2,821,047.91 17,032,640.72

3. Notes receivable

(1) Classified presentation of notes receivable

Category Closing balance Opening balance Bank acceptance notes 11,749,620.00 2,587,200.00

(2) Notes receivable that have been endorsed or discounted by the company at the end of the period and have not yet matured on the balance sheet date

Item Amount derecognized at the end of the period Amount not derecognized at the end of the period Bank acceptance notes 3,835,776.00 -

(3) Classified disclosure based on bad debt accrual method

Category Ending Balance

Book balance Proportion Bad debt provision Provision Proportion Book value Provision for bad debts based on individual items - - - - - Provision for bad debts based on combination 11,749,620.00 100.00% - - 11,749,620.00 Including: Bank acceptance bill combination 11,749,620.00 100.00% - - 11,749,620.00Total 11,749,620.00 100.00% - - 11,749,620.00

(Continued from the above table)

Category Opening Balance

Book balance Proportion Bad debt provision Provision Proportion Book value Provision for bad debts based on individual items - - - - - Provision for bad debts based on combination 2,587,200.00 100.00% - - 2,587,200.00 Including: Bank acceptance bill combination 2,587,200.00 100.00% - - 2,587,200.00Total 2,587,200.00 100.00% - - 2,587,200.00

4. Accounts receivable

(1) Accounts receivable are presented according to the aging structure

Aging Book balance at the end of the period Book balance at the beginning of the period Within 1 year 359,565,129.99 449,577,832.36 1 to 2 years 136,217,764.60 199,145,002.23 2 to 3 years 161,627,194.54 209,578,935.84 3 to 4 years 194,937,651.68 216,047,269.66 4 to 5 years 192,885,710.89 104,413,040.06 More than 5 years 135,463,473.87 60,943,804.53 Total 1,180,696,925.57 1,239,705,884.68

(2) Classified disclosure based on bad debt accrual method

Category Ending Balance

Book balance Proportion Bad debt provision Provision Proportion Book value Provision for bad debt is made individually 442,437,989.9 37.47% 382,189,788.8 86.38% 60,248,201.07

4 7

Among them: accounts receivable with significant individual amounts and individually accrued 442,437,989.9 37.47% 382,189,788.8 86.38% 60,248,201.07 bad debt provisions 4 7

Category Ending Balance

Book balance Proportion Bad debt provision Provision Proportion Book value Provision for bad debt by combination 738,258,935.6 62.53% 262,438,216.2 35.55% 475,820,719.4

3 0 3 Including: Aging combination 738,258,935.6 62.53% 262,438,216.2 35.55% 475,820,719.4

3 0 3 Total 1,180,696,925 100.00% 644,628,005.0 54.60% 536,068,920.5

.57 7 0

(Continued from the above table)

Category Opening Balance

Book balance Proportion Bad debt provision Provision Proportion Book value Provision for bad debt is made individually 442,788,183.3 35.72% 327,070,050.2 73.87% 115,718,133.1

3 0 3 Among them: Accounts receivable with significant individual amounts and individually accrued 442,788,183.3 35.72% 327,070,050.2 73.87% 115,718,133.1 Bad debt provisions 3 0 3 Bad debt provisions are accrued on a group basis 796,917,701.3 64.28% 220,504,521.4 27.67% 576,413,179.8

5 9 6 Including: Aging combination 796,917,701.3 64.28% 220,504,521.4 27.67% 576,413,179.8

5 9 6 Total 1,239,705,884 100.00% 547,574,571.6 44.17% 692,131,312.9

.68 9 9 1 Important individual accounts receivable for which bad debt provisions are made:

Name Ending Balance

Book balance Bad debt provision Proportion ratio Number one reason for provision 294,184,391.4 233,936,190.4 79.52% Historical migration rate combined with expected payment collection progress

9 2

Second place 105,257,217.3 105,257,217.3 100.00% Historical migration rate combined with expected payment recovery progress

4 4

Total 399,441,608.8 339,193,407.7 84.92%

3 6

(Continued from the above table)

Name Opening Balance

Book balance No. 1 in bad debt provisions 303,437,212.5 212,406,048.78

Second place 104,855,757.4 80,168,788.11

Total 408,292,970.0 292,574,836.89

2 Provision for bad debts based on portfolio:

Combined accrual items: combined by aging

Name Ending Balance

Book balance Bad debt provision Proportion within 1 year 358,884,273.5 38,508,282.54 10.73%

1 to 2 years 122,468,277.7 35,699,502.97 29.15%

2 to 3 years 93,795,716.83 45,415,886.08 48.42% 3 to 4 years 64,666,599.16 44,400,086.97 68.66% 4 to 5 years 37,013,422.11 36,983,811.38 99.92% More than 5 years 61,430,646.26 61,430,646.26 100.00% Total 738,258,935.6 262,438,216.2 35.55%

3 0

Instructions on accruing bad debt provisions by group:

With reference to historical credit loss experience, combined with current conditions and predictions of future economic conditions, prepare a comparison table between the number of days overdue accounts receivable and the expected credit loss rate for the entire duration, and calculate expected credit losses.

(3) Bad debt provisions

Category Opening balance Change amount during the period Ending balance

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

Individual provision for bad debts 327,070,050.2 71,187,880.96 10,603,734.37 5,464,407.92 - 382,189,788.8 Provision 0 7According to aging group 220,504,521.4 41,933,694.71 - - - 262,438,216.2 Provision for bad debts 9 Category 0 Opening balance Amount of changes in the current period Closing balance

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

Total 547,574,571.6 113,121,575.6 10,603,734.37 5,464,407.92 - 644,628,005.0

9 7 7

(4) Accounts receivable actually written off in the current period

Item Write-off amount Others 5,464,407.92

(5) Accounts receivable and contract assets of the top five ending balances by debtors

Company name Accounts receivable Contract assets Accounts receivable Proportion to total amount Bad debt provision ending balance Ending balance and contract assets Ending balance

Ending balance

First place 294,184,391.4 - 294,184,391.4 24.92% 233,936,190.4

9 9 2 Second place 105,257,217.3 - 105,257,217.3 8.91% 105,257,217.3

4 4 4 Third place 37,356,796.99 - 37,356,796.99 3.16% 16,521,921.41 Fourth place 33,645,872.03 - 33,645,872.03 2.85% 13,783,018.69 Fifth place 32,613,950.00 - 32,613,950.00 2.76% 17,524,920.67 Total 503,058,227.8 - 503,058,227.8 42.60% 387,023,268.5

5 5 3

5. Accounts receivable financing

(1) Financing of accounts receivable

Item Closing balance Opening balance Accounts receivable 1,214,032.00 -Total 1,214,032.00 -

6. Prepayment

(1) Prepayments are presented based on aging

Aging Closing balance Opening balance

Amount Proportion Amount Proportion Within 1 year 9,323,094.47 90.80% 10,956,857.67 95.13% 1 to 2 years 569,515.95 5.55% 244,279.97 2.12% 2 to 3 years 63,388.59 0.62% 55,521.64 0.48% More than 3 years 310,630.00 3.03% 261,108.36 2.27% Total 10,266,629.01 100.00% 11,517,767.64 100.00%

(2) The top five prepayments at the end of the period by prepayment objects:

Company name Relationship with the company Closing balance Proportion of total amount Prepayment time Reason for non-settlement Unit 1 Non-related party 1,440,006.24 14.03% Within 1 year Prepaid maintenance unit 2 Non-related party 1,415,094.34 13.78% Within 1 year Prepaid purchase unit 3 Non-related party 758,398.12 7.39% Within 1 year Deferred server maintenance fee Unit 4 Non-related party 618,854.43 6.03% Within 1 year Unreimbursed employees Unit 5 Non-related party 484,981.12 4.72% Within 1 year Total prepaid software service fees 4,717,334.25 45.95%

7. Other receivables

Item Closing balance Opening balance Interest receivable - - Dividends receivable - - Other receivables 56,045,100.84 76,447,754.58 Total 56,045,100.84 76,447,754.58

(1) Other receivables

1 Disclosure by age

Aging Book balance at the end of the period Book balance at the beginning of the period Within 1 year 2,997,202.01 75,056,952.84 1 to 2 years 58,489,194.50 1,034,897.49 2 to 3 years 943,651.62 635,038.45 3 to 4 years 570,086.94 926,196.25 4 to 5 years 821,586.42 241,416.66 More than 5 years 6,226,231.03 6,095,162.82 Total 70,047,952.52 83,989,664.51 2 Classification by nature of payment

Nature of payment Book balance at the end of the period Book balance at the beginning of the period Current and social security provident fund advances 35,864,976.45 47,989,680.84 Deposits, security deposits, and reserve funds 34,059,132.64 35,896,622.42 Others 123,843.43 103,361.25 Total 70,047,952.52 83,989,664.51

3. Bad debt provision accrual

Bad debt provisions Phase 1 Phase 2 Phase 3 Total forecast for the next 12 months Estimates for the entire duration Estimates for the entire duration

Credit losses for the period Credit losses for the period (credit losses for the period to come) (credit losses for the period to come)

Credit impairment occurs) Credit impairment occurs)

Opening balance 2,809,619.93 - 4,732,290.00 7,541,909.93 Opening balance in the current period

--Transfer to the second stage - - - - --Transfer to the third stage - - - - --Transfer to the second stage - - - - --Transfer to the first stage - - - - Provision for the current period 6,464,730.61 - - 6,464,730.61 Reversal for the current period - - - - Write-off for the current period - - - - Write-off for the current period - - - - Other changes -3,788.86 - - -3,788.86 Closing balance 9,270,561.68 - 4,732,290.00 14,002,851.68

4 Changes in bad debt provisions for other receivables

Category Opening balance Change amount during the period Ending balance

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

Individual provision for bad debts 4,732,290.00 - - - 4,732,290.00 provision

Total by aging group 2,809,619.93 6,464,730.61 - - -3,788.86 9,270,561.68 Category Beginning balance Amount of changes in the current period Ending balance

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

Provision for bad debts

Total 7,541,909.93 6,464,730.61 - - -3,788.86 14,002,851.68

5 Other receivables with the top five closing balances based on debtors

Company name Nature of payment Closing balance Aging Proportion of total amount Bad debt provision

No. 1 in balance at the end of the period Current accounts and guarantees 57,514,211.85 Within 1 year, 82.11% 8,871,552.79

Gold, deposit 1-2 years

Second place Current account 4,675,460.00 More than 5 years 6.67% 4,675,460.00 Third place Security deposit and deposit 2,000,000.00 Within 1 year 2.86% - Fourth place Security deposit and deposit 1,971,729.261-2 years, 3-4 years, 2.81% - 4-5 years, more than 5 years

on

Fifth place: Security deposit and deposit 509,211.951-2 years, 2-3 years 0.73% -Total 66,670,613.06 95.18% 13,547,012.79

8. Inventory

(1) Inventory classification

Item Ending balance Beginning balance

Book balance Provision for decline in price or total Book value Book balance Provision for decline in price or total Book value equal to performance costs minus performance costs

value preparation value preparation

Raw materials 80,159,001.51 157,160.28 80,001,841.23 80,184,883.77 161,130.96 80,023,752.81 Products in progress 24,019,903.28 - 24,019,903.28 26,748,594.00 - 26,748,594.00 Goods in stock 59,285,850.76 3,858,765.38 55,427,085.38 72,684,827.59 4,818,339.27 67,866,488.32 Goods shipped 17,314,081.32 - 17,314,081.32 20,048,755.59 - 20,048,755.59 Entrusted processing materials - - - 223,186.08 - 223,186.08 Total 180,778,836.8 4,015,925.66 176,762,911.2 199,890,247.0 4,979,470.23 194,910,776.8

7 1 3 0

(2) Provision for inventory depreciation and provision for impairment of contract performance costs

Inventory type Opening balance Increase in the current period Decrease in the current period Ending balance

Provision Others Reversal or write-off Others

Raw materials 161,130.96 - - - 3,970.68 157,160.28 Work in progress - - - - - - Goods in stock 4,818,339. 161,421.08 - 1,120,994.97 - 3,858,765.38

Goods shipped - - - - - -Total 4,979,470. 161,421.08 - 1,120,994.97 3,970.68 4,015,925.66

Note: The rest of the reduction amount in this period is the translation difference of foreign currency statements.

9. Non-current assets due within one year

Item Closing balance Opening balance Long-term receivables due within one year 305,425.19 453,227.68 Financial assets due within one year - 796,956.34 Total 305,425.19 1,250,184.02

10. Other current assets

Item Closing balance Opening balance to be deducted for input tax 44,899,102.73 40,175,411.61 To be certified input tax 15,487,433.44 11,395,304.01 Prepaid income tax 8,870,560.04 8,560,624.79 Prepaid other taxes 79,898.41 5,437.41 Total 69,336,994.62 60,136,777.82

11. Long-term receivables

(1) Long-term receivables

Item Closing balance

Book balance Bad debt provision Book value Financing lease 305,425.19 - 305,425.19 Including: Unrealized financing income -3,837.34 - -3,837.34 Subtotal 305,425.19 - 305,425.19 Item Ending balance

Book balance Bad debt provision Book value less: Part due within one year (Note 6, 9) 305,425.19 - 305,425.19 Total - - -

(Continued from the above table)

Item Opening balance Discount rate range

Book balance Bad debt provision Book value

Finance lease payment 766,369.49 - 766,369.49

Including: Unrealized financing income -26,320.75 - -26,320.75

Subtotal 766,369.49 - 766,369.49

Less: Part due within one year (Note 6, 9) 453,227.68 - 453,227.68

Total 313,141.81 - 313,141.81

12. Long-term equity investment

(1) Long-term equity investment

Invested unit Beginning balance Increase or decrease in the current period

(Book value) Additional investment Decrease in investment Recognition under equity method Other comprehensive Other changes in equity

investment gains and losses income adjustment

Associates

Fuzhou Xintou Biotechnology 172,395,441.6 - - -1,206,947.78 - - Science and Technology Industrial Park Construction 1

Development Co., Ltd.

Division

Fuzhou Xintou Zhikai - 12,062,498.07 - -63,647.01 - -Ruikang Venture Capital

fund partnership

(limited partnership)

Hefei Rhenke Biotechnology 4,774,965.42 - - -223,105.08 - - Technology Co., Ltd.

Beijing Yuanyuan Gene 16,672.91 - - -2,549.90 - - Technology Co., Ltd.

Fujian Herui Gene - - - - - Technology Co., Ltd.

Total 177,187,079.9 12,062,498.07 - -1,496,249.77 - -Invested unit opening balance Increase or decrease in the current period

(Book value) Additional investment Decrease in investment Recognition under equity method Other comprehensive Other changes in equity

investment gains and losses income adjustment

(Continued from the above table)

Invested unit Increase or decrease in the current period Closing balance Impairment provision

Announcement of cash disbursement Provision for impairment Others (book value) Beginning balance Closing balance

dividend or profit

Associates

Fuzhou Xintou Biotechnology - - - 171,188,493.83 - - Science and Technology Industrial Park Construction

Development Co., Ltd.

Division

Fuzhou Xintou Zhikai - - - 11,998,851.06 - - Ruikang Venture Capital

fund partnership

(limited partnership)

Hefei Rhenke Biotech Co., Ltd. - - - 4,551,860.34 - - Technology Co., Ltd.

Beijing Yuanyuan Gene - - - 14,123.01 - - Technology Co., Ltd.

Fujian Herui Gene - - - - 46,351,687.3 46,351,687.30 Technology Co., Ltd. 0

Total - - - 187,753,328.24 46,351,687.3 46,351,687.30

(2) Impairment testing of long-term equity investments

1 The recoverable amount is determined based on the net amount of fair value minus disposal costs.

Item Book value Recoverable amount Impairment amount Fair value and key parameters Basis for determining disposal costs of key parameters

Determine the way

Item Book value Recoverable amount Impairment amount Fair value and key parameters Basis for determining disposal costs of key parameters

Determine the way

Fujian Herui Gene 46,351,687.30 - 46,351,687.30 The fair value is determined by the company based on the net capital position of the invested unit after the recent market price evaluation of the invested unit Technology Co., Ltd., and the disposal costs are evaluated by the company's management.

is zero fair value is zero

13. Fixed assets

Item Closing balance Opening balance Fixed assets 392,800,348.56 401,694,624.80 Fixed assets liquidation - -Total 392,800,348.56 401,694,624.80

(1) Fixed assets

Items Houses, buildings and decoration Machinery and equipment Transportation Electronics and office equipment Total ① Original book value

Balance at the beginning of the period 317,473,198.25559,803,921.77 9,533,291.47 53,986,248.87 940,796,660.36 Increase in the current period - 44,033,291.55 - 11,139,696.35 55,172,987.90 of which: Purchase - 44,965,626.72 - 11,329,854.98 56,295,481.70

Translation of foreign currency statements - -932,335.17 - -190,158.63 -1,122,493.80 Reduction amount in the current period - 27,765,604.66 - 3,391,771.60 31,157,376.26 Of which: disposal or scrapping - 27,765,604.66 - 3,391,771.60 31,157,376.26 Closing balance 317,473,198.25576,071,608.66 9,533,291.47 61,734,173.62 964,812,272.00 ② Accumulated depreciation

Balance at the beginning of the period 109,396,137.98385,194,006.71 4,229,499.64 40,282,391.23 539,102,035.56 Increase in the current period 11,328,586.19 38,990,251.35 485,876.58 7,649,291.85 58,454,005.97 Including: Provision 11,328,586.19 39,766,580.73 485,876.58 7,778,647.59 59,359,691.09

Translation of foreign currency statements - -776,329.38 - -129,355.74 -905,685.12 Reduction amount in the current period - 23,999,985.84 - 1,544,132.25 25,544,118.09 Including: disposal or scrapping - 23,999,985.84 - 1,544,132.25 25,544,118.09 Closing balance 120,724,724.17400,184,272.22 4,715,376.22 46,387,550.83 572,011,923.44 ③ Impairment provision

Beginning balance - - - - -Increase in the current period - - - - -Decrease in the current period - - - - - Items Houses, buildings and decoration Machinery and equipment Transportation electronics and office equipment Total closing balance - - - - - ④ Book value

Book value at the end of the period 196,748,474.08175,887,336.44 4,817,915.25 15,346,622.79 392,800,348.56 Book value at the beginning of the period 208,077,060.27174,609,915.06 5,303,791.83 13,703,857.64 401,694,624.80

14. Projects under construction

Item Closing balance Opening balance Construction in progress 9,514,203.25 - Engineering materials - - Total 9,514,203.25 -

(1) Situation of projects under construction

Item Ending balance Beginning balance

Book balance Impairment provision Net book value Book balance Impairment provision Net book value Fuzhou Industrial Park 9,514,203.25 - 9,514,203.25 - - - 2-1# building decoration

1. Changes in important projects under construction during the current period

Project name Budget amount Beginning balance Amount increased in this period Transfer to fixed in this period Others Closing balance in this period

Asset amount reduction amount

Fuzhou Industrial Park 34,818,375.99 - 9,514,203.25 - - 9,514,203.25 2-1# Building Decoration

Fuzhou Industrial Park 24,406,617.60 - 21,972,769.13 - 21,972,769.13 - 2-2# building decoration

Total - 31,486,972.38 - 21,972,769.13 9,514,203.25

(Continued from the above table)

Project name Cumulative project investment Project progress Capitalization of interest Among them: Interest for the current period Interest for the current period Source of funds

Proportion of budget Cumulative amount Interest capitalized amount Capitalization rate

Fuzhou Industrial Park 27.33% As of the balance sheet - - - Own funds Building 2-1# was renovated on the day of renovation, and water and electricity pipelines were pre-buried

Complete, intelligent pipeline

Pre-embedded completed, fire pipe

Project name Cumulative project investment Project progress Capitalization of interest Among them: Interest for the current period Interest for the current period Proportion of fund sources to the budget Cumulative amount Capitalization amount of interest Capitalization rate

Line transformation completed, ground

Leveling is completed and the partition wall is

50% complete. Ceiling worker

The process is about 30% complete.

Fuzhou Industrial Park 90.03% As of the balance sheet - - - Own funds Building 2-2# decoration date, the construction has been completed and accepted

Put into use, still in progress

Price review and settlement.

Total - -

15. Right-of-use assets

Project Houses and Buildings Total

(1) Original book value

Balance at the beginning of the period 67,706,697.52 67,706,697.52 Increase in the current period 127,018,672.43 127,018,672.43 Including: New lease 127,453,786.86 127,453,786.86

Foreign currency statement translation difference -435,114.43 -435,114.43 Reduction amount in the current period 53,085,847.26 53,085,847.26 Including: Disposal 53,085,847.26 53,085,847.26 Closing balance 141,639,522.69 141,639,522.69

(2) Accumulated depreciation

Balance at the beginning of the period 10,326,804.47 10,326,804.47 Increase in the current period 24,888,189.39 24,888,189.39 Including: Provision 25,020,557.73 25,020,557.73

Foreign currency statement translation difference -132,368.34 -132,368.34 Reduction amount in the current period 11,170,766.13 11,170,766.13 Including: Disposal 11,170,766.13 11,170,766.13 Closing balance 24,044,227.73 24,044,227.73

(3) Impairment provision

Beginning balance - -Increase in the current period - -Decrease in the current period - -Ending balance - -Item Houses and buildings Total

(4) Book value

Book value at the end of the period 117,595,294.96 117,595,294.96 Book value at the beginning of the period 57,379,893.05 57,379,893.05

16. Intangible assets

(1) Intangible assets

Project Medical device production Medical device Patent licensing fee Software Total

Enterprise license rights registration certificate

① Original book value

Balance at the beginning of the period 4,416,492.07 34,270,767.95 3,262,392.00 11,791,610.68 53,741,262.70 Increase in the current period - 37,748,191.14 -82,152.00 2,785,228.05 40,451,267.19 Including: Purchase - - - 2,836,531.30 2,836,531.30 Internal R&D - 37,748,191.14 - - 37,748,191.14

Translation of foreign currency statements - - -82,152.00 -51,303.25 -133,455.25 Reduction amount in the current period - - - 1,343,679.07 1,343,679.07 Including: disposal or scrapping - - - 1,343,679.07 1,343,679.07 Closing balance 4,416,492.07 72,018,959.09 3,180,240.00 13,233,159.66 92,848,850.82 ② Accumulated amortization

Balance at the beginning of the period 4,416,492.07 6,589,765.89 2,856,103.51 8,195,505.08 22,057,866.55 Increase in the current period - 3,542,893.66 -58,306.50 1,053,618.42 4,538,205.58 including: Provision - 3,542,893.66 18,323.44 1,090,768.02 4,651,985.12

Translation of foreign currency statements - - -76,629.94 -37,149.60 -113,779.54 Reduction amount in the current period - - - 146,190.29 146,190.29 Including: disposal or scrapping - - - 146,190.29 146,190.29 Closing balance 4,416,492.07 10,132,659.55 2,797,797.01 9,102,933.21 26,449,881.84 ③ Impairment provision

Balance at the beginning of the period - - - - - Amount increased during the period - - - - - Amount decreased during the period - - - - - Balance at the end of the period - - - - - ④ Book value

Closing book value - 61,886,299.54 382,442.99 4,130,226.45 66,398,968.98 Item Medical device production Medical device Patent licensing fee Software Total

Enterprise license rights registration certificate

Book value at the beginning of the period - 27,681,002.06 406,288.49 3,596,105.60 31,683,396.15 Note: The intangible assets formed through the company's internal research and development in the current period accounted for 40.66% of the balance of intangible assets at the end of the period.

17. Goodwill

(1) Original book value of goodwill

Name of the invested unit Opening balance Increase in the current period Decrease in the current period Ending balance or events forming goodwill Formed by business combination Others Disposal Others

Yashineng Gene Technology has 13,433,638 - - - - 13,433,638.57 Co., Ltd. .57

(2) Goodwill impairment provision

Name of the invested unit Opening balance Increase in the current period Decrease in the current period Ending balance or events forming goodwill Provision Others Disposal Others

Yashineng Gene Technology Co., Ltd.

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

Name Asset group to which it belongs Operating segment to which it belongs Is it the same as before?

Or the composition and basis of the combination are consistent year-to-year. Yashineng Gene Technology Co., Ltd. The main business of Yashineng Gene Technology Co., Ltd. is biotechnology services. Biotechnology services are relatively independent in terms of business, personnel, funds, etc., and the

Cash inflows are independent of other assets or asset groups, so the

Because Technology Co., Ltd. is tested for impairment as an asset group

(4) Specific determination method of recoverable amount

1 The recoverable amount is determined based on the present value of expected future cash flows.

Item Book value of an asset group or combination of asset groups containing goodwill Recoverable amount Impairment amount Yashineng Gene Technology Co., Ltd. 53,764,121.29 136,944,869.7 -

(Continued from the above table)

Project Forecasting period Forecasting period Stable period Basis for determining key parameters of stable period

Years Key Parameters Key Parameters

The revenue growth rate of Yashineng Genomics in the 5-year forecast period is 0% in the stable period, -2.90% in the stable period, 16.90% in the profit margin, and 16.90% in the last year of the forecast period. The discount rate and the discount rate are the same as in the last year of the forecast period.

Discount rate 12.61% Discount rate 12.61% Consistent 2 Other notes

The recoverable amount of goodwill is calculated based on the present value of expected future cash flows. The estimated cash flows are based on the company's approved five-year cash flow forecast. The discount rate used in the cash flow forecast is 12.61%.

Other key data used in impairment testing include: operating income, operating costs and other related expenses.

The company determines the above key data based on historical experience and forecasts of market development. The discount rate used by the Company is a pre-tax rate that reflects the current market time value of money and the risks specific to the underlying asset group.

The above estimate of recoverable amount indicates that there is no impairment loss on goodwill.

18. Long-term deferred expenses

Item Beginning balance Increase in the current period Amortization amount in the current period Other decreases Closing balance Decoration expenses 59,615,821.05 45,648,213.17 13,596,012.38 84,907.22 91,583,114.62

19. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets without offset

Item Ending balance Beginning balance

Deductible temporary deferred income tax Deductible temporary deferred income tax

Difference Asset Difference Asset credit impairment loss 515,744,216.0 88,138,865.74 480,401,768.8 80,996,522.92

8 7

Uncovered losses 330,195,363.7 49,529,304.56 335,289,922.4 50,293,488.36

3 0

Provision for inventory depreciation 4,015,925.66 604,746.26 4,979,470.23 749,337.50 Timing difference in expense recognition under new lease standards 25,563,199.48 4,205,798.12 5,205,434.94 879,586.08 Unrealized profits from internal transactions 52,934,086.74 7,940,113.01 74,350,679.73 11,152,601.96Total 928,452,791.6 150,418,827.6 900,227,276.1 144,071,536.8

9 9 7 2

(2) Deferred income tax liabilities without offset

Item Ending balance Beginning balance

Taxable temporary deferred income tax Taxable temporary deferred income tax

Difference Liabilities Difference Liabilities Accelerated depreciation of fixed assets 127,019,465.2 21,753,001.55 142,496,008.6 23,944,627.56

9 4

Timing difference in expense recognition under the new lease standards 25,322,934.51 4,169,737.42 5,497,901.05 950,847.11 Total 152,342,399.8 25,922,738.97 147,993,909.6 24,895,474.67

0 9

(3) Details of deferred income tax assets not recognized

Item Closing balance Opening balance Deductible losses 658,429,518.12 444,856,137.71 Credit impairment losses 142,886,640.67 74,714,712.75 Losses from changes in fair value - 101,061,315.17 Asset impairment losses 48,510,198.24 48,510,198.24 Share-based payment 2,872,413.79 -Total 852,698,770.82 669,142,363.87

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

Year Ending amount Beginning amount Note 2025 - 9,264,546.34 - 2026 154,998,954.6 155,007,465.1 -

7 9

2027 77,517,859.20 77,517,859.20 - 2028 141,506,102.3 141,812,169.9 -

8 6

2029 60,470,508.88 61,254,097.02 - 2030 223,936,092.9 - -

Total 658,429,518.1 444,856,137.7

2 1

20. Other non-current assets

Item Ending balance Beginning balance

Book balance Impairment provision Book value Book balance Impairment provision Book value Prepayment for construction and decoration - - - 30,107,692.48 - 30,107,692.48

21. Assets whose ownership or use rights are restricted

Item Closing balance

Book balance Book value Restricted type Restricted situation Monetary funds 7,307,026.77 7,307,026.77 / Bill deposit, quality guarantee deposit and other fixed assets - houses and buildings 1 263,997,459.3 181,928,195.5 Mortgage loans Mortgage loans

6 8

Long-term equity investment 2 175,596,753.2 175,596,753.2 Pledge guarantee Pledge guarantee

0 0

Total 446,901,239.3 364,831,975.5

3 5

Note 1: Beijing Berry Hekang, a subsidiary of the company, provided a loan mortgage for the property located on the 1st to 9th floors of Building 5, No. 4 Yard, Shengshengyuan Road, Changping District, Beijing for the "Comprehensive Credit Contract" signed No. 25000011327, with a maximum limit of The amount of the claim is RMB 120,000,000.00, of which the maximum principal amount of the claim is RMB 80,000,000.00. The guaranteed main claim is incurred from April 21, 2025 to April 20, 2026. Beijing Berry Hekang, a subsidiary of the company, will use property 101 on the 1st floor, property 201 on the 2nd floor, property 301 on the 3rd floor and property 401 on the 4th floor located in Building 9, No. 6 Jingshun East Street, Chaoyang District, Beijing as collateral for credit. The maximum mortgage contract number is 202502287RSD018 No. 1, the maximum principal amount of the guaranteed principal claim is RMB 30,000,000.00, and the guarantee period is from June 30, 2025 to May 29, 2026.

Note 2: On February 26, 2024, the company's subsidiary Fujian Berry Gene signed a "Joint Venture Agreement" with Fuzhou Binhai Linkong Development and Construction Co., Ltd. According to the "Joint Venture Agreement", after the establishment of the joint venture, Fujian Berry Gene needs to pledge all its equity in the joint venture company to Fuzhou Binhai Linkong Development and Construction Co., Ltd., and handle the equity pledge registration procedures in accordance with legal regulations.

(Continued from the above table)

Item Opening balance

Book balance Book value Restricted type Restricted situation Monetary funds 24,759,050.21 24,759,050.21 / Bill deposit, quality guarantee deposit and other fixed assets - houses and buildings 209,313,434.3 165,099,125.4 Mortgage loans Mortgage loans

6 7

Long-term equity investment 172,395,441.6 172,395,441.6 Pledge guarantee Pledge guarantee

1 1

Total 406,467,926.1 362,253,617.2

8 9

22. Short-term borrowing

(1) Classification of short-term loans

Item Ending balance Beginning balance of mortgage loan + guaranteed loan (note) 154,169,660.00 113,296,255.68 Undue interest payable 147,158.87 119,583.59 Total 154,316,818.87 113,415,839.27 Note: The balance of the mortgage loan is the balance of the loan between the subsidiary Beijing Berry and Kang and the Beijing Capital Airport Branch of Bank of China Co., Ltd., and the balance of the loan with the Beijing Branch of China Minsheng Banking Co., Ltd. The guaranteed loan balance is composed of the loan balances of subsidiary Beijing Berry and Kang and China Minsheng Banking Co., Ltd. Beijing Branch, subsidiary Beijing Berry and Kang and Bank of China Co., Ltd. Beijing Capital Airport Branch, subsidiary Hangzhou Berry and Hangzhou United Rural Commercial Bank Co., Ltd. Gaosha Branch, subsidiary Hangzhou Berry and Bank of China Hangzhou Qiantang New District Branch.

① The subsidiary Beijing Berry Hekang signed a working capital loan contract No. ZX25040001364195 with the Beijing Branch of China Minsheng Banking Corporation Limited. The loan amount is RMB 45,580,085.27, and the loan period is from April 30, 2025 to April 30, 2026. On the date of this loan, the company provided a joint liability guarantee with a maximum credit limit of RMB 80,000,000.00. The maximum guarantee contract number is Gonggaobaozi No. 2500000113272. The real estate located in Building 5, No. 4, Shenghengyuan Road, Changping District, which Beijing Berry Hekang has obtained the real estate rights for, is used as the collateral for this credit extension. The maximum mortgage contract number is Gonggao Diazi No. 2400000074339. As of December 31, 2025, the principal balance of the loan was RMB 45,580,085.27.

Subsidiary Beijing Berry Hekang signed a working capital loan contract No. ZX25050001404605 with the Beijing Branch of China Minsheng Banking Corporation Limited. The loan amount is RMB 26,660,832.51, and the loan period is from May 23, 2025 to May 23, 2026. On the date of this loan, the company provided a joint liability guarantee with a maximum credit limit of RMB 80,000,000.00. The maximum guarantee contract number is Gonggaobaozi No. 2500000113272. The real estate located in Building 5, No. 4, Shenghengyuan Road, Changping District, which Beijing Berry Hekang has obtained the real estate rights for, is used as the collateral for this credit extension. The maximum mortgage contract number is Gonggao Diazi No. 2400000074339. As of December 31, 2025, the principal balance of the loan was RMB 26,660,832.51.

Subsidiary Beijing Berry Hekang signed a working capital loan contract No. ZX25060001434059 with China Minsheng Banking Corporation Beijing Branch. The loan amount is RMB 4,340,000.00 and the loan period starts from 2025 From June 6, 2026 to June 6, 2026, the company provided a joint liability guarantee with a maximum credit limit of RMB 80,000,000.00 for this loan. The maximum guarantee contract number is Gonggaobaozi No. 2500000113272. The real estate located in Building 5, No. 4, Shenghengyuan Road, Changping District, which Beijing Berry Hekang has acquired the real estate rights for, is used as the collateral for this credit extension. The maximum mortgage contract number is Gonggao Diazi No. 2400000074339. As of December 31, 2025, the principal balance of the loan was RMB 4,340,000.00.

Subsidiary Beijing Berry Hekang signed a working capital loan contract No. ZX25070001499293 with China Minsheng Banking Corporation Beijing Branch. The loan amount is RMB 2,588,742.22 and the loan period starts from 2025 From July 7, 2026 to July 7, 2026, the company provided a joint liability guarantee with a maximum credit limit of RMB 80,000,000.00 for this loan. The maximum guarantee contract number is Gong Gao Bao Zi No. 2 No. 500000113272, and the real estate located in Building 5, No. 4 Yard, Shenghengyuan Road, Changping District, which Beijing Beiruihekang has obtained the real estate rights for, is used as the collateral for this credit extension. The maximum mortgage contract number is Gonggao Diazi No. No. 2400000074339. As of December 31, 2025, the loan principal balance was RMB 2,588,742.22.

The subsidiary Beijing Berry Hekang signed the number 202502287RS018 with the Beijing Capital Airport Branch of Bank of China Co., Ltd. on June 30, 2025. The "Credit Line Agreement", the credit line is RMB 30,000,000.00, signed on June 30, 2025 No. 202502287RS018-01 "Working Capital Loan Contract" 》Borrowing RMB 26,000,000.00, the loan period is 1 year, signed on July 30, 2025 with the number: 202502287RS018-02 "Mobile Loan Contract" borrowing RMB 4,000,000.00 yuan, with a loan term of 1 year. As of December 31, 2025, the loan principal balance was RMB 30,000,000.00. The loan was guaranteed by Gao Yanghe Company. The maximum guarantee contract numbers were 202502287RSB018-01 and 202502287RSB018-02 respectively, and the real estate rights were obtained by Beijing Berry Hekang located in Beijing. Property 101 on the 1st floor, property 201 on the 2nd floor, property 301 on the 3rd floor, and property 401 on the 4th floor of Building 9, No. 6 Jingshun East Street, Chaoyang District, Beijing, serve as collateral for this credit extension. The maximum mortgage contract number is No. 202502287RSD018.

② The subsidiary Hangzhou Berry signed a loan contract numbered Hangzhou United Rural Commercial Bank Co., Ltd. Gaosha Branch No. 8011120250032824 on May 12, 2025. The loan amount is RMB 9,979,315.65, and the loan period is from May 12, 2025 to February 4, 2026. The subsidiary Hangzhou Berry signed a loan contract numbered Hangzhou United Rural Commercial Bank Co., Ltd. Gaosha Branch No. 8011120250063961 with Hangzhou United Rural Commercial Bank Co., Ltd. on August 28, 2025. The loan amount is RMB 17,000,000.00 and the loan period is from August 28, 2025 to March 31, 2026. The subsidiary Hangzhou Berry signed a loan contract numbered Hangzhou United Rural Commercial Bank Co., Ltd. Gaosha Branch No. 8011120250079532 with the Gaosha Branch of Hangzhou United Rural Commercial Bank Co., Ltd. on November 5, 2025. The loan amount is RMB 10,000,000.00 and the loan period is from November 5, 2025 to November 4, 2026. For the three loans, the company provided a joint liability guarantee with a maximum amount of 40,000,000.00 yuan, and the guarantee contract numbers were Hanglianyin (Gaosha) Zuibaozi No. 8011320250018430. As of December 31, 2025, the loan principal balances were RMB 8,000,000.00, RMB 17,000,000.00, and RMB 10,000,000.00 respectively, totaling RMB 35,000,000.00.

The subsidiary Hangzhou Berry signed a loan contract No. 24NRJ182 with the Bank of China Hangzhou Qiantang New District Branch on May 8, 2025. The loan amount is RMB 10,000,000.00, and the loan period is from May 13, 2025 to May 12, 2026. The maximum guarantee provided by Beijing Berry Hekang is a joint liability guarantee of RMB 10,000,000.00, and the guarantee contract number is 24NRB096. As of December 31, 2025, the principal balance of the loan was RMB 10,000,000.00.

23. Notes payable

Category Closing balance Opening balance Letter of credit - 30,168,594.54

24. Accounts payable

Item Closing balance Opening balance Purchase funds 272,907,048.88 257,343,042.70 Including: more than 1 year 38,420,903.90 52,468,390.86

25. Contract liabilities

Item Closing balance Opening balance Advance payment 119,661,876.77 103,489,755.62

26. Employee compensation payable

(1) Presentation of employee benefits payable

Item Opening balance Increase in the current period Decrease in the current period Ending balance Short-term compensation 46,454,308.48 283,914,200.1 286,047,786.8 44,320,721.79

5 4

Post-employment benefits - defined contribution plan 1,412,114.67 25,421,326.38 25,470,058.16 1,363,382.89 Termination benefits 92,607.96 8,093,071.79 8,166,437.86 19,241.89 Other benefits due within one year - - - -Total 47,959,031.11 317,428,598.3 319,684,282.8 45,703,346.57

2 6

(2) Presentation of short-term remuneration

Item Opening balance Increase in the current period Decrease in the current period Closing balance wages, bonuses, allowances and subsidies 23,424,980.73 241,852,050.6 243,905,431.2 21,371,600.08

1 6

Employee welfare fees - 4,750,233.42 4,750,233.42 - Social insurance premiums 992,424.96 14,983,775.44 15,014,413.50 961,786.90Including: Medical insurance premiums 956,717.19 14,274,029.39 14,304,272.92 926,473.66

Work injury insurance premium 35,167.60 603,644.26 603,902.39 34,909.47 Items Beginning balance Increase in the current period Decrease in the current period Ending balance

Maternity insurance premium 540.17 106,101.79 106,238.19 403.77 Housing provident fund 217,079.04 19,139,032.43 19,160,609.00 195,502.47 Trade union funds and employee education funds 21,819,823.75 3,189,108.25 3,217,099.66 21,791,832.34 Short-term paid absence - - - - Short-term profit sharing plan - - - - Total 46,454,308.48 283,914,200.1 286,047,786.8 44,320,721.79

5 4

(3) Display of defined contribution plan

Item Opening balance Increase in the current period Decrease in the current period Ending balance Basic pension insurance 1,364,721.20 24,609,374.68 24,656,264.04 1,317,831.84 Unemployment insurance premium 47,393.47 811,951.70 813,794.12 45,551.05 Enterprise annuity payment - - - -Total 1,412,114.67 25,421,326.38 25,470,058.16 1,363,382.89

27. Taxes payable

Item Ending balance Beginning balance Value-added tax 5,436,287.34 6,376,434.10 Corporate income tax 2,907,003.73 3,896,673.65 Personal income tax 1,132,574.22 1,060,635.50 Stamp tax 264,220.22 215,831.48 Urban maintenance and construction tax 2,301.78 131,306.51 Education fee surcharge 986.48 56,120.42 Local education fee surcharge 657.65 37,413.62 Total 9,744,031.42 11,774,415.28

28. Other payables

Item Closing balance Opening balance Interest payable - - Dividends payable - - Other payables 13,559,567.64 14,937,887.92 Total 13,559,567.64 14,937,887.92

(1) Other payables

1 Presented by nature of payment

Item Ending balance Opening balance Current accounts 6,857,076.11 7,108,444.43 Guarantee and deposit 3,343,653.63 3,756,197.02 The company’s social security provident fund payable 1,006,002.68 1,031,517.83 Others 2,352,835.22 3,041,728.64 Total 13,559,567.64 14,937,887.92

29. Non-current liabilities due within one year

Item Closing balance Opening balance Lease liabilities due within one year (Note 6.31) 11,550,500.44 3,626,355.48

30. Other current liabilities

Item Closing balance Opening balance Output tax to be transferred 8,551,284.19 7,841,699.24

31. Lease liabilities

Item Closing balance Opening balance Houses and buildings 118,835,584.25 46,864,436.04 Subtotal 118,835,584.25 46,864,436.04 Less: Lease liabilities due within one year (Note 6, 29) 11,550,500.44 3,626,355.48 Total 107,285,083.81 43,238,080.56

32. Deferred income

Item Beginning balance Increase in the current period Decrease in the current period Ending balance Reason for formation Government subsidy 10,872,000.00 120,000.00 50,000.00 10,942,000.00

Among them, projects involving government subsidies:

Liability items Beginning balance Added in the current period Included in operations in the current period Included in others in the current period

Amount of subsidy Amount of external income Amount of income Special funds from the central government to support the development of the housing rental market 10,692,000.00 - - - New technologies and clinical applications for prenatal screening and diagnosis of genetic metabolic diseases 130,000.00 70,000.00 - - Research

Changping District high-level scientific and technological talent gathering and development project funds 50,000.00 - - - Prenatal multi-modal artificial intelligence prognosis evaluation of major complex structural malformations - 50,000.00 - - Liability items Opening balance Added in this period This period is included in operating This period is included in other

Subsidy amount, external income amount, income amount estimation and construction of clinical decision-making system

Total 10,872,000.00 120,000.00 - -

(Continued from the above table)

Liability items Offset costs for the current period Other changes Closing balance Related to assets

Amount of expenses/related to income Special funds from the central government to support housing rental market development pilot projects - - 10,692,000.00 Asset-related new technologies and clinical applications for prenatal screening and diagnosis of genetic metabolic diseases - - 200,000.00 Research related to income

Changping District high-level scientific and technological talent gathering and development project funds - 50,000.00 - Prenatal multi-modal artificial intelligence prognostic evaluation of major complex structural malformations related to income - - 50,000.00 Construction of an evaluation and clinical decision-making system related to income

Total - 50,000.00 10,942,000.00

33. Share capital

Item Opening balance Increase or decrease due to this change (+, -) Ending balance

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

Total number of shares 353,521,465.0 - - - - - 353,521,465.0

0 0

34. Capital reserve

Item Opening balance Increase in the current period Decrease in the current period Ending balance Capital premium (equity premium) 821,569,429.62 - -821,569,429.62 Other capital reserves 337,896,544.63 8,142,240.12 4,972,377.62341,066,407.13 Total 1,159,465,974. 8,142,240.12 4,972,377.621,162,635,836.

25 75

Other notes:

(1) The company's other capital reserves increased by RMB 8,142,240.12 in the current period, of which the fair value of equity-settled share-based payment equity instruments changed by RMB 2,412,827.58, and other capital reserves increased by RMB 5,729,412.54 due to equity transactions. Subsidiary Fujian Berry Technology held a shareholders' meeting on July 31, 2025, and voted to adopt the "Management Measures for the First Employee Stock Ownership Plan of Fujian Berry Technology Co., Ltd.", agreeing that Fujian Berry Technology's core technical employees subscribed for a share of 1.6 million yuan in the employee stock ownership platform at a price of 1 yuan per share, and indirectly held 16% of Fujian Berry Technology's equity. It will be unlocked 24 months from the date of grant. After the lock-in period expires, it will be unlocked in batches on the premise of meeting relevant assessment conditions. Share-based payment expenses of RMB 2,872,413.79 were recognized in this period. After deducting minority shareholders' equity of RMB 459,586.21 attributable to minority shareholders, capital reserve of RMB 2,412,827.58 should be recognized in this period.

On September 25, 2025, the subsidiary Yashineng repurchased 20% of its own equity from Hong Kong Berry and minority shareholders at a premium of the same proportion. The premium for repurchasing equity from Hong Kong Berry is RMB 4,869,878.95, and the premium for repurchasing equity from minority shareholders is RMB 859,533.59. The equity repurchase premium should be offset against retained earnings of RMB 4,869,878.95, minority shareholders' equity of RMB 859,533.59, and recognized capital reserve of RMB 5,729,412.54.

(2) The company's other capital reserves decreased by RMB 4,972,377.62 in the current period, of which the fair value of equity-settled share-based payment equity instruments changed by RMB 4,972,377.62.

The company on March 24, 2025 The 12th meeting of the 10th Board of Directors was held on the 12th, and reviewed and approved the "Proposal on Adjusting the "First Phase Employee Stock Ownership Plan (Draft)" and its Summary, and the "Proposal on Adjusting the "First Phase Employee Stock Ownership Plan Management Measures"", and agreed to the "First Phase Employee Stock Ownership Plan" Plan (Draft)" Chapter 6 "2. Lock-up Period of Employee Stock Ownership Plan" "Summary of the First Employee Stock Ownership Plan (Draft)" Chapter 6 "2. Lock-up Period of Employee Stock Ownership Plan" "Administrative Measures for the First Employee Stock Ownership Plan" Chapter 4 Article 8 is adjusted. At the same time, as of April 1, 2025, the 2,823,000 company shares held by the company's first employee stock ownership plan (accounting for 0.7985% of the company's total share capital) have been sold through centralized bidding through the secondary market, and the company actually received an amount of 13,669,117.62 yuan. As of the completion of the stock sale, the company's cumulative recognized major shareholders' bottom-line expenses were 27,846,358.21 yuan. In fact, 22,873,980.59 yuan should be recognized, and 4,972,377.62 yuan should be written back, which is the current reduction of other capital reserves.

35. Other comprehensive income

Item Opening balance Amount incurred in the current period

(A) Before income tax in the current period Less: included in the previous period Less: included in the amount incurred in the previous period Other comprehensive income Other comprehensive income is transferred to profit and loss in the current period and transferred to retained in the current period

income

(1) Other comprehensive income that cannot be reclassified to profit or loss - - - - Among them: Recalculation of changes in defined benefit plans - - - - Other comprehensive income that cannot be transferred to profit or loss under the equity method - - - - Changes in the fair value of other equity instrument investments - - - -

Changes in the fair value of the enterprise's own credit risk - - - -

(2) Other comprehensive income that will be reclassified into profit and loss 21,097,188.0 -5,649,446.76 - - Item Opening balance Amount incurred in the current period

(A) Before income tax in the current period Less: included in the previous period Less: included in the amount incurred in the previous period Other comprehensive income Other comprehensive income is transferred to profit and loss in the current period and transferred to retained in the current period

Income includes: other comprehensive income that can be converted to profit and loss under the equity method 1,274,595.48 - - - changes in fair value of other debt investments - - - - amount of financial assets reclassified and included in other comprehensive income - - - - credit impairment provisions for other debt investments - - - - effective part of cash flow hedging gains and losses - - - - foreign currency financial statement translation differences 19,822,592.5 -5,649,446.76 - -

(3) Total other comprehensive income 21,097,188.0 -5,649,446.76 - -

(Continued from the above table)

Item Amount incurred in the current period Ending balance less: Attribution after tax Attribution after tax (C)=(A)+(B)

Income tax expense Parent company (B) Minority shareholders

(1) Other comprehensive income that cannot be reclassified into profit and loss - - - - Among them: Recalculation of changes in defined benefit plans - - - - Other comprehensive income that cannot be transferred to profit or loss under the equity method - - - - Changes in the fair value of other equity instrument investments - - - - Changes in the fair value of the enterprise's own credit risk - - - -

(2) Other comprehensive income that will be reclassified into profit and loss - -4,691,843.02 -957,603.74 16,405,344.99 Among them: other comprehensive income that can be converted into profit and loss under the equity method - - - 1,274,595.48 Changes in the fair value of other debt investments - - - - Amount of financial assets reclassified into other comprehensive income - - - - Credit impairment provisions for other debt investments - - - -Effective part of cash flow hedging gains and losses - - - - Translation difference of foreign currency financial statements - -4,691,843.02 -957,603.74 15,130,749.51

(3) Total other comprehensive income - -4,691,843.02 -957,603.74 16,405,344.99

36. Surplus reserve

Item Beginning balance Increase in the current period Decrease in the current period Ending balance Statutory surplus reserve 80,849,357.82 - - 80,849,357.82

37. Undistributed profits

Items Current period Previous period Undistributed profits at the end of the previous period before adjustment of withdrawal or distribution ratio 64,542,377.86 256,970,877.5 -

Total undistributed profits at the beginning of the adjusted period (adjustment +, -) - - - Adjusted undistributed profits at the beginning of the period 64,542,377.86 256,970,877.5 -

Add: Net profit attributable to owners of the parent company for the period -196,838,894. -192,428,499. -

41 73

Capital reserve makes up for losses - - - Less: Appropriation of statutory surplus reserve - - - Appropriation of discretionary surplus reserve - - - Appropriation of general risk reserve - - - Common stock dividends payable - - - Common stock dividends converted into share capital - - - Internal carryover of owners' equity - - -

Other decreases (note) 4,869,878.95 - -Undistributed profits at the end of the period -137,166,395. 64,542,377.86 -

Note: For other reductions, see Note 6.34, Other explanations (1).

38. Operating income and operating costs

(1) Operating income and operating costs

Item Amount for the current period Amount for the previous period

Revenue Cost Revenue Cost Main business 919,279,465.9 524,584,198.1 1,058,691,043. 564,612,152.13

7 3 45

Other business 10,538,556.09 4,018,454.15 19,474,230.49 8,297,192.26 Items Amount of the current period Amount of the previous period

Revenue Cost Revenue Cost Total 929,818,022.0 528,602,652.2 1,078,165,273. 572,909,344.39

6 8 94

(2) Deductions from operating income

Items Current period (10,000 yuan) Specific deductions Previous period (10,000 yuan) Specific deductions Amount of operating income 92,981.80 - 107,816.53 - Total amount of deduction items in operating income 1,053.85 - 1,947.42 - Total amount of deduction items in operating income as a proportion of operating income 1.13% - 1.81% - ① Business income unrelated to the main business - -

1. Other business income other than normal operations. Such as leasing fixed assets, 1,053.85 House equipment rental income 1,947.42 House equipment rental income 1,947.42 Intangible assets, packaging, sales materials, non-monetary income with materials, instrument maintenance income, instrument maintenance income, instrument maintenance income, asset exchange, income from operating entrusted management business, etc., and although income, instrument installation and maintenance income, instrument installation and maintenance income are included in the main business income, they are maintenance income outside the normal operation of listed companies.

2. Unqualified quasi-financial business income, such as loan interest income - No loan interest income - No loan interest income; quasi-financial business income and financial industry income newly added in this fiscal year and the previous fiscal year and income generated by financial industry, such as guarantees, commercial factoring, small loans, financing business income income generated from leasing, pawn and other businesses, opened for the sale of main products

Except for the development of financial leasing business.

Deduct business income that has nothing to do with the main business and income that does not have commercial substance.

operating income after revenue

3. Income generated from new trading business in this fiscal year and the previous fiscal year - No new trading income - No new trading income.

4. Related transaction assets that have nothing to do with the listed company’s current normal business operations - None related to the listed company’s current business - None related to the listed company’s current income. Have normal business operations Have related transactions unrelated to normal business operations Have unrelated related transactions

revenue generated revenue generated

5. Income from the beginning of the period to the date of merger of subsidiaries merged under the same control - Same control has not occurred - No income under the same control has occurred. Next Business Combinations Next Business Combinations

6. Income generated from businesses that have not formed or are difficult to form a stable business model - There is no income generated from such business - There is no income generated from such business. Income from students Subtotal of business income unrelated to main business 1,053.85 - 1,947.42 - ② Income without commercial substance - -

7. Income arising from transactions or events that do not significantly change the risk, timing distribution of the enterprise's future cash flows or - no such business income - no amount of such business income.

8. Income generated from transactions that do not have real business. Such as false income realized through self-trading - no such business income - no such business income, using Internet technology or other means

Methods to construct false income generated by transactions, etc.

Items Current period (10,000 yuan) Specific deductions for the previous period (10,000 yuan) Specific deductions

3. Income generated from businesses whose transaction prices are unfair. - No such business income - No such business income

4. Income generated by subsidiaries or businesses of a business combination that has no such business income and is acquired with unfair consideration or non-trading methods during the fiscal year - no such business income.

5. Income involved in non-standard opinions in audit opinions. - Standard for audit opinion None - Standard for audit opinion None

reserved reserved

6. Income generated from other transactions or matters that are not commercially reasonable. - There are no other income generated from transactions or events that are not commercially reasonable. - There are no other income generated from transactions or matters that are not commercially reasonable.

Income Subtotal of income without commercial substance - - - - ③ Other income unrelated to the main business or without commercial substance - No such business income - No such business income Amount after deduction of operating income 91,927.95 105,869.11

(3) Breakdown information of operating income and operating costs

Contract classification Domestic companies Overseas companies Total

Operating income Operating cost Operating income Operating cost Operating income Operating cost Product type

Basic scientific research services 183,809,736.98135,716,459.78 - -183,809,736.98 135,716,459.7

Medical products and services 613,387,074.00315,287,866.74 122,082,654.99 73,579,871.61 735,469,728.99 388,867,738.3

Among them: testing services 189,167,146.51143,203,798.10 96,438,376.51 59,955,992.22 285,605,523.02 203,159,790.3

Sales of reagents 395,731,626.59141,620,013.37 18,322,805.98 7,659,557.89 414,054,432.57 149,279,571.2

Equipment sales 27,376,796.48 29,603,738.09 7,321,472.50 5,964,321.50 34,698,268.98 35,568,059.59

Agent 1,111,504.42 860,317.18 - - 1,111,504.42 860,317.18 Others 10,516,408.23 4,018,454.15 22,147.86 - 10,538,556.09 4,018,454.15 Total 807,713,219.21455,022,780.67 122,104,802.85 73,579,871.61 929,818,022.06 528,602,652.2

39. Taxes and surcharges

Items Amount in this period Amount in previous period Real estate tax 1,624,739.07 3,332,584.57 Stamp tax 1,299,825.09 1,122,786.64 Urban maintenance and construction tax 1,227,228.95 3,889,484.38 Item Amount in this period Amount in previous period Education fee surcharge 525,441.95 1,666,486.34 Local education surcharge 350,294.63 1,110,990.87 Land use tax 5,306.98 98,241.78 Others 473,796.82 15,443.99 Total 5,506,633.49 11,236,018.57

40. Sales expenses

Item Amount incurred in the current period Amount incurred in the previous period Labor costs 132,822,516.76 143,140,473.47 Marketing expenses 23,943,284.30 34,160,107.80 Equipment maintenance expenses 15,181,178.73 20,525,688.34 Depreciation and amortization expenses 13,824,734.42 14,787,351.30 Business entertainment expenses 7,225,332.31 9,292,433.61 Travel and transportation expenses 6,331,573.52 7,339,251.27 Transportation and warehousing service expenses 2,549,240.12 2,991,079.02 Depreciation of right-of-use assets 2,168,279.12 1,897,416.18 Rent, water and electricity charges 1,936,459.53 2,190,926.73 Office expenses 328,688.49 452,552.39 Other expenses 162,641.61 52,891.73 Total 206,473,928.91 236,830,171.84

41. Management expenses

Item Amount incurred in the current period Amount incurred in the previous period Labor costs 72,160,052.01 64,637,248.59 Depreciation and amortization expenses 28,663,360.26 28,491,324.86 Depreciation of right-of-use assets 16,319,238.06 6,152,210.18 Daily maintenance expenses 13,003,411.99 7,848,606.19 Intermediary service fee 9,514,062.78 16,742,517.36 Rent, water and electricity fees 6,075,111.54 8,080,120.55 Quality inspection fee 3,729,741.64 3,611,090.35 Business entertainment expenses 2,082,024.67 1,848,588.88 Office expenses 1,859,896.13 1,733,438.02 Travel and transportation expenses 1,084,921.84 1,016,968.46 Items Amount for the current period Amount for the previous period Conference fees 559,850.56 214,514.57 Equity incentive expenses -2,099,963.83 3,261,624.21 Other expenses 4,800,673.40 5,085,542.16 Total 157,752,381.05 148,723,794.38

42. Research and development expenses

Item Amount incurred in the current period Amount incurred in the previous period Labor expenses 48,388,763.20 40,887,827.21 Material expenses 31,238,986.91 33,838,472.79 Depreciation and amortization expenses 11,966,321.11 7,132,120.64 Scientific research and inspection expenses 4,510,694.86 4,626,112.49 Consulting service fees 4,010,331.82 3,044,889.61 Travel and transportation expenses 1,411,629.17 1,121,672.37 Office expenses 82,509.93 73,806.66 Others 2,754,542.56 4,694,760.45Total 104,363,779.56 95,419,662.22

43. Financial expenses

Item Amount for the current period Interest expense for the previous period 9,979,243.93 9,831,402.96 Less: Interest income 3,196,609.04 3,522,477.58 Plus: Exchange gains and losses -573,461.48 773,354.95 Plus: Handling fee 252,709.83 340,178.52 Total 6,461,883.24 7,422,458.85

44. Other income

Items (sources of other income) Amount incurred in the current period Amount incurred in the previous period is directly included in the current profit and loss Government subsidies (related to income) 1,569,636.68 920,226.35 Government subsidies related to deferred income (related to assets) - 197,500.00 Input tax additional deduction -8,193.94 593,423.78 Individual tax handling fee return 135,078.77 6,360.64 Total 1,696,521.51 1,717,510.77 Note: For details of government subsidies, see X. Government subsidies 2. Government subsidies included in current profits and losses.

45. Investment income

Items Amount incurred in the current period Amount incurred in the previous period Long-term equity investment income calculated by equity method -1,496,249.77 -14,553,527.69 Investment income obtained from disposal of trading financial assets -2,041,593.04 -Total -3,537,842.81 -14,553,527.69

46. Income from changes in fair value

Sources of income from changes in fair value Amount for the current period Amount for the previous period Trading financial assets -2,841,154.08 -117,190.78 Non-current assets due within one year - -14,974.44 Total -2,841,154.08 -132,165.22

47. Credit impairment losses

Item Amount incurred in the current period Amount incurred in the previous period Bad debt losses on accounts receivable -102,517,841.30 -130,675,340.56 Bad debt losses on other receivables -6,464,730.61 -2,254,664.00 Total -108,982,571.91 -132,930,004.56

48. Asset impairment losses

Items Amount incurred in the current period Amount incurred in the previous period Inventory depreciation losses and impairment losses on contract performance costs 674,124.35 -2,436,996.82 Impairment losses on long-term equity investments - -25,492,318.08 Impairment losses on development expenses - -148,973.73 Total 674,124.35 -28,078,288.63

49. Income from asset disposal

Items Amount for the current period Amount for the previous period Gains from disposal of non-current assets 4,998,568.37 1,739,687.32 Including: Gains from disposal of fixed assets -126,541.36 -1,581,838.59 Items Amount for this period Amount for the previous period Gains from disposal of leased assets 5,125,109.73 261,515.94 Gains from disposal of projects under construction - 2,593,405.52

Gains from disposal of intangible assets - 466,604.45 Total 4,998,568.37 1,739,687.32

50. Non-operating income

Item Amount incurred in the current period Amount incurred in the previous period Amount included in non-recurring gains and losses for the current period Gains from damage and scrapping of non-current assets 167,964.83 10,359.65 167,964.83 Including: fixed assets 167,964.83 10,359.65 167,964.83 Liquidated damages income 133,498.40 129,568.26 133,498.40 No payment required 3,679,086.94 47,026.48 3,679,086.94 Others 24,670.88 71,852.76 24,670.88Total 4,005,221.05 258,807.15 4,005,221.05

51. Non-operating expenses

Item Amount incurred in the current period Amount incurred in the previous period Amount included in non-recurring gains and losses for the current period Loss from damage and scrapping of non-current assets 415,316.59 510,403.18 415,316.59 Including: Fixed assets 415,316.59 510,403.18 415,316.59 External donations 1,851,749.90 2,318,104.10 1,851,749.90 Liquidated damages 3,149,503.50 668,684.59 3,149,503.50 Others 809,226.08 906,062.26 809,226.08 Total 6,225,796.07 4,403,254.13 6,225,796.07

52. Income tax expenses

(1) Income tax expense schedule

Items Amount incurred in the current period Amount incurred in the previous period Current income tax expenses 6,789,896.33 12,677,403.26 Deferred income tax expenses -5,327,877.45 5,326,667.64 Final settlement expenses 5,275,953.08 -589,652.60 Exchange gains and losses - 3,204.68 Total 6,737,971.96 17,417,622.98

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

Items Total profits for the current period -189,556,166.06 Income tax expense calculated according to statutory/applicable tax rates -47,389,041.52 Impact of different tax rates applicable to subsidiaries 4,083,313.59 Impact of adjusting income tax in previous periods 5,275,953.08 Impact of non-taxable income -2,235,557.88 Impact of non-deductible costs, expenses and losses 8,788,329.76 Impact of super deduction of R&D expenses -16,708,894.26 Impact of using deductible losses of unrecognized deferred income tax assets in the previous period -274,541.56 Impact of deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period 55,296,138.95 Impact of additional deduction of wages for persons with disabilities -97,728.20 Income tax expenses 6,737,971.96

53. Cash flow statement items

(1) Cash related to operating activities

1 Other cash received related to operating activities

Items Amount for the current period Current accounts for the previous period 640,646.69 117,197.10 Interest income 3,031,700.16 3,433,311.96 Government subsidies 1,920,930.45 969,574.99 Deposits and security deposits received 2,842,398.09 1,073,498.62 Recovered restricted monetary funds 17,452,023.44 - Others 1,593,096.58 201,421.02 Total 27,480,795.41 5,795,003.69

2 Other cash paid related to operating activities

Items Amount incurred in the current period Period expenses paid during the period Amount incurred in the previous period 130,146,772.47 148,464,767.02 Current accounts paid 637,436.59 3,365,888.07 Deposits and guarantees paid 5,016,190.05 5,409,798.38 Cash donation expenses 1,298,675.00 2,318,104.10 Others 4,396,671.42 1,837,621.32 Items Amount incurred in the current period Total amount incurred in the previous period 141,495,745.53 161,396,178.89

3 Other cash received related to investing activities

Item Amount for the current period Amount for the previous period Funds recovered from inter-enterprise borrowings - 12,344,515.56

4 Other cash paid related to investment activities

Item Amount for the current period Amount for the previous period Funds lent by inter-enterprise loans - 14,700,000.00

5 Other cash received related to financing activities

Item Amount incurred in the current period Amount incurred in the previous period Equity incentive sales amount - 1,086,400.00

6 Other cash paid related to financing activities

Item Amount incurred in the current period Cash paid for lease liabilities in the previous period 14,984,686.50 56,744,561.64 Cash paid for share repurchase 9,459,239.90 - Cash paid for equity incentives 1,244,138.58 - Total 25,688,064.98 56,744,561.64

7 Changes in various liabilities arising from financing activities

Item Opening balance Amount increased during the period Decreased amount during the period Closing balance

Cash changes Non-cash changes Cash changes Non-cash changes

Short-term borrowings 113,415,839.2 182,848,975.6 4,756,474.06 146,704,470.1 - 154,316,818.8

7 5 1 7 Lease liabilities (including lease liabilities due within 118,835,584.2 years)

Total 160,280,275.3 182,848,975.6 143,713,222.8 161,138,019.0 52,552,051.64 273,152,403.1

1 5 6 6 2

54. Supplementary information for cash flow statement

(1) Adjustment of net profit to cash flow from operating activities

Item Amount for the current period Amount for the previous period ① Adjust net profit to cash flow from operating activities:

Net profit -196,294,138. -188,175,034.

02 28 plus: Asset impairment provision -674,124.35 28,078,288.63 Credit impairment provision 108,982,571.9 132,930,004.5

1 6 Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets 59,359,691.09 74,182,104.23 Depreciation of right-of-use assets 25,020,557.73 14,810,397.39 Amortization of intangible assets 4,651,985.12 3,008,323.22 Amortization of long-term prepaid expenses 13,596,012.38 8,359,791.23 Losses from disposal of fixed assets, intangible assets and other long-term assets (income is listed with "-") -4,998,568.37 -1,739,687.32 Loss from scrapping of fixed assets (income is listed with "-") 247,351.76 500,043.53 Loss from change in fair value (income is listed with "-") 2,841,154.08 132,165.22 Financial expenses (income is listed with "-") 9,405,782.45 10,403,903.76 Investment losses (income is listed with "-") 3,537,842.81 14,553,527.69 Decrease in deferred income tax assets (increases are indicated by "-") -6,347,290.87 7,197,424.69 Increase in deferred income tax liabilities (decreases are indicated by "-") 1,027,264.30 -1,870,757.05 Decrease in inventory (increases are indicated by "-") 18,825,960.62 31,951,607.53 Decrease in operating receivables (increases are indicated by "-") 63,204,184.84 -16,688,541.5

Increase in operating payables (decreases are listed with "-") -29,678,540.9 -30,297,511.0

6 1 Others -2,099,963.83 633,871.22 Net cash flow generated from operating activities 70,607,732.69 87,969,921.71 ② Major investments and financing activities that do not involve cash receipts and payments:

Conversion of debt into capital - - Convertible corporate bonds due within 1 year - - Financing leased fixed assets - - ③ Net changes in cash and cash equivalents:

Closing balance of cash 372,204,585.7 358,312,814.1

3 4 Less: Opening balance of cash 358,312,814.1 316,128,886.5

4 4 Add: Closing balance of cash equivalents - -Minus: Opening balance of cash equivalents - -Item Amount for the current period Amount for the previous period Net increase in cash and cash equivalents 13,891,771.59 42,183,927.60

(2) Composition of cash and cash equivalents

Item Closing balance Opening balance ① Cash 372,204,585.7 358,312,814.1

3 4 Including: Cash on hand 97,036.11 5,111.61 Bank deposits that can be used for payment at any time 371,630,386.3 357,381,661.0 6 9

Other monetary funds available for payment at any time 477,163.26 926,041.44 ② Cash equivalents - - Including: bond investments due within 3 months - - ③ Closing balance of cash and cash equivalents 372,204,585.7 358,312,814.1

3 4 Including: Restricted cash and cash equivalents used by the parent company or its subsidiaries - -

55. Foreign currency monetary items

(1) Foreign currency monetary items

Item Foreign currency balance at the end of the period Conversion exchange rate Conversion of RMB balance at the end of the period Monetary Funds

Including: USD 6,389,276.37 7.0288 44,908,945.75

HKD 72,282,762.37 0.90322 65,287,236.63 Accounts receivable

Of which: USD 123,198.20 7.0288 865,935.51

HKD 16,383,395.54 0.90322 14,797,810.52 Other receivables

Of which: USD - 7.0288 -

HKD 3,174,064.90 0.90322 2,866,878.90 Accounts payable

Of which: USD - 7.0288 -

HKD 10,082,365.38 0.90322 9,106,594.06 Other payables

Item Foreign currency balance at the end of the period Conversion exchange rate RMB conversion balance at the end of the period Including: US dollars - 7.0288 -

HKD 348,440.50 0.90322 314,718.43

(2) Description of overseas operating entities:

Important overseas business entities: Hong Kong Berry and Yashineng Company. The main place of business of Berry Hong Kong is Hong Kong, and its accounting standard currency is the US dollar; the main place of business of Yashineng Company is Hong Kong, and its accounting standard currency is the Hong Kong dollar. The two overseas operating entities chose US dollars and Hong Kong dollars as their accounting standard currencies based on actual business needs.

56. Leasing

(1) The company serves as the lessee

1 Simplified treatment of short-term leases or lease payments for low-value assets

Item Amount of the current period Short-term lease or leasing expenses of low-value assets 1,084,200.77

2 The total cash outflow related to leasing is RMB 16,209,833.37.

(2) The company acts as the lessor

1 Operating lease

Item Lease income Including: available income not included in lease receipts

Income related to variable lease payments Beijing Herui Jingzhan Medical Laboratory Co., Ltd. 382,342.72 - Fuzhou Haikuo Biotechnology Co., Ltd. 75,199.11 - Hong Kong Wanji Biotechnology Co., Ltd. 22,147.86 - Total 479,689.69 -

7. R&D expenditures

1. List by nature

Item Amount incurred in the current period Amount incurred in the previous period Labor expenses 53,062,005.96 47,240,869.78 Material expenses 37,383,156.05 35,397,014.87 Depreciation and amortization expenses 14,109,351.14 10,265,555.65 Scientific research and inspection expenses 7,277,527.80 8,882,431.00 Project Amount incurred in the current period Amount incurred in the previous period Equipment debugging and testing 3,371,865.17 4,982,556.09 Travel and transportation expenses 1,598,830.63 1,209,610.70 Office expenses 87,830.87 112,535.97 Others 5,727,441.07 5,459,983.05Total 122,618,008.69 113,550,557.11 Including: expensed R&D expenditures 104,363,779.56 95,419,662.22

Capitalized R&D expenditure 18,254,229.13 18,130,894.89

2. R&D projects that meet capitalization conditions

Item Opening balance Increase amount in the current period Decrease amount in the current period Ending balance Internal development Others Confirmed as transferred to the current period Others

Expenses Intangible assets Profit and loss

Project 1 10,246,016. 4,728,041.9 - 14,974,058. - - -

62 9 61

Project 2 7,953,126.9 2,974,560.1 - 10,927,687. - - -

7 1 08

Item 3 6,054,128.5 4,440,254.4 - 10,494,383. - - -

8 6 04

Item 4 2,931,226.1 1,352,996.7 - - - - 4,284,222.8

2 2 4 Item 5 1,773,349.2 4,599,356.3 - - - - 6,372,705.6

8 4 2 Project 6 1,193,042.9 159,019.51 - 1,352,062.4 - - -

0 1

Total 30,150,890. 18,254,229. - 37,748,191. - - 10,656,928.

47 13 14 46

(1) Significant capitalized R&D projects

Project R&D progress Estimated completion time Estimated economic benefits Specific basis for starting capitalization

Production method and time

Item 4: Registration change reissue stage 2026.10 Used to produce products Obtain registration inspection Registration inspection report

When reporting

Project 5 Clinical Trial Phase 2027.03 Used to produce products Obtain registered inspection Registered inspection report

When reporting

(2) Provision for impairment of development expenditures

Items Beginning balance Increase in the current period Decrease in the current period Ending balance Impairment test Item 3 2,009,537.21 - - 2,009,537.21 -Item 8 148,973.73 - - 148,973.73 -Total 2,158,510.94 - - 2,158,510.94 -

Note: The above projects are all projects whose development was terminated in previous years or previous period, and are not the same projects as those listed in VII. 2(1) Important capitalized R&D projects.

8. Changes in consolidation scope

1. Business merger not under common control

None.

2. Merger of enterprises under common control

None.

3. Reverse purchase

None.

4. Changes in the scope of consolidation due to other reasons

Increased scope of consolidation

Company name Equity acquisition method Time of equity acquisition Capital contribution Shareholding ratio Fujian Berry Hekang Industrial Incubator Co., Ltd. Established 2025.06 50 million yuan 100.00% Fujian Berry Technology Co., Ltd. Established 2025.07 8.4 million yuan 84.00% Fuzhou Berry Hekang Management Consulting Co., Ltd. Established 2025.04 2 million yuan 100.00% Fuzhou Changle Ruicheng Hesheng Technology Development Center (Limited Partnership) Established 2025.07 420,000 yuan 20.79% Henan Yuanmeng Kangtong Gene Technology Co., Ltd. Established 2025.10 600,000 yuan 60.00%

9. Interests in other entities

1. Interests in subsidiaries

(1) Composition of our company

Name of subsidiary company Main business location Nature of business Shareholding ratio Method of acquisition

camp direct indirect

Fujian Berry and Kang Gene Technology Co., Ltd. Fuzhou Fuzhou Biotechnology 100.00% - Investment and establishment of Fujian Berry and Kang Biotechnology Co., Ltd. Fuzhou Fuzhou Biotechnology 100.00% - Investment and establishment of Fujian Berry and Kang Gene Diagnostic Technology Co., Ltd. Fuzhou Fuzhou Biotechnology - 100.00% Investment and establishment of Fujian Berry Laboratory Co., Ltd. Fuzhou Fuzhou Biotechnology - 100.00% Investment and establishment of Fuzhou Berry and Kang Medical Devices Co., Ltd. Fuzhou Fuzhou Biotechnology - 100.00% Investment and establishment of Beijing Berry and Kang Biotechnology Co., Ltd. Beijing Beijing Biotechnology 100.00% - Reverse purchase of Hangzhou Berry and Kang Gene Diagnostic Technology Co., Ltd. Hangzhou Hangzhou Biotechnology - 100.00% Not under common control

Under the merger of enterprises, Beijing Biotech Medical Instrument Co., Ltd. Beijing Beijing Biotechnology - 100.00% Invested in the establishment of Qingdao Biotech Medical Laboratory Co., Ltd. Qingdao Qingdao Biotechnology - 100.00% Invested in the establishment of Beijing Biotech Medical Laboratory Co., Ltd. Beijing Beijing Biotechnology - 100.00% Invested in the establishment of Shanghai Biotech Medical Laboratory Co., Ltd. Shanghai Shanghai Biotechnology - 85.00% Investment and establishment of Chengdu Berry and Kang Medical Laboratory Co., Ltd. Chengdu Chengdu Biotechnology - 100.00% Investment and establishment of Hong Kong Berry and Kang Biotechnology Co., Ltd. Hong Kong Hong Kong Biotechnology - 100.00% Investment and establishment of Yashigen Gene Technology Co., Ltd. Hong Kong Hong Kong Biotechnology - 85.00% Non-common control

Under the merger of enterprises, Beijing Berry and Kang Gene Diagnostic Technology Co., Ltd. Beijing Beijing Biotechnology - 100.00% investment and establishment of Fujian Berry and Kang Industrial Incubator Co., Ltd. Fuzhou Fuzhou Investment and assets - 100.00% investment and establishment

management

Fujian Berry Technology Co., Ltd. Fuzhou Fuzhou Biotechnology - 84.00% investment and establishment Fuzhou Berry Hekang Management Consulting Co., Ltd. Fuzhou Fuzhou Investment and assets - 100.00% investment and establishment

management

Fuzhou Changle Ruicheng Hesheng Technology Development Center (Limited Partnership Fuzhou Fuzhou Shareholding Platform - 20.79% Investment and Establishment Partnership)

Henan Yuanmeng Kangtong Gene Technology Co., Ltd. Henan Henan Biotechnology - 60.00% investment and establishment

(2) Important non-wholly owned subsidiaries

Name of subsidiary company Minority shareholders Attributable to minority shareholders in the current period Attributable to minority shareholders in the current period Attributable to minority shareholders at the end of the period

Shareholding ratio Profit and loss of several shareholders Dividends paid by shareholders Equity balance Shanghai Berry Hekang Medical Laboratory Co., Ltd. 15.00% -39,704.54 - -14,172,045.9

Yashineng Gene Technology Co., Ltd. 15.00% 993,808.33 - 41,326,451.35 Subsidiary name Minority shareholders Attributable to minority shareholders in this period Attributable to minority shareholders in this period Minority shareholders at the end of the period

Shareholding ratio Profit and loss of several shareholders Dividends paid by Dong Equity balance Fujian Berry Technology Co., Ltd. 16.00% -1,350,504.62 - -890,918.41 Fuzhou Changle Ruicheng Hesheng Technology Development Center (Limited Partnership) 79.21% -506.51 - 1,599,493.49 Henan Yuanmeng Kangtong Gene Technology Co., Ltd. 40.00% -15,940.01 - -15,940.01

(3) Main financial information of important non-wholly owned subsidiaries

Subsidiary name Closing balance

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Shanghai Berry Hekang 573,357.88 9,283.45 582,641.33 23,667,657.50 - 23,667,657.50 Medical Laboratory All

Ltd.

Yashineng Genomics 222,635,598.3 35,475,725.33 258,111,323.6 18,718,967.87 17,348,393.13 36,067,361.00 Technology Co., Ltd. 3 6

Fujian Berry Technology 127,623,521.7 34,554,421.60 162,177,943.3 157,746,183.5 - 157,746,183.5 Co., Ltd. 8 8 5 5 Fuzhou Changle Ruicheng 4,865.56 895,215.49 900,081.05 5,505.00 - 5,505.00 Hesheng Technology Development

center(limited)

Guy)

Henan Yuanmeng Kangtong 554,141.28 20,884.96 575,026.24 14,876.27 - 14,876.27 Gene Technology Co., Ltd.

company

(continued from table 1 above)

Subsidiary name Opening balance

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Shanghai Berry Hekang 3,727,560.12 287,123.47 4,014,683.59 26,835,002.81 - 26,835,002.81 Medical Laboratory All

Ltd.

Yashineng Genomics 275,111,435.1 16,468,914.56 291,580,349.7 11,486,452.26 766,723.56 12,253,175.82 Technology Co., Ltd. 5 1

Fujian Berry Technology - - - - - Co., Ltd.

Fuzhou Changle Ruicheng - - - - - -Subsidiary name Opening balance

Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Hesheng Technology Development

center(limited)

Guy)

Henan Yuanmeng Kangtong - - - - - Gene Technology Co., Ltd.

company

(continued from table 2 above)

Name of subsidiary company Amount incurred in the current period

Operating income Net profit Total comprehensive income Operating activities

Cash flow Shanghai Berry Hekang Medical Laboratory Co., Ltd. - -264,696.95 -264,696.95 -818,708.33 Yashineng Gene Technology Co., Ltd. 114,783,330.3 13,009,413.73 6,625,388.77 32,541,321.16

Fujian Berry Technology Co., Ltd. 87,336,286.75 -8,440,653.96 -8,440,653.96 18,194,409.84 Fuzhou Changle Ruicheng Hesheng Technology Development Center (Limited Partnership) - -1,705,651.54 -1,705,651.54 4,865.56 Henan Yuanmeng Kangtong Gene Technology Co., Ltd. - -39,850.03 -39,850.03 -37,973.76

(Continued from Table 3 above)

Name of subsidiary company Amount incurred in the previous period

Operating income Net profit Total comprehensive income Operating activities

Cash flow Shanghai Berry Hekang Medical Laboratory Co., Ltd. - -486,548.81 -486,548.81 -471,459.36 Yashineng Gene Technology Co., Ltd. 126,517,854.1 28,842,985.10 34,615,065.69 19,732,928.05

Fujian Berry Technology Co., Ltd. - - - - Fuzhou Changle Ruicheng Hesheng Technology Development Center (Limited Partnership) - - - - Henan Yuanmeng Kangtong Gene Technology Co., Ltd. - - - -

2. Interests in joint arrangements or joint ventures

(1) Important joint ventures or associates

Joint venture or main business registration place Nature of business Shareholding proportion Voting rights Name of joint venture or associated enterprise Place Direct Indirect Proportion Investment in associated enterprise

Accounting treatment method Fujian Herui Gene Technology Co., Ltd. Fuzhou Fuzhou Biotechnology 18.2688% - 18.2688% Accounted by equity method

Long-term equity investment in Hefei Rhenke Biotechnology Co., Ltd. Hefei Hefei Biotechnology 7.6923% - 7.6923% Accounted by equity method

Long-term equity investment in Beijing Yuanyuan Gene Technology Co., Ltd. Beijing Beijing Biotechnology 20.00% - 20.00% Accounted by equity method

Long-term equity investment in the construction of the Fuzhou Xintou Biotechnology Industrial Park Fuzhou Fuzhou Industrial Park opening - 49.00% 49.00% Accounting based on the equity method to establish a development and operation company Long-term equity investment in Fuzhou Xintou Kairuikang Venture Capital Fuzhou Fuzhou Venture Capital - 20.00% 20.00% Accounting based on the equity method Fund partnership (limited partnership) Long-term equity investment

(2) Main financial information of important joint ventures or associates

Item Closing balance / Amount incurred in the current period

Fujian Herui Gene Technology Co., Ltd. Fuzhou Xintou Biotechnology Industrial Park Construction Fuzhou Xintou Zhikai Ruikang Venture Capital Fund

Development Co., Ltd. Golden Partnership (Limited Partnership) Total assets 70,153,746.72 757,255,943.74 59,994,256.36 Total liabilities 175,839,976.97 406,628,947.14 -Total net assets -105,686,230.25 350,626,996.60 59,994,256.36 Operating income 1,535,527.26 5,953,634.80 -Total profit -26,678,571.03 1,442,698.91 -318,235.06Net profit -26,678,571.03 -1,654,945.75 -318,235.06

(Continued from the above table)

Item Opening balance / Amount incurred in the previous period

Fujian Herui Gene Technology Co., Ltd. Fuzhou Xintou Biotechnology Industrial Park Construction Fuzhou Xintou Zhikai Ruikang Venture Capital Fund

Development Co., Ltd. Golden Partnership (Limited Partnership) Total assets 88,578,298.09 695,112,371.24 - Total liabilities 167,585,957.31 342,830,428.89 - Items Beginning balance / Amount incurred in the previous period

Fujian Herui Gene Technology Co., Ltd. Fuzhou Xintou Biotechnology Industrial Park Construction Fuzhou Xintou Zhikai Ruikang Venture Capital Fund

Development Co., Ltd. Golden Partnership (Limited Partnership) Total net assets -79,007,659.22 352,281,942.35 -Operating income 16,241,498.20 2,203,234.86 -Total profit -77,550,053.60 -2,448.39 -Net profit -77,550,053.60 -319,272.92 -

(3) Excess losses incurred by joint ventures or associates

Name of the joint venture or associated enterprise Accumulated unconfirmed losses in the current period Accumulated unconfirmed losses at the end of the period Losses (or losses recognized in the current period)

(shared net profit)

Fujian Herui Gene Technology Co., Ltd. - -4,873,854.78 -4,873,854.78

10. Government subsidies

1. Liability items involving government subsidies

Financial statements Opening balance New in this period Included in this period Transferred to others in this period Closing balance Related to asset items Subsidy amount Non-operating income Other income amount Change/income related

Amount

Deferred income 10,692,000. - - - - 10,692,000. Related to assets

00 00

Deferred income 130,000.00 70,000.00 - - - 200,000.00 Deferred income related to income 50,000.00 - - - 50,000.00 - Deferred income related to income - 50,000.00 - - - 50,000.00 Total related to income 10,872,000. 120,000.00 - - 50,000.00 10,942,000.

00 00

2. Government subsidies included in current profits and losses

Type Amount for the current period Amount for the previous period related to assets - 197,500.00 Related to income 1,569,636.68 920,226.35 Total 1,569,636.68 1,117,726.35

(1) Government subsidy details

Subsidy items Amount incurred in the current period Amount incurred in the previous period Asset-related/Income-related subsidy items Amount incurred in this period Amount incurred in the previous period Asset-related/Income-related non-invasive DNA prenatal testing technology service platform construction project - 197,500.00 Asset-related research and development expense investment funding 506,650.00 - Income-related employment stabilization subsidy 242,851.49 80,567.51 Income-related social security subsidies for new college graduates recruited by small and micro enterprises 209,749.87 315,112.05 Income-related special special fund subsidies for specialties 200,000.00 - Income-related job subsidies and social insurance subsidies for disabled people 130,944.63 123,263.35 Income-related district-level matching subsidy funds for high-tech enterprises 100,000.00 - Temporary reward for revenue growth of technology service industry support measures related to income 80,000.00 - One-time job expansion subsidy related to income 37,750.00 7,500.00 Beijing International Science and Technology Innovation 2025 Beijing Intellectual Property Office related to income 27,263.00 - Center Intellectual Property Capacity Improvement Plan Project related to income

Patent subsidy 11,050.00 55,020.00 Income-related leasing subsidy for newly introduced talents 10,000.00 10,000.00 Income-related one-time living subsidy 10,000.00 - Income-related stamp tax exemption 2,267.49 1,042.92 Income-related Fuzhou Changle District absorbs people who have been lifted out of poverty for cross-provincial employment 1,110.20 252.33 Income-related talent subsidy - 150,000.00 Income-related Zhongguancun Science and Technology Park Chaoyang Park Management Committee Chaoyang 2024 - 100,000.00 Income-related small and medium-sized guidance funds

Apply for foundation construction and capacity expansion project Changping District, Beijing to support high and new technologies - 50,000.00 Small upgrading and regulation cultivation of income-related enterprises

Subsidy for water and electricity - 19,158.19 Relevant to income One-time employment subsidy for small, medium and micro enterprises - 6,000.00 Relevant to income Fuzhou youth trainee subsidy - 1,176.00 Relevant to income to absorb cross-provincial employment of people out of poverty in the central and western regions - 1,134.00 Relevant to income Total 1,569,636.68 1,117,726.35

11. Risks related to financial instruments

1. Risks of financial instruments

The company's main financial instruments include monetary funds, trading financial assets, other non-current financial assets, notes receivable, accounts receivable, other receivables, short-term loans, accounts payable, other payables, and long-term loans. For detailed descriptions of various financial instruments, please refer to the relevant items in Note 6. The company's goal in risk management is to achieve an appropriate balance between risks and returns, reduce the negative impact of risks on the company's operating performance to a minimum, and maximize the interests of shareholders and other equity investors. Based on this risk management objective, the company's basic risk management strategy is to determine and analyze the various risks faced by the company, establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliable manner to control risks within a limited range.

(1) Market risk

Market risk of financial instruments refers to the risk that the fair value or future cash flows of financial instruments fluctuate due to market price changes, including exchange rate risk, interest rate risk and other price risks.

The company uses sensitivity analysis techniques to analyze the possible impact of reasonable and possible changes in market risk-related variables on current profits and losses or shareholders' equity. Since any risk variable rarely changes in isolation, and the correlation between variables will have a significant impact on the final impact of a change in a certain risk variable, the following content is based on the assumption that changes in each variable are independent.

1 Exchange rate risk

Exchange rate risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in foreign exchange rates. The Company's foreign exchange risks are mainly related to US dollars and Hong Kong dollars. The Company's other main business activities are denominated and settled in RMB. Exchange rate risk affects the Company's transactions and the performance of overseas operations. As of December 31, 2025, the balance of the company's foreign currency monetary items can be found in Note 6.55, "Foreign Currency Monetary Items".

The sensitivity analysis of exchange rate risk is shown in the table below, which reflects the impact on net profit and shareholders' equity due to changes in the fair value of monetary assets and monetary liabilities when there are reasonable and possible changes in the foreign currency exchange rates listed below, assuming that other variables remain unchanged. Item Ending balance Beginning balance

USD HKD USD HKD

RMB RMB RMB RMB assets 45,774,881.26 82,951,926.05 3,039,573.18 120,672,535.9

Liabilities - 9,421,312.49 6,208,412.19 7,326,252.40 Item Exchange rate changes Closing balance Opening balance

to net profit to owners’ equity to net profit to owners’ equity

Impact Impact Impact Impact All foreign currencies appreciate against the RMB by 5% 5,965,274.74 5,965,274.74 5,508,872.23 5,508,872.23 All foreign currencies depreciate against the RMB by 5% -5,965,274.74 -5,965,274.74 -5,508,872.23 -5,508,872.23

2 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's interest rate risk mainly arises from bank deposits, trading financial assets, short-term borrowings, and long-term borrowings. Fixed-rate financial liabilities expose the Company to fair value interest rate risk. The Company determines the relative proportions of fixed-rate and floating-rate contracts based on the prevailing market environment, and maintains an appropriate combination of fixed-rate and floating-rate instruments through regular review and monitoring. The Company pays close attention to the impact of interest rate changes on the Company's interest rate risk.

Item Closing balance Opening balance Floating rate financial instruments - - Financial liabilities - -

3 Other price risks

For investments in other financial assets held by the company, management believes that the market price risks faced by these investment activities are acceptable. Other financial asset investments held by the company are listed below:

Item Closing balance Opening balance Trading financial assets 2,821,047.91 17,032,640.72 Total 2,821,047.91 17,032,640.72

(2) Credit risk

Credit risk refers to the risk that one party to a financial instrument cannot fulfill its obligations, causing financial losses to the other party.

The Company manages credit risks by portfolio classification. Credit risk mainly arises from bank deposits and accounts receivable.

The company's bank deposits are mainly deposited in 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 periods based on the debtor's financial status, the possibility of obtaining guarantees from third parties, credit records and other factors such as current market conditions. The company will regularly monitor customer credit records. For debtors with poor credit records, the company will use written reminders, shorten the credit period or cancel the credit period to ensure that the company's overall credit risk is within a controllable range. The Company's maximum exposure to credit risk is the carrying amount of each financial asset on the balance sheet. The Company has not provided any other guarantees that may expose the Company to credit risk.

As of December 31, 2025, among the company's accounts receivable, the top five accounts receivable accounted for 42.60% of the company's total accounts receivable (42.3% on December 31, 2024 7%); among the company's other receivables, the other receivables of the top five units with the largest amount of arrears account for 95.18% of the company's total other receivables (96.05% as of December 31, 2024).

(3) Liquidity risk

Liquidity risk refers to the risk of a shortage of funds when the company fulfills its obligations to settle by delivering cash or other financial assets.

When managing liquidity risk, the Company maintains and monitors cash and cash equivalents that management considers sufficient to meet the Company's operating needs and reduce the impact of cash flow fluctuations. The Company's management monitors the use of bank borrowings and ensures compliance with borrowing agreements.

As of December 31, 2025, the financial liabilities held by the Company based on the maturity period of the undiscounted remaining contractual obligations are analyzed as follows: Item Within 1 year More than 1 year Undiscounted carrying value

total cash flow

Short-term borrowings (including interest) 154,316,818.8 - 154,316,818.8 154,316,818.8

7 7 7 Accounts payable 234,486,144.9 38,420,903.90 272,907,048.8 272,907,048.8

8 8 8 Other payables 4,149,298.19 9,410,269.45 13,559,567.64 13,559,567.64 Non-current liabilities due within one year (including interest) 11,550,500.44 - 11,550,500.44 11,550,500.44 Lease liabilities (including interest) - 107,285,083.8 107,285,083.8 107,285,083.8

1 1 1

12. Disclosure of fair value

1. Closing fair value of assets and liabilities measured at fair value

Item Closing fair value

First level Second level Third level Total

Fair value measurement Fair value measurement Fair value measurement

(1) Trading financial assets - - 2,821,047.91 2,821,047.91

Equity instrument investment - - 2,821,047.91 2,821,047.91

(2) Accounts receivable financing - 1,214,032.00 - 1,214,032.00

Accounts receivable - 1,214,032.00 - 1,214,032.00 items Closing fair value

First level Second level Third level Total

Fair value measurement Fair value measurement Fair value measurement

Total assets continuously measured at fair value - 1,214,032.00 2,821,047.91 4,035,079.91

2. Continuous and non-continuous second-level fair value measurement items, valuation techniques used and qualitative and quantitative information on important parameters. The company uses the present value of cash flow method to determine the fair value of receivables financing, and the fair value is similar to the book value.

3. Continuous and non-continuous third-level fair value measurement items, the valuation techniques used and qualitative and quantitative information of important parameters. The third-level fair value measurement item of the company is the Lizheng Directed No. 32 private equity investment fund invested by the company. The fair value is recognized based on the unit net value on the balance sheet date.

13. Related parties and related transactions

1. The company’s controlling shareholders and actual controllers

Name of related party Shareholding ratio of the company Ratio of voting rights of the controlling shareholder to the company Relationship with the company Gao Yang 6.79% 6.90% Controlling shareholder, actual controller Note: Mr. Gao Yang and his person acting in concert, Ms. Hou Ying, hold a total of 6.90% of the shares of the listed company. Mr. Gao Yang is the controlling shareholder and actual controller of the listed company.

2. Information about the company’s subsidiaries

For details of the company's subsidiaries, please see Note 9.1. Equity in subsidiaries.

3. The company’s joint ventures and associated enterprises

For details of the company's important joint ventures or associates, please refer to Note 9.2, Equity in Joint Arrangements or Associates.

4. Other related parties

Names of other related parties Relationship between other related parties and the company Zhou Daixing Key management personnel Hong Ling Siqi (Zhuhai) M&A Equity Investment Enterprise (Hong Ling Siqi (Zhuhai) M&A Equity Investment Enterprise (Limited Partnership) Limited Partnership) (hereinafter referred to as "Hong Ling Siqi") is a shareholder holding more than 5% of the company's shares, and Hong Ling Siqi's executive partner is the appointed agent of Hong Ling Siqi (Zhuhai) Equity Investment Management Enterprise (Limited Partnership)

It is shown that Ms. WANGHONGXIA (Wang Hongxia) also serves as a director of the company. Zhuhai Sili Equity Investment Fund (Limited Partnership) Zhuhai Sili Equity Investment Fund (Limited Partnership) (hereinafter referred to as "Zhuhai Sili") and the names of other related parties holding the company The executive partners of other related parties and the shareholders of Hongsiqi (Zhuhai) Equity Investment Management Company (Limited Partnership) who have more than 5% of the company's shares are all Hongsiqi (Zhuhai) Equity Investment Management Enterprises (Limited Partnership), and the director of the company, Wang Hongxia (Wang Hongxia), also serves as the shareholder of Hongsiqi (Zhuhai) Mergers and Acquisitions Equity Investment Company (Limited Partnership).

Zhuhai Siyi Equity Investment Fund (Limited Partnership), Zhuhai Siyi Equity Investment Fund (Limited Partnership) appointed representative The executive partners of Zhuhai Siyi Equity Investment Fund (Limited Partnership) (hereinafter referred to as "Zhuhai Siyi") and Hong Ling Siqi (Zhuhai) M&A Equity Investment Enterprise (Limited Partnership), which holds more than 5% of the company's shares, are both Hong Ling Siqi (Zhuhai) Equity Investment Management Enterprise (Limited Partnership), and the company's director WANGHONGXIA (Wang Hongxia) also serves as Hong Ling Siqi (Zhuhai) M&A Equity Investment Company

Zhou Dayue, appointed representative of the executive partner of Zhuhai Siyi Enterprise (Limited Partnership), Zhou Daixing’s close relative, Beijing Herui Jingzhan Medical Laboratory Co., Ltd., a subsidiary of the joint venture

5. Related transactions

(1) Related transactions related to the purchase and sale of goods, provision and receipt of services

1. Purchase of goods/receipt of labor services table:

Related parties Related party transaction content Amount incurred in the current period Approved transaction amount Whether it exceeds the transaction amount incurred in the previous period

Degree (if applicable) Quota (if applicable)

Hefei Rhenke Biotechnology Co., Ltd. Purchased goods 19,469.03 - - 29,115.04 Fujian Herui Gene Technology Co., Ltd. Purchased fixed assets - - - 1,131,816.61 Fujian Herui Gene Technology Co., Ltd. Purchased goods - - - 666,925.66 Total 19,469.03 - - 1,827,857.31 In 2024 and 2025, the company will receive labor services from the above-mentioned related parties at an agreed price set by both parties.

2. List of goods sold/services provided:

Related parties Contents of related transactions Amount incurred in the current period Amount incurred in the previous period Fujian Herui Gene Technology Co., Ltd. Provision of services - 27,166.39 Fujian Herui Gene Technology Co., Ltd. Sales of goods - 438,464.60 Total - 465,630.99 In 2024 and 2025, the company will receive services from the above-mentioned related parties at an agreed price agreed upon by both parties.

(2) Related lease situation

1 The company as the lessor:

Name of lessee Type of leased assets Recognized in the current period Recognized in the previous period

Lease income Lease income Beijing Herui Jingzhan Medical Laboratory Co., Ltd. Houses and buildings 382,342.72 382,342.72

2 The company as the lessee:

Lessor’s name Type of leased assets Amount incurred in the current period

The short-term treatment is simplified. The lease liabilities are not included in the lease payments. The lease liabilities assumed by the lease and the variable debt interest expense value of the low-price debt measurement are the lease payments of the asset lease (such as

Rental charges (if applicable)

use)

Beijing Herui Exquisite Medical Testing Laboratory Machinery and Equipment 460,176.98 - 487,500.00 - Co., Ltd.

(3) Related guarantees

1 The company serves as the guarantor

Guaranteed party Guarantee amount Guarantee starting date Guarantee expiration date Whether the guarantee has been

Completed Fuzhou Xintou Biotechnology Industrial Park Construction and Development Co., Ltd. 147,000,000.0 2025-3-14 2039-10-25 No

Beijing Berry and Kang Biotechnology Co., Ltd. 80,000,000.00 2025-4-21 2026-4-20 No Beijing Berry and Kang Biotechnology Co., Ltd. 30,000,000.00 2025-6-30 2026-6-29 No Hangzhou Berry and Kang Gene Diagnostic Technology Co., Ltd. 40,000,000.00 2025-8-28 2026-8-27 No Hangzhou Beiruihekang Gene Diagnostic Technology Co., Ltd. 10,000,000.00 2025-5-13 2026-5-12 No

(4) Remuneration of key management personnel

Item Amount incurred in the current period (RMB 10,000) Amount incurred in the previous period (RMB 10,000) Remuneration of key management personnel 324.49 470.58

(5) Fund lending from related parties

Related party Lending amount Start date Maturity date Description of lending

Fuzhou Xintou Biotechnology Industrial Park Construction and Development Co., Ltd. 2,450,000.00 2024-10-28 2025-10-27 Industrial park construction project funds, the borrowing interest rate is based on one year from the date the shareholder actually provides the loan

Calculation of 140% of the period

(6) Other related transactions

Related parties Contents of related transactions Amount for the current period Amount for the previous period Fuzhou Xintou Biotechnology Industrial Park Construction and Development Co., Ltd. Interest income on borrowings 126,709.92 89,165.62

6. Accounts receivable and payable from related parties

(1) Items receivable

Project name Related party Closing balance Opening balance

Book balance Bad debt provision Book balance Bad debt provision Accounts receivable Fujian Herui Gene Technology Co., Ltd. 105,257,217.3 105,257,217.3 104,855,757.4 80,168,788.11

4 4 8

Accounts receivable Beijing Yuanyuan Gene Technology Co., Ltd. 532,000.00 531,574.40 532,000.00 406,747.29 Accounts receivable Fuzhou Ruisheng Investment Management Co., Ltd. - - 29,721.43 29,721.43 Other receivables Construction of Fuzhou Xintou Biotechnology Industrial Park 30,514,211.85 8,871,552.79 42,450,000.00 2,409,474.98

Development Co., Ltd.

Other receivables Fuzhou Xintou Biotechnology Industrial Park Construction 27,000,000.00 - 27,000,000.00 -

Development Co., Ltd.

(2) Items payable

Project name Related parties Book balance at the end of the period Book balance at the beginning of the period Accounts payable Fujian Herui Gene Technology Co., Ltd. - 232,000.00 Accounts payable Hefei Rhenke Biotechnology Co., Ltd. 15,000.00 - Accounts payable Beijing Herui Jingzhan Medical Testing Laboratory Co., Ltd. 97,500.00 -

7. Related party commitments

None.

14. Share-based payment

1. Various equity instruments

Category of grant objects Granted in this period Exercisable in this period

Quantity Amount Quantity Amount Employees within the employee stock ownership plan of listed companies - - - -Fujian Berry Technology core technical employees 1,600,000.00 1,600,000.00 - -Total 1,600,000.00 1,600,000.00 - -

(Continued from the above table)

Grant object category Unlocked in this period Expired in this period

Quantity Amount Quantity Amount Employees within the employee stock ownership plan of listed companies - - - - Core technical employees of Fujian Berry Technology - - - -Total - - - -

2. Equity-settled share-based payment

Listed company employee stock ownership plan

Method for determining the fair value of equity instruments on the date of grant: The date when the company’s shareholders’ meeting considers and approves the employee stock ownership plan (i.e. March 2021

Important parameters of the fair value of equity instruments on the grant date: closing price of secondary market of tradable stocks on March 31st:

The basis for determining the number of exercisable equity instruments: The shares obtained by this employee stock ownership plan through non-trading transfers will be unlocked in installments 12 months from the date when the company announced the last transfer of stocks to the name of this plan (i.e. July 1, 2021). The maximum lock-in period is 24 months. At the same time, this employee stock ownership plan is linked to performance appraisal, and the company will issue a lock-in period in each assessment year.

The proportion of shares that can be unlocked will be determined based on the assessment results after the completion of the period. The reasons for the significant difference between the current period's estimate and the previous period's estimate: A larger number of employees have resigned. The cumulative amount of equity-settled share-based payment included in the capital reserve: 42,815,159.63 The total expenses recognized for the equity-settled share-based payment in this period: -4,972,377.62

The first phase of the Employee Stock Ownership Plan of Fujian Berry Technology Co., Ltd.:

Method for determining the fair value of equity instruments on the grant date: According to the valuation report issued by Shanghai Zhonghua Asset Appraisal Co., Ltd., with July 31, 2025 as the base date, the assessed value of all shareholders’ equity is 108 million yuan. The grant price of this employee stock ownership plan is 1 yuan/share, based on the total registered capital as the total number of shares, and the fair value is 10.8 yuan/share.

Share-based payment fees. Important parameters of the fair value of equity instruments on the date of grant: Appraisal value of all shareholders’ equity value Basis for determination of the number of exercisable equity instruments: The best estimate of the number expected to be exercisable at the end of the year. 30% of this employee stock ownership plan is based on service

The service deadline is determined; the remaining 70% is linked to performance appraisal, and the company will

The proportion of shares that can be unlocked is determined based on the assessment results after the end of the year. Reasons for significant differences between this period's estimate and the previous period's estimate: No cumulative amount of equity-settled share-based payment included in capital reserves: 2,412,827.58 Amount of equity-settled share-based payment attributable to minority shareholders: 459,586.21 Total expenses recognized for equity-settled share-based payment in this period: 2,872,413.79

3. Share-based payment expenses for this period

Category of grant objects Equity-settled share-based payment expenses Cash-settled share-based payment expenses Employees within the employee stock ownership plan of listed companies -4,972,377.62 - Core employees of Fujian Berry Technology 2,872,413.79 -Total -2,099,963.83 -

4. Other instructions

Listed company employee stock ownership plan

On July 1, 2021, the Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. completed the non-trading transfer of the company's first phase of the employee stock ownership plan. The 2,823,000 shares subscribed for this plan have been transferred from the company's special securities account for repurchase to the employee stock ownership plan account. According to the "First Phase Employee Stock Ownership Plan (Draft)" (Revised Draft) disclosed by the company, the duration of this plan is 36 months, starting from the date the company's shareholders meeting approves the plan (i.e. March 31, 2021). The stocks obtained by this plan through non-trading transfers will be unlocked in installments 12 months from the date the company announces the transfer of the last stock to the name of this plan (i.e. July 1, 2021). The maximum lock-in period is 24 months.

The company resolved at the seventh meeting of the tenth board of directors on March 29, 2024, to review and approve the "Proposal on Extension of the Duration of the First Employee Stock Ownership Plan" and agreed to extend the duration of the remaining 1,029,200 unlocked company stocks (accounting for 0.29% of the company's total share capital) in the first phase of the Employee Stock Ownership Plan by 12 months to March 31, 2025.

The company held the 12th meeting of the 10th Board of Directors on March 24, 2025, and reviewed and approved the "Proposal on Adjusting the "First Phase Employee Stock Ownership Plan (Draft)" and its Summary" and the "Proposal on Adjusting the "First Phase Employee Stock Ownership Plan Management Measures"", and agreed to the "Proposal on Adjusting the "First Phase Employee Stock Ownership Plan (Draft)" and its Summary. Chapter 6 "2. Lock-up Period of the Employee Stock Ownership Plan (Draft)" Chapter 6 "2. Lock-up Period of the Employee Stock Ownership Plan (Draft)" "Summary of the First-Phase Employee Stock Ownership Plan (Draft)" Chapter 6 "2. Lock-up Period of the Employee Stock Ownership Plan" "Administrative Measures for the First Employee Stock Ownership Plan" Chapter 4 and Article 8 are adjusted. At the same time, as of April 1, 2025, the 2,823,000 company shares held by the company's first employee stock ownership plan (accounting for 0.7985% of the company's total share capital) have been sold through centralized bidding through the secondary market, and the company actually received an amount of 13,669,117.62 yuan. As of the completion of the stock sale, the company's cumulative confirmation of major shareholders' bottom-line expenses was 27,846,358.21 yuan, of which 4,972,377.62 yuan was reversed in this period. According to the relevant provisions of the employee stock ownership plan, this employee stock ownership plan has been implemented and terminated. Subsequent liquidation of relevant assets will be carried out and distribution will be carried out according to the shares held by the holders. The first phase of the Employee Stock Ownership Plan of Fujian Berry Technology Co., Ltd.:

Subsidiary Fujian Berry Technology held a shareholders' meeting on July 31, 2025, and voted to adopt the "Management Measures for the First Employee Stock Ownership Plan of Fujian Berry Technology Co., Ltd.", agreeing that Fujian Berry Technology's core technical employees subscribed for a share of 1.6 million yuan in the employee stock ownership platform at a price of 1 yuan per share, and indirectly held 16% of Fujian Berry Technology's equity. It will be unlocked 24 months from the date of grant. After the lock-in period expires, it will be unlocked in batches on the premise of meeting relevant assessment conditions. The company recognizes share-based payment expenses based on the difference between the grant price of RMB 1 per share and the estimated shareholder equity value of RMB 10.8 per share before and after the grant date. The accumulated share-based payment expenses are RMB 15,680,000.00, which will be apportioned and recognized during the waiting period. Share-based payment expenses of RMB 2,872,413.79 were confirmed in this period.

15. Commitments and contingencies

1. Important commitments

(1) The company's wholly-owned subsidiary Fujian Berry Hekang Gene Technology Co., Ltd. (hereinafter referred to as "Fujian Berry Gene") and Fuzhou Binhai Linkong Development and Construction Co., Ltd. jointly established Fuzhou Xintou Biotechnology Industrial Park Construction and Development Co., Ltd. (hereinafter referred to as the "joint venture") and acquired the Fujian Industrial Park assets held by Fujian Berry Gene (Fujian Industrial Park land use rights and the buildings and buildings on the land, projects under construction and ancillary facilities and equipment, and other assets). In order to ensure the smooth implementation of the transaction, the company and its subsidiary Fujian Berry Gene provided guarantees for some matters of the transaction. The company's guarantee amount for Fujian Berry Gene did not exceed 350 million yuan, and the joint guarantee amount of the company and Fujian Berry Gene for the joint venture company did not exceed 196 million yuan. The joint venture company signed a "Fixed Asset Loan Contract" and a supplementary agreement with Changle Branch of Bank of China Co., Ltd., with a loan amount of 300 million yuan and a loan period of 180 months. Fujian Berry Gene provided a joint liability guarantee for the debts caused by the above-mentioned loans of the joint venture company based on its 49% shareholding ratio, and signed a "Guarantee Contract" (No. FJ1162024234) with the Changle Branch of Bank of China Co., Ltd. After this guarantee, the company and Fujian Berry Gene's guarantee balance for the joint venture is RMB 147 million, and the remaining available guarantee limit is RMB 49 million.

(2) On June 3, 2024, Fujian Berry Gene signed "Industrial Park Lease Contract B" with Fuzhou Xintou Biotechnology Industrial Park Construction and Development Co., Ltd. Lease Contract B is mainly for the North District of the industrial park currently under construction. The leased house is located at Building 2-1#, Building 3#, Building 10#, Building 11# and the 3-5th floor of Building 12# of the Digital Life Industrial Park of Fujian Berry and Kang Gene Technology Co., Ltd. at No. 668 Wensong Road, Changle District, Fuzhou. It is used for research and development and office use. The lease period starts in January 2025, and the leased area will increase annually. The minimum guaranteed rent is RMB 121,469,862. On November 6, 2025, the two parties signed the "Supplementary Agreement to the Industrial Park Lease Contract", and the leased buildings were changed to Building 2-1# and Building 3#. The minimum guaranteed rent is RMB 58,632,123. At the same time, Fujian Berry Hekang Industrial Incubator Co., Ltd. (hereinafter referred to as the "Incubator Company"), a wholly-owned subsidiary of Fujian Berry Hekang, and Fuzhou Linkong Construction signed the "Fuzhou Binhai Linkong Development and Construction Co., Ltd. and Fujian Berry Hekang Industrial Incubator Co., Ltd." "Zhou New District Biomedicine Project Industrial Park Lease Contract", the rental house is located east of Yu Middle Road, Binhai New City, Changle District, Fuzhou, north of Yu South Road, and south of Dongfeng Avenue, 2#2-10 floors and 8#2-5 floors of Fuzhou New District Biomedicine Industrial Park. It is used for production. The lease period will start in stages from December 1, 2026, with a total rent of 32.8071 million yuan.

As of December 31, 2025, the company has paid a deposit of RMB 27 million in the lease contract.

2. Contingent matters

As of December 31, 2025, the company has no major contingencies that need to be disclosed.

16. Events after the balance sheet date

1. The 3,535,213 shares of "Berry Gene" held by the company's controlling shareholder Mr. Gao Yang were compulsorily executed by the Chengdu-Chongqing Financial Court through centralized bidding transactions from December 2, 2025 to January 13, 2026, with an average execution price of 11.92 yuan/share. The company's shares held by Mr. Gao Yang were enforced through centralized bidding transactions from January 6, 2026 to April 9, 2026, for 3,514,959 shares of the company, accounting for 0.99% of the company's total share capital. After the completion of the above equity changes, the shareholding ratio of Mr. Gao Yang and his persons acting in concert dropped to 5.91%.

2. On February 10, 2026, the company, its subsidiary Fujian Berry Technology Co., Ltd. (hereinafter referred to as "Fujian Berry Technology") and its original shareholders signed a "Capital Increase Agreement" with Fuzhou Xintouzhi Kairuikang Venture Capital Fund Partnership (Limited Partnership) (hereinafter referred to as "Ruikang Fund"), stipulating that Ruikang Fund will increase the capital of Fujian Berry Technology on the premise of a qualified listing or overall sale. If Fujian Berry Technology does not complete a qualified listing or overall sale within the next five years after the "Capital Increase Agreement" takes effect, the company and the original shareholders of Fujian Berry Technology will need to repurchase all or part of the equity shares of Fujian Berry Technology held by Ruikang Fund in cash in accordance with the requirements of Ruikang Fund.

17. Other important matters

1. Branch information

(1) Determination basis and accounting policies of reportable segments

Segment information is disclosed by geographic segment.

(2) Financial information of reportable segments

Item Domestic segment Overseas segment Inter-segment elimination Total operating income 815,369,297.29 122,104,802.85 7,656,078.08 929,818,022.06 Including: foreign transaction income 807,713,219.21 122,104,802.85 - 929,818,022.06 Inter-segment transaction income 7,656,078.08 - 7,656,078.08 - Operating costs 462,678,858.75 73,579,871.61 7,656,078.08 528,602,652.28 Operating profit -206,449,244.6 19,113,653.64 - -187,335,591.0

8 4 Total assets 2,089,512,007. 252,637,469.11 57,912,529.05 2,284,236,947.

05 11 Total liabilities 770,786,663.09 67,269,889.13 57,912,254.66 780,144,297.56

2. As mentioned in "VI. 4. Accounts Receivable" above, as of December 31, 2025, the company's balance receivable from Hunan Jiahui Biotechnology Co., Ltd., Hunan Jiahui Biotechnology Co., Ltd. Jiahui Genetic Specialty Hospital (hereinafter referred to as "Hunan Jiahui") was 294.1844 million yuan, accounting for 24.92% of the company's closing balance of accounts receivable. Since Hunan Jiahui had a lot of overdue repayments in previous years, the company formed a preliminary settlement plan with Hunan Jiahui in August 2024 and signed a memorandum of understanding to facilitate settlement and promote repayments. This year, the company's business cooperation with Hunan Jiahui further decreased. A small amount of its accounts receivable has been collected this year, but the overall collectability is still uncertain. Based on the principle of prudence, the Company made a provision for bad debts at the end of the period of 79.52% of Hunan Jiahui's accounts receivable based on the credit characteristics of general hospitals and the higher provision rate of recent commercial banks' corporate subprime loans. At the same time, the company is considering taking legal measures to preserve assets.

3. As of December 31, 2025, the company's top three shareholders and shareholding ratios are Chengdu Tianxing Instrument (Group) Co., Ltd. holding 12.45%, Hongsiqi (Zhuhai) M&A Equity Investment Enterprise (Limited Partnership) holding 8.49%, and Mr. Gao Yang and persons acting in concert holding 6.90%. As mentioned in Note 16.1, the shareholding ratio of the company's controlling shareholder will further decline after the balance sheet date, and there may be a risk that other shareholders or third parties will acquire the company's shares through centralized bidding and other methods, resulting in a change of control of the company.

18. Notes to parent company’s financial statements

1. Other receivables

Item Closing balance Opening balance Interest receivable - - Dividends receivable - - Other receivables 20,006,421.50 30,006,164.64 Total 20,006,421.50 30,006,164.64

(1) Other receivables

1 Disclosure by age

Aging Book balance at the end of the period Aging of the book balance at the beginning of the period Book balance at the end of the period Book balance at the beginning of the period Within 1 year 20,000,256.86 - 1 to 2 years - - 2 to 3 years - 392.14 3 to 4 years 392.14 30,000,000.00 4 to 5 years - - More than 5 years 5,772.50 5,772.50 Total 20,006,421.50 30,006,164.64

2 Classification by nature of payment

Nature of payment Book balance at the end of the period Book balance at the beginning of the period Current and social security provident fund advances 20,000,000.00 30,000,000.00 Deposit, guarantee deposit, reserve fund 6,421.50 6,164.64 Total 20,006,421.50 30,006,164.64

3. Bad debt provision accrual

Bad debt provisions Phase 1 Phase 2 Phase 3 Total forecast for the next 12 months Estimates for the entire duration Estimates for the entire duration

Credit losses for the period Credit losses for the period (credit losses for the period to come) (credit losses for the period to come)

Credit impairment occurs) Credit impairment occurs)

Opening balance - - - - Opening balance in the current period

--Transfer to the second stage - - - - --Transfer to the third stage - - - - --Transfer to the second stage - - - - -Transfer to the first stage - - - -Provision for this period - - - -Reversal for this period - - - -Write-off for this period - - - -Write-off for this period - - - -Other changes - - - -Ending balance - - - -

4 During the reporting period, there were no bad debt provisions and other receivables with significant amounts of bad debt provision reversed or recovered.

5 Other receivables with the top five closing balances based on debtors

Company name Nature of payment Closing balance Aging Proportion of total amount Bad debt provision

Closing balance of Fujian Berry Hekang Gene Technology Current and advance social security reserves 20,000,000.00 Within 1 year 99.97% - Technology Co., Ltd. Gold

Chengdu Tianhe Traditional Chinese and Western Medicine Technology Deposit, margin, reserve 6,421.50 Within 1 year, 3 0.03% -Nursery Co., Ltd. Gold More than 1 year

Total 20,006,421.50 100.00% -

2. Long-term equity investment

Item Ending balance Beginning balance

Book balance Impairment provision Book value Book balance Impairment provision Book value Investment in subsidiaries 4,610,000,000. -4,610,000,000. 4,600,000,000. -4,600,000,000.

00 00 00 00

Investment in associates and joint ventures 52,727,950.88 48,161,967.53 4,565,983.35 52,953,605.86 48,161,967.53 4,791,638.33

Total 4,662,727,950. 48,161,967.53 4,614,565,983. 4,652,953,605. 48,161,967.53 4,604,791,638.

88 35 86 33

(1) Investment in subsidiaries

Invested unit Beginning balance Increase in the current period Decrease in the current period Ending balance Provision for impairment in the current period

Impairment provision Opening balance Closing balance Beijing Berry and Kangsheng 4,300,000,000. - - 4,300,000,000. - - - Wu Technology Co., Ltd. 00 00

Fujian Berry and Kangji 300,000,000.00 - - 300,000,000.00 - - - Yin Technology Co., Ltd.

Fujian Berry and Kangsheng - 10,000,000.00 - 10,000,000.00 - - - Wu Technology Co., Ltd.

Total 4,600,000,000. 10,000,000.00 - 4,610,000,000. - - -

00 00

(2) Investment in associates and joint ventures

Invested unit Beginning balance Increase or decrease in the current period

(Book value) Additional investment Decrease in investment Recognition under equity method Other comprehensive Other changes in equity

investment gains and losses income adjustment

Associates

Hefei Rhenke Biotechnology 4,774,965.42 - - -223,105.08 - - Technology Co., Ltd.

Invested unit Beginning balance Increase or decrease in the current period

(Book value) Additional investment Decrease in investment Recognition under equity method Other comprehensive Other changes in equity

investment gains and losses income adjustment

Beijing Yuanyuan Gene 16,672.91 - - -2,549.90 - - Technology Co., Ltd.

Fujian Herui Gene - - - - - Technology Co., Ltd.

Total 4,791,638.33 - - -225,654.98 - -

(Continued from the above table)

Invested unit Increase or decrease in the current period Closing balance Impairment provision

Announcement of cash disbursement Provision for impairment Others (book value) Beginning balance Closing balance

dividend or profit

Associates

Hefei Rhenke Biotech Co., Ltd. - - - 4,551,860.34 - - Technology Co., Ltd.

Beijing Yuanyuan Gene - - - 14,123.01 - - Technology Co., Ltd.

Fujian Herui Gene - - - - 48,161,967.53 48,161,967.53 Technology Co., Ltd.

Total - - - 4,565,983.35 48,161,967.53 48,161,967.53

(3) Impairment testing of long-term equity investments

1 The recoverable amount is determined based on the net amount of fair value minus disposal costs.

Item Book value Recoverable amount Impairment amount Fair value and key parameters Basis for determining disposal costs of key parameters

Determine the way

Fujian Herui Gene 48,161,967.53 - 48,161,967.53 The fair value is determined based on the net capital position of the invested unit after the recent market price assessment of the invested unit Technology Co., Ltd., and the disposal costs are assessed by the company's management.

is zero fair value is zero

3. Investment income

Items Amount for the current period Amount for the previous period Items Amount for the current period Amount for the previous period Long-term equity investment income calculated by equity method -225,654.98 -14,174,373.8

19. Supplementary information

1. Detailed statement of non-recurring profits and losses for the current period

Item Amount Description of profits and losses from the disposal of non-current assets, including the write-off part of the provision for asset impairment 4,911,133.03 - Government subsidies included in the current profit and loss, except for government subsidies that are closely related to the company's normal operating business and in compliance with national policies and regulations. 1,569,636.68 - Except for government subsidies that are enjoyed according to determined standards and have a continuous impact on the company's profits and losses.

In addition to the effective hedging business related to the company's normal operating business, non-financial enterprises hold -4,882,747.12 - Gains and losses from changes in fair value of financial liabilities and gains and losses from the disposal of financial assets and financial liabilities

Fund occupation fees charged to non-financial enterprises included in current profits and losses 126,709.92 - Gains and losses from entrusting others to invest or manage assets - - Gains and losses from external entrusted loans - - Losses on various assets due to force majeure factors, such as natural disasters - - Reversal of impairment provisions for accounts receivable that have been separately tested for impairment 10,603,734.37 -The investment cost of the enterprise in acquiring subsidiaries, associates and joint ventures is less than what it should enjoy when acquiring the investment - -Income generated from the fair value of the identifiable net assets of the unit

Net profit and loss for the period from the beginning of the period to the date of merger of subsidiaries resulting from business mergers under common control - - Gains and losses on exchange of non-monetary assets - - Gains and losses on debt restructuring - - One-time expenses incurred by the company due to the continuation of relevant operating activities, such as expenses for employee placement, etc. - - One-time impact on current profits and losses due to adjustments in taxation, accounting and other laws and regulations - - One-time recognition of share-based payment expenses due to the cancellation or modification of equity incentive plans - -For cash-settled share-based payment, after the vesting date, the change in fair value of employee compensation payable will generate - - profits and losses.

Gains and losses arising from changes in the fair value of investment properties that are subsequently measured using the fair value model - - Gains from transactions where the transaction price is obviously unfair - - Gains and losses arising from contingencies unrelated to the company's normal operating business - - Trusteeship fee income from entrusted operations - - Other non-operating income and expenses other than the above - 2,133,139.68 - Other profit and loss items that meet the definition of non-recurring gains and losses - - Less: Income tax impact 303,893.59 -

Amount of impact on minority shareholders’ equity 232,288.59 - Item Amount Description Total 9,659,145.02

Item Amount involved Cause Other income 126,884.83 According to the relevant provisions of the "Explanatory Announcement No. 1 on Information Disclosure of Companies that Publicly Offer Securities—Non-recurring Profit and Loss (Revised in 2023)" (China Securities Regulatory Commission Announcement [2023] No. 65), the company will refund the personal tax handling fee

Items such as additional VAT input tax deductions and other items are recognized as recurring profits and losses.

2. Return on net assets and earnings per share

Profit for the reporting period Weighted average earnings per share

Return on equity Basic earnings per share Diluted earnings per share

(yuan/share) (yuan/share) Net profit attributable to the company's common shareholders -12.48% -0.5568 -0.5568Net profit attributable to the company's common shareholders after deducting non-recurring gains and losses -13.09% -0.5841 -0.5841

Chengdu Berry and Kang Gene Technology Co., Ltd.

April 27, 2026