Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Audit Report
For the year ended December 31, 2025
Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Audit Report
For the year ended December 31, 2025
Content Page
Audit Report 1-4
Consolidated and parent company's balance sheet 5-7
Consolidated and parent company's income statement 8-9
Consolidated and parent company's statement of cash flows 10-11
Consolidated and parent company's statement of changes in shareholders' equity 12-15
Notes to the financial statements 16-108
Audit Report
DSB (S) Z (26) No. P[ ]
(Page 1 of 4)
All shareholders of Shenzhen Textile (Holdings) Co., Ltd.
I. Audit opinions
We have audited the financial statements of Shenzhen Textile (Holdings) Co., Ltd. (hereinafter referred to as the
"Shenzhen Textile"), including the consolidated and parent company's balance sheet as at December 31, 2025, the
consolidated and parent company's income statement, consolidated and parent company's statement of cash flows,
consolidated and parent company's statement of changes in shareholders' equity and related notes to the financial
statements for the year then ended.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with
Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at
December 31, 2025 and its operating results and cash flows for the year then ended.
II. Basis for the audit opinion
We have conducted our audit in accordance with the Chinese Auditing Standards for Certified Public Accountants.
Our responsibilities under these standards are further described in the "Certified Public Accountant's
Responsibilities for the Audit of Financial Statements" section of the audit report. In accordance with the
Independence Standard for Chinese Certified Public Accountants No. 1 - Requirements for Independence in Audit
and Review of Financial Statement and the Code of Ethics for Chinese Certified Public Accountants, we are
independent of Shenzhen Textile and have fulfilled other ethical responsibilities. We have complied with the
independence requirements for audits of public interest entities during the audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, are of most significance in our audit of the
financial statements of the current year. These matters are addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. We have identified the following matters as key audit matters to be communicated in the audit report.
As described in the Note (V). 40 to the financial statements, in 2025, the operating revenue of Shenzhen Textile as
presented in the consolidated financial statements was RMB 3,241,380,430.62, of which the revenue from sales of
polarizers was RMB 3,067,530,570.03, accounting for 94.64% of the total revenue. The revenue from sales of
polarizers of Shenzhen Textile is recognized when the customer obtains control of the relevant goods. Due to the
importance of revenue from sales of polarizers to the consolidated financial statements as a whole, and the fact
that the revenue is one of the key performance indicators of Shenzhen Textile, there is an inherent risk that
management may manipulate the revenue recognition, in order to achieve specific goals or expectations. Therefore,
we have identified the recognition of revenue from sales of polarizers as a key audit matter in the audit of the
consolidated financial statements.
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Audit Report - Continued
DSB (S) Z (26) No. P[ ]
(Page 2 of 4)
III. Key audit matters - Continued
In response to the above key audit matters, the audit procedures we performed mainly include:
? Test and evaluate the effectiveness of the operation of internal control related to the sales business of
polarizer;
? Check the sales contracts signed with major customers, identify the terms and conditions of the contracts
related to the transfer of right of control of the goods, and evaluate whether the accounting policies for
recognition of revenue from sales of polarizers meet the requirements of the Accounting Standards for
Business Enterprises;
? Execute analytical procedures for the revenue from sales of polarizers by production line, product type and
customer respectively, and analyze the rationality of the change in revenue from sales of polarizers in
combination with market selling price and other factors;
? Extract samples to perform detail tests on the revenue from sales of polarizers, check the supporting
documents such as invoices, delivery orders and receipts related to the recognition of revenue from sales of
polarizers, and conduct letter of confirmation on the sales amount of major customers to verify the
authenticity of revenue from sales of polarizers;
? Select samples for sales transactions before and after the balance sheet date, check supporting documents
such as delivery orders, receipts and invoices, and evaluate whether the revenue from sales of polarizers is
recorded in the appropriate accounting period.
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Audit Report - Continued
DSB (S) Z (26) No. P[ ]
(Page 3 of 4)
IV. Other information
The management of Shenzhen Textile is responsible for other information. Other information includes information
covered in the 2025 Annual Report of Shenzhen Textile, but excludes the financial statements and our audit report.
Our audit opinion on the financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with financial statements or our
knowledge obtained during the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact. We have nothing to report in this regard.
IV. Responsibilities of the management and those charged with governance for financial statements
The management of Shenzhen Textile is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are free
from material misstatements, whether due to frauds or errors.
In preparing the financial statements, the management is responsible for assessing the going-concern ability of
Shenzhen Textile, disclosing matters related to going concern (if applicable) and applying the going concern basis,
unless the management plans to liquidate Shenzhen Textile, terminate its operations or has no other realistic
alternative.
Those charged with governance are responsible for overseeing the financial reporting process of Shenzhen Textile.
VI. Responsibilities of certified public accountants for the audit of financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
We have exercised professional judgment and maintained professional skepticism in performing our audit under
the auditing standards. At the same time, we also implement the following work:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
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Audit Report - Continued
DSB (S) Z (26) No. P[ ]
(Page 4 of 4)
VI. Responsibilities of certified public accountants for the audit of financial statements - Continued
(2) Understand the internal control related to the audit, so as to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Draw conclusions on the appropriateness of the management's use of the going concern basis. At the same
time, based on the audit evidence obtained, a conclusion is drawn as to whether there is a material uncertainty in
events or circumstances that may give rise to significant doubt about the going-concern ability of Shenzhen
Textile. If we conclude that a material uncertainty exists, we are required to, in our audit report, draw attention of
the users of statements to the related disclosures in the financial statements; if such disclosures are inadequate, we
should modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit
report. However, future events or circumstances may cause Shenzhen Textile to cease to continue as a going
concern.
(5) Evaluate the overall presentation (including disclosures), structure and content of the financial statements, and
whether the financial statements fairly reflect the relevant transactions and matters.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business
activities within Shenzhen Textile to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding the planned scope and timing of the audit,
significant audit findings and other matters, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and the related safeguards (if applicable).
From the matters communicated with those charged with governance, we have determined which matters are of
most significance to the audit of the financial statements in the current year and thus constitute the key audit
matters. We describe these matters in the audit report unless laws and regulations prohibit public disclosure of
these matters, or in extremely rare circumstances, if it is reasonably expected that the negative consequences of
communicating a matter outweigh the benefits to the public interest in the audit report, we determine not to do so.
Deloitte Touche Tohmatsu Certified Public Accountants LLP Certified Public Accountant of China
(Engagement partner)
Shanghai, China
Certified Public Accountant of China
March 26, 2026
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Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Balance Sheet
December 31, 2025
Consolidated Balance Sheet
RMB
Balance as at the end Balance as at the end
Notes
of the current year of the previous year
Current assets:
Monetary funds (V). 1 449,964,450.38 340,961,443.82
Financial assets held for trading (V). 2 736,341,286.18 731,419,904.42
Notes receivable (V). 3 85,980,246.52 47,305,221.88
Accounts receivable (V). 4 761,807,949.52 863,731,936.89
Receivables financing (V). 5 22,584,820.72 6,804,603.68
Advances to suppliers (V). 6 29,141,210.57 8,176,724.70
Other receivables (V). 7 4,324,973.02 3,596,543.96
Including: interest receivable - -
Dividends receivable - -
Inventories (V). 8 884,642,355.51 789,756,700.88
Other current assets (V). 9 85,649,096.62 21,461,736.14
Total current assets 3,060,436,389.04 2,813,214,816.37
Non-current assets:
Long-term equity investments (V). 10 107,583,586.91 114,828,026.04
Other equity instrument investments (V). 11 159,261,600.00 165,402,900.00
Investment properties (V). 12 105,730,781.63 115,993,390.19
Fixed assets (V). 13 1,657,314,603.81 1,873,552,843.91
Construction in progress (V). 14 179,954,389.78 5,814,012.03
Right-of-use assets (V). 15 16,894,843.60 15,338,117.86
Intangible assets (V). 16 31,224,598.20 35,207,791.95
Goodwill (V). 17 - -
Long-term deferred expenses (V). 18 7,030,847.01 6,084,115.87
Deferred tax assets (V). 19 55,777,290.89 58,920,511.20
Other non-current assets (V). 20 37,086,785.90 27,793,871.91
Total non-current assets 2,357,859,327.73 2,418,935,580.96
Total assets 5,418,295,716.77 5,232,150,397.33
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Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Balance Sheet - Continued
December 31, 2025
Consolidated Balance Sheet - Continued
RMB
Balance as at the end Balance as at the end
Notes
of the current year of the previous year
Current liabilities:
Derivative financial liabilities (V). 22 4,071,800.19 1,278,559.35
Notes payable (V). 23 - 31,095,540.29
Accounts payable (V). 24 344,656,835.89 304,812,580.55
Advances from customers (V). 25 769,227.07 1,051,491.96
Contract liabilities (V). 26 3,132,419.01 490,562.97
Employee compensation payable (V). 27 52,647,315.74 56,685,289.92
Taxes payable (V). 28 5,806,818.55 6,853,730.84
Other payables (V). 29 159,826,234.73 160,296,989.98
Including: interest payable - -
Dividends payable - -
Non-current liabilities maturing within one year (V). 30 65,964,666.28 63,347,555.03
Other current liabilities (V). 31 88,386,795.27 54,072,022.27
Total current liabilities 725,262,112.73 679,984,323.16
Non-current liabilities:
Long-term borrowings (V). 32 261,718,054.81 162,388,870.00
Lease liabilities (V). 33 10,415,997.17 9,496,564.12
Deferred income (V). 34 83,469,949.03 96,349,196.26
Deferred tax liabilities (V). 19 47,064,430.16 48,610,809.66
Total non-current liabilities 402,668,431.17 316,845,440.04
Total liabilities 1,127,930,543.90 996,829,763.20
Shareholders' equity:
Equity (V). 35 506,521,849.00 506,521,849.00
Capital reserve (V). 36 1,961,599,824.63 1,961,599,824.63
Other comprehensive income (V). 37 102,271,832.32 106,877,807.32
Surplus reserves (V). 38 106,805,904.93 104,262,315.64
Undistributed profits (V). 39 302,520,158.30 272,608,113.66
Total equity attributable to shareholders of the parent
company
Minority interests 1,310,645,603.69 1,283,450,723.88
Total shareholders' equity 4,290,365,172.87 4,235,320,634.13
Total liabilities and shareholders' equity 5,418,295,716.77 5,232,150,397.33
The notes are an integral part of the financial statements
_____________________ ______________________ ______________________
Principal Chief Finance Officer Chief Accountant
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Shenzhen Textile (Holdings) Co., Ltd.
Balance Sheet of the Parent Company
December 31, 2025
Balance Sheet of the Parent Company
RMB
Balance as at the end Balance as at the end
Notes
of the current year of the previous year
Current assets:
Monetary funds 24,473,234.70 13,630,974.26
Financial assets held for trading 736,341,286.18 731,419,904.42
Accounts receivable (XVI). 1 8,714,374.34 13,028,987.63
Advances to suppliers 149,618.73 99,904.79
Other receivables (XVI). 2 2,014,545.65 1,534,395.80
Including: interest receivable - -
Dividends receivable - -
Inventories 46,562.05 39,835.05
Total current assets 771,739,621.65 759,754,001.95
Non-current assets:
Long-term equity investments (XVI). 3 2,033,445,567.58 2,040,690,006.71
Other equity instrument investments 146,548,800.00 152,221,200.00
Investment properties 86,463,450.62 94,773,462.23
Fixed assets 1,910,229.22 2,099,585.67
Right-of-use assets 2,498,988.67 -
Intangible assets 48,270.75 83,350.98
Long-term deferred expenses 4,756,358.34 4,448,190.05
Other non-current assets 25,760,086.27 25,860,862.33
Total non-current assets 2,301,431,751.45 2,320,176,657.97
Total assets 3,073,171,373.10 3,079,930,659.92
Current liabilities:
Accounts payable 194,131.97 411,743.57
Advances from customers 540,673.07 540,673.07
Employee compensation payable 19,879,990.77 17,955,509.70
Taxes payable 4,337,326.82 5,619,509.34
Other payables 93,730,387.66 87,029,351.12
Including: interest payable - -
Dividends payable - -
Non-current liabilities maturing within one year 478,582.75 -
Total current liabilities 119,161,093.04 111,556,786.80
Non-current liabilities:
Lease liabilities 2,070,057.60 -
Deferred income - 100,000.00
Deferred tax liabilities 32,534,099.01 34,086,313.51
Total non-current liabilities 34,604,156.61 34,186,313.51
Total liabilities 153,765,249.65 145,743,100.31
Shareholders' equity:
Equity 506,521,849.00 506,521,849.00
Capital reserve 1,577,392,975.96 1,577,392,975.96
Other comprehensive income 93,862,232.32 98,116,532.32
Surplus reserves 106,805,904.93 104,262,315.64
Undistributed profits 634,823,161.24 647,893,886.69
Total shareholders' equity 2,919,406,123.45 2,934,187,559.61
Total liabilities and shareholders' equity 3,073,171,373.10 3,079,930,659.92
The notes are an integral part of the financial statements
-7-
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Income Statement
For the year ended December 31, 2025
Consolidated Income Statement
RMB
Amount for the current Amount for the previous
Notes
year year
I. Operating revenue (V). 40 3,241,380,430.62 3,335,283,008.68
Less: operating costs (V). 40 2,756,367,676.81 2,795,859,934.82
Taxes and surcharges (V). 41 11,543,145.79 10,235,505.65
Selling and distribution expenses (V). 42 34,660,033.74 42,260,603.47
G&A expenses (V). 43 128,612,089.80 134,347,821.58
R&D expenses (V). 44 103,974,839.00 103,811,822.91
Financial expenses (V). 45 13,239,709.08 12,121,156.05
Including: interest expenses 6,944,766.30 17,858,022.73
Interest income 4,941,271.94 7,272,362.76
Plus: other income (V). 46 40,845,334.53 41,484,107.53
Investment income (loss) (V). 47 (1,198,003.94) (165,313.89)
Including: investment income (losses) in associates and joint
(7,010,989.13) (10,701,895.08)
ventures
Gains from derecognition of financial assets measured
- -
at amortized costs
Gains (losses) from changes in fair value (V). 48 (936,994.72) 1,134,503.45
Credit loss gains (V). 49 8,447,592.80 5,100,446.66
Asset impairment gains (losses) (V). 50 (138,340,722.92) (132,423,108.75)
Gains from disposal of assets 1,164,099.59 -
II. Operating profit 102,964,241.74 151,776,799.20
Plus: non-operating revenue (V). 51 6,395,734.45 1,805,086.92
Less: non-operating expenses (V). 52 940,862.88 698,017.71
III. Total profit 108,419,113.31 152,883,868.41
Less: income tax expenses (V). 53 12,805,570.48 9,827,102.03
IV. Net profit 95,613,542.83 143,056,766.38
(I) Classified by operating sustainability:
(II) Classified by ownership:
V. Net of tax of other comprehensive income (V). 37 (4,605,975.00) 13,270,426.51
Net of tax of other comprehensive income attributable to
(4,605,975.00) 13,270,426.51
shareholders of the parent company
(I) Other comprehensive income that cannot be reclassified into
(4,605,975.00) 14,560,500.00
profit or loss
- -
profit or loss under the equity method
(II) Other comprehensive income that will be reclassified into profit
- (1,290,073.49)
or loss
- -
or loss under the equity method
- -
comprehensive income
- (1,290,073.49)
financial statements
Net of tax of other comprehensive income attributable to minority
- -
shareholders
VI. Total comprehensive income 91,007,567.83 156,327,192.89
Total comprehensive income attributable to shareholders of the
parent company
Total comprehensive income attributable to minority shareholders 27,194,879.81 53,685,632.14
VII. Earnings per share
Basic earnings per share (RMB/share) 0.14 0.18
Diluted earnings per share (RMB/share) 0.14 0.18
The notes are an integral part of the financial statements
-8-
Shenzhen Textile (Holdings) Co., Ltd.
Income Statement of the Parent Company
For the year ended December 31, 2025
Income Statement of the Parent Company
RMB
Amount for the current Amount for the
Notes
year previous year
I. Operating revenue (XVI). 4 77,639,760.87 77,167,496.95
Less: operating costs (XVI). 4 11,627,229.49 10,205,157.84
Taxes and surcharges 3,033,498.02 3,069,369.36
Selling and distribution expenses 85,663.09 476,938.50
G&A expenses 46,236,884.06 46,124,842.97
Financial expenses 161,947.16 (1,179,537.25)
Including: interest expenses 527,112.25 422,950.59
Interest income 399,594.68 1,698,292.14
Plus: other income 150,758.85 164,150.75
Investment income (XVI). 5 13,965,225.54 12,077,902.81
Including: investment income (losses) in associates and
(7,010,989.13) (10,701,895.08)
joint ventures
Gains from derecognition of financial assets
- -
measured at amortized costs
Gains from changes in fair value 2,425,205.47 2,413,062.80
Credit impairment gains (losses) 66,651.82 (26,291,403.84)
Asset impairment gains (losses) (564,480.00) (20,243,658.34)
Gains from disposal of assets - -
II. Operating profit (loss) 32,537,900.73 (13,409,220.29)
Plus: non-operating revenue 2,089,299.55 1,124,656.60
Less: non-operating expenses 41,754.58 93,185.54
III. Total profit (loss) 34,585,445.70 (12,377,749.23)
Less: income tax expenses 9,149,552.77 (3,885,606.10)
IV. Net profit (loss) 25,435,892.93 (8,492,143.13)
(I) Net profit (loss) from continuing operations 25,435,892.93 (8,492,143.13)
(II) Net profit from discontinued operations - -
V. Net of tax of other comprehensive income (4,254,300.00) 14,486,701.51
(I) Other comprehensive income that cannot be reclassified
(4,254,300.00) 15,776,775.00
into profit or loss
- -
transferred to profit or loss under the equity method
(4,254,300.00) 15,776,775.00
investments
- -
risk
(II) Other comprehensive income that will be reclassified
- (1,290,073.49)
into profit or loss
- -
to profit or loss under the equity method
- -
in other comprehensive income
- -
investments
- (1,290,073.49)
currency financial statements
VI. Total comprehensive income 21,181,592.93 5,994,558.38
The notes are an integral part of the financial statements
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Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Cash Flows
For the year ended December 31, 2025
Consolidated Statement of Cash Flows
RMB
Amount for the current Amount for the
Notes
year previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 3,308,223,415.70 3,390,788,584.83
Refunds of taxes and surcharges received 13,163,610.09 21,049,133.80
Other cash received related to operating activities (V). 54(1) 132,944,006.58 87,008,969.95
Sub-total of cash inflows from operating activities 3,454,331,032.37 3,498,846,688.58
Cash paid for purchase of goods and receipt of services 2,705,656,832.58 2,842,864,632.73
Cash paid to and on behalf of employees 254,545,354.48 238,890,310.33
Cash paid for taxes and surcharges 55,145,150.97 32,071,014.09
Other cash paid related to operating activities (V). 54(1) 91,190,097.08 153,756,206.34
Sub-total of cash outflows from operating activities 3,106,537,435.11 3,267,582,163.49
Net cash flows from operating activities (V). 55(1) 347,793,597.26 231,264,525.09
II. Cash flows from investing activities:
Cash received from recovery of investment - 1,349,489.37
Cash received from investment income 17,323,464.63 11,747,113.36
Net cash received from disposal of fixed assets, intangible
assets, and other long-term assets
Net cash received from disposal of other long-term
assets
Net cash received from disposal of subsidiaries and other -
business units
Other cash received related to investing activities (V). 54(2) 1,149,136,738.42 1,697,000,000.00
Sub-total of cash inflows from investing activities 1,169,834,027.29 1,710,096,583.99
Cash paid to acquire and construct fixed assets, intangible
assets and other long-term assets 238,969,979.73 29,441,167.62
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other business -
units
Other cash paid related to investing activities (V). 54(2) 1,163,389,759.35 1,605,454,000.00
Sub-total of cash outflows from investing activities 1,401,639,235.53 1,634,895,167.62
Net cash flows from the investing activities (231,805,208.24) 75,201,416.37
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Including: cash received by subsidiaries from absorption of -
investments of minority shareholders
Cash received from acquisition of borrowings 141,755,054.19 -
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities 141,755,054.19 -
Cash paid for debt repayments 41,473,530.00 406,216,304.56
Cash paid for distribution of dividends and profits or 42,123,749.16
payment of interests
Including: dividends and profits paid to minority -
shareholders by subsidiaries
Other cash paid related to financing activities (V). 54(3) 12,484,469.33 9,508,462.57
Sub-total of cash outflows from financing activities 96,081,748.49 466,358,420.51
Net cash flows from financing activities 45,673,305.70 (466,358,420.51)
IV. Effect of fluctuation in exchange rate on cash and cash (13,768,475.71)
equivalents
V. Net increase (decrease) in cash and cash equivalents (V). 55(1) 147,172,715.46 (159,335,617.98)
Plus: balance of cash and cash equivalents at the beginning 302,084,839.35
(V). 55(2) 461,420,457.33
of the year
VI. Balance of cash and cash equivalents at the end of the 449,257,554.81
(V). 55(2) 302,084,839.35
year
The notes are an integral part of the financial statements
- 10 -
Shenzhen Textile (Holdings) Co., Ltd.
Statement of Cash Flows of the Parent Company
For the year ended December 31, 2025
Statement of Cash Flows of the Parent Company
RMB
Amount for the current Amount for the
Notes
year previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 89,344,780.98 80,553,754.68
Refunds of taxes and surcharges received - -
Other cash received related to operating activities 4,971,695.97 7,902,075.25
Sub-total of cash inflows from operating activities 94,316,476.95 88,455,829.93
Cash paid for purchase of goods and receipt of services 4,419,294.84 2,842,492.81
Cash paid to and on behalf of employees 40,520,746.74 35,045,305.67
Cash paid for taxes and surcharges 17,342,747.66 13,926,380.37
Other cash paid related to operating activities 10,077,755.49 15,727,708.36
Sub-total of cash outflows from operating activities 72,360,544.73 67,541,887.21
Net cash flows from operating activities 21,955,932.22 20,913,942.72
II. Cash flows from investing activities:
Cash received from recovery of investment - 1,554,056.96
Cash received from investment income 16,348,614.11 7,790,814.29
Net cash received from disposal of fixed assets, intangible
assets, and other long-term assets
- -
Net cash received from disposal of other long-term
assets
Net cash received from disposal of subsidiaries and other
- -
business units
Other cash received related to investing activities 1,160,427,138.42 1,373,585,151.73
Sub-total of cash inflows from investing activities 1,176,775,752.53 1,382,930,022.98
Acquisition and construction of fixed assets, intangible
assets and other long-term assets 1,242,473.57 2,993,281.20
Cash paid
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other business
- -
units
Other cash paid related to investing activities 1,150,516,500.00 1,363,000,000.00
Sub-total of cash outflows from investing activities 1,151,758,973.57 1,365,993,281.20
Net cash flows from the investing activities 25,016,778.96 16,936,741.78
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Cash received from acquisition of borrowings - -
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities - -
Cash paid for debt repayments - -
Cash paid for distribution of dividends and profits or
payment of interests
Other cash paid related to financing activities 159,356.17 -
Sub-total of cash outflows from financing activities 36,128,094.94 33,346,867.31
Net cash flows from financing activities (36,128,094.94) (33,346,867.31)
IV. Effect of fluctuation in exchange rate on cash and cash
(2,355.80) 1,356.80
equivalents
V. Net increase in cash equivalents 10,842,260.44 4,505,173.99
Plus: balance of cash and cash equivalents at the beginning 13,630,974.26
of the year
VI. Balance of cash and cash equivalents at the end of the 24,473,234.70
year
The notes are an integral part of the financial statements
- 11 -
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Changes in Shareholders' Equity
For the year ended December 31, 2025
Consolidated Statement of Changes in Shareholders' Equity
RMB
Amount for the current year
Equity attributable to shareholders of the parent company
Item
Other comprehensive Minority interests Total shareholders' equity
Equity Capital reserve Surplus reserves Undistributed profits
income
I. Balance as at the end of the previous year 506,521,849.00 1,961,599,824.63 106,877,807.32 104,262,315.64 272,608,113.66 1,283,450,723.88 4,235,320,634.13
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Others - - - - - - -
II. Balance at the beginning of the current year 506,521,849.00 1,961,599,824.63 106,877,807.32 104,262,315.64 272,608,113.66 1,283,450,723.88 4,235,320,634.13
III. Increase/decrease in the current year - - (4,605,975.00) 2,543,589.29 29,912,044.64 27,194,879.81 55,044,538.74
(I) Total comprehensive income - - (4,605,975.00) - 68,418,663.02 27,194,879.81 91,007,567.83
(II) Capital contributed or reduced by - - - - - - -
shareholders
included in shareholders' equity
(III) Profit distribution - - - 2,543,589.29 (38,506,618.38) - (35,963,029.09)
(IV) Internal transfer of shareholders' equity - - - - - - -
capital
capital
into retained earnings
(V) Special reserves - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,961,599,824.63 102,271,832.32 106,805,904.93 302,520,158.3 1,310,645,603.69 4,290,365,172.87
- 12 -
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Changes in Shareholders' Equity - Continued
For the year ended December 31, 2025
Consolidated Statement of Changes in Shareholders' Equity - Continued
RMB
Amount for the previous year
Equity attributable to shareholders of the parent company
Item
Other comprehensive Minority interests Total shareholders' equity
Equity Capital reserve Surplus reserves Undistributed profits
income
I. Balance as at the end of the previous year 506,521,849.00 1,961,599,824.63 93,607,380.81 104,262,315.64 216,160,896.14 1,229,765,091.74 4,111,917,357.96
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Others - - - - - - -
II. Balance at the beginning of the current year 506,521,849.00 1,961,599,824.63 93,607,380.81 104,262,315.64 216,160,896.14 1,229,765,091.74 4,111,917,357.96
III. Increase/decrease in the current year - - 13,270,426.51 - 56,447,217.52 53,685,632.14 123,403,276.17
(I) Total comprehensive income - - 13,270,426.51 - 89,371,134.24 53,685,632.14 156,327,192.89
(II) Capital contributed or reduced by
- - - - - - -
shareholders
- - - - - - -
shareholders
- - - - - - -
included in shareholders' equity
(III) Profit distribution - - - - (32,923,916.72) - (32,923,916.72)
(IV) Internal transfer of shareholders' equity - - - - - - -
- - - - - - -
share capital
- - - - - - -
share capital
- - - - - - -
income into retained earnings
(V) Special reserves - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,961,599,824.63 106,877,807.32 104,262,315.64 272,608,113.66 1,283,450,723.88 4,235,320,634.13
The notes are an integral part of the financial statements
- 13 -
Shenzhen Textile (Holdings) Co., Ltd.
Statement of Changes in Shareholders' Equity of the Parent Company
For the year ended December 31, 2025
Statement of Changes in Shareholders' Equity of the Parent Company
RMB
Amount for the current year
Item Other comprehensive
Equity Capital reserve Surplus reserves Undistributed profits Total shareholders' equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,577,392,975.96 98,116,532.32 104,262,315.64 647,893,886.69 2,934,187,559.61
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current year 506,521,849.00 1,577,392,975.96 98,116,532.32 104,262,315.64 647,893,886.69 2,934,187,559.61
III. Increase/decrease in the current year - - (4,254,300.00) 2,543,589.29 (13,070,725.45) (14,781,436.16)
(I) Total comprehensive income - - (4,254,300.00) - 25,435,892.93 21,181,592.93
(II) Capital contributed or reduced by - - - - - -
shareholders
shareholders
included in shareholders' equity
(III) Profit distribution - - - 2,543,589.29 (38,506,618.38) (35,963,029.09)
(IV) Internal transfer of shareholders' - - - - - -
equity
share capital
share capital
income into retained earnings
(V) Special reserves - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,577,392,975.96 93,862,232.32 106,805,904.93 634,823,161.24 2,919,406,123.45
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
For the year ended December 31, 2025
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
RMB
Amount for the previous year
Item
Equity Capital reserve Other comprehensive Surplus reserves Undistributed profits Total shareholders' equity
- 14 -
Shenzhen Textile (Holdings) Co., Ltd.
income
I. Balance as at the end of the previous year 506,521,849.00 1,577,392,975.96 83,629,830.81 104,262,315.64 689,309,946.54 2,961,116,917.95
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current year 506,521,849.00 1,577,392,975.96 83,629,830.81 104,262,315.64 689,309,946.54 2,961,116,917.95
III. Increase/decrease in the current year - - 14,486,701.51 - (41,416,059.85) (26,929,358.34)
(I) Total comprehensive income - - 14,486,701.51 - (8,492,143.13) 5,994,558.38
(II) Capital contributed or reduced by
- - - - - -
shareholders
- - - - - -
shareholders
- - - - - -
included in shareholders' equity
(III) Profit distribution - - - - (32,923,916.72) (32,923,916.72)
(IV) Internal transfer of shareholders'
- - - - - -
equity
- - - - - -
share capital
- - - - - -
share capital
- - - - - -
income into retained earnings
(V) Special reserves - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,577,392,975.96 98,116,532.32 104,262,315.64 647,893,886.69 2,934,187,559.61
The notes are an integral part of the financial statements
- 15 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(I) Basic information of the Company
Shenzhen Textile (Holdings) Co., Ltd. (hereinafter referred to as "the Company") is a joint stock limited company
registered in Guangdong Province. The Company was listed on Shenzhen Stock Exchange in August 1994. The
Company has publicly issued RMB ordinary shares (A shares) and domestically listed foreign shares (B shares) to
the domestic and foreign public respectively, and listed for trading.
Headquartered in Shenzhen, Guangdong Province, the Company and its subsidiaries (hereinafter referred to as
"the Group") are principally engaged in the research and development, production and marketing of polarizers for
liquid crystal displays, as well as property management, which are mainly located in the prosperous commercial
area of Shenzhen.
The consolidated and parent company's financial statements of the Company were approved by the Board of
Directors on March 26, 2026.
(II) Basis for the preparation of financial statements
The Group implements the Accounting Standards for Business Enterprises and related provisions issued by the
Ministry of Finance. In addition, the Group also discloses relevant financial information in accordance with the
Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing Securities to the Public
No. 15 - General Provisions on Financial Reports (Revised in 2023).
The Group has evaluated its going-concern ability for 12 months from December 31, 2025 and has not found any
matters or circumstances that cast significant doubt on the going-concern ability. Therefore, the financial
statements have been prepared on the going concern basis.
The accounting of the Group is based on the accrual basis. Except for certain financial instruments measured at
fair value, the financial statements are measured at historical cost. In the event of any asset impairment, a
provision for impairment will be made in accordance with relevant provisions.
Under the historical cost measurement, assets are measured at the amount of cash or cash equivalents paid or the
fair value of the consideration paid at the time of acquisition. Liabilities are measured at the amount of money or
assets actually received for assuming current obligations, or the contract amount of assuming current obligations,
or the amount of cash or cash equivalents expected to be paid to repay liabilities in daily activities.
Fair value is the price received from the sale of an asset or paid for the transfer of a liability by a market
participant in an orderly transaction occurring on the measurement date. Regardless of whether the fair value is
observable or estimated by using valuation techniques, the fair value measured and disclosed in these financial
statements is determined on this basis.
- 16 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(II) Basis for the preparation of financial statements - Continued
For financial assets where the transaction price is taken as the fair value at initial recognition and valuation
techniques involving unobservable input value are used in the subsequent measurement of fair value, the valuation
techniques are corrected during the valuation process to make the initial recognition result determined by the
valuation techniques equal to the transaction price.
The fair value measurement is divided into three levels based on the observability of the input value of the fair
value and the importance of such input value to the fair value measurement as a whole:
? Level 1 input value is the unadjusted quoted price in active markets for identical assets or liabilities that are available
on the measurement date.
? Level 2 input value is the directly or indirectly observable input value of the relevant assets or liabilities except for the
level 1 input value.
? Level 3 input value is the unobservable input value of the relevant assets or liabilities.
(III) Important accounting policies and accounting estimates
The financial statements prepared by the Company meet the requirements of the Accounting Standards for
Business Enterprises, and truly and completely reflect the Company's consolidated and parent company's financial
position as at December 31, 2025, and the consolidated and parent company's operating results, changes in
consolidated and parent company's shareholders' equity and consolidated and parent company's cash flows for the
year then ended.
The Company adopts the Gregorian calendar year for its accounting year, that is, from January 1 to December 31
of each year.
Operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash
equivalents by the enterprise. The operating cycle of the Company is 12 months.
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries
operate. The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company's
overseas subsidiaries determine RMB as their recording currency based on the currency in the main economic
environment in which they operate. The currency used by the Company in preparing these financial statements is
RMB.
- 17 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Item Importance criteria
Significant accounts receivable with the provision for The individual book balance accounts for more than 0.5% of the total
bad debts made on an individual basis assets
The individual recovery or reversal amount accounts for more than 10%
Recovery or reversal amount of provision for bad debts of the total amount of provision for bad debts recovery or reversal of the
of significant accounts receivable corresponding accounts receivable and the amount exceeds RMB 10
million
Advances to suppliers with aging over 1 year and of
Individual amount accounts for more than 0.5% of total assets
significant amount
The balance of a single construction in progress accounts for over 10% of
Significant construction in progress project the total balance of construction in progress and the amount is more than
RMB 100,000,000.00.
Important accounts payable, advances from
customers,contract liabilities and other payables with Individual amount accounts for more than 0.5% of total assets
aging over 1 year
Other cash received related to significant investing
The amount exceeds RMB 50 million
activities
Other cash paid related to significant investing activities The amount exceeds RMB 50 million
The total assets, total revenue or total profit of the non-wholly-owned
Major non-wholly-owned subsidiaries subsidiary account for more than 10% of the amount of the corresponding
items in the consolidated financial statements of the Group
The book value of the long-term equity investments of the enterprise at
Significant joint ventures or associates the end of the year accounts for more than 5% of the net assets of the
consolidated financial statements of the Group
control
Business combinations are categorized into those under common control and those not under common control.
If, before and after the business combination, all parties involved are ultimately controlled by the same party or
the same group of parties and such control is not temporary, the combination is considered under common control.
The assets and liabilities obtained in the business combination are measured at their book value as recorded in the
consolidated financial statements of the ultimate controller on the combination date. Any difference between the
book value of the net assets acquired by the combining party and the book value of the consideration paid is
adjusted against the share premium in capital reserve. If the equity premium is insufficient, the difference is
adjusted against retained earnings.
All direct expenses incurred for the purpose of the business combination are recognized in current profit or loss as
they occur.
When the entities involved in the combination are not under the ultimate control of the same party or the same
group of parties before and after the combination, it is considered a business combination not under common
control.
The combination cost refers to the fair value of the assets paid, the liabilities incurred or assumed, and the equity
instruments issued by the acquirer to obtain the right of control of the acquiree. Any intermediary fees for business
combination, including but not limited to audit, legal, and valuation consulting services, and other related G&A
expenses incurred by the acquirer are charged to current profit or loss as they arise.
Any identifiable assets, liabilities, and contingent liabilities of the acquiree that meet the recognition criteria and
are obtained by the acquirer in the combination are measured at fair value on the acquisition date.
- 18 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III)Significant accounting policies and accounting estimates - Continued
control - Continued
If the combination cost exceeds the acquiree's fair value share of net identifiable assets obtained, this difference is
recognized as goodwill and initially measured at cost. If the combination cost is less than the acquiree's fair value
share of net identifiable assets obtained, the acquirer shall first reassess the fair values of all identifiable assets,
liabilities, and contingent liabilities of the acquiree, as well as the measurement of the combination cost. After
reassessment, if the combination cost is still less than acquiree's fair value share of net identifiable assets obtained,
the difference is included in current profit or loss.
Goodwill arising from a business combination is presented separately in the consolidated financial statements and
is measured at cost less any accumulated provision for impairment.
Control means that an investor has power over the investee, derives variable returns by participating in the
investee's relevant activities, and can use that power to affect the amount of returns. Whenever changes in relevant
facts and circumstances alter any element of this definition of control, the Group will reassess the situation.
The consolidation scope in the consolidated financial statements is determined on the basis of control.
A subsidiary is consolidated from the date the Group obtains the right of control over it until the date such right is
lost.
For subsidiaries that the Group disposes of, operating results and cash flows prior to the disposal date (the date
when the loss of control occurs) are appropriately included in the consolidated income statement and consolidated
cash flow statement.
For subsidiaries acquired in a business combination not under common control, their operating results and cash
flows from the acquisition date (the date when the right of control is obtained) are appropriately included in the
consolidated income statement and consolidated cash flow statement.
For subsidiaries acquired in a business combination under common control, regardless of the point in time during
the reporting period at which the combination takes place, the subsidiary is deemed to have been under the
Group's consolidation scope from the date it came under the ultimate controller. Its operating results and cash
flows from the earliest beginning date of the reporting period are appropriately included in the consolidated
income statement and consolidated cash flow statement.
The primary accounting policies and reporting periods adopted by the subsidiaries are determined in accordance
with the uniform accounting policies and reporting periods set by the Company.
- 19 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Continued
Any effects on the consolidated financial statements from intercompany transactions between the Company and
its subsidiaries, or among the subsidiaries themselves, are eliminated upon consolidation.
The shares of the subsidiary's ownership interest that are not part of the parent company are shown as minority
interests under the item "minority interests" under the item on shareholders' equity in the consolidated balance
sheet. the share of the subsidiary's net profit or loss attributable to minority interests is presented in the
consolidated income statement under the net profit item as "minority interest income".
If the losses borne by minority shareholders exceed the share of owners' equity they hold at the beginning of the
subsidiary's period, the excess continues to be deducted from the minority interests.
Transactions involving the purchase of a subsidiary's minority interests or the partial disposal of a subsidiary's
equity investments without losing the right of control are accounted for as equity transactions. The book value of
the parent company's owners' equity and the minority interests are adjusted to reflect the changes in their
respective ownership in the subsidiary. Any difference between the adjustment to minority interests and the fair
value of the consideration paid or received is adjusted against the capital reserve. If the capital reserve is
insufficient, the difference is adjusted against retained earnings.
Joint venture arrangements are classified as either joint operations or joint ventures, based on the rights and
obligations of the parties—determined by factors such as the arrangement's structure, legal form, and contractual
terms. A joint operation is a joint arrangement in which the parties have rights to the related assets and obligations
for the related liabilities. A joint operation refers to those joint venture arrangements under which the joint venture
is entitled to relevant assets and be responsible for relevant liabilities. A joint venture is a joint venture
arrangement in which the parties are entitled only to the arrangement's net assets.
The Group accounts for investments in joint ventures using the equity method. For further details, refer to Note
(III), Section 17.3.2, "Long-term equity investments accounted for under the equity method."
Cash refers to cash on hand and deposits readily available for payment. Cash equivalents refer to short-term
(generally maturing within three months from the purchase date), highly liquid investments held by the Group that
are easily convertible into known amounts of cash and subject to an insignificant risk of value changes.
Foreign currency transactions are initially recognized at an exchange rate similar to the spot exchange rate on the
date of the transaction, and the exchange rate similar to the spot rate on the date of the transaction is determined in
a systematic and reasonable manner.
- 20 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
At each balance sheet date, foreign currency monetary items are translated into RMB at the spot rate on that date.
Any exchange differences arising from changes in the spot exchange rate (compared to the rate at initial
recognition or the previous balance sheet date) are recognized in current profit or loss, except for: (1) exchange
differences on foreign-currency-specific borrowings that qualify for capitalization, which are capitalized as part of
the cost of the related asset during the capitalization period; (2) exchange differences on hedging instruments used
to hedge foreign exchange risk, which are accounted for under hedge accounting; (3) foreign exchange differences
arising from changes in the book balance of monetary items classified as measured at fair value through other
comprehensive income, except for amortized costs, are recognized in current profit or loss.
When preparing consolidated financial statements involving foreign operations, if a foreign currency monetary
item essentially constitutes a net investment in a foreign operation, any exchange differences arising from
fluctuation in exchange rate are included under "Exchange differences on translation of foreign currency
statements" in other comprehensive income. Upon disposal of the foreign operation, these differences are
recognized in profit or loss for the disposal period.
Foreign currency non-monetary items measured at historical cost continue to be measured using the spot exchange
rate in recording currency on the transaction date. For foreign currency non-monetary items measured at fair value,
the spot exchange rate on the date the fair value is determined is used for translation. Any difference between the
translated amount in recording currency and the original currency is treated as a fair value change (including
fluctuation in exchange rate) and is recognized in current profit or loss or other comprehensive income, as
appropriate.
To prepare consolidated financial statements, foreign-currency financial statements of overseas operations are
translated into RMB as follows: all assets and liabilities in the balance sheet are translated at the spot exchange
rate on the balance sheet date; shareholders' equity items are translated at the spot exchange rate on the date of
occurrence; all items in the income statement and items reflecting profit distribution are translated using an
exchange rate approximating the spot exchange rate on the transaction date; any difference between the sum of
translated assets and the sum of translated liabilities plus equity items is recognized as other comprehensive
income and included in shareholders' equity.
Foreign currency cash flows and the cash flows of overseas subsidiaries are translated using an exchange rate
approximating the spot exchange rate on the date of the cash flow. The impact of fluctuation in exchange rate on
cash and cash equivalents is presented separately in the statement of cash flows under "Effect of exchange rate
changes on cash and cash equivalents".
The figures for the prior year-end and the actual amounts for the previous year are presented according to the
amounts translated in the previous year's financial statements.
When the Group disposes of its entire owners' equity in a foreign operation or otherwise loses the right of control
over a foreign operation—whether by partially disposing of equity investments or for any other reason—all
differences on translation of foreign currency statements related to that foreign operation and presented under
shareholders' equity (attributable to the parent company) in the balance sheet are transferred in full to profit or loss
for the disposal period.
- 21 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When disposing of part of an equity investments or in other circumstances that reduce the Group's ownership
interest in an overseas operation without losing the right of control over that operation, any differences on
translation of foreign currency statements related to the disposed portion are attributed to minority interests and
are not transferred to profit or loss for the current period. When disposing of a portion of equity in an overseas
operation that is classified as an associate or a joint venture, the differences on translation of foreign currency
statements related to that operation are transferred to profit or loss in the disposal period, in proportion to the
percentage of equity disposed.
The Group recognizes a financial asset or financial liability when it becomes a party to the contractual provisions
of a financial instrument.
For purchases or sales of financial assets in the ordinary course of business, the Group recognizes the assets to be
received and the liabilities to be assumed on the trade date, or derecognizes the assets sold on the trade date.
Financial assets and financial liabilities are measured at fair value upon initial recognition (see Note (II) "Basis of
accounting and valuation principles" for details on determining fair value). For financial assets and liabilities
measured at fair value through profit or loss, transaction costs are recognized directly in profit or loss for the
current period; for other categories of financial assets and liabilities, the relevant transaction costs are included in
the initial recognition amount. When the Group initially recognizes accounts receivable that do not include a
significant financing component, or when the financing component of a contract not exceeding one year is
disregarded under Accounting Standards for Business Enterprises No. 14 - Revenue (hereinafter referred to as
“Revenue Standard”), such receivables are initially measured at the transaction price as defined in the Revenue
Standard.
The effective interest method is the method used to calculate the amortized cost of a financial asset or liability and
to allocate the interest income or interest expenses over the relevant accounting periods.
The effective interest rate is the rate that discounts the estimated future cash flows over the expected life of a
financial asset or liability to the financial asset's book balance or the financial liability's amortized cost. In
determining the effective interest rate, the Group estimates expected cash flows based on all contractual terms of
the financial asset or liability (e.g., early repayment, extension, call options, or other similar options), but does not
factor in expected credit losses.
The amortized cost of a financial asset or liability is the initial recognized amount minus any repaid principal, plus
or minus the accumulated amortization of the difference between the initial recognized amount and the amount at
maturity using the effective interest method, and then minus the accumulated provision for losses (applicable only
to financial assets).
- 22 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
After initial recognition, the Group subsequently measures different categories of financial assets at amortized
cost, at fair value through other comprehensive income, or at fair value through profit or loss.
If the contractual terms of a financial asset stipulate that, on specified dates, cash flows comprise solely payments
of principal and interest on the outstanding principal, and the Group's business model for managing this financial
asset is to collect the contractual cash flows, the Group classifies this financial asset as measured at amortized cost.
Such financial assets mainly include monetary funds, notes receivable, accounts receivable, and other receivables.
If the contractual terms of a financial asset stipulate that, on specified dates, cash flows comprise solely payments
of principal and interest on the outstanding principal, and the Group's business model for managing the financial
asset is both to collect contractual cash flows and to sell the financial asset, then the Group classifies this asset as
measured at fair value through other comprehensive income. Such financial assets with a maturity of more than
one year from the date of acquisition are presented as "Other debt investments," while those maturing within one
year (inclusive) from the balance sheet date are presented under "Non-current assets due within one year."
Accounts receivable and notes receivable classified upon acquisition as measured at fair value through other
comprehensive income are presented under "Receivables financing," and any other items acquired with a maturity
of one year (inclusive) or less are presented under "Other current assets."
At initial recognition, on an individual financial asset basis, the Group may irrevocably designate a non-trading
equity instrument investment, other than any contingent consideration recognized in a business combination not
under common control, as measured at fair value through other comprehensive income. Such financial assets are
presented as "Other equity instrument investments."
If a financial asset meets any of the following conditions, it indicates that the Group holds this asset for trading
purposes:
? The main purpose of acquiring the financial asset is to sell it in the near term.
? Upon initial recognition, the financial asset is part of an identifiable portfolio of financial instruments that is
collectively managed, and there is objective evidence of a recent pattern of short-term profit-taking.
? The financial asset is a derivative, except for derivatives that meet the definition of a financial guarantee
contract or are designated as effective hedging instruments.
Financial assets measured at fair value through profit or loss include those classified as such and those designated
as such:
? Any financial asset that does not meet the classification criteria for measurement at amortized cost or at fair value
through other comprehensive income is classified as measured at fair value through profit or loss.
? At initial recognition, to eliminate or significantly reduce accounting mismatches, the Group may irrevocably
designate a financial asset as measured at fair value through profit or loss.
- 23 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Financial assets measured at fair value through profit or loss are presented under "Financial assets held for
trading." Those due in more than one year from the balance sheet date (or with no fixed maturity) and expected to
be held for more than one year are presented under "Other non-current financial assets."
Financial assets measured at amortized cost are subsequently measured at amortized cost using the effective
interest method, and any gain or loss arising from impairment or derecognition is recognized in profit or loss.
The Group recognizes interest income on financial assets measured at amortized cost using the effective interest
method. For purchased or originated financial assets that are already credit-impaired, the Group determines
interest income from the date of initial recognition based on the asset's amortized cost and a credit-adjusted
effective interest rate. For all other financial assets, the Group calculates interest income by multiplying the book
balance of the asset by the effective interest rate.
For a financial asset classified as measured at fair value through other comprehensive income, any impairment
loss or gain and interest income calculated using the effective interest method are recognized in profit or loss,
while all other fair value changes are recognized in other comprehensive income. The amount recognized in profit
or loss each period is the same as if the asset had been measured at amortized cost throughout its life. When such a
financial asset is derecognized, the cumulative gains or losses previously recognized in other comprehensive
income are transferred from other comprehensive income to profit or loss.
For a non-trading equity instrument investment designated as measured at fair value through other comprehensive
income, fair value changes are recognized in other comprehensive income. When the financial asset is
derecognized, the cumulative gains or losses previously recognized in other comprehensive income are transferred
out of other comprehensive income and into retained earnings. During the period the Group holds this non-trading
equity instrument investment, if the right to receive dividends is established, the related economic benefits are
likely to flow to the Group, and the amount of dividends can be measured reliably, then the Group recognizes
dividend income in profit or loss.
Financial assets measured at fair value through profit or loss are subsequently measured at fair value; gains or
losses arising from fair value changes, as well as any dividend and interest income related to these assets, are
recognized in profit or loss.
- 24 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group recognizes impairment allowances and provision for losses based on expected credit losses for
financial assets measured at amortized cost, financial assets classified as fair value through other comprehensive
income, and lease receivables.
For all notes receivable and accounts receivable arising from transactions governed by the Revenue Standard, as
well as operating lease receivables arising from transactions governed by Accounting Standards for Business
Enterprises No. 21 - Leases, the Group measures the provision for loss at an amount equal to the lifetime expected
credit losses.
For other financial instruments, except for those purchased or originated with credit loss, the Group evaluates
changes in credit risk since initial recognition at each balance sheet date. If the credit risk of such a financial
instrument has significantly increased since initial recognition, the Group measures the provision for loss at an
amount equal to the lifetime expected credit losses; if it has not significantly increased, the Group measures the
provision for loss at an amount equal to the 12-month expected credit losses. Except for financial assets classified
as fair value through other comprehensive income, any increase or reversal of the provision for credit losses is
recognized as an impairment loss or gain in the current period's profit or loss. For financial assets classified as fair
value through other comprehensive income, the Group recognizes the provision for credit losses in other
comprehensive income and records the impairment loss or gain in profit or loss, without reducing the asset's book
value in the balance sheet.
If, in a prior period, the Group measured the provision for loss at an amount equal to the lifetime expected credit
losses (due to a significant increase in credit risk since initial recognition), but at the current balance sheet date
that significant increase in credit risk no longer applies, then the Group measures the provision for loss at an
amount equal to the 12-month expected credit losses. The amount of any resulting reversal is recognized as an
impairment gain in profit or loss.
The Group uses reasonable and supportable forward-looking information to compare the risk of default on a
financial instrument at the balance sheet date with the risk of default at initial recognition, in order to determine
whether the credit risk has significantly increased since initial recognition.
- 25 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the Group assesses whether credit risk has increased significantly, it considers the following factors:
(1) Whether internal price indicators resulting from changes in credit risk have undergone a significant change.
(2) Whether, if an existing financial instrument is effectively originated or issued as a new financial instrument on
the balance sheet date, there is a significant change in the interest rate or other terms of that instrument (e.g., more
stringent contractual terms, increased collateral or guarantees, or a higher yield).
(3) Whether external market indicators of credit risk for the same financial instrument, or similar instruments with
the same expected term, have changed significantly. Such indicators include credit spreads, credit default swap
(CDS) prices for the borrower, the length of time and extent to which a financial asset's fair value is below its
amortized cost, and other market information related to the borrower (e.g., changes in the prices of the borrower's
debt or equity instruments).
(4) Whether the external credit rating of the financial instrument has actually changed or is expected to change
significantly.
(5) Whether there has been a downgrade in the debtor's internal credit rating, either actual or anticipated.
(6) Whether there has been an adverse change in the debtor's business, financial, or economic conditions that is
expected to significantly affect the debtor's ability to meet its debt obligations.
(7) Whether the debtor's operating performance, whether actual or expected, has changed significantly.
(8) Whether the credit risk of other financial instruments issued by the same debtor has increased significantly.
(9) Whether there has been a significantly adverse change in the regulatory, economic, or technological
environment in which the debtor operates.
(10) Whether the value of collateral securing the debt, or the quality of a third-party guarantee or credit
enhancement, has changed significantly. Such changes are expected to reduce the debtor's economic incentive to
repay under the contractual schedule or affect the probability of default.
(11) Whether there has been a significant change in factors that would reduce the borrower's economic incentive
to repay in accordance with the contractual terms.
(12) Whether the loan contract is expected to be modified, including the potential release or amendment of
contractual obligations due to anticipated breaches of contract, granting interest-free periods, raising interest rates,
requiring additional collateral or guarantees, or otherwise modifying the contractual framework of the financial
instrument.
(13) Whether there is a significant change in the debtor's expected performance or repayment behavior.
(14) Whether the Group's credit management approach for the financial instrument has changed.
Regardless of the outcome of the above assessment, if payments under the financial instrument's contract are more
than (or equal to) 30 days past due, it indicates that the financial instrument's credit risk has increased significantly.
On the balance sheet date, if the Group concludes that a financial instrument has only low credit risk, it presumes
the credit risk has not increased significantly since initial recognition. A financial instrument is considered to have
low credit risk if its risk of default is low, the borrower has a strong capacity to meet its contractual cash flow
obligations in the short term, and even over a longer period, adverse changes in economic and operating
conditions would not necessarily reduce the borrower's ability to meet those obligations.
(III) Significant accounting policies and accounting estimates - Continued
- 26 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
When one or more events occur that the Group expects to adversely affect the future cash flows of a financial
asset, that asset is considered credit-impaired. Evidence for a credit-impaired financial asset includes the
following observable information:
(1) The debtor breaches a contract, such as default or delinquency in interest or principal payments.
(2) The debtor breaches the contract, such as default or delay in repayment of interest or principal.
(3) The creditor gives the debtor concessions under economic or contractual considerations relating to the debtor's
financial difficulties that would not have been made under any other circumstances;
(4) The debtor is highly likely to go bankrupt or undertake other financial restructuring.
(5) The issuer's or debtor's financial difficulties lead to the disappearance of an active market for the financial
asset.
(6) A financial asset is purchased or originated at a substantial discount, reflecting the fact that a credit loss has
occurred.
Based on the Group's internal credit risk management, if internal recommendations or externally obtained
information indicates that the debtor of a financial instrument cannot fully repay all creditors, including the Group
(regardless of any guarantee obtained by the Group), the Group considers this a default event.
Regardless of the above assessment, if payments under the financial instrument's contract are more than (or equal
to) 90 days past due, the Group presumes the instrument is in default.
For financial assets and lease receivables, the expected credit loss is the present value of the difference between
the contractual cash flows the Group is entitled to receive and the cash flows the Group actually expects to receive.
When measuring the expected credit losses on financial instruments, the Group's method reflects: an unbiased,
probability-weighted average determined by evaluating a range of possible outcomes; the time value of money;
and reasonable and supportable information about past events, current conditions, and forecasts of future
economic conditions, available without undue cost or effort at the balance sheet date.
If the Group no longer reasonably expects to recover all or part of the contractual cash flows of a financial asset,
the Group writes off the book balance of the financial asset directly. This write-off constitutes derecognition of the
relevant financial asset.
- 27 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
A financial asset is derecognized if one of the following conditions is met: (1) the contractual right to receive cash
flows from the financial asset expires; (2) the financial asset has been transferred and substantially all the risks
and rewards of ownership of the asset have been transferred to the transferee; or (3) the financial asset has been
transferred, and although the Group has neither transferred nor retained substantially all the risks and rewards of
ownership, it has not retained control over the asset.
If the Group has neither transferred nor retained substantially all the risks and rewards of ownership of the
financial asset but retains control of it, the Group continues to recognize the transferred financial asset to the
extent of its continuing involvement, and recognizes a corresponding liability. The Group measures that liability
as follows:
? Where the transferred financial asset is measured at amortized cost, the book value of the related liability
equals the book value of the asset in which the Group continues to be involved minus the amortized cost of
any rights retained by the Group (if the Group retained such rights due to the transfer) and plus the amortized
cost of any obligations assumed by the Group (if the Group assumed such obligations due to the transfer).
Such liabilities are not designated as financial liabilities measured at fair value through profit or loss.
? Where the transferred financial asset is measured at fair value, the book value of the related liability equals
the book value of the asset in which the Group continues to be involved minus the fair value of any rights
retained by the Group (if the Group retained such rights due to the transfer) and plus the fair value of any
obligations assumed by the Group (if the Group assumed such obligations due to the transfer). The fair
values of such rights and obligations are measured on a stand-alone basis.
When the full transfer of a financial asset qualifies for derecognition, the difference between the book value of the
transferred financial asset on the derecognition date and the sum of the consideration received and the
corresponding portion of the cumulative fair value changes previously recognized in other comprehensive income
is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity instrument investment
designated as measured at fair value through other comprehensive income, any cumulative gains or losses
previously recognized in other comprehensive income are transferred out of other comprehensive income and into
retained earnings.
When a partial transfer of a financial asset qualifies for derecognition, the book value of the original asset before
transfer is allocated between the portion being derecognized and the portion that continues to be recognized, based
on the relative fair values of each portion on the transfer date. The difference between (a) the consideration
received for the derecognized portion plus the corresponding portion of the cumulative fair value changes
previously recognized in other comprehensive income and (b) the book value of the derecognized portion on the
derecognition date is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity
instrument investment designated as measured at fair value through other comprehensive income, any cumulative
gains or losses previously recognized in other comprehensive income are transferred out of other comprehensive
income and into retained earnings.
If a full transfer of a financial asset does not satisfy the derecognition criteria, the Group continues to recognize
the entire transferred financial asset and recognizes the consideration received as a liability.
- 28 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Based on the contractual terms and the economic substance of the issued financial instrument rather than merely
its legal form and in conjunction with the definitions of financial liabilities and equity instruments, the Group
classifies the financial instrument (or its components) as either a financial liability or an equity instrument at
initial recognition.
Upon initial recognition, financial liabilities are classified as financial liabilities measured at fair value through
profit or loss or other financial liabilities.
Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading
(including derivatives classified as financial liabilities) and those designated as measured at fair value through
profit or loss. Except for derivative financial liabilities, which are presented separately, financial liabilities
measured at fair value through profit or loss are presented as financial liabilities held for trading.
If a financial liability meets any of the following conditions, it indicates that the Group has assumed this liability
for trading purposes:
? The primary purpose of assuming the financial liability is to repurchase it in the near term.
? Upon initial recognition, the financial liability is part of an identifiable portfolio of financial instruments that
is collectively managed, and there is objective evidence of a recent pattern of short-term profit-taking.
? The financial liability is a derivative, except for derivatives that meet the definition of a financial guarantee
contract or are designated as effective hedging instruments.
At initial recognition, if any of the following conditions are met, the Group may designate a financial liability as
measured at fair value through profit or loss: (1) the designation can eliminate or significantly reduce accounting
mismatches; (2) under the Group's formally documented risk management or investment strategy, portfolios of
financial liabilities or combined portfolios of financial assets and liabilities are managed and evaluated on a fair
value basis, and this is reported internally to key officers; or (3) it is part of an eligible hybrid contract containing
an embedded derivative.
Financial liabilities held for trading are subsequently measured at fair value, with any gains or losses arising from
fair value changes, along with dividends or interest expenses related to these liabilities, recognized in profit or loss.
- 29 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
For a financial liability designated as measured at fair value through profit or loss, the portion of the fair value
change attributable to the Group's own credit risk is recognized in other comprehensive income, while other
changes in fair value are recognized in profit or loss. When the financial liability is derecognized, the accumulated
fair value change attributable to changes in the Group's own credit risk that was previously recorded in other
comprehensive income is transferred to retained earnings. Any dividends or interest expenses related to such
financial liabilities are recognized in profit or loss. If treating the effect of changes in the liability's own credit risk
in this manner creates or enlarges an accounting mismatch in profit or loss, the Group recognizes all gains or
losses on the liability (including those related to changes in its own credit risk) in profit or loss.
Except for financial liabilities arising from the transfer of financial assets that do not meet derecognition criteria,
or where the Group continues to be involved in transferred financial assets, other financial liabilities are classified
as financial liabilities measured at amortized cost. They are subsequently measured at amortized cost, and any
gains or losses from derecognition or amortization are recognized in profit or loss.
If the Group modifies or renegotiates a contract with a counterparty, and it does not result in the derecognition of a
financial liability subsequently measured at amortized cost but leads to changes in the contractual cash flows, the
Group recalculates the book value of the financial liability and recognizes any related gain or loss in profit or loss.
For recalculated book value, the Group shall determine it by discounting the renegotiated or modified contractual
cash flows at the original effective interest rate of the financial liability. For any costs or fees incurred as a result
of modifying or renegotiating the contract, the Group shall adjust the book value of the modified financial liability
and amortize them over the remaining term thereof.
If the present obligation of a financial liability is fully or partially discharged, the liability (or the discharged
portion) is derecognized. If the Group (as borrower) signs an agreement with a lender to replace the original
financial liability with a new one, and the terms of the new liability differ substantially from those of the original
liability, the Group derecognizes the original liability and recognizes the new one.
When a financial liability is fully or partially derecognized, the difference between the book value of the
derecognized portion and the consideration paid (including any non-cash assets transferred or new financial
liabilities assumed) is recognized in profit or loss for the current period.
- 30 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
An equity instrument is a contract that evidences a residual interest in the Group's assets after deducting all
liabilities. The Group treats the issuance (including refinancing), repurchase, sale, or cancellation of its equity
instruments as changes in equity. The Group does not recognize fair value changes in equity instruments.
Transaction costs directly attributable to equity transactions are deducted from equity.
The Group's distributions made to holders of equity instruments are treated as profit distribution, and any issued
stock dividends do not affect the total shareholders' equity.
Derivatives, including forward foreign exchange contracts, are initially measured at fair value on the contract date
and subsequently measured at fair value.
When the Group has a legal right to offset recognized financial assets and liabilities, and that right is currently
enforceable, and the Group intends to settle on a net basis or to realize the asset and settle the liability
simultaneously, the financial assets and liabilities are presented on the balance sheet at the net amount. Otherwise,
financial assets and financial liabilities are presented separately in the balance sheet without offset.
For notes receivable with significantly increased credit risk, such as those past due and not accepted or where
there is clear evidence that the acceptor is likely unable to fulfill its acceptance obligation, the Group evaluates
credit losses on an individual basis. Other notes receivable are evaluated based on their credit risk characteristics
as a group.
Any increase or reversal of the provision for expected credit losses on notes receivable is recognized as a credit
loss or gain in profit or loss.
characteristic combination
Apart from those notes receivable whose credit losses are determined on an individual basis, the Group classifies
the remaining notes receivable into different groups based on shared credit risk characteristics:
Combination category Determination basis
Combination 1 Bank acceptance bills
Combination 2 Commercial acceptance bills
- 31 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group uses an impairment matrix at the group level to determine expected credit losses for accounts
receivable. Any increase or reversal of the provision for expected credit losses of accounts receivable is
recognized as a credit loss or gain in profit or loss.
characteristic combination.
The Group classifies accounts receivable into Combination 1 and Combination 2 based on the credit risk
characteristics of counterparties under different business segments. Combination 1 refers to accounts receivable
arising from the polarizer business revenue, where provisions for credit losses are made based on overdue aging
relative to the credit term. Combination 2 refers to accounts receivable arising from property leasing and other
business revenue, where provisions for credit losses are made based on natural aging.
The Group uses both the natural aging of accounts receivable and the overdue aging relative to the credit term as
credit risk characteristics, applying an impairment matrix to determine expected credit losses. Natural aging is
calculated starting from the date of initial recognition of the accounts receivable, while overdue aging begins once
the natural aging exceeds the credit term granted to the customer. If the terms and conditions of an accounts
receivable are modified but do not lead to derecognition, the aging continues to accumulate.
The Group individually determines credit losses for accounts receivable where there is evidence of a significant
increase in credit risk.
The Group determines credit losses for receivables financing on an individual-asset basis. The Group recognizes
the provision for credit losses for receivables financing in other comprehensive income and records any credit loss
or gain in profit or loss, without reducing the book value presented in the balance sheet.
Based on the credit status of the accepting bank for bank acceptance bills, the Group individually assesses and
determines credit losses for receivables financing.
- 32 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group determines credit losses for other receivables on a group basis. Any increase or reversal of the
provision for expected credit losses on other receivables is recognized as a credit loss or gain in profit or loss.
characteristic combination
The Group divides other receivables into different combinations based on common credit risk characteristics.
Common credit risk characteristics used by the Group include initial recognition date, remaining contract term,
and length of overdue period.
The aging is calculated from the date of initial recognition. If the terms and conditions of other receivables are
modified but do not lead to derecognition, the aging continues to accumulate.
value consumables and packaging materials
The Group's inventories mainly include raw materials, work in progress, finished products, and materials
processed on consignment. Inventories are initially measured at cost, which includes purchase costs, processing
costs, and other expenditures incurred to bring the inventories to their current location and condition.
When inventories are issued, the actual cost is determined using the weighted average method.
The Group uses a perpetual inventory system.
Low-value consumables and packaging materials are amortized using the straight-line method or are written off in
full at once.
- 33 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
On the balance sheet date, inventories are measured at the lower of cost and net realizable value. If net realizable
value is lower than cost, a provision for inventory depreciation is made.
Net realizable value is the estimated selling price of inventories in the ordinary course of business, less the
estimated costs to complete, the estimated selling and distribution expenses, and related taxes. When determining
the net realizable value of inventories, the Group uses conclusive evidence while considering the purpose of
holding the inventories and the impact of events after the balance sheet date.
After the provisions for the inventory depreciation are made, the factors causing any write-down of inventory
value have disappeared, leading to the net realizable values of inventories higher than its book value, the amount
of write-down shall be resumed and be reversed from the original provision for inventory devaluation with the
reversal being included in current profit or loss.
Generally, provisions for inventory depreciation are made on an item-by-item basis.
Control means that an investor has power over the investee, derives variable returns by participating in the
investee's relevant activities, and can use that power to affect the amount of returns. Common control refers to
shared control over an arrangement under relevant agreements, where decisions about the arrangement's relevant
activities require the unanimous consent of the parties sharing the right of control. Significant influence refers to
the power to participate in decisions on an investee's financial and operating policies, but not to control or
commonly control the formation of those policies. When determining whether the investor can exercise control or
significant influence over the investee, the potential voting rights arising from convertible corporate bonds or
exercisable warrants currently held by the investor or other parties are taken into account.
For a long-term equity investment acquired in a business combination under common control, the initial
investment cost is determined on the combination date based on the share of the book value of the acquiree's
owners' equity in the ultimate controller's consolidated financial statements. Any difference between the initial
investment cost of the long-term equity investment and the book value of the cash paid, non-cash assets
transferred, or liabilities assumed is adjusted against capital reserve. If the capital reserve is insufficient, the
difference is adjusted against retained earnings. Where equity securities are issued as consideration for the
combination, on the combination date, the initial investment cost of the long-term equity investment is determined
based on the share of the book value of the acquiree's owners' equity in the ultimate controller's consolidated
financial statements. The total par value of the issued shares is recognized as share capital, and any difference
between the initial investment cost and the total par value of the shares issued is adjusted against capital reserve. If
the capital reserve is insufficient, the difference is adjusted against retained earnings.
- 34 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
For a long-term equity investment acquired in a business combination not under common control, on the
acquisition date the initial investment cost is determined based on the combination cost.
Audit, legal, valuation, consulting, and other related G&A expenses incurred by the acquirer or purchaser for the
business combination are recognized in profit or loss when they occur.
Long-term equity investments obtained through methods other than a business combination are initially measured
at cost. Where an investor gains significant influence or common control but not control over an investee through
additional investment, the cost of the long-term equity investment is the sum of the fair value of the previously
held equity investment (as determined in accordance with Accounting Standards for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments) and the new investment cost.
In the parent company's financial statements, long-term equity investments in subsidiaries are measured using the
cost method. A subsidiary is an investee over which the Group can exercise control.
Under the cost method, long-term equity investments are measured at their initial investment cost. Any additional
investment or capital recovery adjusts the cost of the long-term equity investment. Current investment income is
recognized based on the amount of cash dividends or profits declared and distributed by the investee.
The Group applies the equity method to its investments in associates and joint ventures. An associate is an
investee over which the Group has significant influence, and a joint venture is a joint venture arrangement under
which the Group has rights to the net assets of the arrangement.
Under the equity method, if the initial investment cost of the long-term equity investment exceeds the share of the
fair value of the investee's identifiable net assets at the time of investment, the initial investment cost is not
adjusted. If the initial investment cost is less than the share of the fair value of the investee's identifiable net assets
at the time of investment, the difference is recognized in current profit or loss, and the cost of the long-term equity
investment is adjusted accordingly.
- 35 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the equity method is adopted for accounting, the Group, based on its attributable share of the net profit or
loss and other comprehensive income realized by the investee, respectively recognize the investment income and
other comprehensive income, and simultaneously adjust the book value of the long-term equity investment.
COOEC shall calculate the shares according to profits or cash dividends declared by the investee and
correspondingly reduce the book value of long-term equity investments; as to any change in owners' equity of the
investee other than net profit or loss, other comprehensive income and profit distribution, the Group shall adjust
the book value of the long-term equity investment and include such change in capital reserves. When recoginzing
the attributable share of net profit or loss of the investee, the Group shall, based on the fair value of identifiable
net asset of the investee when it obtains the investment,recognize the net profits of the investee after adjustment. If
accounting policies and accounting periods adopted by the investee are inconsistent with those of the Company,
the financial statements of the investee shall be adjusted according to the accounting policies and accounting
periods of the Company and investment income and other comprehensive income etc. shall be recognized on such
basis. For transactions between the Group and associates and joint ventures, if the invested or sold assets do not
constitute business, the unrealized profit or loss from internal transactions will be offset at the part attributable to
the Group and the investment profit or loss will be recognized on that basis However, the unrealized losses from
internal transactions between the Group and any investee shall not be offset if they belong to the losses from the
impairment of the transferred assets.
When recognizing the net losses occurred in the investee that shall be shared, the reduction value of book value of
long-term equity investments and other long-term equities that constitute net investments in the investee will be
the limit until it becomes zero. In addition, if the Group has the obligation to assume extra-amount losses for the
investee, the estimated liabilities are recognized according to the estimated obligations and included in the current
investment losses. Where the investee realizes net profits in the subsequent period, the Group shall restore the
income shared after making up for unrecognized losses undertaken by such income.
When a long-term equity investment is disposed of, the difference between its book value and the actual proceeds
is recognized in current profit or loss. If a long-term equity investment has been accounted for using the equity
method and the remaining equity after disposal is still accounted for using the equity method, any other
comprehensive income previously recognized under the equity method is treated on the same basis as if the
investee had directly disposed of the related assets or liabilities, and is transferred proportionately. Any other
changes in owners' equity of the investee, other than net profit or loss, other comprehensive income, and profit
distribution, which were previously recognized, are transferred proportionately to the current profit or loss. If a
long-term equity investment is accounted for using the cost method and the remaining equity after disposal
continues to be accounted for using the cost method, any other comprehensive income recognized before the
Group gained control, under either the equity method or the accounting standards for recognizing and measuring
financial instruments, is treated on the same basis as if the investee had directly disposed of the related assets or
liabilities, and is transferred proportionately. Other changes in owners' equity other than net profit or loss, other
comprehensive income and profit distribution in net asset of the investee accounted for and recognized by using
the equity method shall be carried forward to the current profit or loss.
- 36 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Where the Group loses the control over the investee due to the disposal of part of the equity investments, when it
prepares separate financial statements, the remaining equity after disposal that can commonly control or have
significant influence on the investee will be measured under the equity method, and the remaining equity shall be
deemed to have been adjusted under the equity method on acquisition. If the remaining equity after disposal can
not exercise common control or significant influence on the investee, such equity will be changed to be accounted
for according to recognition and measurement standards of financial instruments and the difference between fair
value and book value on the date of loss of the control shall be included in the current profit or loss. For other
comprehensive income recognized by using the equity method or financial instruments recognition and
measurement standards before the Group obtains the control over the investee, accounting treatment shall be made
on the same basis as that for direct disposal of relevant assets or liabilities by the investee when the Group loses
the control over the investee. Other changes in owners' equity other than net profit or loss, other comprehensive
income and profit distribution in net asset of the investee recognized by using the equity methodshall be carried
forward to the current profit or loss when the control over the investee is lost. Where the remaining equities after
disposal are accounted for under the equity method, the other comprehensive income and other owners' equity
shall be carried forward in proportion. If the remaining equity after disposal is changed to be accounted for
according to the recognition and measurement standards of the financial instruments, the other comprehensive
income and other owner's equity shall be fully carried forward.
In case the common control or significant influence over the investee is lost for disposing part of equity
investments, the remaining equity will be changed to be accounted for according to the recognition and
measurement principles of financial instruments. The difference between the fair value and the book value on the
date of the loss of common control or significant influence shall be included in the current profit or loss. Any
other comprehensive income previously recognized under the equity method for the original equity investment is
accounted for on the same basis as if the investee had directly disposed of related assets or liabilities once the
equity method ceases to apply. All other changes in owners' equity recognized due to factors other than net profit
or loss, other comprehensive income, and profit distribution of the investee are transferred in full to current
investment income when the equity method is no longer applied.
Where the Group disposes of equity investments in subsidiaries through multiple transactions and by stages until
loss of control, if the above transactions belong to a package of transactions, accounting treatment shall be made
on the transactions as a transaction to dispose equity investments of subsidiaries and lose the control. The
difference between each disposal cost and the book value of long-term equity investments corresponding to
disposed equities before the loss of control shall be firstly recognized as other comprehensive income and then
transferred into the current profit or loss at the loss of control.
Investment property refers to property held to earn rentals or for capital appreciation, or both, and includes leased
land use rights and leased buildings.
Investment property is initially measured at cost. Subsequent expenses related to the investment property, if the
economic benefits related to the asset are likely to flow in and the cost can be measured reliably, shall be included
in the cost of the investment property. Other subsequent expenses shall be included in the current profit or loss
when incurred.
- 37 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group uses the cost model for subsequent measurement of investment property and provides for depreciation
on a straight-line basis over its service life. The depreciation method, useful life, estimated residual value, and
annual depreciation rates for each category of investment property are as follows:
Depreciation method Depreciation life Annual depreciation
Type Residual value rate (%)
(years) rate (%)
Houses and buildings Straight-line method 10-40 0.00-4.00 2.40-10.00
When an investment property is being disposed of or permanently withdraws from use without any economic
benefits expected from the disposal, the investment property shall be derecognized.
The difference between the disposal proceeds of an investment property (through sale, transfer, retirement, or
damage) and its book value, net of related taxes and fees, is recognized in current profit or loss.
Fixed assets refer to tangible assets held for the purpose of producing goods, providing services, renting or
operating management, with a service life exceeding one fiscal year. Fixed assets will only be recognized when
the economic benefits associated with such assets are likely to flow into the Group and the cost can be measured
reliably. A fixed asset is initially measured at cost.
For the subsequent expenses related to the fixed assets, if the economic benefits related to the fixed assets are
likely to flow in and the cost can be measured reliably, they shall be included in the cost of the fixed assets, and
the book value of the replaced part shall be derecognized, Other subsequent expenses shall be included into the
current profit or loss when incurred.
From the month following the date a fixed asset is in working condition for intended use, the Group depreciates
the asset on a straight-line basis over its service life. The depreciation method, service year, estimated residual
value, and annual depreciation rates for each category of fixed assets are as follows:
Depreciation life Annual depreciation
Type Depreciation method Residual value rate (%)
(years) rate (%)
Buildings and constructions Straight-line method 10-40 0.00-4.00 2.40-10.00
Machinery equipment Straight-line method 10-14 4.00 6.86-9.60
Transportation equipment Straight-line method 8 4.00 12.00
Electronic equipment and others Straight-line method 5 4.00 19.20
Estimated net residual value refers to the amount obtained by the Group from the disposal of the fixed assets at
present after deducting the estimated disposal expenses, assuming that the estimated service life of the fixed asset
has expired and the fixed asset is in the expected state at the end of its service life.
- 38 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the fixed assets are disposed of or it is expected that no economic benefits can be generated through use or
disposal, the fixed assets shall be derecognized. The difference of the revenue from disposal of fixed assets such
as sales, transfer, retirement or damage deducting their book value and related taxes shall be included into the
current profit or loss.
The Group will review service life, estimated net residual value and depreciation methods of the fixed assets at the
end of each year. Changes, if any, shall be handled as changes in accounting estimates.
The construction in progress is measured at actual cost, which includes various project expenditures incurred
during the construction period, capitalized borrowing costs before the project reaches working condition for
intended use, and other related costs. No depreciation is made for construction in progress.
The construction in progress shall be carried forward to the fixed assets after it reaches the working condition for
intended use. The criteria and timing for the conversion of various types of construction in progress into fixed
assets are as follows:
Time point of conversion into
Type Criteria for conversion to fixed assets
fixed assets
The machinery equipment shall be carried forward to the fixed assets when
it has been accepted and the following conditions are met:
Installation of (1) The machinery equipment and its supporting facilities have been Reach working condition for
machinery equipment installed; intended use
(2) After commissioning, the machinery equipment can maintain normal and
stable operation or produce qualified products for a period of time.
The capitalization of the borrowing costs that can be directly attributable to the acquisition, construction or
production of assets that meet the capitalization conditions will start when the asset expenditure has incurred, the
borrowing costs have incurred, and the acquisition, construction or production activities necessary for the asset to
reach the intended usable or salable state have begun; the capitalization shall be ceased when the acquired and
constructed or produced assets eligible for capitalization have reached their working condition for intended use or
sales condition. The remaining borrowing costs are recognized as expenses on occurrence.
For specialized borrowings, the capitalization amount is based on the actual interest expenses incurred in the
current period, after deducting the interest income earned from unused borrowing funds deposited in the bank or
investment income earned from temporary investments; general borrowings shall be determined by multiplying
the weighted average of asset disbursements of the part of accumulated asset disbursements exceeding special
borrowings by the capitalization rate of used general borrowings, and on this basis, the capitalization amount is
determined. The capitalization rate is calculated and recognized as per the weighted average interest rate of
general borrowing.
- 39 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Intangible assets include land use right, software and patent rights, etc.
The intangible assets shall be initially measured at the costs. For intangible assets with limited service life, the
original value shall be evenly amortized by straight-line method within the expected service life from the time
when they are available for use. The intangible assets with uncertain service life shall not be amortized. The
amortization method, service life and residual value rate of various intangible assets are as follows:
Amortization Residual value rate
Type Service life (year) and basis of determination
method (%)
Straight-line
Land use rights 50 (Determine the service life based on the statutory service life) -
method
Straight-line 5 (Determine the service life based on the period expected to bring
Software -
method economic benefits)
Straight-line 15 (Determine the service life based on the period expected to bring
Patent right -
method economic benefits)
At the end of the period, the service life and amortization method of intangible assets with limited service life
shall be reviewed and adjusted if necessary.
The expenditures in research phase will be included in current profit or loss on occurrence.
Expenditures in the development stage will be recognized as intangible assets only when the following conditions
are simultaneously satisfied, and included in current profit or loss if the following conditions are not satisfied:
(1) It is technically feasible to complete the intangible assets so that it can be used or sold;
(2) It has the intention to complete the intangible assets and use or sell them;
(3) The manner in which an intangible asset generates economic benefits includes the ability to prove that there is
a market for the products produced through the use of this intangible asset or a market for the intangible asset
itself. In the case that the intangible asset will be used internally, its usefulness shall be proven.
(4) With the support of sufficient technology, financial resources and other resources, it is able to complete the
development of the intangible assets, and it is able to use or sell the intangible assets;
(5) The expenditures attributable to the intangible assets in the development stage can be measured reliably.
Where the research expenditures and the development expenditures are indistinguishable, the COOEC shall
include research expenditures and development expenditures incurred in current profit or loss. The cost of the
intangible assets formed by internal development activities only includes the total expenditure incurred from the
time when the capitalization conditions are met to the time when the intangible assets reach the intended use. The
expenses recognized in profit or loss before meeting the capitalization conditions during the development for the
same intangible asset will not be adjusted.
The scope of R&D expenditure includes wages, salaries, and welfare expenses of personnel directly engaged in
R&D activities, materials, fuel and power costs directly consumed in R&D activities, and depreciation expenses
of instruments and equipment for R&D activities, etc.
- 40 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
On each balance sheet date, the Group checks whether there is any indication that long-term equity investments,
investment properties measured by the cost model, fixed assets, construction in progress, right-of-use assets and
intangible assets with a definite service life may have impairment. If there are indications of impairment of such
assets, the recoverable amount shall be estimated. Intangible assets with indefinite service life and intangible
assets that have not yet reached a usable state are subject to impairment testing every year regardless of whether
there are indications of impairment.
The recoverable amount of the estimated asset is based on a single asset. If it is difficult to estimate the
recoverable amount of a single asset, the recoverable amount of the asset group shall be determined on the basis of
the asset group to which the asset belongs. The recoverable amount is the higher of the net amount obtained by
deducting the disposal expenses from the fair value of an asset or an asset group and the present value of its
expected future cash flows.
If the recoverable amount of the asset is lower than its book value, the provision for asset impairment shall be
made at the difference and included in the current profit or loss.
The goodwill shall be tested for impairment at least at the end of each year. The impairment test of goodwill shall
be carried out in combination with the asset group or combination of asset groups related to it. That is, from the
acquisition date, the book value of goodwill shall be allocated using a reasonable method to the asset group or
portfolio of asset groups that benefit from the synergies of the business combination. If the recoverable amount of
the asset group or group of asset groups including the allocated goodwill is lower than its book value, the
corresponding impairment losses shall be recognized. Amount of impairment losses shall be firstly used to deduct
the book value of goodwill allocated to the asset group or portfolio of asset groups, and then deduct book value of
other assets according to the proportion of the book values of other assets (except for goodwill) in the asset group
or portfolio of asset groups.
The above losses from assets impairment will not be reversed in subsequent accounting periods once recognized.
Long-term deferred expenses refer to the expenses which have been already incurred but will be borne in the
current period and in the future with an amortization period of over 1 year. Long-term deferred expenses are
amortized evenly over the expected benefit period.
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration
received or receivable from customers. Contract assets and contract liabilities under the same contract are
presented by their net amounts.
During the accounting period when employees provide services for the Group, the Group recognizes the short-
term compensation actually incurred as liabilities and includes it in the current profit or loss or related asset costs.
The employee welfare expenses incurred by the Group shall be included in the current profit or loss or related
asset costs according to the actual amount incurred. If the employee benefits are non-monetary benefits, they shall
be measured at fair value.
- 41 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
For the medical insurance premiums, work-related injury insurance premiums, maternity insurance premiums and
other social insurance premiums and housing provident funds paid by the Group for employees, as well as the
labor union funds and employee education expenses withdrawn by the Group in accordance with the provisions,
the corresponding employee compensation amount shall be calculated and determined according to the prescribed
accrual basis and accrual ratio during the accounting period when employees provide services for the Group, and
the corresponding liabilities shall be recognized and included in the current profit or loss or related asset costs.
Post-employment benefits are all defined contribution plans.
During the accounting period when employees provide services for the Group, the Group recognizes the amount
payable calculated according to the defined contribution plans as a liability and includes it in the current profit or
loss or related asset costs.
When the Group provides dismissal benefits to employees, the employee compensation liability arising from the
dismissal benefits shall be recognized at the earlier of the following dates and included in the current profit or loss:
when the Group cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor
relationship plan or the layoff proposal; when the Group recognizes the costs or expenses related to the
restructuring involving the payment of dismissal benefits.
When the obligation related to the contingency such as product quality guarantee is a current obligation of the
Group, and the performance of such obligation is likely to result in the outflow of economic benefits, and the
amount of such obligation can be measured reliably, it is recognized as estimated liabilities.
On the balance sheet date, by considering the risks, uncertainty and time value of money and other factors related
to contingency, the estimated liabilities will be measured according to the best estimate of the required
expenditures for performace of relevant present obligation. If the time value of money is significant, the best
estimate shall be determined by the amount discounted by the estimated future cash flows.
When the Group has fulfilled its performance obligations under the contract, that is, when the customer obtains
right of control of the relevant goods or services, the revenue is recognized based on the transaction prices
allocated to the specific performance obligation. Performance obligations refer to the contractual commitments in
which the Group transfers clearly distinguishable goods or services to the customers.
- 42 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Continued
The Group evaluates the contract on the contract commencement date, identifies each individual performance
obligation contained in the contract, and determines whether each individual performance obligation is performed
within a certain period of time or at a certain point in time. If one of the following conditions is met, it is a
performance obligation performed within a certain period of time, and the Group recognizes revenue within a
certain period of time according to the performance progress: (1) the customer obtains and consumes the
economic benefits brought by the Group at the same time as the Group performs the contract; (2) The customer is
able to control the goods under construction in the course of the Group's performance; (3) The goods produced
during the performance of the Group have irreplaceable uses, and the Group has the right to receive payment for
the performance accumulated to date throughout the contract period. Otherwise, the Group recognizes the revenue
at the point when the customer obtains the right of control of the relevant goods or services.
For goods sold to customers, the Group recognizes revenue when the right of control of the goods is transferred,
that is, when the goods are delivered to the designated place of the other party and signed by the other party. For
property service, the Group recognizes revenue in the course of providing property service.
Transaction prices refer to the amount of consideration that the Group is expected to be entitled to receive as a
result of the transfer of goods or services to customers, but does not include the amount received on behalf of third
parties and the amount expected to be returned to customers by the Group. When determining the transaction
prices, the Group considers the impact of variable consideration, significant financing components in the contract,
non-cash consideration, consideration payable to customers and other factors.
If the contract contains two or more performance obligations, the Group shall, on the commencement date of the
contract, allocate the transaction prices to each individual performance obligation according to the relative ratio of
the individual selling price of the goods or services promised by each individual performance obligation. However,
if there is conclusive evidence that the contractual discount or variable consideration is only related to one or more
(but not all) performance obligations in the contract, the Group shall allocate the contractual discount or variable
consideration to the relevant one or more performance obligations. Individual selling price refers to the price at
which the Group sells goods or services to customers separately. If the individual selling price cannot be directly
observed, the Group will comprehensively consider all the information that can be reasonably obtained and
estimate the individual selling price by maximizing the use of observable input value.
For sales with sales return clauses, the Group recognizes revenue at the amount of consideration expected to be
entitled to receive due to the transfer of goods to the customer (i.e., excluding the amount expected to be returned
due to sales return) when the customer obtains the relevant control over goods, and recognizes liabilities at the
amount expected to be returned due to sales return; at the same time, the balance of the book value of the expected
goods to be returned at the time of transfer after deducting the expected cost of recovering the goods (including
the impairment of the value of the returned goods) is recognized as an asset. The net amount after deducting the
cost of the above asset will be transferred as cost based on the book value of the transferred goods.
For sales with quality assurance clauses, if the quality assurance provides a separate service in addition to assuring
the customer that the goods or services sold meet the established standards, the quality assurance constitutes a
single performance obligation. Otherwise, the Group shall conduct accounting treatment for the quality assurance
liability in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.
The Group determines whether it is the principal or the agent when engaging in transactions based on whether it
has the right of control over the goods or services before transferring them to the customer. If the Group can
control the goods or services before transferring them to the customer, the Group is the main responsible person
and recognizes the revenue according to the total consideration received or receivable; otherwise, the Group is an
agent and recognizes revenue based on the expected commissions or service fee it is entitled to receive. This
amount is determined by subtracting the price payable to other related parties from the total consideration received
or receivable.
- 43 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Continued
If the Group receives payment in advance from customers for sales of goods or services, the payment is first
recognized as a liability and then transferred to revenue when the relevant performance obligations are fulfilled.
When the Group's advances from customers do not need to be returned and the customer may waive all or part of
its contractual rights, the Group expects to be entitled to the amount related to the contractual rights waived by the
customer, and recognizes the above amount as revenue in ratio according to the mode of the customer's exercise
of contractual rights; otherwise, the Group will only transfer the relevant balance of the above-mentioned
liabilities to revenue when it is highly unlikely that the customer will request the fulfillment of the remaining
performance obligations.
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Group from the
government for free. Government subsidies are recognized when they can meet the conditions attached to
government subsidies and can be received.
The government subsidies considered as monetary assets are measured at the amount received or receivable.
The subsidies fro production line and equipment in the Group's government subsidies can form long-term assets,
so such government subsidies are asset-related government subsidies.
Government subsidies related to assets are recognized as deferred income and included in the current profit or loss
by stages according to the straight-line method within the service life of the relevant assets.
The industry development support funds and enterprise development support funds in the Group's government
subsidies cannot form long-term assets, so such government subsidies are income-related government subsidies.
Income-related government subsidies used to compensate for relevant costs and losses in subsequent periods are
recognized as deferred income and included in the current profit or loss in the period when the relevant costs or
expenses are recognized; if it is used to compensate the relevant costs and losses incurred, it shall be directly
included in the current profit or loss.
Government subsidies related to the daily activities of the Group are included in other income according to the
essence of economic business. Government subsidies unrelated to the daily activities of the Group are included in
the non-operating revenue.
When the recognized government subsidies need to be returned, if there is relevant deferred income balance, the
book balance of relevant deferred income shall be offset, and the excess shall be included in the current profit or
loss; if there is no relevant deferred income, it shall be directly included in the current profit or loss.
- 44 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Leases refers to a contract in which the lessor transfers the right of use of the asset to the lessee for consideration
within a certain period of time.
At the commencement date of the contract, the Group assesses whether the contract is a lease contract or contains
a lease. Unless the terms and conditions of the contract change, the Group does not reassess whether the contract
is a lease contract or contains a lease.
When a contract contains one or more lease and non-lease parts, the Group will split the individual lease and non-
lease parts and allocate the contract consideration according to the relative ratio of the sum of the individual price
of each lease part and the individual price of the non-lease part.
Except for short-term leases, the Group recognizes the right-of-use assets of the lease on the lease commencement
date. The lease commencement date refers to the starting date when the lessor provides the leased assets for use by
the Group. Right-of-use assets are initially measured at cost. The cost includes:
The initial measurement amount of the lease liabilities;
the lease payments made on or before the lease commencement date, or the relevant amount after deducting
the lease incentive already enjoyed if any;
Initial direct expenses incurred by the Group;
The estimated costs incurred by the Group for dismantling and removing the leased assets, restoring the
premises where the leased assets are located or restoring the leased assets to the state agreed in the lease
clauses.
The Group depreciates right right-of-use assets with reference to the depreciation provisions of Accounting
Standards for Business Enterprises No. 4 — Fixed Assets. If the Group can reasonably determine that the
ownership of leased assets will be obtained at the expiration of the lease term, the right-of-use assets shall be
depreciated within the remaining service life of the leased assets. If it is not reasonably certain that ownership of
leased assets will be obtained at the expiration of the lease term, the depreciation shall be accrued during the
shorter of the lease term and remaining service life leased assets.
The Group determines whether the right-of-use assets are impairment in accordance with the Accounting
Standards for Business Enterprises No. 8 - Asset Impairment and performs accounting treatment on the identified
impairment losses.
Except for short-term leases, the Group makes initial measurement of the lease liabilities on the lease
commencement date according to the present value of the lease payments that have not been paid on that date.
When calculating the present value of lease payments, the Group uses the interest rate implicit in lease as the
discount rate, and if the interest rate implicit in lease cannot be determined, the incremental borrowing rate is used
as the discount rate.
- 45 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the
leased assets during the lease term, including:
Fixed payment amount and substantial fixed payment amount. If there is lease incentive, the relevant amount
of lease incentive shall be deducted;
Variable lease payment amount depending on index or ratio;
The exercise price of the option reasonably determined by the Group to be exercised;
The amount to be paid to terminate the lease when the lease term reflects that the Group will exercise the
option;
The amount expected to be paid according to the residual value of the guarantee provided by the Group.
After the lease commencement date, the Group calculates the interest expenses of the lease liabilities for each
period of the lease term at a fixed cyclical interest rate and includes it in the current profit or loss or related asset
costs.
After the lease commencement date, if any of the following circumstances occurs, the Group shall remeasure the
lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has
been reduced to zero, but the lease liabilities still needs to be further reduced, the Group shall include the
difference in the current profit or loss:
If the lease term changes or the evaluation result of the purchase option changes, the Group will re-measure
the lease liabilities according to the present value calculated by the changed lease payment amount and the revised
discount rate;
If the estimated payable amount according to the guarantee residual value or the index or proportion used to
determine the lease payment changes, the Group will re-measure the lease liabilities according to the present value
calculated by the changed lease payment amount and the original discount rate.
the lessee
The Group chooses not to recognize right-of-use assets and lease liabilities for short-term leases of some plants
and some leased warehouses. Short-term lease refers to a lease that lasts for no more than 12 months and includes
no purchase options at the lease commencement date. The Group includes the lease payments of short-term leases
in the current profit or loss or related asset costs according to the straight-line method in each period of the lease
term.
If the lease is modified and the following conditions are met at the same time, the Group will account for the lease
modification as a separate lease:
? The lease modification expands the scope of the lease by adding one or more right of use of the leased assets;
? The increased consideration is equivalent to the individual price of the expanded part adjusted according to
the contract.
- 46 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
If the lease modification is not accounted for as a separate lease, on the effective date of the lease modification,
the Group re-apportions the consideration of the modified contract, re-determines the lease term, and re-measures
the lease liabilities at the present value calculated according to the modified lease payments and the revised
discount rate.
If the lease modification results in a reduction in the scope of the lease or the lease term, the Group shall reduce
the book value of the right-of-use assets accordingly, and include the relevant gains or losses of partial or
complete termination of leases into the current profit or loss. If the lease liabilities are remeasured due to other
lease modification, the Group shall adjust the book value of the right-of-use assets accordingly.
If the contract contains both the lease and non-lease parts, the Group shall allocate the contract consideration
according to the provisions of the revenue standards on the allocation of transaction prices, and the basis of
allocation shall be the separate price of the lease part and the non-lease part.
Leases that substantially transfer substantially all of the risks and rewards associated with the ownership of leased
assets are financing leases Leases other than financing lease are operating leases.
During each period of the lease term, the Group recognizes the lease receipts of operating leases as rental income
by using the straight-line method. The initial direct costs incurred by the Group in connection with operating
leases are capitalized when incurred, amortized on the same basis as rental income recognition during the lease
term, and included in the current profit or loss in installments.
The variable lease receipts related to operating leases acquired by the Group and not included in the lease receipts
are included in the current profit or loss when actually incurred.
If the operating lease is changed, the Group will account for it as a new lease from the effective date of the change,
and the advance or receivable lease receipts related to the lease before the change will be regarded as the receipt
amount of the new lease.
- 47 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Income tax expenses include current income tax and deferred income tax.
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and prior periods are
measured at the expected income tax payable (or refundable) calculated in accordance with the tax law.
For the difference between the book value of certain assets and liabilities and their tax bases, and the temporary
differences arising from the difference between the book value and tax base of items that are not recognized as
assets and liabilities but whose tax bases can be determined in accordance with the tax law, the balance sheet
liability method is adopted to recognize deferred tax assets and deferred tax liabilities.
In general, the relevant deferred income taxes are recognized for all temporary differences. However, for
deductible temporary differences, the Group recognizes the relevant deferred tax assets to the extent of the taxable
income that is likely to be obtained to offset the deductible temporary differences. In addition, deferred tax assets
or liabilities are not recognized for temporary differences associated with the initial recognition of goodwill and
with the initial recognition of assets or liabilities arising from transactions that are neither business combinations
nor affect accounting profit or taxable income (or deductible losses) and do not result in equal taxable temporary
differences and deductible temporary differences.
For deductible loss and tax credits that can be carried forward to subsequent years, the corresponding deferred tax
assets arising therefrom are recognized to the extent that future taxable income will be probable to be available
against deductible losses and tax credits.
The Group recognizes deferred tax liabilities arising from taxable temporary differences associated with
subsidiaries, associates and investments in joint ventures, unless the Group is able to control the timing of the
reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the
foreseeable future. For deductible temporary differences related to subsidiaries, associates and investments in joint
ventures, the Group recognizes deferred tax assets only if it is probable that the temporary differences will reverse
in the foreseeable future and it is probable that taxable income will be available to offset the deductible temporary
differences in the future.
On the balance sheet date, deferred tax assets and deferred tax liabilities should be measured at the applicable tax
rate during the period of expected recovery of the relevant assets or liquidation of the relevant assets according to
the provisions of tax laws.
Except for the current income tax and deferred income taxes related to transactions and events directly included in
other comprehensive income or shareholders' equity, which are included in other comprehensive income or
shareholders' equity, and the book value of deferred income taxes arising from business combination to adjust
goodwill, the remaining current income tax and deferred income tax expenses or income are included in the
current profit or loss.
On the balance sheet date, the book value of the deferred tax assets shall be reviewed. If it is likely that sufficient
taxable income will not be available in the future to offset the benefits of the deferred tax assets, the book value of
the deferred tax assets shall be written down. When it is likely to earn sufficient taxable income, the written down
amount is reversed.
- 48 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the Group has a legal right to settle on a net basis and intends to settle with net amount or acquire assets and
pay off liabilities simultaneously, the Group reports the net amount of current income tax assets and current tax
liabilities after offsetting.
When the Group has the legal right to settle current income tax assets and current income tax liabilities on a net
basis, and the deferred tax assets and deferred tax liabilities are related to the income tax levied by the same tax
collection authority on the same taxpayer or on different taxpayers, but in each important future period of reversal
of deferred tax assets and liabilities, the involved taxpayer intends to settle current income tax assets and liabilities
on a net basis or to obtain assets and settle liabilities at the same time, the deferred tax assets and deferred tax
liabilities of the Group are presented at the net amount after offset.
On December 5, 2025, the Ministry of Finance issued the Interpretation No. 19 of the Accounting Standards for
Business Enterprises, hereinafter referred to as the "Interpretation No.19"). Interpretation No. 19 specifies the
assessment of the cash flow characteristics of financial asset contracts and related disclosures, as well as the
disclosures for equity instruments designated to be measured at fair value with changes recorded in other
comprehensive income, and it will come into effect on January 1, 2026.
Assessment of the contractual cash flow characteristics of financial assets and related disclosure
To assesses whether the contractual cash flows of a financial asset are consistent with a basic lending arrangement,
the entity may need to consider the different components of interest. The assessment of interest should focus on
what the entity is being compensated for, rather than the amount of compensation, although the latter may indicate
that the entity is being compensated for factors other than the basic lending risks and costs. If the contractual cash
flows are linked to variables other than the basic lending risks or costs (such as the value of an equity instrument
or the price of a commodity), or if the contractual cash flows represent a portion of the debtor's revenue or profit,
then the contractual cash flows are inconsistent with the basic lending arrangement. The Group will implement
this provision as of January 1, 2026, and believes that the adoption of the above provisions has no material impact
on the Group's financial statements.
Disclosure of designated equity instruments measured at fair value with changes recognized in other
comprehensive income
Interpretation No. 19 stipulates that an entity shall, at a minimum, disclose by category the fair value of designated
investment in equity instruments measured at fair value through other comprehensive income at the end of the
reporting period, and the changes in their fair value during the reporting period, and may make further disclosure
by item based on the principle of materiality and in conjunction with the entity's actual situation. Among these, the
amount of change related to investments derecognized during the reporting period and the amount of change
related to investments held at the end of the reporting period shall be disclosed separately. The entity shall also
disclose the transfer of cumulative gains or losses included in equity related to investments derecognized during
the reporting period. The Group will implement this provision as of January 1, 2026, and believes that the
adoption of the above provisions has no material impact on the Group's financial statements.
- 49 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group has no significant changes in accounting estimates during the year.
(IV) Taxes
Tax type Tax basis Tax rate
The output tax for domestic sales is calculated at
Balance of output tax minus deductible input tax; tax
Value-added tax exemption, offset and refund measures are applicable to
according to relevant tax regulations, and the
the sales of export products
export product tax rebate rate is 13%
Urban maintenance and
Turnover tax payable 7%
construction tax
Education surcharge Turnover tax payable 3%
Local education surtax Turnover tax payable 2%
Corporate income tax Taxable income 25%、20%、15%、8.25%
THE RESIDUAL VALUE AFTER DEDUCTING 30%
Property taxes FROM THE ORIGINAL VALUE OF THE PROPERTY 1.2%
AT ONCE
Notes to the taxpayers with different corporate income tax rates:
Name of taxpayer Income tax rate
The Company 25%
Shenzhen Shenfang Property Management Co., Ltd. 20% (Note 1)
Shenzhen Meibainian Garment Co., Ltd. 20% (Note 1)
Shenzhen Lisi Industrial Development Co., Ltd. 20% (Note 1)
Shenzhen Shenfang Sungang Property Management Co., Ltd. 20% (Note 1)
SATO (Hong Kong) Limited 8.25% (Note 2)
Shenzhen SAPO Photoelectric Co., Ltd. (hereinafter referred to as "SAPO
Photoelectric")
Note 1: See Note (IV) and 2(2) for details.
Note 2: according to the Inland Revenue Ordinance of Hong Kong, SATO (Hong Kong) Limited is subject to a
two-tier profits tax system. The first HKD 2 million of taxable profits shall taxed at a rate of 8.25%, and the
profits generated thereafter shall be taxed at a rate of 16.5%.
Note 3: See Note (IV) and 2(1) for details.
(1) In 2025, SAPO Photoelectric, a subsidiary of the Company, was jointly recognized as Industry and
Information Technology Bureau of Shenzhen Municipality, Shenzhen Finance Bureau and Shenzhen Tax Service,
State Taxation Administration, respectively, with a certification period of 3 years, and the certificate numbers of
GR202544204289 respectively. Since SAPO Photoelectric was recognized as a high-tech enterprise, it is eligible
for the tax incentives for high-tech enterprises for three years. After filing with the competent tax bureau, SAPO
Photoelectric has paid corporate income tax at a tax rate of 15%.
- 50 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(IV) Taxes - continued
(2) The Company's subsidiaries, Shenzhen Meibainian Garment Co., Ltd., Shenzhen Lisi Industrial Development
Co., Ltd., Shenzhen Shenfang Sungang Property Management Co., Ltd. and Shenzhen Shenfang Property
Management Co., Ltd. are qualified small low-profit enterprises. According to the Announcement of the Ministry
of Finance and the State Taxation Administration of Taxation on Further Implementing Preferential Policies for
Corporate Income Tax of Small and Micro Enterprises (No. 13, 2022) and the Announcement of the Ministry of
Finance and the State Taxation Administration on Preferential Policies for Corporate Income Tax of Small and
Micro Enterprises and Individual Industrial and Commercial Households (No. 6, 2023), the part of the annual
taxable income not exceeding RMB 3 million will be included in the taxable income after deducting 25%, and
corporate income tax will be paid at a tax rate of 20%.
(3) In accordance with the relevant provisions of the Notice of the State Administration of Taxation of the General
Administration of Customs of Ministry of Finance on Import Tax Policies for Supporting the Development of the
New Display Device Industry (No. 19[2021]Cai Guan Shui), SAPO Photoelectric , a subsidiary of the Company,
meets the relevant conditions and enjoys the policy of exemption from import duties for related products from
January 1, 2021 to December 31, 2030.
(4) According to the Announcement on the Policy of Additional Value-Added Tax Deduction for Advanced
Manufacturing Enterprises (CZBSWZJGG [2023] No.43) issued by the Ministry of Finance and the State
Taxation Administration in September 2023, from January 1, 2023 to December 31, 2027, advanced
manufacturing enterprises are allowed to deduct the value-added tax payable by 5% of the deductible input tax for
the current period. SAPO Photoelectric, a subsidiary of the Company, meets the relevant conditions and enjoyed
the policy of additional deduction of value-added tax (VAT) in 2025.
(V) Notes to financial statements items
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Cash on hand: 15,510.21 4,751.69
RMB 15,451.50 4,691.50
HKD 58.71 60.19
Bank deposits (Note 1): 449,263,543.52 302,111,853.17
RMB 291,041,371.64 245,621,517.80
USD 93,081,165.25 40,462,152.89
JPY 64,400,647.02 15,265,963.38
HKD 740,359.61 762,219.10
Other monetary funds (Note 2): 685,396.65 38,844,838.96
RMB 685,394.45 10,920,461.06
JPY 2.20 27,924,377.90
Total 449,964,450.38 340,961,443.82
Including: total amount deposited abroad - -
- 51 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
Note 1: On December 31, 2025, the bank deposits include interest income from current deposits, agreement
deposit and 7-day notice deposits amounting to RMB 21,498.92 (on December 31, 2024: RMB 31,765.51).
Note 2: On December 31, 2025, the Group's other monetary funds included RMB 684,860.26 (December 31, 2024:
RMB 3,401,500.00) restricted in use due to account freezing, and RMB536.39 (December 31, 2024: RMB
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Financial assets measured at fair value through current profit or
loss
Including: money funds, structured deposits and wealth
management products
(1) Classification of notes receivable
RMB
Balance as at the end of the Balance as at the end of the
Category
current year previous year
Bank acceptance bills 85,980,246.52 47,305,221.88
(2) As at December 31, 2025, the Group has no pledged notes receivable.
(3) As of December 31, 2025, notes receivable endorsed or discounted by the Group and not yet due on the balance
sheet date at the end of the period.
RMB
Amount derecognized at the Amount not derecognized at the
Item
end of the period end of the period
Bank acceptance bills - 53,001,736.07
(4) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Ratio Provision Book value Provision Book value
Amount Amount Amount Ratio (%) Amount
(%) ratio (%) ratio (%)
Provision for bad debts
accrued on an individual - - - - - - - - - -
basis
Provision for bad debts
made by portfolio
Including: bank
acceptance bills
Total 85,980,246.52 100.00 - 85,980,246.52 47,305,221.88 100.00 - 47,305,221.88
(5) In 2025, the Group has no actual write-off of notes receivable.
- 52 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Disclosure by aging
RMB
Book balance at the end of the Book balance at the end of the
Aging
year previous year
Within 1 year 777,768,360.91 888,265,598.53
Over 3 years 13,513,950.97 13,565,696.79
Total 791,770,983.21 902,199,660.44
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts accrued 38,464,614.51 4.86 18,450,283.68 47.97 20,014,330.83
on an individual basis
Provision for bad debts made 753,306,368.70 95.14 11,512,750.01 741,793,618.69
by portfolio
Including: portfolio 1 743,510,570.70 93.90 11,247,868.50 1.51 732,262,702.20
Combination 2 9,795,798.00 1.24 264,881.51 2.70 9,530,916.49
Total 791,770,983.21 100.00 29,963,033.69 761,807,949.52
RMB
Balance as at the end of the previous year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts accrued
on an individual basis
Provision for bad debts made
by portfolio
Including: portfolio 1 854,782,067.66 94.74 20,338,340.21 2.38 834,443,727.45
Combination 2 11,794,762.87 1.31 259,364.97 2.20 11,535,397.90
Total 902,199,660.44 100.00 38,467,723.55 863,731,936.89
As of December 31, 2025, the Company has no significant accounts receivable with individual provision for bad
debts.
As of December 31, 2025, the credit risk and provision for bad debts of accounts receivable of Portfolio 1 are as
follows:
RMB
Balance as at the end of the current year
Type Expected average loss
Book balance Provision for bad debts Book value
rate (%)
Within the credit period 1.28 711,685,368.76 9,123,382.28 702,561,986.48
More than 90 days overdue 100.00 31,816.23 31,816.23 -
(with impairment)
Total 743,510,570.70 11,247,868.50 732,262,702.20
- 53 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Disclosure by provision method for bad debts - Continued
As of December 31, 2025, the credit risk and provision for bad debts of accounts receivable of Portfolio 2 are as
follows:
RMB
Balance as at the end of the current year
Aging Expected average loss
Book balance Provision for bad debts Book value
rate (%)
Within 1 year 1.55 9,271,692.90 143,294.18 9,128,398.72
Over 3 years 100.00 67,250.00 67,250.00 -
Total 9,795,798.00 264,881.51 9,530,916.49
As of December 31, 2025, provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of the
year
Balance at the beginning of the - - -
year
- Transfer to credit loss incurred - - -
- Reversal of credit loss not - - -
incurred
Withdrawal in the current year 5,012,530.89 - 5,012,530.89
Reversal in the current year (13,392,133.71) (125,087.04) (13,517,220.75)
Charge-off in the current year - - -
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the 16,449,082.72 13,513,950.97 29,963,033.69
current year
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or write- end of the current
year Provision Other changes year
reversal off
Provision for
bad debts
There was no significant amount of provision for bad debts recovered or reversed this year.
(4) There are no accounts receivable actually written off this year.
- 54 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(5) Top 5 accounts receivable in terms of the ending balances by debtors
RMB
Proportion in accounts
Provision for bad debts
Book balance at the end of the receivable
Entity name Balance as at the end of the
year Ratio of balance at the end of
current year
the year (%)
Customer 1 128,443,330.43 16.22 1,653,660.98
Customer 2 100,119,032.87 12.64 1,287,356.61
Customer 3 90,314,120.50 11.41 1,170,120.08
Customer 4 84,819,285.15 10.71 1,127,277.20
Customer 5 73,851,813.87 9.33 949,605.87
Total 477,547,582.82 60.31 6,188,020.74
(1) Presentation of receivables financing by category
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Bank acceptance bills 22,584,820.72 6,804,603.68
The Group believes that the bank acceptance bills it holds are issued by banks with high credit ratings and carry
no significant credit risk; therefore, no provision for bad debts has been made.
As at December 31, 2025, the Group has no pledged receivables financing.
(3) As of December 31, 2025, receivables financing endorsed or discounted by the Group and not yet due on the
balance sheet date at the end of the period
RMB
Amount derecognized at the end Amount not derecognized at the
Item
of the period end of the period
Bank acceptance bills 76,263,471.66 -
(4) In 2025, the Group has no receivables financing with actual write-off.
- 55 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Disclosure of advances to suppliers by aging
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Aging
Amount Ratio (%) Amount Ratio (%)
Within 1 year 28,531,062.77 97.91 7,233,035.70 88.46
Over 3 years 70,145.61 0.24 62,085.80 0.76
Total 29,141,210.57 100.00 8,176,724.70 100.00
As of December 31, 2025, the Group has no advances to suppliers with an aging of more than 1 year and an
important amount.
(2) Top 5 advances to suppliers in terms of the ending balances by prepayment objects
The total amount of the top five prepayments categorized by prepayment objects as of the end of the year was
RMB 24,076,887.09, accounting for 77.27% of the ending balance of advances to suppliers.
(1) Disclosure by aging
RMB
Balance as at the end of Balance as at the end of
Aging
the current year the previous year
Within 1 year 3,292,434.09 2,878,553.22
Over 3 years 18,454,569.46 18,436,540.75
Total 22,366,272.14 21,580,746.02
Less: provision for bad debts 18,041,299.12 17,984,202.06
Book value 4,324,973.02 3,596,543.96
(2) Disclosure by nature of payment
RMB
Book balance at the end of Book balance at the end of
Nature of payment
the year the previous year
Current accounts 15,455,577.41 15,422,685.97
Guarantee and deposits 2,373,756.82 2,523,551.88
Export tax rebate 709,028.48 709,028.48
Petty cash and employee borrowings 293,128.97 296,058.95
Others 3,534,780.46 2,629,420.74
Total 22,366,272.14 21,580,746.02
- 56 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(3) Provision for bad debts
As of December 31, 2025, provision for bad debts is made based on general model of expected credit losses
RMB
Phase I Phase II Phase III
The entire expected The entire expected
Provision for bad debts Expected credit losses Total
credit loss over the credit loss over the
over the next 12
life of the instruments life of the instruments
months
(No credit loss) (With credit loss)
Balance at the beginning of the year 146,991.50 39,206.78 17,798,003.78 17,984,202.06
Balance at the beginning of the year
-Transfer to phase II (23,085.73) 23,085.73 - -
-Transfer to phase III - (7,445.09) 7,445.09 -
-Reversal to phase II - - - -
-Reversal to phase I - - - -
Withdrawal in the current year 22,343.56 36,164.89 2,425.00 60,933.45
Reversal in the current year - (3,836.39) (3,836.39)
Charge-off in the current year - - - -
Write-off in the current year - -
Other changes - - -
Balance as at the end of the current 146,249.33 87,175.92 17,807,873.87 18,041,299.12
year
As of December 31, 2025, provision for bad debts shall be made according to the credit risk characteristic
combination
RMB
Balance as at the end of the current year
Item Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Provision for bad debts based on credit risk
characteristic combination 80.66 22,366,272.14 18,041,299.12 4,324,973.02
Provision for other receivables
As of December 31, 2025, the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Within 1 year 4.44 3,292,434.09 146,249.33 3,146,184.76
Over 3 years 96.50 18,454,569.46 17,807,873.87 646,695.59
Total 22,366,272.14 18,041,299.12 4,324,973.02
- 57 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(4) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at
Type beginning of the Recovery or Resale or write- the end of the
Provision Other changes
year reversal off current year
Provision for bad debts 17,984,202.06 60,933.45 (3,836.39) - - 18,041,299.12
There is no provision for bad debts recovery or reversal of significant amount in the current year.
(5) There are no other receivables actually written off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Proportion of
other receivables Provision for bad
Balance as at the (%) debts
name end of the current Balance as at the Nature of amount Aging Balance as at the
year end of the current end of the current
year year
Customer 1 Intercourse
payment
Customer 2 Intercourse Over 3 years
payment
Customer 3 Intercourse Within 1 year
payment
Customer 4 Intercourse Over 3 years
payment
Customer 5 980,461.06 4.38 Others Over 3 years 980,461.06
Total 16,287,801.03 72.82 15,242,801.03
(1) Classification of inventories
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Provision for Provision for
Item
Book balance inventory Book value Book balance inventory Book value
depreciation depreciation
Raw materials 507,546,211.97 36,085,589.06 471,460,622.91 453,134,126.81 14,875,137.34 438,258,989.47
Products in
progress
Finished
products
Entrusted
processing 6,920,970.30 508,174.16 6,412,796.14 1,710,557.68 496,720.51 1,213,837.17
materials
Total 1,011,973,907.29 127,331,551.78 884,642,355.51 911,706,239.87 121,949,538.99 789,756,700.88
Note: as of December 31, 2025, the book balance of the polarizer inventories was RMB 1,006,015,410.72
(December 31, 2024: RMB 905,482,857.11), with a corresponding provision for inventory depreciation of RMB
(2) Provision for inventory depreciation
RMB
Balance at the Increase in the current year Decrease in the current year Balance as at the
Item beginning of the Reversal or end of the current
year Provision Others Others year
write-off
- 58 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
Raw materials 14,875,137.34 21,310,338.94 - 99,887.22 - 36,085,589.06
Products in 35,879,526.66 - 44,098,641.74 - 58,000,907.47
progress
Finished 81,139,403.67 - 88,760,181.17 - 32,736,881.09
products
Entrusted 11,453.65 - - - 508,174.16
processing 496,720.51
materials
Total 121,949,538.99 138,340,722.92 - 132,958,710.13 - 127,331,551.78
- 59 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Provision for inventory depreciation - Continued
Specific basis for determining the net realizable value of inventories and the reasons for reversal or write-off of
the provision for inventory depreciation during the current year:
Reasons for reversing or
writing off provision for
Item Specific basis for determining net realizable value
inventory depreciation this
year
The net realizable value is determined by the estimated
Raw materials, goods in process and selling price of the relevant finished products minus the Received or sold in the
consigned processing materials estimated cost to be incurred until completion, estimated current year
selling and distribution expenses and relevant taxes.
The net realizable value is determined by the estimated
It is sold or market value is
Finished products selling price of the inventories minus the estimated
recovered in the current year
selling and distribution expenses and related taxes.
(3) As of December 31, 2025, there is no amount in the balance of inventories used for guarantee and no amount
of capitalization of borrowing costs.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Value-added tax to be deducted and input tax to be certified 56,593,276.80 2,100,314.86
Cost of return receivable 29,008,785.23 19,314,386.69
Prepaid income tax 47,034.59 47,034.59
Total 85,649,096.62 21,461,736.14
RMB
Changes in the current year
Other Provision
compr for
Balance at the Investment profit Chang Balance as at the impairment
Additi ehensi
Investees beginning of the or loss recognized es in Cash dividends Provisio end of the current Balance as
onal Reduced ve or profits
year under the equity other n for Others year
invest investment incom equity declared to be at the end
method impairm
ment e paid of the
ent current year
adjust
ment
I. Joint ventures
Shenzhen Guanhua Printing - - (7,280,934.44) - - - - - 104,274,952.84
and Dyeing Co., Ltd.
Sub-total 111,555,887.28 - - (7,280,934.44) - - - - - 104,274,952.84 -
II. Associates
Shenzhen Changlianfa Printing - - 269,945.31 - - (233,450.00) - - 3,308,634.07
and Dyeing Co., Ltd.
Sub-total 3,272,138.76 - - 269,945.31 - - (233,450.00) - - 3,308,634.07 -
Total 114,828,026.04 - - (7,010,989.13) - - (233,450.00) - - 107,583,586.91 -
- 60 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Details of other equity instrument investments
RMB
Changes in the current year
Dividend Accumulative
Gains accrued Loss accrued to Accumulative gains
income losses accrued Reasons designated as
Balance at the to other other Balance as at the recognized in accrued to other to other
comprehensive being measured at fair
Item beginning of Additional Reduced comprehensive comprehensive Others end of the current the current comprehensive
income value through other
the year investment investment income in the income in the year period income comprehensive income
current year current year
- - - (6,680,600.00) - 123,203,400.00 - 120,603,400.00 - The Group plans to
Hualian Development Group Co., Ltd. 129,884,000.00
hold it for a long time
- - 1,278,300.00 - - 20,921,200.00 1,037,735.85 18,361,343.74 - The Group plans to
Shenzhen Dailisi Underwear Co., Ltd. 19,642,900.00
hold it for a long time
- - - (468,900.00) - 12,712,800.00 869,411.17 11,212,800.00 - The Group plans to
Shenzhen Nanfang Textile Co.,Ltd. 13,181,700.00
hold it for a long time
Shenzhen Xinfang Knitting Factory - - - (270,100.00) - 2,424,200.00 198,000.00 1,900,200.00 - The Group plans to
Co., Ltd. hold it for a long time
- - - - - - - - (14,831,681.50) The Group plans to
Jintian Industry (Group) Co., Ltd. -
hold it for a long time
Total 165,402,900.00 - - 1,278,300.00 (7,419,600.00) - 159,261,600.00 2,105,147.02 152,077,743.74 (14,831,681.50)
(2) Description of derecognition in the current year
There is no derecognition of other equity instrument investments this year.
- 61 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Investment properties measured at the cost mode
RMB
Item Houses and buildings
I. Total original book value
(1) Outsourcing -
(2) Transfer of fixed assets -
(1) Disposal 903,094.00
(2) Other transfer-out -
II. Accumulated depreciation and accumulated amortization
(1) Provision or amortization 9,578,063.55
(2) Transfer of fixed assets -
(1) Disposal 218,548.99
(2) Other transfer-out -
III. Provision for impairment
(1) Provision -
(1) Disposal -
IV. Book value
(2) Investment properties without certificate of title
RMB
Reasons for failure to obtain
Item Book value
the certificate of title
Warrants not obtained for
Houses and buildings 10,174,628.79
historical reasons
- 62 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Fixed assets
RMB
Electronic equipment
Buildings and Machinery Transportation
Item and Total
constructions equipment equipment
Others
I. Total original book value
the year
(1) Purchase - 5,699,245.91 1,462,223.02 1,920,350.26 9,081,819.19
(2) Transfer from - 4,971,157.07 307,011.28 - 5,278,168.35
construction in progress
(3) Other changes - - - - -
(1) Disposal or scrapping 1,200,082.66 50,002,603.71 899,097.77 1,561,435.59 53,663,219.73
(2) Other changes - - - - -
year
II. Accumulated depreciation
the year
(1) Provision 23,096,381.84 199,623,463.69 2,160,850.05 3,486,951.33 228,367,646.91
(2) Other changes - - - - -
(1) Disposal or scrapping 402,358.83 45,088,586.69 753,558.59 1,310,319.85 47,554,823.96
(2) Other changes - - - - -
year
III. Provision for impairment
the year
(1) Provision - - - - -
(1) Disposal or scrapping 99,508.16 3,643,617.60 1,102.16 133,587.12 3,877,815.04
year
IV. Book value
year
of the year
(2) Fixed assets without certificate of title
RMB
Reasons for failure to obtain the
Item Book value
certificate of title
Warrants not handled for historical
Houses and buildings 10,438,495.07
reasons
(3) Fixed assets of mortgage and guarantee
As at December 31, 2025, the Group's fixed assets mortgaged for bank borrowings are detailed in Note (V) 21
"Assets with Restricted Ownership or Right of Use".
- 63 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Construction in progress 179,954,389.78 5,814,012.03
(1) Status of construction in progress
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Net book value Book balance Net book value
impairment impairment
Installation of
machinery 179,954,389.78 - 179,954,389.78 5,814,012.03 - 5,814,012.03
equipment
- 64 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Changes in major projects under construction in the current year
RMB
Including: the
Amount Proportion of the Capitalization
Other Accumulated amount of the
transferred project rate of
Beginning Increase in the decreases in Progress of capitalization capitalized
Project Budget to fixed Ending balance accumulative interest in this Source of funds
balance current year current year construction (%) amount of interests in the
assets in the input in budget year (%)
interest current year
current year (%)
production line project 1,333,600,000.00 - 179,954,389.78 - - 179,954,389.78 13.49 13.49 176,406.29 176,406.29 2.24 funds and
(Line 8) borrowings
- 65 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Buildings and Machinery equipment Total
Item
constructions
I. Total original book value:
(1) Addition 9,977,227.43 1,438,279.28 11,415,506.71
(1) Termination of leases 1,520,405.16 1,249,146.48 2,769,551.64
II. Accumulated depreciation
(1) Provision 9,120,156.88 738,624.09 9,858,780.97
(1) Termination of leases 1,520,405.16 1,249,146.48 2,769,551.64
III. Provision for impairment
(1) Provision - - -
IV. Book value
- 66 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Details of intangible assets
RMB
Item Land use rights Software Patent right Total
I. Total original book value
(1) Purchase - 471,775.41 - 471,775.41
II. Accumulated accumulation
(1) Provision 891,565.32 3,563,403.84 - 4,454,969.16
III. Provision for impairment
IV. Book value
year
As at December 31, 2025, for the intangible assets pledged by the Group due to bank borrowings, please refer to
Note (V), 21 "Assets with restricted ownership or right of use" for details.
(1) Original book value of goodwill
RMB
Name of the investees Balance at the Increase in current Decrease in current Balance as at the end
or matters forming goodwill beginning of the year year year of the current year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen Meibainian Garment Co., Ltd. 2,167,341.21 - - 2,167,341.21
Total 11,782,099.76 - - 11,782,099.76
- 67 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Provision for impairment of goodwill
RMB
Name of the investees Balance at the Balance as at the
Increase in current Decrease in current
beginning of the end of the current
or matters forming goodwill year year
year year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen Meibainian Garment Co., Ltd. 2,167,341.21 - - 2,167,341.21
Total 11,782,099.76 - - 11,782,099.76
RMB
Balance at the Amortization Balance as at the
Increase in the
Item beginning of the amount for the Other decreases end of the current
current year
year current year year
Decoration and facility 2,653,265.77 1,706,534.63
renovation costs
(1) Deferred tax assets without offset
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Deductible Deferred tax Deductible Deferred tax
temporary temporary
differences Assets differences Assets
Provision for credit losses 47,068,758.51 8,605,770.45 55,500,808.39 9,874,641.13
Provision for asset impairment 151,835,215.23 22,775,282.28 146,194,722.68 21,929,208.40
Unrealized profits of internal transactions 1,967,734.40 295,160.16 2,056,848.93 308,527.34
Employee compensation payable 4,469,827.00 1,117,456.75 4,173,800.00 1,043,450.00
Deferred income 83,392,067.07 12,508,810.06 95,821,558.58 14,373,233.79
Deductible losses 84,464,489.24 12,669,673.38 96,771,113.52 14,515,667.03
Fair value changes of investments in other 14,831,681.50 3,707,920.38
equity instruments
Lease liabilities 17,683,257.08 2,907,352.60 16,381,050.71 2,457,157.61
Changes in fair value of derivative 3,362,200.19 504,330.03
financial liabilities
Provision 14,370,007.84 2,155,501.18 9,451,090.40 1,417,663.56
Total 423,445,238.06 67,247,257.27 442,461,234.06 69,819,253.14
Based on the Group's profit forecast for the future periods, the Group believes that it is highly probable to obtain
sufficient taxable income to utilize the above-mentioned deductible temporary differences and deductible losses in
the future periods, so the relevant deferred tax assets are recognized.
- 68 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Deferred tax liabilities without offset
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences Liabilities differences Liabilities
Difference between initial recognition
cost and tax base of long-term equity
investments
Fair value changes of investments in other 152,077,743.74 38,019,435.94
equity instruments
Rent receivable 6,414,441.92 1,603,610.48 8,532,598.56 2,133,149.64
Right-of-use assets 16,894,843.60 2,784,125.41 15,338,117.86 2,300,717.68
Changes in fair value of financial assets 2,425,205.47 606,301.37
- -
held for trading
Total 239,895,928.09 58,534,396.54 244,173,453.52 59,509,551.60
(3) Deferred tax assets or liabilities listed net amount after write-offs
RMB
Ending balance of
Deduction amount Deduction amount of Balance of deferred
deferred tax assets or
of deferred tax deferred tax assets tax assets or
liabilities after write-
Item assets and liabilities and liabilities at the liabilities after
off of the current
at the end of the end of the previous offset at the end of
year
current year year the previous year
Deferred tax assets (11,469,966.38) 55,777,290.89 (10,898,741.94) 58,920,511.20
Deferred tax liabilities (11,469,966.38) 47,064,430.16 (10,898,741.94) 48,610,809.66
(4) Unrecognized deferred tax assets
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Deductible temporary differences 9,402,132.77 15,750,990.01
Deductible losses 325,441,799.20 365,594,502.67
Total 334,843,931.97 381,345,492.68
(5) Deductible losses from unrecognized deferred tax assets will be expired in the following years
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Total 325,441,799.20 365,594,502.67
- 69 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Advances for projects and
equipment
Investment funds to be
liquidated
Total 37,086,785.90 - 37,086,785.90 27,793,871.91 - 27,793,871.91
- 70 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
At the end of current year At the end of the previous year
Item
Book balance Book value Restricted type Restricted condition Book balance Book value Restricted type Restricted condition
Restricted right Account freezing and Restricted right Account freezing and
Monetary funds 685,396.65 685,396.65 38,844,838.96 38,844,838.96
of use guarantee of use guarantee
Notes receivable 30,291,952.76 30,291,952.76
of use not been derecognized of use been derecognized
Fixed assets 581,895,750.64 448,156,480.33 Mortgage
of use of use
Intangible assets 44,770,083.00 31,200,960.01 Mortgage
of use of use
Total 680,352,966.36 516,221,379.94 695,802,625.36 548,494,232.06
- 71 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Forward foreign exchange contracts 4,071,800.19 1,278,559.35
RMB
Balance as at the end of the Balance as at the end of the
Bill type
current year previous year
Bank acceptance bills - 31,095,540.29
The Group had no notes payable due but unpaid at the end of the year.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Payment for goods 315,492,749.54 282,510,771.35
Service fee 17,809,719.59 15,645,017.04
Payment for outsourcing processing 8,954,077.38 3,489,364.64
Royalties 1,949,556.00 2,006,578.00
Others 450,733.38 1,160,849.52
Total 344,656,835.89 304,812,580.55
As at December 31, 2025, the Group had no significant accounts payable with aging of over 1 year or overdue.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Rent and others 769,227.07 1,051,491.96
As at December 31, 2025, the Group had no significant advances from customers with aging of over 1 year.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Payment for goods 3,132,419.01 490,562.97
As at December 31, 2025, the Group had no significant contract liabilities with aging of more than 1 year.
- 72 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Presentation of employee compensation payable
RMB
Balance at the Increase in current Decrease in current Balance as at the end
Item
beginning of the year year year of the current year
Short-term compensation 53,625,879.32 227,614,006.70 230,183,092.64 51,056,793.38
Post-employment benefits - defined 22,812,522.26 23,512,522.26 -
contribution plans
Dismissal welfare 2,359,410.60 - 768,888.24 1,590,522.36
Total 56,685,289.92 250,426,528.96 254,464,503.14 52,647,315.74
(2) Presentation of short-term compensation
RMB
Balance at the Balance as at the
Increase in current Decrease in current
Item beginning of the end of the current
year year
year year
Salaries, bonuses, allowances and subsidies 51,400,482.93 199,876,062.05 202,797,724.38 48,478,820.60
Employee welfare expenses - 7,519,689.14 7,490,204.64 29,484.50
Social insurance premiums - 5,173,319.35 5,173,319.35 -
Including: medical insurance 3,818,635.71 3,818,635.71 -
premiums
Maternity insurance premiums - 640,272.20 640,272.20 -
Work-related injury insurance 714,411.44 714,411.44 -
premiums
Housing provident fund - 10,180,132.09 10,180,132.09 -
Union funds and employee education 4,864,804.07 4,541,712.18 2,548,488.28
funds
Total 53,625,879.32 227,614,006.70 230,183,092.64 51,056,793.38
(3) Presentation of defined contribution plans
RMB
Balance at the Balance as at the
Increase in current Decrease in current
Item beginning of the end of the current
year year
year year
Basic endowment insurance premiums 700,000.00 19,234,522.69 19,934,522.69 -
Supplementary endowment insurance 2,800,406.18 2,800,406.18 -
premiums
Unemployment insurance premium - 777,593.39 777,593.39 -
Total 700,000.00 22,812,522.26 23,512,522.26 -
The Group participates in the endowment insurance and unemployment insurance plans established by
government agencies in accordance with the regulations. According to the plans, the Group makes contributions to
such plans in accordance with the prescribed standards. Except for the above monthly contributions, the Group
has no further payment obligations. The corresponding expenses are included in the current profit or loss or the
cost of related assets when incurred.
The Group shall pay RMB 19,234,522.69 and RMB 777,593.39 to the endowment insurance and unemployment
insurance plans respectively for the current year (2024: RMB 15,756,686.06 and RMB 691,145.34). As of
December 31, 2025, the Group has fully paid the amount of pension insurance and unemployment insurance plans
payable during the reporting period.
- 73 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of the Balance as at the end of the
Taxation
current year previous year
Corporate income tax 3,763,975.34 4,720,967.29
Individual income tax 670,592.00 751,443.34
Value-added tax 251,065.10 592,143.28
Other taxes 1,121,186.11 789,176.93
Total 5,806,818.55 6,853,730.84
(1) Other payables by nature of payment
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Engineering equipment payment 43,922,031.06 56,213,373.95
Current accounts 46,981,495.00 53,333,604.97
Guarantee and deposits 57,213,864.04 37,775,687.75
Others 11,708,844.63 12,974,323.31
Total 159,826,234.73 160,296,989.98
(2) As at December 31, 2025, the Group had no significant other payables with aging of more than 1 year or
overdue.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Long-term borrowings maturing within one year (Note (V), 32) 48,033,108.58 47,011,978.04
Lease liabilities maturing within one year (Note (V), 33) 7,267,259.91 6,884,486.59
Estimated liabilities due within one year 10,664,297.79 9,451,090.40
Total 65,964,666.28 63,347,555.03
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Endorsed but undue acceptance bills 53,001,736.07 30,291,952.76
Payables for returned goods 31,679,349.15 23,747,757.33
Product quality assurance 3,705,710.05 -
Output tax to be carried forward in the value-added tax - 32,312.18
Total 88,386,795.27 54,072,022.27
- 74 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of the Balance as at the end of the
Item Interest rate range
current year previous year
Guaranteed borrowings (Note) 167,899,085.74 209,400,848.04 3.26%-3.31%
Credit borrowings 141,852,077.65 - 2.24%
Total 309,751,163.39 209,400,848.04
Less: long-term borrowings maturing
within one year
Long-term borrowings due after one year 261,718,054.81 162,388,870.00
Note: SAPO Photoelectric, a subsidiary of the Company, obtained the loan by mortgaging the real estate such as
the plant it held, and the Company and Hengmei Optoelectronics Co., Ltd. provided 60% and 40% joint and
several liability guarantee for the loan respectively.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Lease liabilities 17,683,257.08 16,381,050.71
Total 17,683,257.08 16,381,050.71
Less: Lease liability maturing within one year 7,267,259.91 6,884,486.59
Lease liabilities due after one year 10,415,997.17 9,496,564.12
The Group's lease liabilities are presented as follows according to the maturity of undiscounted remaining
contractual obligations:
RMB
Within 1 month 1- 3 months 3 - 12 months 1 - 5 years Over 5 years Total
Balance as at the
end of the current 1,049,935.94 2,078,351.34 4,688,581.14 9,705,967.44 1,937,423.13 19,460,258.99
year
Balance as at the
end of the 1,105,714.51 2,425,877.50 3,879,671.64 7,808,943.06 3,098,158.97 18,318,365.68
previous year
RMB
Balance at the Increase in current Decrease in current Balance as at the end
Item Formation causes
beginning of the year year year of the current year
Government 3,940,329.84 16,819,577.07 83,469,949.03 Government
subsidies subsidies received
RMB
Changes in the current year
Balance at the Balance as at the
Item beginning of the Conversion of end of the current
New shares
year Bonus issue provident fund Others Sub-total year
issued
into shares
Total shares 506,521,849.00 - - - - - 506,521,849.00
- 75 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance at the Decrease in current Balance as at the end of
Item Increase in current year
beginning of the year year the current year
Equity premium 1,826,482,608.54 - - 1,826,482,608.54
Other capital reserves 135,117,216.09 - - 135,117,216.09
Total 1,961,599,824.63 - - 1,961,599,824.63
RMB
Amount for the current year
Less:
Less: the
retained
amount
income
included in
included in
other Attributabl
Balance at the Amount before other Balance as at the
comprehensiv Attributable to e to
Item beginning of the income tax this comprehensi Less: income tax end of the current
e income in parent company minority
year year ve income in expenses year
prior period after tax shareholder
prior periods
and s after tax
and
transferred to
transferred
current profit
to current
or loss
profit or loss
I. Other comprehensive income that (6,141,300.00) - - (1,535,325.00) (4,605,975.00) - 102,271,832.32
cannot be reclassified into profit or loss
instrument investments
II. Other comprehensive income to be - - - - - - -
reclassified into profit or loss later
Total of other comprehensive income 106,877,807.32 (6,141,300.00) - - (1,535,325.00) (4,605,975.00) - 102,271,832.32
RMB
Balance at the Decrease in current Balance as at the end of
Item Increase in current year
beginning of the year year the current year
Statutory surplus reserve 104,262,315.64 2,543,589.29 - 106,805,904.93
RMB
Item Amount for the current year Amount for the previous year
Undistributed profits at the beginning of the year before
adjustment
Total adjusted undistributed profits at the beginning of
- -
the year
Adjusted undistributed profit at the beginning of the 272,608,113.66
year
Plus: net profit attributable to shareholders of the parent
company in the current year
Less: Withdrawal of statutory surplus reserves 2,543,589.29 -
Distribution of dividends of ordinary shares (Note) 35,963,029.09 32,923,916.72
Undistributed profits at the end of the year 302,520,158.30 272,608,113.66
Note: According to the resolution of the General Meeting of Shareholders on May 19, 2025, the Company
distributed a cash dividend of RMB 0.71 (including tax) for every 10 shares, totally RMB 35,963,029.09
(including tax) based on the share capital of 506,521,849 shares as of December 31, 2024.
- 76 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 3,177,244,941.55 2,708,436,607.17 3,275,150,434.05 2,748,312,498.75
Other business 64,135,489.07 47,931,069.64 60,132,574.63 47,547,436.07
Total 3,241,380,430.62 2,756,367,676.81 3,335,283,008.68 2,795,859,934.82
(2) Primary business by product
RMB
Amount for the current year Amount for the previous year
Product type Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Polarizer sales business 3,067,530,570.03 2,682,406,961.72 3,161,332,478.08 2,720,719,735.99
Property leasing and 109,714,371.52 26,029,645.45
others
Total 3,177,244,941.55 2,708,436,607.17 3,275,150,434.05 2,748,312,498.75
(3) Primary business by region
RMB
Amount for the current year Amount for the previous year
Main business area Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Domestic 2,807,874,318.29 2,418,697,219.08 3,113,083,695.45 2,621,542,725.57
Overseas 369,370,623.26 289,739,388.09 162,066,738.60 126,769,773.18
Total 3,177,244,941.55 2,708,436,607.17 3,275,150,434.05 2,748,312,498.75
(4) Description of performance obligations
The Group's businesses are mainly the production and sales of polarizers. For goods sold to customers, the Group
recognizes revenue when the right of control of the goods is transferred, that is, when the goods are delivered to
the designated place of the other party and signed by the other party. The Group recognizes a receivable when the
goods are delivered to the customer because the delivery of the goods to the customer represents an unconditional
right to receive the contractual consideration, and the maturity of the payment depends only on the passage of time.
When the customer makes a prepayment for goods, the Group recognizes the transaction amount received as a
contract liability and recognizes the revenue when the goods are delivered to the customer.
The Group provides property services to customers, and such services represent performance obligations
performed over a period of time. For property service, the Group recognizes revenue in the course of providing
property service.
(5) Description of allocation to remaining performance obligations
As of December 31, 2025, the amount of contract liabilities corresponding to the performance obligations that the
Group has already signed contracts for but has not yet fulfilled or has not fully fulfilled is RMB 3,132,419.01,
which will be recognized as revenue when the customer obtains the control over goods.
- 77 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Amount for the current Amount for the previous
Item
year year
Property taxes 8,545,385.60 7,240,576.84
Urban maintenance and construction tax 375,243.29 397,643.06
Education surcharge 267,606.86 287,055.45
Other taxes 2,354,910.04 2,310,230.30
Total 11,543,145.79 10,235,505.65
RMB
Amount for the current Amount for the previous
Item
year year
Employee compensation 13,859,259.00 15,245,568.88
Sales service fee 14,066,794.72 19,491,891.54
Business entertainment expenses 1,130,045.94 1,117,751.47
Others 5,603,934.08 6,405,391.58
Total 34,660,033.74 42,260,603.47
RMB
Amount for the current Amount for the previous
Item
year year
Employee compensation 91,924,691.04 90,301,081.26
Depreciation cost 11,209,271.67 10,962,929.91
Professional service fees 5,540,619.77 10,520,874.85
Amortization of intangible assets 4,454,969.16 4,575,688.69
Property leasing and utilities 2,751,267.57 2,441,383.42
Business entertainment expenses 649,200.79 1,193,877.91
Others 12,082,069.80 14,351,985.54
Total 128,612,089.80 134,347,821.58
RMB
Amount for the current Amount for the previous
Item
year year
Employee compensation 17,031,748.89 15,844,594.49
Material consumption 81,524,391.18 83,483,679.76
Depreciation cost 2,056,127.28 3,275,385.23
Others 3,362,571.65 1,208,163.43
Total 103,974,839.00 103,811,822.91
The Group has no development expenses of R&D projects that meet the capitalization requirements.
- 78 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Item Amount for the current year Amount for the previous year
Interest expenses (Note) 7,121,172.59 17,858,022.73
Less: capitalized interest 176,406.29 -
Interest income 4,941,271.94 7,272,362.76
Exchange differences 9,266,532.25 (3,772,940.12)
Service fee and others 1,969,682.47 5,308,436.20
Total 13,239,709.08 12,121,156.05
Note: The interest expenses of the lease liabilities in 2025 is RMB 715,255.07.
RMB
Classification by nature Amount for the current year Amount for the previous year
Transfer-in of deferred income 16,497,827.07 16,401,790.63
Support funds for industry development (Note 1) 5,200,000.00 7,988,744.44
Support funds for enterprise development (Note 2) 124,784.96 989,098.49
Tax incentives 18,484,146.10 16,014,588.22
Others 538,576.40 89,885.75
Total 40,845,334.53 41,484,107.53
Note 1: The support funds of industry development mainly include the subsidy for the green manufacturing pilot
demonstration project of the Industry and Information Technology Bureau of Shenzhen Municipality and the
subsidy for the atmospheric environment quality improvement of the Ecology and Environment Bureau of
Shenzhen Municipality.
Note 2: The support funds of enterprise development mainly include the social security and post subsidies for
employing people lifted out of poverty and the one-time employment expansion subsidy for 2025 from the Human
Resources Bureau of Pingshan District, Shenzhen Municipality.
RMB
Item Amount for the current year Amount for the previous year
Losses on long-term equity investments accounted for under equity
(7,010,989.13) (10,701,895.08)
method
Investment income from disposal of long-term equity investments - 833,613.28
Investment income obtained during holding the financial assets held
for trading
Investment loss from derecognition of derivative financial liabilities (10,832,640.65) (6,454,000.00)
Dividend income from investments in other equity instrument during
the holding period
Total (1,198,003.94) (165,313.89)
- 79 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Amount for the current Amount for the previous
Sources of gains from changes in fair value
year year
Financial assets held for trading 2,425,205.47 2,413,062.80
Derivative financial liabilities (3,362,200.19) (1,278,559.35)
Total (936,994.72) 1,134,503.45
RMB
Amount for the current Amount for the previous
Item
year year
Gains on impairment of accounts receivable (Note (V), 4 (2)) 8,504,689.86 5,093,840.35
Gains on impairment of other receivables (Note (V), 7 (3)) (57,097.06) 6,606.31
Total 8,447,592.80 5,100,446.66
RMB
Amount for the current Amount for the previous
Item
year year
Inventory depreciation loss (138,340,722.92) (123,538,967.06)
Fixed asset impairment loss - (6,863,474.54)
Other asset impairment loss - (2,020,667.15)
Total (138,340,722.92) (132,423,108.75)
RMB
Amount included in the
Amount for the current Amount for the previous current non-recurring
Item
year year
profit or loss
Gains from unclaimed payables 5,108,649.83 1,439,654.31 5,108,649.83
Liquidated damages 1,121,434.64 275,672.99 1,121,434.64
Insurance compensation 20,692.22 24,911.31 20,692.22
Gains from the damage and scrapping of non-
current assets
Others 131,900.37 64,506.89 131,900.37
Total 6,395,734.45 1,805,086.92 6,395,734.45
- 80 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Amount included in the
Amount for the current Amount for the previous current non-recurring
Item
year year
profit or loss
Losses on scrapping of non-current assets 39,914.17 51,361.87 39,914.17
Amercement outlay 3,390.66 44,000.00 3,390.66
Compensation expenses 842,646.03 468,146.00 842,646.03
Other losses 54,912.02 134,509.84 54,912.02
Total 940,862.88 698,017.71 940,862.88
(1) List of income tax expenses
RMB
Amount for the current Amount for the previous
Item
year year
Income tax expenses for the current period 9,673,404.67 8,562,225.60
Deferred tax expenses 3,132,165.81 1,264,876.43
Total 12,805,570.48 9,827,102.03
(2) Adjustment process of accounting profits and income tax expenses
RMB
Amount for the current Amount for the previous
Item
year year
Total profits 108,419,113.31 152,883,868.41
Income tax expenses calculated at statutory tax rate 27,104,778.33 38,220,967.10
Influence of different tax rates applicable to subsidiaries (8,786,686.81) (15,431,945.83)
Influence of adjustments to the income tax for the prior years 954,565.40 (27,243.77)
Influence of non-taxable income (1,122,137.29) (3,079,800.79)
Influence of nondeductible costs, expenses and losses 1,777,866.90 5,591,965.60
Utilization of unrecognized deductible losses and deductible temporary
(1,383,582.51) (7,061,678.51)
differences from prior periods and their tax effects
Tax effects of unrecognized deductible losses and deductible temporary
differences
Additional deduction for R&D expenses (12,633,463.47) (12,458,381.02)
Others 4,075.02 (5,122.03)
Income tax expenses 12,805,570.48 9,827,102.03
- 81 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Cash related to operating activities
Other cash received related to operating activities
RMB
Amount for the current Amount for the previous
Item
year year
Guarantee and deposit 95,357,705.42 30,652,489.87
Interest income 4,972,503.26 9,057,486.70
Government subsidies 9,265,114.80 24,242,842.93
Current accounts and others 23,348,683.10 23,056,150.45
Total 132,944,006.58 87,008,969.95
Other cash paid related to operating activities
RMB
Amount for the current Amount for the previous
Item
year year
Guarantee and deposit 39,437,305.24 57,908,823.39
Out-of-pocket expenses 49,378,916.99 68,667,614.18
Current accounts and others 2,373,874.85 27,179,768.77
Total 91,190,097.08 153,756,206.34
(2) Cash related to investing activities
Other cash received related to significant investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Structured deposits and wealth management products 1,000,000,000.00 950,000,000.00
Monetary fund 148,427,138.42 747,000,000.00
Certificates of deposit and others 709,600.00 -
Total 1,149,136,738.42 1,697,000,000.00
Other cash paid related to significant investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Structured deposits and wealth management products 1,150,000,000.00 950,000,000.00
Monetary fund - 649,000,000.00
Forward foreign exchange contracts 13,389,759.35 6,454,000.00
Total 1,163,389,759.35 1,605,454,000.00
- 82 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Cash related to investing activities - continued
Other cash received related to investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Wealth management investment, structured deposits and others 1,149,136,738.42 1,697,000,000.00
Other cash paid related to investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Structured deposits and wealth management products 1,150,000,000.00 950,000,000.00
Monetary fund - 649,000,000.00
Forward foreign exchange contracts 13,389,759.35 6,454,000.00
Total 1,163,389,759.35 1,605,454,000.00
(3) Cash related to financing activities
Other cash paid related to financing activities
RMB
Amount for the current Amount for the previous
Item
year year
Lease payments 12,484,469.33 9,508,462.57
Changes in various liabilities arising from financing activities
RMB
Balance at the Increase in current year Decrease in current year Balance as at the
Item beginning of the Non-cash Non-cash end of the
year Cash changes Cash changes current year
changes changes
Long-term 141,755,054.19 6,373,365.34 47,778,104.18 - 309,751,163.39
borrowings (Note)
Lease liabilities - 12,130,761.78 10,828,555.41 - 17,683,257.08
(Note)
Total 225,781,898.75 141,755,054.19 18,504,127.12 58,606,659.59 - 327,434,420.47
Note: long-term borrowings and lease liabilities include those maturing within one year.
(4) The Group does not present cash flows on a net basis.
(5) The Group has no significant activities that do not involve current cash receipts and payments but affect the
financial position of the enterprise or may affect the cash flows of the enterprise in the future.
- 83 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Supplementary information to the statement of cash flows
RMB
Amount for the current Amount for the previous
Supplementary information
year year
Net profit 95,613,542.83 143,056,766.38
Plus: provision for assets impairment 138,340,722.92 132,423,108.75
Provision for credit losses (8,447,592.80) (5,100,446.66)
Depreciation of fixed assets and investment properties 237,945,710.46 237,717,328.95
Depreciation of right-of-use assets 9,858,780.97 9,651,343.75
Amortization of intangible assets 4,454,969.16 4,575,688.69
Amortization of long-term deferred expenses 1,706,534.63 2,934,915.74
Losses (gains) from disposal of fixed assets, intangible assets and other long-
(1,164,099.59) -
term assets
Losses (gains) on retirement of non-current assets 26,856.78 51,020.45
Losses from changes in fair value (income) 936,994.72 (1,134,503.45)
Financial expenses (income) 20,713,242.01 17,301,161.66
Investment loss (income) 1,198,003.94 165,313.89
Decrease (increase) in deferred tax assets 3,143,220.31 1,684,854.22
Increase (decrease) in deferred tax liabilities (11,054.50) (419,977.79)
Decrease (increase) in inventories (233,226,377.55) (176,903,495.67)
Decrease (increase) in operating receivables (34,639,831.51) 29,434,877.96
Increase (decrease) in operating payables 111,343,974.48 (164,173,431.78)
Net cash flows from operating activities 347,793,597.26 231,264,525.09
Ending balance of cash and cash equivalents 449,257,554.81 302,084,839.35
Less: beginning balance of cash and cash equivalents 302,084,839.35 461,420,457.33
Net increase (decrease) in cash and cash equivalents 147,172,715.46 (159,335,617.98)
(2) Composition of cash and cash equivalents
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
I. Cash 449,257,554.81 302,084,839.35
Including: cash on hand 15,510.21 4,751.69
Unrestricted bank deposits 449,242,044.60 302,080,087.66
Other unrestricted monetary funds - -
II. Cash equivalents - -
III. Balance of cash and cash equivalents at the end of the year 449,257,554.81 302,084,839.35
(3) As of the end of the year, the Group had no cash and cash equivalents with restricted use that were still
presented as such.
- 84 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(4) Monetary funds other than cash and cash equivalents
RMB
Balance as at the end Balance as at the end of the
Item Reason
of the current year previous year
Not available for payment
Bill and L/C guarantee 536.39 35,443,338.96
at any time
Interest on demand and agreement deposits and Not available for payment
Others 684,860.26 3,401,500.00 Account freezing
Total 706,895.57 38,876,604.47
(1) Foreign currency monetary items
RMB
Foreign currency balance Conversion at the end of
Exchange rate of the current year
Item at the end of the current
conversion
year RMB balance
Monetary funds 158,222,232.79
Including: USD 13,242,824.56 7.0288 93,081,165.25
JPY 1,437,610,760.10 0.0448 64,400,649.22
HKD 819,754.12 0.9032 740,418.32
Accounts receivable 77,112,536.74
Including: USD 10,935,180.15 7.0288 76,861,194.24
HKD 278,280.00 0.9032 251,342.50
Other receivables 495,717.51
Including: USD 70,526.62 7.0288 495,717.51
Accounts payable 178,353,317.24
Including: USD 242,062.43 7.0288 1,701,408.41
JPY 3,943,122,965.00 0.0448 176,651,908.83
Other payables 6,125,444.55
Including: USD 867,786.00 7.0288 6,099,494.24
JPY 15,131.00 0.0448 677.87
HKD 27,981.00 0.9032 25,272.44
(1)As a lessee
The Group leases a number of assets, including houses and buildings, for lease terms of 1 to 10 years. The above
right-of-use assets cannot be used for purposes such as borrowing mortgages, guarantees, etc.
The Group had no variable lease payments that were not included in the measurement of lease liabilities.
- 85 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) As a lessee - continued
The short-term lease expenses subject to simplified accounting treatment and recognized in the current profit or
loss in this year amounted to RMB 1,218,112.00 (previous year: RMB 950,508.89).
The total cash outflows related to leases in the current year amounted to RMB 13,702,581.33 (previous year:
RMB 10,458,971.46).
(2) As a lessor
Operating lease as lessor
RMB
Including: revenue related to
Item Lease income variable lease payments not
included in lease receipts
Buildings and constructions 96,149,109.79 -
The operating leases of the Group as the lessor are related to houses and buildings, with lease terms ranging from
The revenue related to operating leases in the current year amounted to RMB 96,149,109.79 (previous year: RMB
amounted to RMB 0 (previous year: RMB 0).
RMB
Undiscounted lease receipts
Item Amount at the end of current Amount at the end of the
year previous year
The first year after the balance sheet date 62,836,298.43 66,825,466.35
The second year after the balance sheet date 42,497,987.11 49,946,457.62
The third year after the balance sheet date 31,889,090.71 31,103,495.38
The fourth year after the balance sheet date 9,303,836.50 8,785,825.58
The fifth year after the balance sheet date 5,911,687.52 6,625,510.75
Subsequent years 4,518,270.00 5,106,929.55
Total undiscounted lease receipts 156,957,170.27 168,393,685.23
- 86 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
（VI）R&D expenditures
(1) Presented by nature of expenses
RMB
Item Amount for the current year Amount for the previous year
Employee compensation 17,031,748.89 15,844,594.49
Material consumption 81,524,391.18 83,483,679.76
Depreciation cost 2,056,127.28 3,275,385.23
Others 3,362,571.65 1,208,163.43
Total 103,974,839.00 103,811,822.91
Including: expensed R&D expenditures 103,974,839.00 103,811,822.91
Capitalized R&D expenditures - -
(2) The Group has no development expenses of R&D projects that meet the capitalization requirements.
(3) The Group has no significant outsourced projects under research.
(VII) Changes in the scope of consolidation
The Company's subsidiary, Shenzhen Huaqiang Hotel Co., Ltd, completed its liquidation and distribution in 2024
and is no longer included in the scope of consolidation this year.
(VIII) Interests in other entities
(1) Structure of the enterprise group
Shareholding ratio Method
Main Registered capital Registration of the Company of
Name of subsidiaries Business nature (%)
premise (RMB) place acquisiti
Direct Indirect on
Shenzhen Lisi Industrial Establish
Shenzhen RMB 2,360,000.00 Shenzhen Property leasing 100.00 -
Development Co., Ltd. ment
Shenzhen Shenfang
Establish
Property Management Shenzhen RMB 1,600,400.00 Shenzhen Property management 100.00 -
ment
Co., Ltd.
Shenzhen Meibainian Production and sales Establish
Shenzhen RMB 13,000,000.00 Shenzhen 100.00 -
Garment Co. Ltd. of textiles ment
Shenzhen Shenfang
Sungang Property Establish
Shenzhen RMB 1,000,000.00 Shenzhen Property management 100.00 -
ment
Management Co., Ltd.
Shenzhen SAPO Production and sales Acquisiti
Shenzhen RMB 583,333,333.00 Shenzhen 60.00 -
Photoelectric Co., Ltd. of polarizers on
SATO (Hong Kong) Establish
Hong Kong HKD 10,000.00 Hong Kong Polarizer sales - 100.00
Limited ment
- 87 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(VIII) Interests in other entities - continued
(2) Significant non-wholly-owned subsidiaries
RMB
Dividends declared to be
Profit or loss attributable Balance of minority
Shareholding ratio by distributed to minority
Name of subsidiaries to minority shareholders interests at the end of the
minority shareholders shareholders in the
in the current year current year
current year
Shenzhen SAPO
Photoelectric Co., 40.00% 27,194,879.81 - 1,310,645,603.69
Ltd.
(3) Key financial information of significant non-wholly-owned subsidiaries
RMB
SAPO Photoelectric
Balance as at the end of Balance as at the end of
Item the current year/ the previous year/
Amount for the current Amount for the previous
year year
Current assets 2,277,246,004.30 2,039,673,042.84
Non-current assets 1,960,766,749.97 1,998,903,130.31
Total assets 4,238,012,754.27 4,038,576,173.15
Current liabilities 613,303,419.14 567,603,106.30
Non-current liabilities 353,456,061.45 267,706,992.70
Total liabilities 966,759,480.59 835,310,099.00
Operating revenue 3,137,568,960.10 3,230,006,072.51
Net profit 67,987,199.53 134,214,080.34
Total comprehensive income 67,987,199.53 134,214,080.34
Cash flows from operating activities 322,248,751.41 205,666,636.23
(VIII) Interests in other entities - continued
Summarized financial information of insignificant joint ventures and associates
RMB
Balance as at the end of Balance as at the end of
the current year/ the previous year/
Item
Amount for the current Amount for the previous
year year
Joint ventures:
Total of investment book value 104,274,952.84 111,555,887.28
Total amounts of the following items calculated at shareholding ratio
- Net profit (loss) (7,280,934.44) (10,814,606.80)
-Other comprehensive income - -
-Total comprehensive income (7,280,934.44) (10,814,606.80)
Associates:
Total of investment book value 3,308,634.07 3,272,138.76
Total amounts of the following items calculated at shareholding ratio
-Net profit 36,495.31 112,711.72
-Other comprehensive income - -
-Total comprehensive income 36,495.31 112,711.72
- 88 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(IX) Government grants
(1) As of December 31, 2025, the Group had no government subsidies recognized at the amount receivable.
(2) Liability items involving government subsidies
RMB
Subsidies Amount Related to
Amount Other
Amount at the increased in the included in assets/
included in changes in Amount at the end
Liabilities beginning of current year non-operating
other income the current of current year Related to
the year revenue in the
in the current year income
current year
year
Deferred 16,497,827.0 Related to
income 7 assets
(3) Government subsidies included in the current profit or loss
RMB
Amount for the previous
Grants Amount for the current year
year
Other income 21,822,612.03 25,379,633.56
(X) Risks associated with financial instruments
THE GROUP'S MAIN FINANCIAL INSTRUMENTS INCLUDE MONETARY FUNDS, FINANCIAL
ASSETS HELD FOR TRADING, NOTES RECEIVABLE, ACCOUNTS RECEIVABLE, RECEIVABLES
FINANCING, OTHER RECEIVABLES, OTHER EQUITY INSTRUMENT INVESTMENTS, SHORT-TERM
BORROWINGS, DERIVATIVE FINANCIAL LIABILITIES, NOTES PAYABLE, ACCOUNTS PAYABLE,
OTHER PAYABLES, OTHER CURRENT LIABILITIES AND LONG-TERM BORROWINGS, ETC. AT THE
END OF THE YEAR, THE FINANCIAL INSTRUMENTS HELD BY THE GROUP ARE AS FOLLOWS, AND
THE DETAILS ARE DESCRIBED IN NOTE (V). RISKS ASSOCIATED WITH THESE FINANCIAL
INSTRUMENTS AND THE RISK MANAGEMENT POLICIES ADOPTED BY THE GROUP TO MITIGATE
THESE RISKS ARE DESCRIBED BELOW. THE GROUP'S MANAGEMENT MANAGES AND MONITORS
THESE EXPOSURES TO ENSURE THAT THE RISKS ARE CONTROLLED WITHIN CERTAIN LIMITS.
- 89 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
RMB
Amount at the end of current Amount at the end of the
Item
year previous year
Financial assets
Measured at fair value through current profit or loss
Financial assets held for trading 736,341,286.18 731,419,904.42
Measured at fair value through other comprehensive income
Receivables financing 22,584,820.72 6,804,603.68
Other equity instrument investments 159,261,600.00 165,402,900.00
Measured at amortized costs
Monetary funds 449,964,450.38 340,961,443.82
Notes receivable 85,980,246.52 47,305,221.88
Accounts receivable 761,807,949.52 863,731,936.89
Other receivables 4,324,973.02 3,596,543.96
Financial liabilities
Measured at fair value through current profit or loss
Derivative financial liabilities 4,071,800.19 1,278,559.35
Measured at amortized costs
Notes payable - 31,095,540.29
Accounts payable 344,656,835.89 304,812,580.55
Other payables 159,826,234.73 160,296,989.98
Other current liabilities 53,001,736.07 30,291,952.76
Long-term borrowings 309,751,163.39 209,400,848.04
THE GROUP USES SENSITIVITY ANALYSIS TECHNIQUES TO ANALYZE THE POSSIBLE IMPACT OF
REASONABLE AND POSSIBLE CHANGES IN RISK VARIABLES ON THE CURRENT PROFIT OR LOSS
AND SHAREHOLDERS' EQUITY. AS ANY RISK VARIABLE SELDOM CHANGES IN ISOLATION, AND
THE CORRELATION BETWEEN THE VARIABLES WILL HAVE A SIGNIFICANT EFFECT ON THE
FINAL AFFECTED AMOUNT OF THE CHANGE OF A RISK VARIABLE, THE FOLLOWING CONTENTS
ARE CARRIED OUT UNDER THE ASSUMPTION THAT THE CHANGE OF EACH VARIABLE IS
INDEPENDENTLY:
THE GROUP'S OBJECTIVE IN RISK MANAGEMENT IS TO ACHIEVE AN APPROPRIATE BALANCE
BETWEEN RISK AND RETURN, MINIMIZE THE NEGATIVE IMPACT OF RISK ON THE GROUP'S
OPERATING PERFORMANCE, AND MAXIMIZE THE INTERESTS OF SHAREHOLDERS AND OTHER
EQUITY INVESTORS. BASED ON THIS RISK MANAGEMENT OBJECTIVE, THE BASIC STRATEGY OF
THE GROUP'S RISK MANAGEMENT IS TO IDENTIFY AND ANALYZE VARIOUS RISKS FACED BY
THE GROUP, ESTABLISH AN APPROPRIATE RISK TOLERANCE BOTTOM LINE AND CONDUCT RISK
MANAGEMENT, AND TIMELY AND RELIABLY SUPERVISE VARIOUS RISKS TO CONTROL RISKS
WITHIN A LIMITED SCOPE.
- 90 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
CURRENT YEAR - CONTINUED
Foreign exchange risk refers to the risk of losses arising from the exchange rate fluctuation. The Group's exposure
to foreign exchange risk is mainly related to the USD, the JPY and the HKD. Except for some of the Group's
import purchases and export sales in Chinese mainland, which were mainly settled in USD, JPY and HKD, the
Group's other major business activities were settled in RMB.
As of December 31, 2025, except for the foreign currency monetary items in Note (V), 56, the assets and
liabilities of the Group were all in RMB. The foreign currency balances of assets and liabilities (converted into
RMB) listed in the table below may expose the Group to foreign exchange risks that could impact its operating
performance.
RMB
Balance as at the end of the current year
Item
Assets Liabilities
USD 170,438,077.00 7,800,902.65
JPY 64,400,649.22 176,652,586.70
HKD 991,760.82 25,272.44
The Group closely monitors the impact of exchange rate changes on the Group's foreign exchange risk and will
take measures to avoid foreign exchange risk according to the actual situation.
Sensitivity analysis of foreign exchange risk
With other variables unchanged, the pre-tax impact of reasonable changes in exchange rates on the current profit
or loss and shareholders' equity is as follows:
RMB
CURRENT YEAR PREVIOUS YEAR
FLUCTUATION IN IMPACT ON IMPACT ON
ITEM IMPACT ON SHAREHOLDERS' IMPACT ON SHAREHOLDERS'
EXCHANGE RATE
PROFIT EQUITY PROFIT EQUITY
ALL
REVALUATION
FOREIGN
AGAINST RMB BY 2,567,586.26 2,567,586.26 (2,401,052.54) (2,401,052.54)
CURRENCI
ES
ALL
DEPRECIATION
FOREIGN
AGAINST RMB BY (2,567,586.26) (2,567,586.26) 2,401,052.54 2,401,052.54
CURRENCI
ES
The Group's risk of changes in cash flows of financial instruments due to changes in interest rates is mainly
related to bank borrowings with floating rates. The Group continues to closely monitor the impact of interest rate
changes on the Group's interest rate risk. The Group's policy is to maintain the floating rate of these borrowings,
and there are currently no interest rate swap arrangements.
- 91 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
CURRENT YEAR - CONTINUED
SENSITIVITY ANALYSIS OF INTEREST RATE RISK:
WITH OTHER VARIABLES UNCHANGED, THE PRE-TAX IMPACT OF REASONABLE CHANGES IN
INTEREST RATES ON THE CURRENT PROFIT OR LOSS AND SHAREHOLDERS' EQUITY IS AS
FOLLOWS:
RMB
CURRENT YEAR PREVIOUS YEAR
FLUCTUATION IMPACT ON IMPACT ON
ITEM IN EXCHANGE IMPACT ON SHAREHOLDERS' IMPACT ON SHAREHOLDERS'
RATE PROFIT EQUITY PROFIT EQUITY
IMPACT IMPACT
FLOATING RATE (3,094,866.74) (3,094,866.74)
UP 1% (2,092,051.50) (2,092,051.50)
BORROWINGS
FLOATING RATE 3,094,866.74 3,094,866.74
DOWN 1% 2,092,051.50 2,092,051.50
BORROWINGS
As of December 31, 2025, the maximum credit risk exposure that may cause financial losses to the Group mainly
comes from the losses of the Group's financial assets due to the failure of the other party to the contract to perform
its obligations, including: monetary funds, financial assets held for trading, notes receivable, accounts receivable,
receivables financing and other receivables. On the balance sheet date, the book value of the Group's financial
assets represents its maximum credit risk exposure.
In order to reduce the credit risk, the Group arranges special personnel to determine the credit line, conduct credit
approval, and implement other monitoring procedures to ensure that necessary measures are taken to recover
overdue debts. In addition, the Group reviews the recovery of financial assets on each balance sheet date to ensure
that adequate provision for credit losses has been made for the relevant financial assets. Therefore, the
management of the Group believes that the credit risk assumed by the Group has been greatly reduced.
The Group's monetary funds are deposited in banks with high credit ratings, so the monetary funds only have low
credit risk.
As of December 31, 2025, the balance of accounts receivable from the top five customers of the Group was RMB
has no other significant credit risk exposure concentrated in a single financial asset or a portfolio of financial
assets with similar characteristics.
When managing liquidity risk, the Group maintains cash and cash equivalents that the management believes are
sufficient and monitors them to meet the Group's operational needs and reduce the impact of fluctuations in cash
flows. The Group's management monitors the use of bank borrowings and ensures compliance with loan
agreements.
- 92 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
CURRENT YEAR - CONTINUED
AS OF DECEMBER 31, 2025, THE UNUSED COMPREHENSIVE BANK CREDIT LINE OF THE GROUP
WAS RMB 113,649.52.
THE GROUP'S FINANCIAL LIABILITIES HELD ARE PRESENTED AS FOLLOWS BASED ON THE
MATURITY OF UNDISCOUNTED REMAINING CONTRACTUAL OBLIGATIONS:
RMB
Item Within 1 year 1 - 5 years Over 5 years Total
Accounts payable 344,656,835.89 - - 344,656,835.89
Other payables 159,826,234.73 - - 159,826,234.73
Other current liabilities 53,001,736.07 - - 53,001,736.07
Long-term borrowings 55,787,469.56 269,158,669.95 - 324,946,139.51
Lease liabilities 7,816,868.42 9,705,967.44 1,937,423.13 19,460,258.99
Derivative financial liabilities 4,071,800.19 - - 4,071,800.19
RMB
Transfer Nature of transferred Amount of Derecognition Judgment basis for derecognition
method financial assets transferred financial
assets
The credit risk level of the acceptance bank of
the bank acceptance bill transferred by
Outstanding bank
Transfer by endorsement is relatively high, and almost all
acceptance bills classified 76,263,471.66 Derecognized
endorsement the risks and rewards of the ownership of the
as receivables financing
corresponding receivables financing have been
transferred
The credit risk level of the acceptance bank of
Outstanding bank the bank acceptance bill transferred by
Transfer by
acceptance bills classified 53,001,736.07 Not derecognized endorsement is not high, and almost all the
endorsement
as notes receivable risks and rewards of the ownership of the
relevant notes receivable are retained
Total 129,265,207.73
RMB
Amount of
Transfer method of Gains or losses related
Item derecognized financial
financial assets to derecognition
assets
Transfer by 76,263,471.66
Receivables financing -
endorsement
- 93 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
RMB
Amount of assets arising Amount of liabilities
Asset transfer
Item from continued arising from continued
method
involvement involvement
Transfer by 53,001,736.07 53,001,736.07
Notes receivable
endorsement
(XI)Disclosure of fair value
RMB
Fair value at the end of current year
Measured at the fair Measured at the fair
Item Measured at the fair
value of the 2nd value of the 3rd Total
value of the 1st level
level level
Continuous fair value measurement
(I) Financial assets held for trading - 736,341,286.18 - 736,341,286.18
(II) Receivables financing - - 22,584,820.72 22,584,820.72
(III) Other equity instrument investments - - 159,261,600.00 159,261,600.00
Total assets constantly measured at fair 736,341,286.18 181,846,420.72 918,187,706.90
value
(IV) Derivative financial liabilities - 4,071,800.19 - 4,071,800.19
Total liabilities constantly measured at 4,071,800.19 - 4,071,800.19
fair value
sustainable items measured on the basis of fair value of level 2
RMB
Fair value at the end of
Item current year Valuation techniques Input value
Discounted cash flow
Financial assets held for trading 736,341,286.18 Expected rate of return
method
The contracted delivery
exchange rate under forward
Discounted cash flow
Derivative financial liabilities 4,071,800.19 foreign exchange contracts and
method
the market forward exchange
rate as of the balance sheet date
sustainable items measured on the basis of fair value of level 3
RMB
Fair value at the end of
Item current year Valuation techniques Input value
Discounted cash flow
Receivables financing 22,584,820.72 Discount rate
method
Comparable Public P/B ratio of similar listed
Company Method companies
Comparable earnings
Other equity instrument investments 159,261,600.00 Market price
method
Statement adjustment
Book value
method
- 94 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XI) Disclosure of fair value - continued
Financial assets and liabilities not measured at fair value mainly include: monetary funds, notes receivable,
accounts receivable, other receivables, notes payable, accounts payable, other payables, other current liabilities
and long-term borrowings, etc.
The Group's management believes that the book value of financial assets and financial liabilities measured at
amortized costs in the financial statements is close to the fair value of such assets and liabilities.
(XII) Related parties and related party transactions
Registered Proportion of
Name Registration place Business nature capital Parent company's
voting rights of the
shareholding ratio
(RMB 10,000) parent company in
in the Company (%)
the Company (%)
Equity
Floor 18, Investment investments,
Shenzhen Investment Holdings Building, Shennan
real estate 3,358,600.00 46.21 46.21
Co., Ltd. Road, Futian
District, Shenzhen development,
etc.
Parent company of the Company: the parent company of the Company is a wholly state-owned company approved
and authorized by the Shenzhen Municipal Government, which exercises the functions of the investor in
accordance with the law for the state-owned enterprises within the authorized scope.
During the reporting period, the registered capital of the parent company changed as follows:
RMB 10,000
Balance at the beginning of the Balance as at the end of the
Increase in current year Decrease in current year
year current year
See Note (VIII), 1 for details of the subsidiary.
See Note (V), 10 for details of the Company's joint ventures and associates.
- 95 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII)Related parties and related-party transactions - continued
Name of related party Relationship with the Company
Shenzhen Shentou Property Development Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Shenzhen Seg Longyan Energy Technology Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Guoren P&C Insurance Co., Ltd. Shenzhen Subsidiary of the parent company of the Company, Shenzhen Investment
Branch Holdings Co., Ltd.
Shenzhen Talent Service Center (Shenzhen TalentSubsidiary of the parent company of the Company, Shenzhen Investment
Market) Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Property Management Co., Ltd.
Holdings Co., Ltd.
Shenzhen Cultural Enterprise Development Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Shenzhen Investment Holdings Development Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Shenzhen Investment Holdings Digital Subsidiary of the parent company of the Company, Shenzhen Investment
Technology Co., Ltd. Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Leaguer Education Co., Ltd.
Holdings Co., Ltd.
Shenzhen Legal Training Center Co., Ltd. Subsidiary of the parent company of the Company, Shenzhen Investment
Holdings Co., Ltd.
Shenzhen Investment Holdings Sports Event Subsidiary of the parent company of the Company, Shenzhen Investment
Development Co., Ltd. Holdings Co., Ltd.
Shenzhen Silver Lake Convention Center (Hotel) Subsidiary of the parent company of the Company, Shenzhen Investment
Co., Ltd. Holdings Co., Ltd.
Wuzhou Guest House Operation Branch of Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Wuzhou International Hotel Holdings Co., Ltd.
Management Group Co., Ltd.
Jiazhihua Center Cinema of Shenzhen Cultural Subsidiary of the parent company of the Company, Shenzhen Investment
Enterprise Development Co., Ltd. Holdings Co., Ltd.
Shenzhen Penglao Human Resources Subsidiary of the parent company of the Company, Shenzhen Investment
Management Co., Ltd. Holdings Co., Ltd.
Shenzhen Talent Recruitment International Subsidiary of the parent company of the Company, Shenzhen Investment
(Group) Co., Ltd. (formerly known as Shenzhen Holdings Co., Ltd.
Talent Recruitment International Co., Ltd.)
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Guohui Hotel Co., Ltd.
Holdings Co., Ltd.
Xinmei Fontana Holding (Hong Kong) Limited One of the directors of the Company is a director of SAPO Photoelectric
Kunshan Xinmei Optical Technology Co., Ltd. One of the directors of the Company is a director of SAPO Photoelectric
Minority shareholder of the Company's subsidiary SAPO Photoelectric; one of
Hengmei Optoelectronics Co., Ltd.
the directors of the Company is a director of SAPO Photoelectric
A subsidiary of a minority shareholder of SAPO Photoelectric, a subsidiary of the
Fuzhou Hengmei Optoelectronics Co., Ltd.
Company
A subsidiary of a minority shareholder of SAPO Photoelectric, a subsidiary of the
Haosheng Hengxin (Wuxi) Materials Co., Ltd.
Company
Hoardsun Advanced Materials Korea LLC A subsidiary of a minority shareholder of SAPO Photoelectric, a subsidiary of the
Company
Shenzhen Xinfang Knitting Factory Co., Ltd. The Company's participated company
Shenzhen Dailisi Underwear Co., Ltd. The Company's participated company
- 96 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII)Related parties and related-party transactions - continued
(1) Procurement of goods/receipt of labor services
RMB
Content of related party Amount for the current Amount for the
Related party
transactions year previous year
Equipment costs, optical
Hengmei Optoelectronics Co., Ltd. film materials and 179,843,047.65 2,874.60
processing
Xinmei Fontana Holding (Hong Kong) Limited Raw materials 177,573,836.05 -
Kunshan Xinmei Optical Technology Co., Ltd. Raw materials 18,328,566.87 -
Hoardsun Advanced Materials Korea LLC Raw materials 5,388,320.92 -
Fuzhou Hengmei Optoelectronics Co., Ltd. Optical film materials 1,370,344.95 -
Shenzhen Seg Longyan Energy Technology Co., Ltd. Purchase of electricity 1,061,155.37 1,146,803.41
Rental and property
Shenzhen Investment Holdings Development Co., Ltd. 618,425.18 65,786.40
management fees
Guoren P&C Insurance Co., Ltd. Shenzhen Branch Insurance premiums 431,262.04 285,104.25
Shenzhen Talent Service Center (Shenzhen Talent Outsourcing service fee
Market)
Shenzhen Investment Holdings Digital Technology Information construction
Co., Ltd.
Shenzhen Penglao Human Resources Management Labor dispatch fees
Co., Ltd.
Shenzhen Legal Training Center Co., Ltd. Training expenses 61,136.99 34,597.00
Shenzhen Leaguer Education Co., Ltd. Training expenses 27,944.70 20,449.02
Shenzhen Property Management Co., Ltd. Property management fee 25,899.76 47,258.75
Equipment costs,
Shenzhen Cultural Enterprise Development Co., Ltd. 23,416.00 136,298.00
exhibition fees
Shenzhen Talent Recruitment International (Group) Campus recruitment fees
Co., Ltd. (formerly known as Shenzhen Talent 14,342.15 7,000.00
Recruitment International Co., Ltd.)
Shenzhen Silver Lake Convention Center (Hotel) Co., Service fee
Ltd.
Wuzhou Guest House Operation Branch of Shenzhen Service fee
Wuzhou International Hotel Management Group Co., 8,352.00 -
Ltd.
Shenzhen Guanhua Printing and Dyeing Co., Ltd. Interest expenses 3,316.31 9,025.99
Jiazhihua Center Cinema of Shenzhen Cultural Service fee
Enterprise Development Co., Ltd.
Shenzhen Guohui Hotel Co., Ltd. Service fee 1,200.00 -
Shenzhen Investment Holdings Sports Event Marketing expenses
- 80,000.00
Development Co., Ltd.
Shenzhen Property Management Co., Ltd. Property management fee - 47,258.75
Total 385,172,921.07 2,039,449.40
- 97 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII) Related parties and related-party transactions - continued
(2) Sales of goods/ rendering of services
RMB
Content of related party Amount for the current Amount for the
Related party
transactions year previous year
Haosheng Hengxin (Wuxi) Materials Co., Ltd. Processing fees 7,267,737.20 -
Fuzhou Hengmei Optoelectronics Co., Ltd. Processing fees 910,142.37 -
Hengmei Optoelectronics Co., Ltd. Processing fees 577,658.64 -
Shenzhen Xinfang Knitting Factory Co., Ltd. Lease 11,428.57 -
Shenzhen Changlianfa Printing and Dyeing Co., Ltd. Lease 11,428.57 -
Total 8,778,395.35 -
(3) Related party leases
The Group as lessor
RMB
Lease income Lease income
Lessee Type of leased asset recognized in this recognized in previous
period period
Shenzhen Xinfang Knitting Factory Co., Ltd. Houses and buildings 11,428.57 -
Shenzhen Changlianfa Printing and Dyeing Co., Ltd. Houses and buildings 11,428.57 -
Total 22,857.14 -
The Group as lessee
RMB
Amount in the current period
Rental costs for
Variable lease
short-term leases Interest
payments not
Type of and low-value expense on Increase in
Lessor included in the
leased asset asset leases for Paid rents lease right-of-use
measurement of
simplified liabilities assets
lease liabilities (if
processing (if assumed
applicable)
applicable)
Shenzhen Investment -
Houses and
Holdings Development 389,545.30 440,134.57 7,295.94 2,541,344.41
buildings
Co., Ltd.
RMB
Amount in the current period
Rental costs for
Variable lease
short-term leases Interest
payments not
Type of and low-value expense on Increase in
Lessor included in the
leased asset asset leases for Paid rents lease right-of-use
measurement of
simplified liabilities assets
lease liabilities (if
processing (if assumed
applicable)
applicable)
Shenzhen Investment
Houses and
Holdings Development 65,786.40 - 65,786.40 - -
buildings
Co., Ltd.
(4) Loans from and to related parties
RMB
Related party Amount borrowed Start date Maturity date Notes
Borrowed from
Shenzhen Guanhua Printing and Annual interest rate
Dyeing Co., Ltd. 0.15%
- 98 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII) Related parties and related-party transactions - continued
(5) Remuneration of key management personnel
RMB
Item Amount for the current year Amount for the previous year
Remuneration of key officers 6,322,000.00 6,932,991.00
(1) Receivables
RMB
Balance as at the end of the Balance as at the end of the
current year previous year
Project Related party
Provision for bad Provision for bad
Book balance Book balance
debts debts
Haosheng Hengxin (Wuxi) Materials
Co., Ltd.
Fuzhou Hengmei Optoelectronics
Accounts Co., Ltd.
receivable Hengmei Optoelectronics Co., Ltd. 652,754.27 538,757.54 - -
Shenzhen Shentou Property
Development Co., Ltd.
Total 4,943,014.86 1,431,280.10 6,027.00 602.70
Kunshan Xinmei Optical Technology
Co., Ltd.
Shenzhen Investment Holdings Digital
Advances to 96,500.00 - - -
Technology Co., Ltd.
suppliers
Shenzhen Investment Holdings
Development Co., Ltd.
Total 4,894,944.67 - - -
Shenzhen Dailisi Underwear Co., Ltd. 1,100,000.00 55,000.00 1,100,000.00 55,000.00
Shenzhen Investment Holdings
Other receivables 106,237.44 568.37 73,096.00 3,910.64
Development Co., Ltd.
Total 1,206,237.44 55,568.37 1,173,096.00 58,910.64
(2) Payables
RMB
Balance as at the end of the Balance as at the end of the
Project Related party
current year previous year
Xinmei Fontana Holding (Hong Kong) Limited 14,853,562.10 -
Fuzhou Hengmei Optoelectronics Co., Ltd. 1,370,344.95 -
Accounts payable
Hengmei Optoelectronics Co., Ltd. 633,118.20 -
Total 16,857,025.25 -
Shenzhen Guanhua Printing and Dyeing Co., Ltd. 3,806,454.17 3,816,981.88
Shenzhen Changlianfa Printing and Dyeing Co.,
Ltd.
Shenzhen Xinfang Knitting Factory Co., Ltd. 244,789.85 244,789.85
Shenzhen Investment Holdings Digital
Technology Co., Ltd.
Shenzhen Investment Holdings Development
Other payables 18,417.00 29,238.40
Co., Ltd.
Shenzhen Cultural Enterprise Development Co.,
Ltd.
Shenzhen Investment Holdings Sports Event
- 80,000.00
Development Co., Ltd.
Shenzhen Property Management Co., Ltd. - 7,934.52
Total 6,409,336.97 6,497,980.44
- 99 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XIII) Commitments and contingencies
(1) Capital commitments
RMB
Amount at the end of current Amount at the end of previous
Item
year year
Contracted but not recognized in the financial statements
Commitment on construction and purchase of long-lived assets 7,977,917.50 53,374.76
As of December 31, 2025, the Group had no contingencies such as pending litigations and external guarantees to
be discolsed.
(XIV) Events after the balance sheet date
On March 26, 2026, the profit distribution proposal for the year 2025 was approved by the Board of the Company.
It is proposed that the Company distribute cash dividends of RMB 0.48 per ten shares (tax inclusive) to all
shareholders based on the total share capital of 506,521,849 shares as of December 31, 2025, resulting in total
cash dividends of RMB 24,313,048.75 (tax inclusive). The profit distribution plan is subject to the consideration
and approval of the Company's General Meeting.
RMB
Item Amount
Profit or dividend to be distributed 24,313,048.75
Profit or dividend declared to be granted upon deliberation and approval -
- 100 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XV) Other significant matters
(1) Determination basis and accounting policies for reporting segments
According to the internal organizational structure, management requirements and internal reporting system of the
Group, the Group's operating business is divided into two operating segments. The management of the Group
regularly evaluates the operating results of these segments to decide on the allocation of resources to them and
evaluate their performance. On the basis of operating segments, the Group has identified the following two
reporting segments, polarizer business, property leasing business and other business.
Information on segment reporting is disclosed according to the accounting policies and measurement standards
adopted by each segment when reporting to the management, and these measurement bases are consistent with the
accounting and measurement bases when preparing the financial statements.
(2) Financial information of reporting segments
RMB
Current year or end of Property leasing and
Polarizer Offset Total
current year others
Operating revenue:
Revenue from
external transactions
Revenue from
transactions between - 3,578,055.92 (3,578,055.92) -
segments
Total operating
revenue of segments
Operating expenses
(Note)
Operating profit 67,696,577.60 40,317,571.37 (5,049,907.23) 102,964,241.74
Net profit 67,893,144.85 32,905,892.39 (5,185,494.41) 95,613,542.83
Total assets of
segments
Total liabilities of
segments
Previous year or the
Property leasing and
beginning of current Polarizer Offset Total
others
year
Operating revenue:
Revenue from
external transactions
Revenue from
transactions between - 4,239,345.09 (4,239,345.09) -
segments
Total operating
revenue of segments
Operating expenses
(Note)
Operating profit 136,015,568.69 (20,628,307.04) 36,389,537.55 151,776,799.20
Net profit 134,120,025.66 (15,831,104.78) 24,767,845.50 143,056,766.38
Total assets of
segments
- 101 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
Total liabilities of
segments
Note: this item includes operating costs, taxes and surcharges, G&A expenses, R&D expenses, selling and
distribution expenses and financial expenses.
- 102 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XV) Other important matters - Continued
Based on the current operating status of Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as
"Shenzhen Xieli"), the Company applied to the People's Court of Luohu District, Shenzhen (hereinafter referred to
as the "Court") for compulsory liquidation of Shenzhen Xieli on January 7, 2026. The Court accepted the case on
January 22, 2026, and the case is currently under compulsory liquidation proceedings.
(XVI) Notes to the main items of the parent company's financial statements
(1) Disclosure by aging
RMB
Book balance at the end of the Book balance at the beginning
Aging
year of the year
Within 1 year 8,710,793.24 10,649,986.34
Total 8,829,397.23 13,135,062.34
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts - - -
accrued on an individual - -
basis
Provision for bad debts
made by portfolio
Total 8,829,397.23 100.00 115,022.89 8,714,374.34
- 103 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(2) Disclosure by provision method for bad debts - Continued
RMB
Balance as at the end of the previous year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts - - -
accrued on an individual - -
basis
Provision for bad debts
made by portfolio
Total 13,135,062.34 100.00 106,074.71 13,028,987.63
As of December 31, 2025, accounts receivable with provision for bad debts accrued on a portfolio basis:
RMB
Balance as at the end of the current year
Aging Expected average loss Provision for bad
Book balance Book value
rate (%) debts
Within 1 year 1.32 8,710,793.24 115,022.89 8,595,770.35
Total 8,829,397.23 115,022.89 8,714,374.34
As of December 31, 2025, provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of the year 106,074.71 - 106,074.71
Balance at the beginning of the year - - -
- Transfer to credit loss incurred - - -
- Reversal of credit loss not incurred - - -
Withdrawal in the current year 8,948.18 - 8,948.18
Reversal in the current year - - -
Charge-off in the current year - - -
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the current
year
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or write- end of the current
Provision Other changes
year reversal off year
Provision for bad
debts
There was no significant amount of provision for bad debts recovered or reversed this year.
- 104 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(4) There are no accounts receivable actually written off this year.
(5) Top five entities in terms of the ending balance of accounts receivable by debtor
RMB
Balance of provision
Ratio in total
Book balance at the for bad debts as at the
Entity name accounts receivable
end of the year end of the current
(%)
year
Customer A 6,980,341.04 79.06 93,757.57
Customer B 1,227,979.88 13.91 -
Customer C 118,603.99 1.34 -
Customer D 117,394.64 1.33 5,869.73
Customer E 81,272.44 0.92 -
Total 8,525,591.99 96.56 99,627.30
(1) Disclosure by aging
RMB
Balance as at the end of Balance as at the end of
Aging
the current year the previous year
Within 1 year 1,973,476.50 15,129,726.66
Over 3 years 27,509,236.20 25,380,195.11
Total 43,392,112.71 42,987,562.86
Less: provision for bad debts 41,377,567.06 41,453,167.06
Book value 2,014,545.65 1,534,395.80
(2) Disclosure by nature of payment
RMB
Book balance at the end of Book balance at the end of
Nature of payment
the year the previous year
Transactions with related parties within the consolidation scope 26,114,041.10 26,189,641.10
Transactions with external units 15,455,577.41 15,422,435.97
Guarantee and deposits 10,000.00 10,000.00
Others 1,812,494.20 1,365,485.79
Total 43,392,112.71 42,987,562.86
(3) Provision for bad debts
As of December 31, 2025, provision for bad debts was made in accordance with the general model of expected
credit loss.
RMB
Stage 1 Stage 2 Stage 3
Expected credit loss Lifetime expected Lifetime expected
Provision for bad debts Total
for the next 12 credit loss (without credit loss (credit-
months credit impairment) impaired)
Balance at the beginning of the
year
Balance at the beginning of the
current year
-- Transferred to Stage 2 (13,636,400.01) 13,636,400.01 - -
-- Transferred to Stage 3 - (2,204,641.09) 2,204,641.09 -
-- Reclassified to Stage 2 - - - -
-- Reclassified to Stage 1 - - - -
Provision for the year - - - -
- 105 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
Reversed during the year - - (75,600.00) (75,600.00)
Written off during the year - - - -
Written off during the year - - - -
Other changes - - - -
Balance at the end of the year 74,666.33 13,909,400.01 27,393,500.72 41,377,567.06
As of December 31, 2025, provision for bad debts shall be made according to the credit risk characteristic
combination
RMB
Balance as at the end of the current year
Phase Expected average loss Provision for bad
Book balance Book value
rate (%) debts
Provision for bad debts based on
credit risk characteristic combination 95.36 43,392,112.71 41,377,567.06 2,014,545.65
Provision for other receivables
- 106 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(3) Provision for bad debts - continued
As of December 31, 2025, the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average loss
Book balance Provision for bad debts Book value
rate (%)
Within 1 year 3.78 1,973,476.50 74,666.33 1,898,810.17
Over 3 years 99.58 27,509,236.20 27,393,500.72 115,735.48
Total 43,392,112.71 41,377,567.06 2,014,545.65
(4) Changes in provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or end of the
Provision Other changes
year reversal write-off current year
Provision for bad debts 41,453,167.06 - (75,600.00) - - 41,377,567.06
(5) There were no other receivables actually written off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Proportion of
other Provision for
Balance as at receivables bad debts
Entity name the end of the Balance as at Nature of amount Aging Balance as at
current year the end of the the end of the
current year current year
ratio (%)
Customer A 26,114,041.10 60.18 Intercourse payment Over1- 3 years 26,114,041.10
Customer B 11,389,044.60 26.25 Intercourse payment Over 3 years 11,389,044.60
Customer C 1,800,000.00 4.15 Intercourse payment Over 3 years 1,800,000.00
Customer D 1,100,000.00 2.54 Intercourse payment Within 1 year 55,000.00
Customer E 1,018,295.37 2.35 Intercourse payment Over 3 years 1,018,295.37
Total 41,421,381.07 95.47 40,376,381.07
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
subsidiaries
Investments in
joint ventures
Investments in
associates
Total 2,070,836,335.22 37,390,767.64 2,033,445,567.58 2,077,516,294.35 36,826,287.64 2,040,690,006.71
- 107 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(1) Investment in subsidiaries
RMB
Provision for
Provision for
Balance at the Balance as at the end of impairment
Investees Increase in current year Decrease in current year impairment in the
beginning of the year the current year Balance as at the end of
current year
the current year
SAPO Photoelectric 1,910,247,781.94 - - - 1,910,247,781.94 14,415,288.09
Shenzhen Lisi Industrial Development Co., - - - 8,073,388.25 -
Ltd.
Shenzhen Meibainian Garment Co., Ltd. - 564,480.00 - 564,480.00 - 22,975,479.55
Shenzhen Shenfang Property Management - - - 1,713,186.55 -
Co., Ltd.
Shenzhen Shenfang Sungang Property - - - 5,827,623.93 -
Management Co., Ltd.
Total 1,925,861,980.67 564,480.00 - 564,480.00 1,925,861,980.67 37,390,767.64
(2) Investment in associates and joint ventures
RMB
Changes in the current year
Balance of
Other Cash dividends
Balance at the Investment profit Balance as at the provision for
comprehensi or profits
Investees beginning of the Additional Reduced or loss recognized end of the current impairment
ve income Change in declared to be Provision for Others
year investment investment under the equity year as at the end
adjustment other equity paid impairment
method of the current
year
Joint ventures
Shenzhen Guanhua Printing - - (7,280,934.44) - - - - - 104,274,952.84 -
and Dyeing Co., Ltd.
Sub-total 111,555,887.28 - - (7,280,934.44) - - - - - 104,274,952.84 -
Associates
Shenzhen Changlianfa - - 269,945.31 - - (233,450.00) - - 3,308,634.07 -
Printing and Dyeing Co., Ltd.
Sub-total 3,272,138.76 - - 269,945.31 - - (233,450.00) - - 3,308,634.07 -
Total 114,828,026.04 - - (7,010,989.13) - - (233,450.00) - - 107,583,586.91 -
- 108 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 76,736,666.87 10,942,684.48 77,167,496.95 10,205,157.84
Other business 903,094.00 684,545.01 - -
Total 77,639,760.87 11,627,229.49 77,167,496.95 10,205,157.84
(2) Primary business by product
RMB
Amount for the current year Amount for the previous year
Products Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Property leasing 76,736,666.87 10,942,684.48 77,167,496.95 10,205,157.84
(3) Primary business by region
RMB
Amount for the current year Amount for the previous year
Region Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Domestic 76,736,666.87 10,942,684.48 77,167,496.95 10,205,157.84
RMB
Amount for the current Amount for the previous
Item
year year
Long-term equity investment income calculated under the equity method (7,010,989.13) (10,701,895.08)
Income from long-term equity investments under cost method 5,200,000.00 4,700,000.00
Investment income from the recovery of long-term equity investments - 5,838,587.94
Investment income obtained during holding the financial assets held for trading 14,540,478.82 10,795,474.10
Dividend income from investments in other equity instrument during the 1,235,735.85
holding period
Total 13,965,225.54 12,077,902.81
- 109 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
According to the Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to
the Public - Non-recurring Profit or Loss (Revision 2024) (hereinafter referred to as "Interpretive Announcement
No. 1") issued by the China Securities Regulatory Commission, the Group's non-recurring profit or loss for 2025
are as follows:
RMB
Amount for the current
Item
year
Profit or loss from disposal of non-current assets, including the writing-off part for which the asset
impairment provision is made
Government subsidies included in the current profit or loss (except for those that are closely related to the
Company's normal business operations, comply with national policies and regulations, are enjoyed
according to determined standards, and have a sustained impact on the Company's profit or loss) 6,426,316.96
Profit or loss from changes in fair value of financial assets and liabilities held by non-financial enterprises
and profit or loss from the disposal of financial assets and financial liabilities, except for effective hedging
operations related to the Company's normal business operations (11,769,635.37)
Reversal of provision for impairment of accounts receivable subject to separate impairment test 4,371,571.58
Non-operating revenue and expenses other than the above-mentioned items 5,481,728.35
Total non-recurring profit or loss 5,647,224.33
Less: income tax effect of non-recurring profit or loss 906,584.80
Net amount of non-recurring profit or loss 4,740,639.53
Less: net effect of non-recurring profit or loss attributable to minority shareholders (after tax) (243,998.88)
Non-recurring profit or loss attributable to the Company's ordinary shareholders 4,984,638.41
This return on net assets and earnings per share table is prepared by Shenzhen Textile (Holdings) Co., Ltd. in
accordance with the Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing
Securities in Public (No. 9) - Calculation and Disclosure of Return on Net Assets and Earnings per Share
(Revision 2010) issued by the China Securities Regulatory Commission.
RMB
Weighted average rate of Earnings per share
Profit in the reporting period return on net assets % Diluted earnings per
Basic earnings per share
share
Net profit attributable to ordinary shareholders of
the COOEC
Net profit attributable to ordinary shareholders of
the Company after deducting non-recurring profit or
loss 2.14 0.13 0.13
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