Changchai Company, Limited Annual Report 2025
CHANGCHAI COMPANY, LIMITED
ANNUAL REPORT 2025
April 2026
Changchai Company, Limited Annual Report 2025
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Changchai Company, Limited (hereinafter referred to
as the “Company”) hereby guarantee the factuality, accuracy and completeness of the
contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Xie Guozhong, the Company’s legal representative and General Manager, and Jiang He, head
of the Company’s financial department (equivalent to financial manager) hereby guarantee
that the Financial Statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future and other forward-looking statements mentioned in this Report shall
NOT be considered as absolute promises of the Company to investors. Therefore, investors
are kindly reminded to pay attention to possible investment risks.
The Company has described in detail the risks it might face in “XI Prospects” in “Part III
Management Discussion and Analysis” herein.
The Board has approved a final dividend plan as follows: based on the 705,692,507 shares, a
cash dividend of RMB0.22 (tax inclusive) per 10 shares is to be distributed to the shareholders,
with no bonus issue from either profit or capital reserves.
Changchai Company, Limited Annual Report 2025
Table of Contents
Changchai Company, Limited Annual Report 2025
Documents Available for Reference
Manager and head of the financial department.
sealed by the CPA firm.
Securities Time and Ta Kung Pao (HK) (newspapers designated by the CSRC for information
disclosure) during the Reporting Period.
The above-mentioned documents available for reference are all kept in the Secretariat of the Board
of Directors of the Company.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
Changchai Company, Limited Annual Report 2025
Definitions
Term Definition
Changchai Company, Limited and its consolidated subsidiaries,
“Changchai”, the “Company” or “we”
except where the context otherwise requires
Changchai Benniu Changzhou Changchai Benniu Diesel Engine Fittings Co., Ltd.
Changchai Wanzhou Changchai Wanzhou Diesel Engine Co., Ltd.
Horizon Investment Changzhou Horizon Investment Co., Ltd.
Horizon Agricultural Equipment Changzhou Changchai Horizon Agricultural Equipment Co., Ltd.
Changchai Robin Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd.
Changchai Machinery Jiangsu Changchai Machinery Co., Ltd.
Xingsheng Real Estate Management Changzhou Xingsheng Real Estate Management Co., Ltd.
Zhenjiang Siyang Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd.
Expressed in the Chinese currency of Renminbi, expressed in tens
RMB, RMB’0,000
of thousands of Renminbi
The “Reporting Period” or “Current
The period from 1 January 2025 to 31 December 2025
Period”
Changchai Company, Limited Annual Report 2025
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Changchai, Changchai B Stock code 000570, 200570
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 常柴股份有限公司
Abbr. 苏常柴
Company name in English (if any) CHANGCHAI COMPANY,LIMITED
Abbr. (if any) CHANGCHAI CO.,LTD.
Legal representative Xie Guozhong
Registered address 123 Huaide Middle Road, Changzhou, Jiangsu, China
Zip code 213002
Registered addresses previously
N/A
used
Office address 123 Huaide Middle Road, Changzhou, Jiangsu, China
Zip code of office address 213002
Company website http://www.changchai.com.cn
Email address cctqm@public.cz.js.cn
II Contact Information
Board Secretary Securities Representative
Name He Jianjiang
Address
Changzhou, Jiangsu, China
Tel. (86) 519-68683155
Fax (86) 519-86630954
Email address cchjj@changchai.com
III Media for Information Disclosure and Place where this Report Is Lodged
Stock exchange website where this Report is
Shenzhen Stock Exchange: http://www.szse.cn
disclosed
Media name: Securities Times, Ta Kung Pao (HK)
Media and website where this Report is disclosed
http://www.cninfo.com.cn
Changchai Company, Limited Annual Report 2025
Place where this Report is lodged Board Secretariat of the Company
IV Change to Company Registered Information
Unified social credit code 91320400134792410W
Change to principal activity of the
No change
Company since going public
On 22 November 2018, the State-owned Assets Supervision and
Administration Commission of Changzhou Municipal People’s
Every change of controlling shareholder Government transferred its entire holdings of 170,845,236 shares
since incorporation in the Company (a stake of 30.43%) to Changzhou Investment
Group Co., Ltd. for no compensation, which has thus become the
controlling shareholder of the Company.
V Other Information
The independent audit firm hired by the Company:
Zhongxinghua Certified Public Accountants (Special General
Name
Partnership)
Office address
Fengtai District, Beijing, China
Accountants writing signatures Wang Jun, Li Pengcheng,Lu Xia
The independent sponsor hired by the Company to exercise constant supervision over the Company in the
Reporting Period:
□ Applicable √ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the Company in
the Reporting Period:
□ Applicable √ Not applicable
VI Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
change (%)
Operating revenue
(RMB)
Net profit attributable to
the listed company’s 50,820,986.84 18,489,896.00 174.86% 108,495,607.05
shareholders (RMB)
Net profit attributable to
the listed company’s
shareholders before 20,573,578.22 52,958,683.45 -61.15% -47,466,184.54
exceptional gains and
losses (RMB)
Changchai Company, Limited Annual Report 2025
Net cash generated
from/used in operating 289,562,549.07 -154,292,968.70 —— 137,189,827.35
activities (RMB)
Basic earnings per share
(RMB/share)
Diluted earnings per
share (RMB/share)
Weighted average return
on equity (%)
Change of 31
Total assets (RMB) 5,578,281,300.02 5,381,900,903.82 3.65% 5,159,394,958.92
Equity attributable to the
listed company’s 3,443,190,677.55 3,362,683,464.32 2.39% 3,398,946,911.23
shareholders (RMB)
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative for the last three accounting years, and the latest independent
auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern.
□ Yes √ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before
and after exceptional gains and losses was negative.
□ Yes √ No
VII Accounting Data Differences under China’s Accounting Standards for Business Enterprises (CAS) and
International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
□ Applicable √ Not applicable
No difference for the Reporting Period.
□ Applicable √ Not applicable
No difference for the Reporting Period.
VIII Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 897,763,657.72 663,422,968.11 501,193,579.88 413,945,616.97
Net profit attributable to the
listed company’s shareholders
Changchai Company, Limited Annual Report 2025
Net profit attributable to the
listed company’s shareholders
before exceptional gains and
losses
Net cash generated from/used in
-14,769,195.97 -59,536,914.66 -140,609,621.01 504,478,280.71
operating activities
Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs
materially from what have been disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
IX Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item 2025 2024 2023 Note
Gain or loss on disposal
of non-current assets
(inclusive of impairment
allowance write-offs)
During the reporting
period, the government
Government grants subsidies recorded in
recognized in current the current profit and
profit or loss (exclusive loss of our company
amounted to RMB
of those that are closely
related to the Company's deducting the
normal business government subsidies
operations and given in related to assets
accordance with defined deferred income of
criteria and in RMB 3,409,729.46 and
compliance with the job stabilization
subsidies of RMB
government policies, and 689,075.00, the
have a continuing impact government subsidies
on the Company's profit recorded in the current
non-recurring profit and
or loss)
loss were RMB
During the reporting
In addition to effective period, the stock prices
hedging activities related of Jiangsu Liance
to the normal business Electromechanical
-13,253,234.92 -58,411,420.91 74,628,323.54 Technology Co., Ltd.
operations of the same
and Kailong High-Tech
company, the profit and Co., Ltd., held by
loss from changes in fair Horizon Investment, a
value arising from wholly-owned
subsidiary of the
Changchai Company, Limited Annual Report 2025
non-financial enterprises company, increased
compared to the
holding financial assets
beginning of the period.
and financial liabilities, Meanwhile, the fair
as well as the profit and value of the equity held
loss arising from the by the company in
Jiangsu Horizon New
disposal of financial Energy Technology Co.,
assets and financial Ltd. decreased
liabilities compared to the
beginning of the period.
Profit and loss from
entrusting others to 789,983.38 1,122,559.94
invest or manage assets
Reversal of impairment
provision for accounts
receivable separately
tested for impairment
Debt restructuring gains
-42,868.87 267,434.70
and losses
Other non-operating
income and expenses
-1,163,570.19 1,952,095.73 -254,543.89
other than those
mentioned above
Less: Income tax impact 8,030,670.45 -9,444,181.95 27,193,473.11
Impact amount of
minority shareholders' 249,531.51 361,173.09 -47,741.93
equity (after tax)
Total 30,247,408.62 -34,468,787.45 155,961,791.59 --
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Exceptional Gain/Loss Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Changchai Company, Limited Annual Report 2025
Part III Management Discussion and Analysis
I Principal Activity of the Company in the Reporting Period
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Our products are mainly used in agricultural machinery, small
engineering machinery, generator sets and shipborne machinery and other fields closely related to people's
livelihood.
In the Reporting Period, there were no major changes in the Company's core business and main products.
Our main products are divided into two categories: diesel engines and gasoline engines. The details are as follows:
Main
Product Application
produc Graphic display Product description
features fields
ts
Our diesel engine products include
single-cylinder diesel engines and High power, low Agricultural
multi-cylinder engines, covering oil consumption, machinery,
power range from 3kW to 180kW, low noise, construction
Diesel
and cylinder diameters from 70mm compact machinery,
engine
to 140mm. Besides sale in domestic structure, low generator sets,
market, our diesel engines are sold emission, good shipborne
to Southeast Asia, South America, reliability machinery
the Middle East and Africa.
Our gasoline engines are mainly
general-purpose small gasoline
engines, covering the power range Agricultural
Simple structure,
Gasolin from 1.5kW to 9.0kW. Besides sale machinery,
good reliability,
e in domestic market, our gasoline small
easy
engine engines are sold to Southeast Asia, construction
maintenance
the Middle East, Europe and machinery
America, Africa, Japan and other
countries and regions.
(1) R&D model
We have established an innovative technology management system for internal combustion engine based on
market demand and forward-looking technologies. Prior to the new products or new technologies development,
the marketing department first conducts market assessment and customer research, and then initiates a project
according to the forecasted market demand; the technology center conducts development according to the project
materials, and collects feedback information from the market and customers in real time during the development
Changchai Company, Limited Annual Report 2025
process to ensure technology leadership and product suitability.
(2) Purchasing model
We adopt the "purchase-to-order" purchasing model. The ERP system converts the sales orders, the sales plan
developed by the sales department and the production plan drawn up by the production department into the
demand of parts needed, and the purchasing department organizes the purchase according to such demand.
Meanwhile, the purchasing department makes a plan to guide parts procurement according to the sales
department's sales plan, and provide it to the supplier, and urge the supplier to prepare for the goods.
(3) Production model
We adopt the "make-to-order" production management model. The sales department makes sales plans for
different stages according to the orders in hand, sales data in previous years, market demand judgment and
feedback of existing customers' purchasing intentions. The Company's production department makes the
production plan according to the sales orders displayed in the ERP system, the sales plan made by the sales
department and the reserve inventory demand, and organizes the production task in strict accordance with the plan.
During the production process, the quality assurance department arranges regular inspection to ensure the product
quality.
(4) Sale model
We adopt the sales model of "direct selling + distribution", i.e. the direct selling model for the main engine factory,
and the distribution model for the individual circulation market represented by farmers and overseas market.
We mainly specialize in the R&D, manufacture and sales of diesel engines under the brand "Changchai" and
gasoline engines under the brand "Robin". Up to now, we have successfully developed a number of advanced core
technologies with independent intellectual property rights. In terms of diesel engine, according to the statistics of
China Internal Combustion Engine Industry Association (CICEIA), as the largest small- and medium-sized
single-cylinder diesel engine manufacturer in the agricultural machinery industry of China, we have maintained a
high market share of single-cylinder engines, and our market share of single-cylinder diesel engines of some
power ranges has ranked first in China. For many years, in the process of achieving steady economic development
of the enterprise, we developed in a sound manner and cultivated the "Changchai" brand, a famous small diesel
engine brand of China with independent intellectual property rights.
(1) National policy driver
In recent years, the country has introduced a series of policies to support the development of the agricultural
machinery market, including subsidy policies for the purchase and scrapping of agricultural machinery, as well as
support policies for the agricultural machinery circulation industry. The No. 1 central document of 2026 focuses
on agricultural and rural modernization and comprehensive rural revitalization. With the core objectives of
enhancing the comprehensive productive capacity of agriculture and stabilizing food security, it proposes three
major upgrading directions for agricultural machinery: high-end intelligence, green and low-carbon, and hillside
adaptability. By optimizing subsidies and expanding scenarios, it aims to release industrial dividends and promote
the transformation of agricultural machinery equipment into new productive forces.
The "Work Plan for Stabilizing Growth in the Machinery Industry (2025-2026)" proposes to leverage policies
such as subsidies for the purchase and application of agricultural machinery, as well as subsidies for the scrapping
and renewal of agricultural machinery, to promote the "preferential subsidies for superior machines" and "inflow
and outflow" of subsidized machinery, and to facilitate the application and promotion of advanced and applicable
agricultural machinery equipment.
Changchai Company, Limited Annual Report 2025
The "Guiding Opinions of the Ministry of Agriculture and Rural Affairs on Vigorously Developing Smart
Agriculture" and the "National Smart Agriculture Action Plan (2024-2028)" emphasize the innovative research,
development, promotion, and application of advanced and applicable smart agricultural machinery. This aims to
facilitate the deep integration of technological innovation and industrial innovation, providing strong
technological equipment support for the development of modern agriculture. The introduction and implementation
of a series of policies benefiting and supporting farmers will contribute to the high-quality development of the
agricultural machinery industry, ushering in a favorable policy environment for the sustainable development of
high-end products.
(2) Industrial chain synergy empowers the sustainable development of the Company
We have built our own casting manufacturing and processing plants to meet the use requirements of some diesel
engine parts. In terms of production and quality, we have formed a significant synergy with its own internal
combustion engine assembly team. Our casting manufacturing team and internal combustion engine assembly
team work together to form a mutually reinforcing positive feedback loop to assist the Company in integrating the
internal combustion engine industry chain and building differentiated industry barriers. In terms of collaborative
production, the reduction of external purchase is of great significance for the Company to reduce process flow,
reduce intermediate loss, improve production efficiency, shorten delivery time and increase purchasing bargaining
power. In terms of quality coordination, the self-built foundry can improve our quality control of parts to improve
the yield and reliability of internal combustion engines.
(3) Stable and efficient R&D team
We have experienced technical management team and perfect technical support team. Our key technical personnel
and R&D management personnel have been engaged in internal combustion engine R&D design, production and
manufacturing for a long time. With profound professional knowledge and rich practical experience, they can
make strong forward-looking and scientific judgment in the market direction and technical route. Also, we have
established an effective training mechanism to foster talented persons for the follow-up R&D.
(4) Well-known brand with many well-known customers
The Company, formerly known as Changzhou Diesel Engine Factory, is a national industrial enterprise with a
history of a hundred years and one of the earliest professional internal combustion engine manufacturers in China.
Our diesel and gasoline engines, as power sources of agricultural machinery and commercial vehicles, show
excellent performance in power range, reliability, power per liter, noise control and emission standards, and have
been recognized by customers. We maintained a long-term partnership with major customers, with cumulative
partnership time exceeding 15 years. Many main engine plant customers of the Company are well-known
enterprises in the agricultural machinery industry, with their market shares being at the forefront of the market.
II The industry situation in which the company operates during the reporting period
We are a manufacturer of internal combustion engines and fittings in general equipment manufacturing. According
to the classification of fuel used, internal combustion engines are mainly divided into diesel engines and gasoline
engines. Our diesel engines and gasoline engines are mainly used in non-road mobile machinery fields such as
harvesters, tractors, plant protection machinery, small engineering machinery, and shipborne machinery.
(1) Basic information on the industry
Internal combustion engines (ICEs) serve as a crucial pillar for safeguarding China's manufacturing industry,
energy security, and national defense security. They are also a fundamental cornerstone for the sustained
development of the national economy and the modernization of national defense. As thermal power devices that
Changchai Company, Limited Annual Report 2025
currently lead in thermal efficiency, excel in power density, and have the widest range of application scenarios,
ICEs occupy an irreplaceable core position in the power equipment system. In alignment with the strategic
objectives of carbon peaking and carbon neutrality, as well as the overall requirements for high-quality
development in the manufacturing industry, the ICE and agricultural machinery equipment industries are
accelerating the implementation of innovation-driven development strategies. They are focusing on enhancing
their independent innovation capabilities, continuously promoting the construction of common key technology
platforms, and strengthening the resilience and safety levels of industrial and supply chains. Simultaneously, the
industry is actively advancing intelligent manufacturing and green manufacturing, accelerating its transformation
and upgrading towards high efficiency, intelligence, and cleanliness, and fully supporting the construction of a
modern industrial system.
(2) Development pattern and trend of the industry
The "15th Five-Year Plan" period marks a crucial stage for China to achieve its carbon peaking goal, and the
internal combustion engine (ICE) industry is entering a strategic window for transformation and reshaping. The
"two new" policies of 2026 provide clear guidance for the promotion of green and intelligent products and the
low-carbon upgrading of industries, making energy conservation and carbon reduction the core task for
high-quality development in the sector. Driven by both policy guidance and market demand, the industry is
accelerating its layout of a diversified fuel power technology system, with the application of low-carbon and
zero-carbon fuels becoming an important direction. Hybrid power (including extended range) serves as a key path
for the transition from internal combustion power to new energy, continuously playing an irreplaceable role in the
commercial vehicle and non-road sectors. Through the concerted efforts of combustion optimization, emission
control, and intelligent monitoring, ICEs are accelerating their upgrade towards high efficiency, intelligence,
cleanliness, and low carbon. The deep integration of digital technology and manufacturing processes, coupled
with continuously enhanced synergy across the industrial chain, is injecting new momentum into the industry's
leap towards high-end development. Relying on technological breakthroughs and systematic innovations, the ICE
industry will continue to consolidate its foundation as a driving force for national economic and defense security.
In recent years, the country has introduced a series of policies to support the development of the agricultural
machinery market, including policies on agricultural machinery purchase subsidies, scrapping and renewal
subsidies, and support for the agricultural machinery circulation industry. The No. 1 central document of 2026
focuses on agricultural and rural modernization and comprehensive rural revitalization. With the core objectives
of enhancing comprehensive agricultural production capacity and stabilizing food security, it proposes three major
upgrading directions for agricultural machinery: high-end intelligence, green and low-carbon, and hillside
adaptability. By optimizing subsidies and expanding scenarios, it aims to release industrial dividends and promote
the transformation of agricultural machinery equipment into new productive forces.
In 2025, influenced by factors such as low grain prices and frequent abnormal weather, China's agricultural
machinery market as a whole performed below expectations. The industry underwent accelerated differentiation
amidst adjustments, with the trend of structural transformation becoming increasingly evident. In terms of product
structure, traditional mainstay products exhibited sluggish performance, but there was uneven performance in
different segments. The tractor market saw a year-on-year decline in production, yet large tractors achieved
growth, and high-end models such as power-shift tractors experienced leapfrog growth, breaking the dominant
position of traditional mechanical-shift tractors. The harvesting machinery market declined overall, but its
structure continued to be optimized, with an increase in the proportion of large-feed models, and tracked
harvesters bucked the trend with their export advantages. The rice transplanter market showed differentiation, with
high-speed riding models experiencing a decline in production due to subsidy adjustments, while hand-guided
models achieved growth due to price advantages and adjusted agronomic needs. Micro-tillers, as a representative
Changchai Company, Limited Annual Report 2025
category of mechanization in hilly and mountainous areas, performed impressively.
From the perspective of competition, the industry reshuffle is accelerating, and market concentration is
continuously increasing. Leading enterprises, leveraging their technological, channel, and brand advantages, have
steadily expanded their market share and occupied a dominant position in niche areas. Most small and
medium-sized enterprises operate on a smaller scale and face increased survival pressures. Looking at the trend of
upgrading, high-end and intelligent products have become the focus of enterprises' efforts. High-end tractors such
as power shift and infinitely variable speed have entered large-scale applications; the integration of high-precision
automatic drive systems with Beidou is accelerating; the industrialization of new energy agricultural machinery is
accelerating, with breakthroughs in hybrid tractors and electric drive seeders. In terms of export performance,
agricultural machinery exports have become an important driving force for industry development, with a rapid
growth in total volume, with countries along the Belt and Road contributing the majority of the share. Looking at
policy orientation, 2026, as the first year of the 15th Five-Year Plan, will see continued efforts in large-scale
equipment renewal and subsidies for agricultural machinery purchase and application, with policies oriented
towards "preferential subsidies for superior machinery" forcing enterprises to transform towards high-tech and
high-value-added fields. With technological development, agricultural machinery is shifting towards high-end,
intelligent, digital, and green directions, with significant growth potential in areas such as intelligent agricultural
machinery equipment, machinery for hilly and mountainous areas and specialty economic crops, new energy
agricultural machinery, agricultural robots and unmanned systems, and agricultural machinery after-market
services. In the process of national strategic deployment and transformation and upgrading, the agricultural
machinery market still has vast potential for development.
III Core Competitiveness Analysis
Changchai is a century-old national industrial enterprise and one of China’s earliest specialized manufacturers of
internal combustion engines. The "Changchai" brand is recognized as a China Famous Trademark, and its diesel
engines are China Brand Name Products. The company has obtained certifications including ISO 9001, IATF
(Automotive Product Quality Management System), as well as obtain the AOE advanced certification from the
Chinese Customs.
Changchai has been repeatedly listed among China’s Top 100 Machinery Industry Enterprises and China’s
Industry Leading Enterprises. It has been honored with titles such as:
? National Contract-Honoring & Creditworthy Enterprise
? Leading Agricultural Machinery Components Enterprise in China
? AAA Credit-Rated Agricultural Machinery Enterprise
? Jiangsu Provincial Quality Management Excellence Award
? Changzhou Mayor’s Quality Award
? "Fine Farming Cup" Award for Top 10 Most Satisfactory After-Sales Service Brands (multiple years)
During the reporting period, the company was further recognized as:
? National Product & Service Quality Integrity Demonstration Enterprise
? China Agricultural Machinery Annual TOP50+ Supporting Supplier Award
? Key Large-Scale Machinery Industry Enterprise
? Outstanding Brand in Jiangsu Agricultural Equipment Industry
Changchai Company, Limited Annual Report 2025
? Jiangsu Contract-Honoring & Creditworthy Enterprise
Over the years, while achieving steady economic growth, Changchai has cultivated and developed the
"Changchai" brand—a renowned national brand in China’s small diesel engine industry with independent
intellectual property rights and a strong reputation at home and abroad.
Changchai operates a National-Level Technical Center, a Postdoctoral Research Station, and the Jiangsu
Provincial Small- and Medium-Power Internal Combustion Engine Engineering Research Center. The company
specializes in manufacturing single- and multi-cylinder diesel engines in the small-to-medium power range,
offering the most comprehensive product portfolio and broadest power coverage in China’s small diesel engine
sector, with independent IP rights for all core products.
During the reporting period, the company obtained the re-evaluation certificate for the National Enterprise
Technology Center, was awarded the first prize for outstanding quality management team activity achievements in
the 2025 National Machinery Industry, and its M15 diesel engine was honored with the Agricultural Machinery
Supplier Technology Innovation Award of the Year. During the reporting period, the company was granted 32
patents. By the end of 2025, the company had a total of 209 valid patents authorized both domestically and
internationally, including 42 domestic invention patents and 4 international invention patents.
Changchai adheres to a market-centered approach, continuously exploring new marketing strategies that adapt to
market development. It implements a "five-in-one" management approach, encompassing "complete machine
sales, spare parts supply, three-guarantee services, capital recovery, and information feedback". Changchai has
established a nationwide sales and service network, with 24 sales service centers and 746 special maintenance
stations. Its service outlets are spread throughout urban and rural areas, making it one of the more comprehensive
and widely-covered sales and service networks in the national small and medium-sized diesel engine industry.
Under the unified command of the company's headquarters, the "Changchai Customer Call Center", Changchai
provides customers with high-quality pre-sale, in-sale, and after-sale services, adhering to the service principles of
"proactive, fast, convenient, and accurate". Additionally, to meet the non-road National IV emission requirements
and provide more precise after-sale services to customers, the company has specially developed a service
monitoring platform with Changchai characteristics.
IV Core Business Analysis
In 2025, the global economic recovery was sluggish, geopolitical games intensified, and the external environment
became more complex and severe. Domestically, the economy sought progress while maintaining stability, and the
overall trend of recovery and improvement was further consolidated. However, issues such as contradictions in the
supply-demand structure and insufficient effective demand remained prominent. The agricultural machinery
industry was in a critical transition period characterized by both slowing growth and structural adjustment.
Affected by factors such as low grain prices, frequent extreme weather, and declining operational profits for users,
the traditional agricultural machinery market continued to face pressure, with market demand shifting from
incremental expansion to stock renewal. Emerging fields such as smart agricultural machinery and new energy
equipment experienced growth against the trend, with demand for high-end products increasing and the industrial
structure continuously optimizing. The market evolved towards high-end, intelligent, and diversified development,
and the agricultural machinery industry steadily moved towards a new stage of high-quality development amidst
Changchai Company, Limited Annual Report 2025
adjustments. The company anchored its development strategy, closely adhered to its annual business objectives,
and all employees worked together to deepen product research and development, market expansion, and quality
improvement, building a solid core competitive advantage and promoting the sustained high-quality development
of the enterprise. During the reporting period, the company sold 651,700 diesel engines, gasoline engines, and
units of various types, achieving a total sales revenue of RMB 2.476 billion, an increase of 2.50% compared to the
same period last year.
In terms of product research and development and supporting facilities, the company has continuously increased
its R&D investment, obtained multiple new domestic and international patent authorizations, laying a solid
foundation for technological upgrading. In the field of multi-cylinder engines, several key products have
undergone optimization and iteration, and have been launched in batches, with significant breakthroughs in core
component technology. Key products have been matched with and produced in batches by harvesting machinery
OEM enterprises, successfully entering the mainstream market of high-horsepower power for harvesting
machinery and achieving precise layout in new markets. At the same time, the company has steadily promoted the
development of high-horsepower platforms and light engine series products, continuously enriching its product
portfolio. Substantial progress has been made in hybrid technology, with the completion of the configuration
design of an extended-range hybrid system for tractors of specific horsepower, achieving a key leap in the
technological route.
In terms of sales and services, within the domestic market, the single-cylinder engine has consistently maintained
a stable market share among original equipment manufacturers and industrial supporting areas. It actively
explores emerging and niche markets, effectively hedges against downward market pressure, and drives sales to
stabilize and rebound. The multi-cylinder engine has intensified the promotion of new products in advantageous
fields, strengthened terminal market collaboration, and steadily expanded into niche markets such as construction
machinery and generator sets. The development and breakthrough of unit product supporting have moved towards
diversification, specialization, and segmentation. In terms of export sales, the scale of exports has significantly
increased, with robust growth momentum in core and emerging markets, providing strong support for building a
new development pattern where domestic and international dual cycles mutually reinforce each other.
Simultaneously, the company continues to optimize its sales network, strictly regulates cross-regional sales
management, and further enhances the quality and control level of sales channel operations.
In terms of quality management, the company takes system reconstruction as the core, clarifies the key objectives
of system establishment, and takes multiple measures to improve the quality management system. It carries out
special work to tackle key issues related to product quality, effectively optimizes product quality levels, and builds
a unique quality management system. Simultaneously, it implements organizational structure innovation, achieves
iterative upgrades of quality management methods, and deeply reshapes quality culture. In terms of supply chain
construction, the company establishes an SQE supplier quality management project team to further standardize the
inspection and evaluation mechanism for new suppliers, continuously improving the standardization and
refinement level of supplier management. Under the premise of ensuring supply quality and stability, various
effective measures are taken to reasonably reduce procurement costs and enhance the overall efficiency of the
supply chain. The production system maintains efficient operation, continuously reduces production and
operational costs through optimizing production processes and management models, improves labor productivity,
and enhances the comprehensive competitiveness of enterprise production and operation.
In terms of internal management, the company adheres to high-quality party building to lead development,
thoroughly studies and implements relevant spirits, promotes the comprehensive and in-depth development of
strict party governance, strengthens discipline inspection and supervision, strictly enforces discipline rules,
encourages party members and cadres to take on responsibilities, and fully leverages the exemplary role of party
Changchai Company, Limited Annual Report 2025
members. In accordance with legal and regulatory requirements, the company has completed tasks such as the
audit committee taking over the responsibilities of the board of supervisors and the establishment of employee
directors, simultaneously revised and improved relevant systems, and continuously optimized the corporate
governance environment. The company strengthens external investment control through refined management,
promotes several subsidiaries to complete governance structure upgrades and internal control system
improvements, and effectively enhances decision-making efficiency and compliance management level. In terms
of talent team construction, the company vigorously selects and appoints young cadres, optimizes the assessment
mechanism, guides cadres to focus on quality, cost, and efficiency improvement; creates a good atmosphere of
emulation and competition through skill competitions, increases the cultivation of high-skilled talents,
comprehensively improves employees' professional quality and job performance ability, and provides solid talent
support for the company's high-quality development.
During the reporting period, the houses within the scope of the company's foundry and the surrounding land
parcels' urban renewal project (Phase I) were expropriated by the government. This matter was approved at the
first extraordinary shareholders' meeting in 2025 and is yet to be signed into an expropriation compensation
agreement. The company's headquarters along the street were also expropriated by the government. The company
signed a compensation agreement with the Housing and Urban-Rural Development Bureau of Zhonglou District,
Changzhou. As of the end of the reporting period, the company has received all the compensation payments for
the expropriation of the headquarters' shops along the street. In August 2025, the company acquired 3% of the
equity held by six individual shareholders of Zhenjiang Siyang. Currently, the company holds a total of 52% of
Zhenjiang Siyang's equity. As of the end of the reporting period, the wholly-owned subsidiary Changchai Luobin's
merger and absorption of Horizon Nongzhuang, and the wholly-owned subsidiary Changniu Company's merger
and absorption of its wholly-owned subsidiary Changben Company have been fully completed.
(1) Breakdown of Operating Revenue
Unit: RMB
As % of
As % of total Change (%)
total
Operating revenue operating Operating revenue
operating
revenue (%)
revenue (%)
Total 2,476,325,822.68 100% 2,415,869,028.32 100% 2.50%
By operating division
Internal
combustion 2,425,736,833.58 97.96% 2,371,931,691.41 98.18% 2.27%
engines
Other 50,588,989.10 2.04% 43,937,336.91 1.82% 15.14%
By product category
Diesel engines 2,284,464,160.03 92.25% 2,243,543,689.25 92.87% 1.82%
Gasoline
engines
Other 55,204,841.35 2.23% 49,465,500.69 2.05% 11.60%
Changchai Company, Limited Annual Report 2025
By operating segment
Domestic 2,026,517,354.88 81.84% 2,059,623,002.73 85.25% -1.61%
Overseas 449,808,467.80 18.16% 356,246,025.59 14.75% 26.26%
By marketing model
Distribution 1,202,751,523.31 48.57% 961,865,962.18 39.81% 25.04%
Direct sales 1,273,574,299.37 51.43% 1,454,003,066.14 60.19% -12.41%
(2) Operating Division, Product Category, Operating Segment or Marketing Model Contributing over 10%
of Operating Revenue or Operating Profit
□Applicable √ Not applicable
Unit: RMB
YoY
YoY
YoY change in
Gross change in
change in gross
Operating revenue Cost of sales profit operating
cost of profit
margin revenue
sales (%) margin
(%)
(%)
By operating division
Internal
combustion 2,425,736,833.58 2,131,368,875.08 12.14% 2.27% 2.27% 0.00%
engines
By product category
Diesel
engines
Gasoline
engines
By operating segment
Domestic 2,026,517,354.88 1,770,854,257.65 12.62% -1.61% -0.53% -0.94%
Overseas 449,808,467.80 409,141,517.81 9.04% 26.26% 20.68% 4.20%
By marketing model
Distribution 1,202,751,523.31 1,046,514,649.02 12.99% 25.04% 24.99% 0.04%
Direct sales 1,273,574,299.37 1,133,481,126.44 11.00% -12.41% -11.58% -0.83%
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
(3) Whether Revenue from Physical Sales Is Higher than Service Revenue
√ Yes □ No
Operating
Item Unit 2025 2024 Change (%)
division
Unit sales Unit 519,057 477,592 8.68%
Diesel engines
Output Unit 514,235 473,719 8.55%
Changchai Company, Limited Annual Report 2025
Inventory Unit 91,069 95,891 -5.03%
Any over 30% YoY movements in the data above and why:
□ Applicable √ Not applicable
(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period
□ Applicable √ Not applicable
(5) Breakdown of Cost of Sales
Unit: RMB
Product As % of As % of
Item total cost total cost Change (%)
category Cost of sales Cost of sales
of sales of sales
(%) (%)
Raw
materials
Diesel Labor cost 236,268,258.66 11.10% 230,255,452.63 11.26% 2.61%
engines
Depreciation 58,454,666.96 2.75% 58,977,062.10 2.88% -0.89%
Energy 30,849,454.12 1.45% 25,209,330.48 1.23% 22.37%
(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period
√Yes □ No
During the reporting period, Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. (hereinafter referred to
as "Changchai Robin"), a wholly-owned subsidiary, inherited all assets, liabilities, businesses, and all other rights
and obligations of Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. (hereinafter referred to as
"Horizon Agricultural Equipment") through a comprehensive merger. In February 2025, the company received the
Registration Notice (Deng Zi [2025] No. 02270081) issued by the Government Service Management Office of
Changzhou High-tech Industrial Development Zone (Xinbei District), indicating that Horizon Agricultural
Equipment had cancelled its independent legal person status, marking the completion of the merger between the
two wholly-owned subsidiaries.
The wholly-owned subsidiary Changzhou Changniu Machinery Co., Ltd. (hereinafter referred to as "Changniu
Company") has merged all assets, liabilities, businesses, and all other rights and obligations of its wholly-owned
subsidiary Changzhou Changchai Benniu Diesel Engine Parts Co., Ltd. (hereinafter referred to as "Changben
Company") through a consolidation and merger process. Changniu Company has inherited the registered capital,
equity structure, and governance structure of Changben Company. In September 2025, the company received the
"Registration Notice" (Deng Zi [2025] No. 09080200) and "Registration Notice" (Deng Zi [2025] No. 09080101)
issued by the Government Service Management Office of Changzhou High-tech Industrial Development Zone
(Xinbei District). The deregistration procedures for Changben Company and the change procedures for Changniu
Company have been completed, marking the completion of the consolidation and merger of the wholly-owned
subsidiary by the wholly-owned subsidiary.
Changchai Company, Limited Annual Report 2025
As of the end of the reporting period, the consolidation scope of the Company included the parent company and
seven subsidiaries.
(7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period
□ Applicable √ Not applicable
(8) Major Customers and Suppliers
Major customers:
Total sales to top five customers (RMB) 1,099,384,631.33
Total sales to top five customers as % of total sales of the
Reporting Period (%)
Total sales to related parties among top five customers as % of
total sales of the Reporting Period (%)
Information about top five customers:
Sales revenue contributed
As % of total sales
No. Customer for the Reporting Period
revenue (%)
(RMB)
Total -- 1,099,384,631.33 44.40%
Other information about major customers:
□ Applicable √ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 333,781,726.97
Total purchases from top five suppliers as % of total purchases
of the Reporting Period (%)
Total purchases from related parties among top five suppliers
as % of total purchases of the Reporting Period (%)
Information about top five suppliers:
Purchase in the Reporting As % of total purchases
No. Supplier
Period (RMB) (%)
Changchai Company, Limited Annual Report 2025
Total -- 333,781,726.97 18.31%
Other information about major suppliers:
□ Applicable √ Not applicable
During the reporting period, the proportion of the company's trade business revenue in its operating revenue
exceeded 10%:
□ Applicable √ Not applicable
Unit: RMB
Reason for any
significant change
Selling expense 52,818,923.00 60,617,254.43 -12.86%
Administrative
expense
This growth mainly
resulted from
Finance costs -4,959,323.92 -23,423,038.69 —— increased interest
income and exchange
gains.
R&D expenses 83,676,763.37 83,401,477.60 0.33%
√ Applicable □ Not applicable
Major R&D Progr Expected impact on the
Purpose Specific objectives
project ess Company
After the implementation of
Develop an Energy conservation and
the project, the product meets
efficient, emission reduction to meet
Research and the China Stage VI/Euro VI
low-emission, China stage VI/Euro VI emission
development In emission standards, which
and intelligent standards, optimize power
of hybrid progr will help promote the
diesel engine performance and driving
powertrain ess technological upgrading of
hybrid comfort, and achieve system
system the company's industry and
powertrain integration, lightweight,
boasts broad and promising
system intelligence, and connectivity.
market application prospects.
Development Develop diesel In Enhance product power After the implementation of
project of engines with progr performance and system the project, the company's
multi-cylinde higher ess stability, optimize fuel economy, technical level will be further
Changchai Company, Limited Annual Report 2025
r series diesel performance, reduce emissions for enhanced, its product
engine energy saving, environmental protection, and portfolio will be enriched,
and emission meet emission standards. and it will be able to meet
reduction emission standards and
market demands.
After the implementation of
the project, the product meets
the requirements of the China
Develop
Stage IV emission standard
Development high-performanc
Enhance the product's power for non-road vehicles, which
project of e post-treatment
performance, reliability, and fuel helps the company expand its
multi-cylinde systems and In
efficiency, meet the non-road product application market
r diesel create progr
China stage IV emission and enhance its brand
engine with environmentally ess
standards, and extend the competitiveness. At the same
post-treatmen friendly,
product's service life. time, it actively responds to
t system high-performanc
the national environmental
e diesel engines
protection strategy and
achieves sustainable
development.
Develop diesel
engines with Enhance product performance,
higher achieve efficient power output After the implementation of
High power
performance, and energy conservation and the project, the product meets
air-cooled In
energy saving, emission reduction, meet the emission requirements and
diesel engine progr
and emission requirements of the China Stage market demands, presenting a
development ess
reduction to meet IV emission standard for promising market outlook in
project
market demands non-road vehicles, and adapt to the future.
and emission complex usage environments.
standards
Through optimized design and After the implementation of
Develop technological innovation, we the project, the product meets
Development
efficient, enhance product reliability and the non-road China stage IV
project of In
environmentally optimize diesel engine emission standard, which aids
diesel engine progr
friendly, and performance to meet the the company in expanding
for generator ess
energy-saving requirements of the China stage into related fields. The
sets
diesel engines IV emission standard for product holds broad market
non-road vehicles prospects.
After the implementation of
Develop diesel Optimize product performance,
Development the project, the product meets
engines with enhance various product
project of In the requirements of the China
higher indicators, and achieve domestic
multi-cylinde progr Stage IV emission standard
performance to advanced levels to meet the
r light diesel ess for non-road vehicles,
meet market non-road China stage IV
engine boasting broad and promising
demand emission requirements.
market application prospects,
Changchai Company, Limited Annual Report 2025
further enhancing the market
competitiveness of the
company's products.
Key
technology
and product
development Develop
After the implementation of
project for hydrogen internal Through key technologies,
the project, the product has
high-perform combustion In complete system integration and
certain market adaptability
ance engines to progr performance optimization to
and promotion potential, with
zero-carbon achieve clean and ess achieve internationally advanced
strong competitiveness and
emission efficient power product indicators.
broad market prospects.
hydrogen generation
internal
combustion
engine
After the implementation of
Develop diesel the project, the upgraded
Diesel higher In diesel engines to meet the requirements of the China
Engine performance and progr requirements of the China stage Stage IV emission standard
Development that meet ess IV emission standard for for non-road vehicles, and the
Project emission non-road vehicles. product has broad and
standards promising market application
prospects.
After the implementation of
the project, the product meets
the requirements of the China
Develop diesel
Stage IV emission standard
for non-road vehicles,
Diesel higher In performance and promote the
promoting the further
Engine performance and progr implementation of energy
maturity and development of
Development that meet ess conservation and emission
the company's non-road
Project emission reduction.
product technology. The
standards
product has broad and
promising market application
prospects.
After the implementation of
Optimize and
upgrade diesel Improve product performance,
Diesel In market demand and complies
engine reach the advanced level of
Engine progr with the China Stage IV
performance to similar foreign products, and
Development ess emission standard for
meet market meet emission requirements.
Project non-road vehicles, presenting
demands
a promising market outlook
Changchai Company, Limited Annual Report 2025
in the future.
After the implementation of
Diesel engines with Optimize diesel engine
the project, it will meet the
Engine higher In performance to achieve the goals
requirements of the China
Matching performance, progr of high efficiency output, energy
Stage IV emission standard
Tractor energy saving, ess conservation, and emission
for non-road vehicles and
Development and emission reduction.
meet market demands.
Project reduction
L22 China
After the implementation of
Stage IV Meet emission Improve product performance,
In the project, the product meets
Diesel requirements and reach the advanced level of
progr the non-road China stage IV
Engine satisfy market similar domestic products, and
ess emission standards and holds
Development demands meet emission requirements.
broad market prospects.
Project
Improve diesel engine
L24
Develop diesel performance, conserve energy, After the implementation of
Common
engines with and reduce emissions, ensuring the project, the product meets
Rail China
higher In that the performance and the non-road China Stage IV
Stage IV
performance, progr reliability of the diesel engine emission standards and
Diesel
energy saving, ess reach the leading level of similar satisfies market demand,
Engine
and emission domestic products and meet the indicating a promising market
Optimization
reduction non-road China Stage IV outlook for the product.
Project
emission standards.
Develop After the implementation of
Improve product performance to
In reach the advanced level of
Engine ce diesel engines the non-road China Stage IV
progr similar foreign products and
Development satisfying emission standards,
ess meet the non-road China Stage
Project emission presenting a broad market
IV emission standards.
standards prospect.
Develop Execute major design After the implementation of
higher-performan optimizations to reach the project, the product meets
Turbocharged
ce diesel engines Comp international advanced levels emission requirements, has a
Diesel
satisfying leted across all performance metrics, clear target market
Engine
emission satisfying Non-Road China positioning, and boasts broad
Development
standards Stage IV standards. market prospects.
Develop
Stage IV environmentally- Achieve compliance with maintain existing OEM
Comp
Diesel friendly diesel Non-Road China Stage IV application compatibility
leted
Engine engines meeting regulations. while expanding market
Development emission opportunities.
requirements
Mining Develop a Comp Improve product performance, After the implementation of
Pickup Truck mining pickup leted meet the non-road China Stage the project, the company's
Changchai Company, Limited Annual Report 2025
Engine engine with IV emission regulations and product range will be further
Development higher related requirements, and ensure expanded, and the products
performance and that all indicators reach the will meet emission
meeting emission domestic leading level. requirements, presenting
requirements broad market prospects.
Develop Completed projects will yield
high-efficiency, solutions for small
Air-Cooled structural and performance
energy-saving agricultural machinery that
China Stage Comp optimizations to reach
diesel engines align with energy
IV Diesel leted international benchmarks and
compliant with conservation policies,
Engine Non-Road China Stage IV
emission offering significant market
Development compliance.
standards potential.
Develop
L12
high-efficiency, Implementation will expand
Water-Cooled
eco-friendly and Enhance product reliability and product applications, enrich
China Stage Comp
energy-efficient energy efficiency while meeting technical reserves, and meet
IV Diesel leted
single-cylinder Stage IV emission regulations. both regulatory and market
Engine
diesel engines demands.
Development
Details about R&D investments:
Number of R&D
personnel
R&D personnel as % of
total employees
Educational background of R&D personnel
Bachelor’s degree 99 91 8.79%
Master’s degree 9 9 0.00%
Age structure of R&D personnel
Below 30 17 17 0.00%
Details about R&D investments:
R&D investments (RMB) 83,676,763.37 83,401,477.60 0.33%
R&D investments as % of operating
revenue
Capitalized R&D investments (RMB) 0.00 0.00 ——
Capitalized R&D investments as % of
total R&D investments
Reasons for any significant change in the composition of R&D personnel and the impact:
□ Applicable √ Not applicable
Changchai Company, Limited Annual Report 2025
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable √ Not applicable
Reasons for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable √ Not applicable
Unit: RMB
Item 2025 2024 Change (%)
Subtotal of cash generated from
operating activities
Subtotal of cash used in
operating activities
Net cash generated from/used in
operating activities
Subtotal of cash generated from
investing activities
Subtotal of cash used in
investing activities
Net cash generated from/used in
-6,366,802.34 8,037,734.16 ——
investing activities
Subtotal of cash generated from
financing activities
Subtotal of cash used in
financing activities
Net cash generated from/used in
financing activities
Net increase in cash and cash
equivalents
Explanation of why any of the data above varies significantly:
√Applicable Not applicable
The significant year-on-year change in net cash flow from operating activities was primarily due to the company's
increased collection of payment for goods during the reporting period, coupled with reduced inventory pressure
and lower procurement costs, as well as measures taken to reduce costs and cut expenses;
The significant year-on-year change in net cash flow from investing activities was primarily due to the receipt of
land compensation from the Wuxing branch and the Sanjing branch in the previous period;
The significant year-on-year change in net cash flow from financing activities was primarily due to the decrease in
cash dividends distributed by the company during the reporting period.
Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period
√Applicable Not applicable
The significant difference between the net cash flow generated from the company's operating activities during the
reporting period and the net profit for the current year is primarily due to the impact of changes in the fair value of
the financial assets held by the company during the reporting period on current earnings, the reduction in
inventory, and the decrease in procurement funds paid to suppliers.
Changchai Company, Limited Annual Report 2025
V Analysis of Non-Core Businesses
√Applicable Not applicable
Unit: RMB
As % of Recurrent
Amount Source
gross profit or not
The increase was primarily attributable
Return on to dividends received from equity hol
investment dings and investment income generated
from cash management activities.
During the reporting period, the stock
prices of Jiangsu Liance Electromecha
nical Technology Co., Ltd. and Kailon
g High-Tech Co., Ltd., which are held
by Horizon Investment, a wholly-own
Gains/losses on
ed subsidiary of the company, have in
changes in fair -19,942,996.94 -30.11% No
creased compared to the beginning of
value
the period. Meanwhile, the fair value
of the equity held by the company in
Jiangsu Horizon New Energy Technol
ogy Co., Ltd. has decreased compared
to the beginning of the period.
Asset impairment It was mainly due to the increase in
-23,624,390.85 -35.67% No
loss provision for inventory depreciation.
Non-operating It was mainly due to the receipt of tr
income ademark infringement compensation.
The main reason is the payment of lat
Non-operating
expense
ngsu Changchai Machinery Co., Ltd.
It is mainly due to the expropriation o
Asset disposal
income
arters area.
VI Analysis of Assets and Liabilities
Unit: RMB
As % of As % of in Reason for any
Amount total Amount total percent significant change
assets assets age (%)
The increase was
primarily due to
the acceleration of
payment collection
Cash and Cash during the
Equivalents reporting period,
coupled with the
discounting of
some collected
bank acceptance
Changchai Company, Limited Annual Report 2025
bills.
Accounts
receivable
It was mainly due
to the increase in
product sales
during the
reporting period,
Inventories 757,083,436.15 13.57% 819,201,998.42 15.22% -1.65%
which consumed
the diesel engine
inventory reserved
at the beginning of
the period.
Investment
property
It was mainly due
to the sale of
machinery and
equipment related
Fixed assets 550,316,120.80 9.87% 615,414,505.40 11.43% -1.56% to the acquisition
and storage of land
for casting during
the reporting
period.
Construction
in progress
Short-term
borrowings
Contract
liabilities
Indicate whether overseas assets take up a high percentage in total assets.
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: RMB
Gain/loss Impair
Cumulativ
on ment
e Purchased Othe
fair-value allowan Sold in the
Beginning fair-value in the r Ending
Item changes ce for Reporting
amount changes Reporting chan amount
in the the Period
charged to Period ge
Reporting Reporti
equity
Period ng
Changchai Company, Limited Annual Report 2025
Period
Financial assets
Held-for-tr
ading
financial 303,667,45 21,405,61 1,248,243,6 1,201,131,9 372,184,68
assets 0.00 0.00 0.00
(derivative 9.65 0.48 06.00 86.15 9.98
financial
assets
exclusive)
Investment
in other 941,120,05 796,791,2 981,361,29
equity 8.72 95.81 5.81
instrument
s
Subtotal of 1,244,787,5 21,405,61 796,791,2 1,248,243,6 1,201,131,9 1,353,545,9
financial 0.00 0.00
assets 18.37 0.48 95.81 06.00 86.15 85.79
Other 0.00 0.00 0.00 0.00 0.00
Total of 1,622,656,7 -19,344,8 796,791,2 1,248,243,6 1,201,131,9 1,690,664,7
above 35.86 49.98 95.81 06.00 86.15 42.82
Financial
liabilities
Contents of other change: N/A
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
Unit: RMB
Item At the period-end Reason for restriction
Bank acceptance bill guarantee deposits、Letter of guarantee
Monetary assets 90,163,871.20 deposits,Performance bond deposits,Term deposits and accrue
d interest
Notes receivable 77,099,600.00 Payment obligations for undiscounted but discounted bills
Notes receivable 59,152,351.53 Payment obligations for undiscounted but transferred bills
VII Investments Made
√ Applicable □ Not applicable
Investments made in Reporting Investments made in same
+/-%
Period (RMB) period of last year (RMB)
Changchai Company, Limited Annual Report 2025
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(1) Securities Investments
√ Applicable □ Not applicable
Unit: RMB
Gain/
loss Pur
Accu
Acco on cha Sol
mulat Gain/
Co untin Begin fair sed d in Endin
ed fair loss
Variety de Nam Initial g ning value in the g Fun
value in the Accou
of of e of invest meas carryi chang the Rep carryi ding
chang Repor nting
securit sec secu ment urem ng es in Rep orti ng sour
es ting title
y uri rity cost ent amou the orti ng amou ce
record Perio
ty meth nt Repor ng Peri nt
ed in d
od ting Peri od
equity
Perio od
d
Invest
ment
Domes Foto Fair 362,6 380,1 421,9 in Self-
tic/fore n value
ign Mot meth 0
stock or od
instru
ments
Invest
ment
Domes Ban Fair 229,7 200,5 243,3 in Self-
tic/fore k of value
ign Jian meth 0 ,960.
stock gsu od
instru
ments
Domes Kail Fair Held-f
tic/fore value 0.0 or-trad
ign meth 0 ing
stock od
nolo financi
Changchai Company, Limited Annual Report 2025
gy al
assets
Held-f
Lian or-trad
Domes Fair 40,70 16,21 15,91 56,92 Self-
tic/fore value
ign meth 0 financi
stock od
gy al
assets
Held-f
Domes Fair or-trad
tic/fore 160,7 value 320,0 0.0 -78,9 216,1 ing
ign 44.76 meth 40.00 0 00.38 60.00 financi
stock od
al
assets
Total 32,01 -- 81,99 1,020 30,00 0.00 2,923 40,01 -- --
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Sale of Major Assets and Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
□ Applicable √ Not applicable
IX Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the
Company’s net profit:
Unit: RMB
Relatio Principal Registere Total Net Operatin Operating Net
Name
nship activity d capital assets assets g revenue profit profit
Changchai Company, Limited Annual Report 2025
with
the
Compa
ny
Production
Changchai Subsidi of diesel 55,063,0 151,924, 67,546,6 212,686, 369,472.5 365,267.
Benniu ary engine 00.00 404.55 60.15 024.48 5 61
accessories
Diesel
Changchai Subsidi 85,000,0 77,764,2 53,572,1 51,637,8 2,251,989 1,870,38
engine
Wanzhou ary 00.00 57.38 52.81 56.67 .61 9.53
assembly
External
Horizon Subsidi investment 40,000,0 98,135,7 85,214,11 21,011,94 15,914,1
Investment ary and 00.00 66.86 1.71 1.90 85.78
consulting
Gasoline
Changchai Subsidi 37,250,0 122,984, 98,278,2 136,656, 7,577,854 7,117,29
engines
Robin ary 00.00 273.37 25.13 821.30 .27 0.82
assembly
Internal
combustion
Changchai Subsidi 300,000, 811,429, 531,128, 963,061, 20,335,41 18,534,7
engine and
Machinery ary 000.00 069.10 139.35 299.21 7.55 45.46
related
accessories
Xingsheng
Real estate
Real Estate Subsidi 1,000,00 3,776,90 2,134,23 2,324,56 189,608.3 166,232.
manageme
Manageme ary 0.00 6.22 1.64 8.97 2 34
nt service
nt
Manufactur
ing and
Zhenjiang Subsidi marketing 2,000,00 145,493, 124,502, 77,022,4 15,115,88 12,864,3
Siyang ary of diesel 0.00 715.72 534.21 32.90 2.33 27.55
engines for
ships
Subsidiaries obtained or disposed of in the Reporting Period:
□ Applicable √ Not applicable
Other information about principal subsidiaries and joint stock companies:
As of the end of the reporting period, the company held a total of 52% of Zhenjiang Siyang's equity, making it the
largest shareholder.
and obligations of the wholly-owned subsidiary Horizon Nongzhuang through a merger by absorption. As of
February 2025, Horizon Nongzhuang has been deregistered as an independent legal entity, marking the
completion of the merger between the two wholly-owned subsidiaries.
Changchai Company, Limited Annual Report 2025
grandchild company, through an overall merger and absorption process. Changniu Company has acquired all
assets, liabilities, businesses, and all other rights and obligations of Changben Company, inheriting its registered
capital, equity structure, and governance structure. As of September 2025, Changben Company has cancelled its
independent legal person status, and Changniu Company has completed the business registration changes,
marking the completion of the merger.
X Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
XI Prospects
The Company’s development strategy is to base on farm machinery, become stronger in the engine business,
explore more markets and develop in a scientific way.
The country's series of policies and deployments to comprehensively promote rural revitalization and accelerate
the construction of a strong agricultural nation have continued to gain momentum, bringing significant positive
impacts on the high-quality development of the industry. The company will seize the policy opportunities
presented by the country's strong support for agricultural production and the development of the agricultural
machinery and equipment industry. It will adhere to innovation-driven leadership, talent aggregation as support,
quality improvement as the foundation, brand building as the focus, and capital operation as the driving force. It
will accelerate the iterative upgrading and technological innovation of traditional power products, actively plan
for the research and development of intelligent and new energy products, continuously expand into new fields and
markets, and fully promote the optimization and diversified development of the industrial structure. We will
steadfastly advance:
(1) Accelerating Technological Upgrades and Market Expansion for Existing Products
First, the Company will prioritize the optimization and enhancement of its core products.
stabilize supply share with major OEM partners for single-cylinder engines, increase market penetration in key
industrial clusters, tap into high-potential sales regions, and consolidate our industry leadership position. For
multi-cylinder engines, we will accelerate product optimization and upgrades, expedite R&D and
commercialization of policy-compliant new products, enhance profitability of existing products, expand product
line offerings, strengthen supporting services in core market segments, and increase market share in specialized
applications.
export-oriented models with enhanced reliability and superior performance. Leveraging OEM partners' global
distribution channels, we will expand our international market presence. Through optimized resource allocation
and synergies, we aim to improve overall export efficiency, enhance market service quality, and actively increase
customer satisfaction.
Second, we will focus on value chain extension by developing premium product offerings.
and specialized development in niche markets to move up the value chain. This includes expanding applications in
Changchai Company, Limited Annual Report 2025
specialized vehicles, UAV crop protection, stationary power, and telecommunications markets. Our independently
developed integrated UAV charging system has been launched with positive market feedback.
Company is integrating advanced technologies including Internet of Things (IoT), big data analytics, artificial
intelligence, and new materials into product development. These innovations enhance intelligent control systems,
real-time monitoring capabilities, and big data collection/analysis functions in diesel engines, thereby increasing
product value-added features and better meeting end-user requirements.
Third, we will extend its market reach toward end-user applications. The Company's core products consist of
small-to-medium power diesel engines and general-purpose gasoline engines, primarily serving off-road
applications including agricultural machinery, crop protection equipment, construction machinery, and marine
engines. We are intensifying R&D efforts and market penetration in generator sets, outboard motors, cold chain
systems, fishing vessels, and telecommunication tower applications.
(2) Driving Industrial Transformation Through New Energy Integration
With technological advancements and the upgrading of market demand structure, the agricultural machinery
industry is accelerating its transformation towards high-end, intelligent, large-scale, and specialized products.
Green, low-carbon, and digital intelligence have become the core tracks for the industry's high-quality
development. The company has always been market-oriented, anchoring its strategic direction towards
intelligence and new energy. Relying on its core strengths in the field of light power, the company continues to
improve its technological innovation system, intensify technological research and development efforts, and
increase R&D resource investment to advance its technological route and product layout. The company has been
expanding its new energy product matrix, steadily advancing the research, development, and trial production of
hybrid power projects, as well as supporting integration in multiple downstream fields. During the reporting
period, the company completed the configuration design of an extended-range hybrid system for tractors with
a limited partner in the establishment of Changzhou Changtou Xinhui No.1 Equity Investment Fund (Limited
Partnership) and Yuanzhi Changtou Xingyu (Changzhou) Equity Investment Partnership (Limited Partnership),
focusing on new industries such as advanced manufacturing, new energy vehicles, and upstream and downstream
new energy sectors.
We will strengthen our foundation both internally and externally, accelerate research and development to expand
new products, enhance quality to build a strong core, implement lean management to reduce costs and increase
efficiency, continuously innovate to boost vitality, and scientifically plan to empower development. By 2026, we
anticipate achieving sales revenue of 2.6 billion yuan, of which 70 million US dollars will be earned through
exports.
The aforementioned business plan does not represent the listed company's profit forecast for 2026. Whether it can
be achieved depends on various factors such as changes in market conditions and the level of effort put forth by
the management team, and there is significant uncertainty. Investors are advised to pay special attention.
(1) Market Risks
Affected by factors such as low grain prices, frequent extreme weather, and declining user operating profits, the
traditional product market continues to face pressure, while new market segments and fields maintain their growth
momentum. Currently, the agricultural machinery industry is facing a pattern of coexistence of downward
pressure and structural changes. With the deepening of agricultural modernization, the market is evolving towards
Changchai Company, Limited Annual Report 2025
high-end, intelligent, and diversified directions, ushering in a new stage of higher-quality development for the
agricultural machinery market. Most enterprises are continuously strengthening product research and development
and optimization to meet market demands, increasing market maintenance and expansion efforts, and promoting
comprehensive upgrading of industry competition.
Countermeasures: First, deeply cultivate the domestic market, consolidate leading position, and ensure the
industry leadership. Second, optimize overseas layout, seize international opportunities, and achieve incremental
breakthroughs. Third, accelerate industrial upgrading, transform towards new and intelligent directions, and drive
leapfrog development. Fourth, strengthen production management, implement precise and meticulous strategies,
and lay a solid foundation for development. Fifth, improve mechanism construction, adhere to strict management
and care, and activate entrepreneurial momentum
(2) Industry Risks
Influenced by the development of new energy application technology and related policies, enterprises are
accelerating their research, application, and market support in the field of new energy power. This has had a
certain impact on the market share of diesel engine-related supporting fields, and the traditional stock market has
been squeezed. Furthermore, as original equipment manufacturers (OEMs) accelerate their self-research in electric
powertrains and some high-end agricultural machinery markets adopt hybrid power solutions, internal combustion
engine (ICE) companies that rely solely on traditional mechanical pumps or simple electronic control technology
will struggle to meet OEMs' demands for integrated and intelligent powertrains, risking being marginalized in the
supply chain.
Countermeasures: Firstly, develop products that comply with national energy conservation and emission reduction
policies, plan ahead for products and technologies that meet higher emission standards, optimize and upgrade the
product line according to market demand, strengthen the application of intelligent technology and new materials,
lay out intelligent eco-businesses, enhance product added value and competitiveness, and consolidate market
advantages. Secondly, accelerate the research and development of new energy power, and continuously promote
the research and development of hybrid power products and supporting work. Thirdly, accelerate the completion
of verification for high-horsepower platforms, improve the serialization of light engine platforms, and launch
them into the market in batches. Fourthly, adhere to the coordinated development of product management and
capital operation, pay attention to emerging industries, and use the capital market to accelerate the speed of
external expansion.
(3) International Trade Risks
In recent years, the global landscape has become increasingly complex, with frequent geopolitical conflicts and
international trade disputes. These developments have severely impacted regional politics and security, global
economic recovery, food and energy security, and ecological environments, leading to varying degrees of
influence on foreign trade policies worldwide. Significant changes in the political stability or trade policies of
overseas markets could substantially affect our export sales.
Countermeasures: First, by complementing and sharing internal and external resources, information, and products,
we aim to enhance our independent expansion capabilities and improve overall foreign trade efficiency. Second,
innovate and modify the products based on overseas market demands, promoting more high-performance and
new-field products to overseas markets. Third, consolidate core advantages in traditional main markets, expand
market share in key markets, and cultivate growth momentum in emerging potential markets. Fourth, intensify
training for overseas service personnel, enhance service capability building, and delegate overseas website
construction, accelerating the construction of an overseas market service network. Fifth, closely monitor exchange
rate fluctuations, select appropriate currencies for pricing and settlement, and promptly take measures such as
Changchai Company, Limited Annual Report 2025
adjusting product prices and payment terms to reduce risks.
(4)Raw Material Price Volatility Risk
The market prices of raw materials are influenced by multiple factors such as the macroeconomic environment,
industry capacity, and changes in market demand, resulting in frequent price fluctuations. Fluctuations in the
prices of major raw materials such as steel and pig iron can exert certain pressure on the company's production
costs, thereby affecting the company's operating profits accordingly.
Countermeasures: First, strengthen internal management through measures such as technological improvement
and cost management enhancement, optimize workflows, and improve production and operation efficiency.
Second, continue to implement supply guarantee projects and focus on building a stable, efficient, and reliable
supply system. Third, timely track market dynamics, strengthen inventory management, and mitigate the adverse
impact of raw material price fluctuations on the company.
(5) Talent Risk
Talent is the core strategic resource for the high-quality development of enterprises. The sustainable and healthy
development of enterprises cannot be separated from the solid support of a high-quality talent team. Companies
need various talents to empower management, improve operational quality and efficiency, and accelerate the pace
of transformation and upgrading. If the salary system, talent incentive and restraint mechanisms are not sound
enough, it is easy to lead to insufficient cultivation of high-end management leaders and core technical backbones,
weak reserve of backup talent teams, and thus restrict the continuous improvement of the enterprise's scientific
research innovation ability and core competitiveness.
Countermeasures: First, closely align with the company's development strategy and actual management practices,
continuously improve talent introduction channels, enhance the talent training system, optimize the talent team
structure, and comprehensively enhance the comprehensive quality of employees. Second, focus on the needs of
business development, continuously strengthen employees' job performance capabilities and professional levels
through systematic and professional training. Third, improve the talent incentive mechanism and performance
evaluation system, vigorously promote the construction of a younger and more professional cadre team, and
comprehensively enhance the contribution of human resources to enterprise development. Fourth, strengthen the
construction of the employee representative conference system and the service and security of the labor union,
actively build harmonious labor relations, and continuously enhance employees' sense of belonging, happiness,
and cohesion..
XII Communications with the Investment Community such as Researche, Inquiries and Interviews during
the Reporting Period
√ Applicable □ Not applicable
Place Contents and
Way of Type of Index to main inquiry
Date of visit of Visitor materials
visit visitor information
visit provided
The company's
operating
performance, www.cninfo.com.cn,
Onlin
Investors profitability, 000570 Su Chang C
e Online
meeti exchange
public construction, ons Management Info
ng
equity rmation, 20240423
investment, and
other related
Changchai Company, Limited Annual Report 2025
situations
XIII Implementation of Market Value Management System and Valuation Enhancement Plan
Indicate whether the Company has disclosed the Market Value Management System
□ Yes √ No
Indicate whether the Company has disclosed the Valuation Enhancement Plan
□ Yes √ No
XIV Implementation Status of the "Dual Enhancement of Quality and Returns" Initiative
Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.
□ Yes √ No
Changchai Company, Limited Annual Report 2025
Part IV Corporate Governance
I General Information of Corporate Governance
In the Reporting Period, the Company was strictly in line with laws, statutes such as Company Law, Securities
Laws, Code of Corporate Governance of Listed Companies, Guide Opinion on Establishment of Independent
Director System by Listed Companies and Guidelines on Internal Controls of Listed Companies and so on,
continuously perfected corporate governance, established and accomplished internal management and control
system, consistently and deeply put forward corporate governance activities, so as to further normalize operation
of the Company, raising corporate governance level, laying a guard for steady and healthy development of the
Company, protect legal rights and interests of the Company and all shareholders.
The Company promulgated or revised a series of internal control systems through all aspects of normal operation
and management activities in accordance with each national laws and regulations, characteristics of the industry,
operation and self-managing business, and improved it continuously, and finally formed a normative management
system. And formulated a series of management systems, process and standard covered each operation link and
level of the financial assets control, human resources management, quality environment management and internal
audit supervisor etc., which ensured all the work had rules to follow.
Indicate by tick market whether there is any material incompliance with the applicable laws, administrative
regulations and regulations issued by the CSRC governing the governance of listed companies.
□ Yes √ No
No such cases in the Reporting Period.
II The Company’s Independence from Its Controlling Shareholder and Actual Controller in Asset,
Personnel, Financial Affairs, Organization and Business
The Company was independent from the controlling shareholder Changzhou Investment Group Co., Ltd in terms
of assets, business, personnel, organization and financing, with independent & complete business and capability to
operate independently.
are clearly defined, and there are no funds, assets and other resources being occupied or used without
compensation between them.
personnel and salary management, and each has an independent management organization, a sound management
policy, and an independent personnel appraisal and assessment system.
and financial management policy, opened an independent bank account, and implemented independent accounting
and independent tax payments. There is no interference in the financial activities of the Company by the
controlling shareholder.
sound organizational system that meets its own production and operation needs, which operates independently and
well, and there is no subordinate relationship with the functional departments of the controlling shareholder.
Changchai Company, Limited Annual Report 2025
production and operational capability. The Company conducts related transactions reasonably on the principle of
independence.
III Horizontal Competition
□ Applicable √ Not applicable
IV Directors, Supervisors and Senior Management
Endin
Begin
g
ning +/-
Incum share
Gend End of shareh
Name Age Office title bent/F Start of tenure (share holdi
er tenure olding
ormer ) ng
(share
(share
)
)
Shen Chairman of Incum Ongoin
Male 39 6 August 2025 0 0 0
Zhe the Board bent g
Xie Director
Incum Ongoin
Guozho Male 56 12 June 2023 0 0 0
General bent g
ng
Manager
Fema Incum Ongoin
Tan Jie 46 Director 12 June 2023 0 0 0
le bent g
Director
Jiang Incum Ongoin
Male 53 16 April 2020 0 0 0
He Chief bent g
Accountant
Yang Incum Ongoin
Male 53 Director 16 April 2020 0 0 0
Feng bent g
Wang
Independent Incum Ongoin
Mancan Male 62 16 April 2020 0 0 0
director bent g
g
Zhang Fema Independent Incum Ongoin
Yan le director bent g
Independent Incum Ongoin
Jia Bin Male 47 16 April 2020 0 0 0
director bent g
Cai
Fema Employee Incum Ongoin
Weixua 39 22 December 2025 0 0 0
le director bent g
n
Sun
Vice-general Incum Ongoin
Jianzho Male 53 16 April 2020 0 0 0
Manager bent g
ng
Vice-general
He 13 December 2021
Manager Incum Ongoin
Jianjian Male 46 0 0 0
Secretary of bent g
g 18 October 2016
the Board
Wang Vice-general Incum Ongoin
Male 38 12 June 2023 0 0 0
Jing Manager bent g
Changchai Company, Limited Annual Report 2025
Wang Chief Incum Ongoin
Male 54 12 June 2023 0 0 0
Weifeng Engineer bent g
Li Chairman of Resig
Male 44 12 June 2023 January 0 0 0
Desen the Board nation
Vice 22
Zhang Resig
Male 59 Chairman of 12 June 2023 Decemb 0 0 0
Xin nation
the Board er 2025
Total -- -- -- -- -- -- 0 0 0
Disclosures on Departures of Directors, Supervisors, and Dismissals of Senior Management During the Reporting
Period
□ Yes √ No
Changes in the Company's Directors, Supervisors and Senior Management
√ Applicable □Not applicable
Name Office title Type Date Reason
Cai Weixuan Employee Director Elected 22 December 2025 Work Transfer
Chairman of the
Li Desen Resignation 1 January 2025 Work Transfer
Board
Vice Chairman of
Zhang Xin Resignation 22 December 2025 Work Transfer
the Board
Professional backgrounds, major work experience and current duties in the Company of the incumbent directors,
supervisors and senior management:
Shen Zhe: Previously served as Deputy General Manager of Liyang City Construction and Development Co., Ltd.,
Deputy Director of Liyang Municipal State-owned Assets Supervision and Administration Office (on temporary
assignment), General Manager of Jiangsu-Anhui Cooperation Demonstration Zone Construction and
Development Group Co., Ltd., General Manager of Liyang Pingling Construction Investment Group Co., Ltd.,
and Chairman of Changzhou Talent Science and Technology Innovation Group Co., Ltd. And the Vice President
of Changzhou Investment Group Co., Ltd. and Chairman of the company.
Xie Guozhong:Previously served as General Manager, Assistant General Manager, and Deputy General Manager
of the company's sales company, and currently serves as Deputy Secretary of the Party Committee, Director, and
General Manager of the company, as well as Chairman of Zhenjiang Siyang and Director of Changchai
Machinery.
Tan Jie: Previously served as Deputy Director of the Accounting Department and Deputy Director of the
Personnel and Education Department of Changzhou Municipal Finance Bureau, Deputy Secretary-General of
Changzhou Certified Public Accountants Association and Secretary of the Youth League Committee, Director of
the Comprehensive Department, Director of the Agriculture Department, Director of the Agriculture and Rural
Affairs Department, and Director of the Administrative and Political-Legal Department of Changzhou Municipal
Finance Bureau, and Assistant President of Changzhou Investment Group Co., Ltd. Currently serves as Member
of the Party Committee, Director, and Vice President of Changzhou Investment Group Co., Ltd., and Director of
the Company.
Jiang He: Previously served as Accountant, Assistant Minister, and Deputy Minister of the Finance Department of
the Company. Currently serves as Director, Chief Accountant, and Minister of the Finance Department of the
Changchai Company, Limited Annual Report 2025
Company.
Yang Feng: Previously served as Business Manager of the Shanghai Investment Banking Department of China
Economic Development Trust & Investment Corp., Business Director of the Investment Banking Department of
Orient Securities Co., Ltd., General Manager of the Investment Banking Department and Operation Management
Headquarters and Assistant to the Chairman of AJ Securities, Executive General Manager of the Corporate
Development Financing Department and Investment Banking Department of CITIC Securities Co., Ltd., and
Managing Director of Daiwa Securities China Co., Ltd. Currently serves as Executive Director of De Xin
Investment Management (Hong Kong) Co., Ltd., Independent Director of Shanghai Kindly Enterprise
Development Group Co., Ltd., and Director of the Company.
Wang Mancang: Previously served as Teacher and Lecturer in the Department of Management, Lecturer and
Professor in the Department of Finance at Northwest University School of Economics and Management.
Currently serves as Director of the Department of Finance at Northwest University School of Economics and
Management, Director of the Public Economics Research Institute, Counselor of Xi'an Municipal Government,
Expert of the "Finance and Fiscal Group" of the Government Decision-making Advisory Committee, and
Independent Director of the Company.
Zhang Yan: Previously served as Chief Accountant of Changzhou Zhengda Certified Public Accountants Co., Ltd.
and Executive Deputy Chief Accountant of Jiangsu Gongzheng Certified Public Accountants Co., Ltd. ,Associate
Professor at Jiangsu University of Technology School of Management. Currently serves as Director of Changzhou
Communications Holding Group Co., Ltd., Director of Changzhou Transportation Industry Group Co., Ltd.,
Independent Director of DinoPark Cultural Tourism Group Co., Ltd., Independent Non-executive Director of
Seazen Enjoy Services Group Limited, Independent Director of Jiangsu Tianmu Lake Tourism Co., Ltd., and
Independent Director of the Company.
Jia Bin: Previously served as Deputy Director of the First Research Office of Tianjin Internal Combustion Engine
Research Institute, Assistant Secretary-General and Deputy Secretary-General of China Internal Combustion
Engine Industry Association, and Secretary-General of Small Gasoline Engine Branch of China Internal
Combustion Engine Industry Association. Currently serves as Director of the First Research Office of Tianjin
Internal Combustion Engine Research Institute (Tianjin Motorcycle Technology Center), Secretary-General of
China Internal Combustion Engine Industry Association, Independent Director of Lutian Machinery Co., Ltd.,
Director of Tianjin Tianbo Keda Technology Co., Ltd., and Independent Director of the Company.
Ni Mingliang: Previously served as Clerk and Vice Chairman of the Labor Union of the Company. Currently
serves as Deputy Secretary of the Party Committee, Chairman of the Board of Supervisors, Chairman of the Labor
Union of the Company, Chairman of the Board of Directors of the Property Management Company, and Director
of Horizon Investment.
Cai Weixuan: Served successively as an organizational officer, editor, middle-level assistant, deputy director of
the Political Department of our company, head of the Youth Committee, deputy secretary of the Youth Committee,
and secretary of the Youth Committee. Currently serves as a staff director of Changchai Co., Ltd., director of the
Political Department, and deputy director of the office.
Sun Jianzhong: Previously served as Director of the Technology Center and Assistant General Manager of the
Company. Currently serves as Deputy General Manager of the Company and General Manager of Changchai
Machinery.
He Jianjiang: Previously served as Clerk, Assistant Minister and Deputy Minister of the Investment and
Development Department, and Securities Affairs Representative of the Company. Currently serves as Deputy
General Manager, Board Secretary and Minister of the Investment and Development Department of the Company,
Changchai Company, Limited Annual Report 2025
Chairman and General Manager of Horizon Investment, Director of Horizon Agricultural Equipment.
Wang Jing: Previously served as Foreign Trade Salesperson of the Overseas Business Division, Technician,
Deputy Workshop Director, Assistant Factory Director, Deputy Factory Director and Secretary of the
Single-Cylinder Party General Branch of the Single-Cylinder Engine Factory, and Assistant General Manager of
the Company. Currently serves as Deputy General Manager of the Company and Chairman of Changchai Benniu.
Wang Weifeng: Previously served as Designer of the Development Department, Designer of the Technology
Center and Deputy Chief Engineer of the Company. Currently serves as Chief Engineer of the Company.
The situation where the controlling shareholder and actual controller concurrently serve as the chairman and
general manager of a listed company
□ Applicable √Not applicable
Offices held concurrently in shareholding entities:
√ Applicable □ Not applicable
Remuneratio
n or
Shareholding Office held in the allowance
Name Start of tenure End of tenure
entity shareholding entity from the
shareholding
entity
Shen
Changzhou Vice President April 2024 Ongoing Yes
Zhe
Investment
Group Co., Member of the Party
Tan Jie Ltd. Committee, Director, Vice April 2023 Ongoing Yes
President
Notes Nil
Offices held concurrently in other entities:
√ Applicable □ Not applicable
Rem
uner
ation
or
Office allo
Name Other entity held in the Start of tenure End of tenure wan
entity ce
from
the
entit
y
He
Jiangsu Horizon New Energy Technology
Jianjian Director 28 July 2023 Ongoing No
Co., Ltd.
g
De Xin Investment Management Co., Executive
Limited Director
Yang
Independe
Feng Shanghai Kindly Enterprise Development
nt 17 April 2023 Ongoing
Group Co., Ltd.
Director
Wang Department of Finance of the School of Head of 1 September 2006 Ongoing Yes
Changchai Company, Limited Annual Report 2025
Mancan Economics and Management of Departme
Northwest University nt,
g Professor
Public Economics Research Institute Director Ongoing
Xi'an Municipal Government Counselor Ongoing
Financial and Fiscal Affairs Panel of the
Government Decision-making Advisory Expert Ongoing
Committee
Independe
Focuslight Technologies Inc. nt 2 May 2019 13 June 2025 Yes
Director
Independe Yes
Xi'an Wonder Energy Chemical Co., Ltd. nt 24 June 2020 4 December 2025
Director
Director
of the
Tianjin Internal Combustion Engine
First March 2009 December 2025 Yes
Research Institute
Research
Office
China Internal Combustion Engine Secretary-
December 2024 Ongoing No
Industry Association General
Jia Bin Independe Yes
Lutian Machinery Co., Ltd. nt 31 December 2019 Ongoing
Director
Tianjin Tianbo Keda Technology Co., Ltd. Director 18 August 2020 Ongoing No
Independe
Chongqing Zongshen Power Machinery
nt 10 September 2025 Ongoing Yes
Co., Ltd.
Director
Associate Yes
Jiangsu University of Technology August 2008 October 2025
professor
Independe Yes
Jiangsu Tianmu Lake Tourism Co., Ltd. nt 8 February 2021 Ongoing
Director
Independe Yes
nt
S-Enjoy Service Group Co., Limited non-execu 20 October 2018 Ongoing
Zhang
tive
Yan Director
Independe Yes
DinoPark Cultural Tourism Group Co.,
nt September 2024 Ongoing
Ltd.
Director
Changzhou Communications Holding Yes
Director April 2024 May 2025
Group Co., Ltd.
Changzhou Transportation Industrial
Director April 2022 May 2025 Yes
Group Co., Ltd.
Notes Nil
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors
and senior management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
Changchai Company, Limited Annual Report 2025
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors
and senior management:
In 2025, the monthly salaries of directors, supervisors, and senior management personnel who received
remuneration from the Company were disbursed in accordance with the Company’s regulations on salary
management and grade standards. Year-end incentive compensation was paid based on the Company’s
performance and assessment results. Current directors Shen Zhe and Tan Jie receive their remuneration from
shareholder entities.
Remuneration of directors, supervisors and senior management for the Reporting Period
Unit: RMB’0,000
Total before-tax
Any remuneration
Name Gender Age Office title Incumbent/Former remuneration from
from related party
the Company
Chairman of the
Shen Zhe Male 39 Incumbent 0 Yes
Board
Director
Xie
Male 57 General Incumbent 87.12 No
Guozhong
Manager
Tan Jie Female 46 Director Incumbent 0 Yes
Director
Jiang He Male 53 Chief Incumbent 76.06 No
Accountant
Yang Feng Male 53 Director Incumbent 10 No
Wang Independent
Male 62 Incumbent 10 No
Mancang director
Independent
Zhang Yan Female 55 Incumbent 10 No
director
Independent
Jia Bin Male 47 Incumbent 10 No
director
Cai Employee
Female 39 Incumbent 23.27 No
Weixuan Director
Sun Vice-general
Male 53 Incumbent 77.62 No
Jianzhong Manager
Vice-general
He Manager
Male 46 Incumbent 76.06 No
Jianjiang Secretary of the
Board
Vice-general
Wang Jing Male 38 Incumbent 76.84 No
Manager
Wang
Male 54 Chief Engineer Incumbent 76.45 No
Weifeng
Changchai Company, Limited Annual Report 2025
Vice Chairman
Zhang Xin Male 59 Resignation 87.12 No
of the Board
Total -- -- -- -- 620.54 --
The assessment basis for the actual
The remuneration of directors and senior management personnel is
compensation received by all
assessed in accordance with the "Remuneration Management System for
directors and senior management
Directors and Senior Management Personnel".
at the end of the reporting period
In 2025, the assessment of the independent director allowance received
by independent directors was not applicable; employee directors received
Assessment completion status of
corresponding compensation in accordance with the company's
actual salaries received by all
performance assessment regulations; the board's compensation and
directors and senior management
assessment committee organized annual performance and duty
personnel at the end of the
assessment for senior management personnel, and approved and paid
reporting period
their actual compensation based on the assessment results, which had
been reviewed by the board of directors.
Deferred payment arrangement for
According to the "Remuneration Management System for Directors and
the actual remuneration received
Senior Management", 10% of the annual remuneration of senior
by all directors and senior
management is reserved as term incentive income, which will be assessed
management at the end of the
and paid upon the end of their term.
reporting period
The situation regarding the
cessation of payment and recourse
for the actual salaries received by
Not applicable
all directors and senior
management at the end of the
reporting period
Other circumstances
□Applicable √Not applicable
V Performance of Duty by Directors in the Reporting Period
Attendance of directors at board meetings and general meetings
Total The
number of Board director
Board Board
board Board meetings failed to
meetings meetings General
meetings meetings attended by attend two
Director attended the director meetings
the director attended on way of consecutiv
through a failed to attended
was site telecommu e board
proxy attend
eligible to nication meetings
attend (yes/no)
Shen Zhe 6 2 4 0 0 No 2
Xie
Guozhong
Tan Jie 12 5 7 0 0 No 4
Jiang He 12 5 7 0 0 No 4
Changchai Company, Limited Annual Report 2025
Yang Feng 12 2 10 0 0 No 4
Wang
Mancang
Zhang Yan 12 4 8 0 0 No 4
Jia Bin 12 1 11 0 0 No 4
Cai
Weixuan
Zhang Xin 11 4 7 0 0 No 4
Explanation of why any director failed to attend two consecutive board meetings: N/A
Indicate by tick mark whether any directors raised any objections on any matter of the Company.
□ Yes √ No
No such cases in the Reporting Period.
Indicate by tick mark whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Suggestions from directors adopted or not adopted by the Company:
All directors of the Company in line with the law, rules, normative documents and obligations given by the
Company of the Company Law, Article of Associations, Rules of Procedure of the Board and Independent
Directors System, comprehensively focused on the development and operation of the Company, actively attended
the general meeting of shareholder and meeting of board of directors. Independent directors given independent
opinions for the significant events of the Company, and effectively maintained the profits of the Company and all
the shareholders. The Company actively listened to the suggestions from directors upon the significant events and
adopted them. For more details, please refer to the Report on the Work of the Board of Directors for 2025
disclosed by the Company on http://www.cninfo.com.cn dated 14 April 2026.
VI Special Committees under the Board of Directors during the Reporting Period
Number Specific
of Important Other circumstance
Name of Member Date of
meetings Contents comments and performanc s of the
committee s meeting
convene suggestions e of duties objection (if
d any)
The meeting
Zhang
deliberated
Audit Yan, 21Januar and approved
Committee Wang y 2025 the "2024
Annual Report
Mancang Audit Plan".
Changchai Company, Limited Annual Report 2025
, The meeting
Tan Jie deliberated
and approved
the "2024
Annual Report
Audit
Communicatio
n Items" and Nil
the "Audit
Department's
Work
Summary and
Work Plan".
The meeting
deliberated
and approved
the "2024
Annual It is agreed to
Report", submit the
"Proposal on "2024 Annual
the Accrual of Report",
Credit "Proposal on
Impairment the Accrual of
Provisions and Credit
Asset Impairment
Impairment Reserves and
Provisions for Asset
Internal Reserves for
Control 2024", "2024
Self-Evaluatio Internal
n Report", Control
"Proposal on Self-Evaluatio
of Financial the Renewal
Audit of
Institutions, Appointment
Internal of Financial
Control Audit Audit
Institutions, Institutions,
and Their Internal
Audit Fees for Control Audit
"2024 and Their
Evaluation Audit Fees for
Report on the 2025" to the
Performance Board of
of Accounting Directors for
Firms and review.
Report of the
Audit
Committee of
the Board of
Directors on
Changchai Company, Limited Annual Report 2025
the
Performance
of Its
Supervisory
Duties over
Accounting
Firms".
The meeting
reviewed the
"Work
Agree to
Summary of
submit the
the Audit
"First
Department
Quarterly
Report of
Board of
deliberated
Directors for
and approved
review.
the "First
Quarter Report
of 2025".
The meeting
reviewed the
"Half-Yearly
Agree to
Work Report
submit the
of the Audit
"2025
Department
Semi-Annual
for 2025" and
Report" and
deliberated
the "Proposal
and approved
on the Accrual
the
of Credit
Impairment
August Report for
Reserves and
Asset
"Proposal on
Impairment
the Accrual of
Reserves for
Credit
the First Half
Impairment
of 2025" to
Reserves and
the Board of
Asset
Directors for
Impairment
review.
Reserves for
the Half-Year
of 2025".
The meeting
reviewed the Agree to
"Work Report submit the
of the Audit "Third
October for the Third Report of
deliberated Directors for
and approved review.
the "Third
Quarter Report
Changchai Company, Limited Annual Report 2025
of 2025".
The meeting
deliberated
and approved
the
"Assessment
Results of
Senior Agreed to
Wang
Remuneratio Management submit all
Mancang 22
n and Personnel of proposals to
Appraisal , the Company the Board of
Committee in 2024" and Directors for
Jia Bin
the review.
"Assessment
Plan for Senior
Management
Personnel of
the Company
in 2025".
VII Performance of Duty by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in
the Reporting Period.
□ Yes √ No
The Supervisory Committee raised no objections in the Reporting Period.
VIII Employees
Number of in-service employees of the Company as the parent at the period-end 1,817
Number of in-service employees of major subsidiaries at the period-end 558
Total number of in-service employees at the period-end 2,375
Total number of paid employees in the Reporting Period 2,375
Number of retirees to whom the Company as the parent or its major subsidiaries need to
pay retirement pensions
Functions
Function Employees
Production 1,547
Sales 186
Changchai Company, Limited Annual Report 2025
Technical 308
Financial 41
Administrative 254
Other 39
Total 2,375
Educational backgrounds
Educational background Employees
Junior high school graduates and below 914
High school graduates 617
College graduates and technical secondary school graduates 504
Bachelors 318
Masters and above 22
Total 2,375
The Company always adhered to the principle of tilting the remuneration incentive mechanism towards excellent
talents, so as to display the roles of various professional technicians, management staff and skilled backbones.
Besides, it adhered to the principle of increasing the employee’s income integrated with increasing labor
production efficiency and production & operation efficiency, so as to perfect the salary structure and further
increase employees’ income steadily.
The Company established the Management Rules on the Education & Training for Employees, aiming to enhance
employees’ quality and try its best to cultivate a team of faithful and highly professional talents. Besides, it
innovated the training mechanism, optimized the training environment, and reinforced to encourage employees to
attend various training, so as to inspire the employees’ potential to the maximum extent and further promote the
sustainable development of the Company.
□ Applicable √ Not applicable
IX Company profit distribution and conversion of capital reserve into share capital
How the profit distribution policy, especially the cash dividend policy, was formulated, executed or revised in the
Reporting Period:
√ Applicable □ Not applicable
In Articles of Association, which had confirmed the specific profits distribution and cleared out the conditions,
standards and proportion of the cash bonus, stipulated the decision-making progress of the formulation and
Changchai Company, Limited Annual Report 2025
alternation of the profits distribution policies and the chapters as well as the regulations fully ensure the
opportunities for the medium and small shareholders to exert the functions and to provide advice as well as
appeals. The cash bonus of recent 3 years of the Company met with the regulations of the Articles of Association
and during the decision-making process of the profit’s distribution proposal, fully respected the advice from the
medium and small shareholders. The profits distribution pre-plan and the turning capital reserve into share capital
preplan of the Company were both met with the relevant regulations of the Articles of Association and so on.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and resolution of general meeting Yes
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors faithfully performed their duties and played their due role Yes
Specific reasons and the next steps it intends to take to enhance the investor return level if
N/A
the Company did not pay cash dividend:
Non-controlling interests are able to fully express their opinion and desire and their legal
N/A
rights and interests are fully protected
In case of adjusting or changing the cash dividend policy, the conditions and procedures
N/A
involved are in compliance with applicable regulations and transparent
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal despite the facts that the
Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to
shareholders are positive.
□ Applicable √ Not applicable
Final dividend plan for the Reporting Period:
√ Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB) (tax inclusive) 0.22
Total shares as the basis for the profit distribution proposal (share) 705,692,507
Cash dividends (RMB) (tax inclusive) 15,525,235.15
Cash dividends in other forms (such as share repurchase) (RMB) 0
Total cash dividends (including those in other forms) (RMB) 15,525,235.15
Distributable profit (RMB) 1,017,201,184.37
Total cash dividends (including those in other forms) as % of total profit distribution 100%
Cash dividend policy
Other
Particulars about the dividend plan
The profit distribution plan approved by the Board of Directors is as follows: Based on the Company's total
share capital as of December 31, 2025, a cash dividend of RMB 0.22 per 10 shares (tax inclusive) will be
distributed to all shareholders, with no bonus shares issued and no capital reserve converted into share capital.
Changchai Company, Limited Annual Report 2025
X Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Formulation and Implementation of Internal Control System during the Reporting Period
During the Reporting Period, the Company strictly complied with national laws and regulations and relevant
regulations such as the Basic Code for Internal Control of Enterprises and the Guidelines for Application of
Enterprise Internal Control, as well as the provisions and requirements of the Company's internal control standards,
and optimized important business processes and improved and perfected the internal control system through
continuous supervision and effective evaluation of the operation of the Company's internal control, so as to adapt
to the changing external environment and internal management requirements and improve the efficiency of the
Company's operation and management. By doing so, the Company effectively prevented risks in operation and
management, and promoted the achievement of internal control objectives. The Company's internal control system
can cover the major aspects of the Company's operation and management, and the internal control design is sound
and reasonable, with no material omissions.
□ Yes √ No
XII Management of Subsidiaries by the Company during the Reporting Period
Problems
Integration Progress on Solutions Solution Subsequent
Subsidiary found in
plan integration taken progress solution
integration
Nil Nil Nil Nil Nil Nil Nil
XIII Self-Evaluation Report or Independent Auditor’s Report on Internal Control
Disclosure date of the internal
control self-evaluation report
Index to the disclosed internal
control self-evaluation report
Evaluated entities’ combined assets
as % of consolidated total assets
Evaluated entities’ combined
operating revenue as % of 100.00%
consolidated operating revenue
Changchai Company, Limited Annual Report 2025
Identification standards for internal control weaknesses
Type Financial reporting Non-financial reporting
The Company classifies internal
control deficiencies based on their
impact severity into material
weaknesses, significant deficiencies,
and general deficiencies:
(1) Material Weakness: One or more
control deficiencies that could result A deficiency shall be identified
in a severe deviation from control as a material weakness if it
objectives; exhibits any of the following
(2) Significant Deficiency: One or characteristics:
more control deficiencies with lesser (1) Serious violations of national
severity and economic consequences laws, administrative regulations,
than a material weakness but still and regulatory documents;
likely to cause deviation from (2) Failure to follow collective
control objectives; decision-making procedures for
(3) General Deficiency: Deficiencies "three major and one big"
not classified as material matters;
weaknesses or significant (3) Lack of systematic controls
Nature standard deficiencies. or complete failure of control
Qualitative Criteria: A deficiency systems for critical business
shall be identified as a material operations related to corporate
weakness if it exhibits any of the production and management;
following characteristics: (4) Failure of internal controls
supervisors, or senior management; resulting in public censure by
Requires restatement of previously regulatory authorities;
issued financial statements; (5) Material weaknesses
statements assessments that remain
material misstatement in current
financial statements that internal
controls failed to detect;
audit function are ineffective in
overseeing internal controls.
Quantitative Criteria: Based on the Quantitative Criteria: With
Quantitative standard
statements data, the quantitative standards for internal control
thresholds for determining the deficiencies in financial
Changchai Company, Limited Annual Report 2025
materiality of misstatements reporting, the quantitative
(including omissions) in the thresholds for determining the
Company's consolidated financial significance of non-financial
statements are as follows: reporting internal control
Material Weakness: Misstatement ≥ deficiencies in the listed
Significant Deficiency: 2.5% of Material Weakness: Potential
annual profit ≤ Misstatement < 5% direct loss ≥ 0.1% of net assets;
of annual profit; Significant Deficiency: 0.05% of
General Deficiency: Misstatement < net assets ≤ potential direct loss <
General Deficiency: Potential
direct loss < 0.05% of net assets.
Number of material weaknesses in
internal control over financial 0
reporting
Number of material weaknesses in
internal control not related to 0
financial reporting
Number of serious weaknesses in
internal control over financial 0
reporting
Number of serious weaknesses in
internal control not related to 0
financial reporting
√ Applicable □ Not applicable
Opinion paragraph in the independent auditor’s report on internal control
We have believed that Changchai Company, Limited maintained effective internal control of the financial
report in significant aspects according to the Basic Norms of Internal Control and relevant regulations on 31
December 2025.
Independent auditor’s report on internal
Disclosed
control disclosed or not
Disclosure date 14 April 2026
Index to such report disclosed Zhongxinghua Internal Control Audit Report No. (2026) 00000075
Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal control
None
not related to financial reporting
Changchai Company, Limited Annual Report 2025
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the
Company’s internal control.
□ Yes √ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent
with the internal control self-evaluation report issued by the Company’s Board.
√ Yes □ No
Indicate by tick mark whether non-standard audit opinions on internal control were issued during the reporting
period or the previous year
□ Yes √ No
XIV Remediation of Problems Identified by Self-inspection in the Special Action on the Governance of
Listed Companies
Nil
XV Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries was identified as a key polluter by the
environment authorities.
√ Yes □ No
The number of enterprises included in the list of
enterprises required to disclose environmental 4
information in accordance with the law (in number)
Query index for legally disclosed environmental
No. Name
information reports
Department - Enterprise Environmental
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-w
hjt.jiangsu.gov.cn:18181/spsarchive-webapp/web/s
ps/views/yfpl/views/yfplHomeNew/index.js
XVI Social Responsibility
For specific details, please refer to the "2025 Annual Social Responsibility Report of Changchai Co., Ltd."
disclosed by the company on April 14, 2026 on http://www.cninfo.com.cn.
XVII Efforts in Poverty Alleviation and Rural Revitalization
Nil
Changchai Company, Limited Annual Report 2025
Part V Significant Events
I Fulfillment of Commitments
well as the Company Itself and Other Entities Fulfilled in the Reporting Period or Ongoing at the
Period-End
√ Applicable □ Not applicable
Type of Date of Term of Fulf
Commitment Promisor commitme Details of commitment commitme commit illm
nt nt making ment ent
authority in interfering with the
Company's operational and
management activities, and not to
appropriate the Company's
interests;
benefits to other entities or
individuals free of charge or
under unfair conditions, nor
taking any other actions that may
harm the Company's interests;
commitment until the completion
of the Company's current private
placement, if the China Securities
Commitment Regulatory Commission (CSRC) April 11,
s Made Changzhou issues new regulatory 2020 -
During Initial Investment requirements regarding measures April 11, Ong
Other Decemb
Public Group Co., to mitigate dilution of returns and 2020 oing
er 31,
Offering or Ltd. related commitments, and if the 9999
Refinancing above commitments do not satisfy
such CSRC requirements, the
undersigned further commits to
supplementing this undertaking in
accordance with the CSRC's latest
regulations;
the Company's measures to
mitigate dilution of returns and
any related commitments made
herein. If the undersigned violates
these commitments and causes
losses to the Company or its
investors, it shall bear
corresponding compensation
liabilities in accordance with the
law.
Changchai Company, Limited Annual Report 2025
Shareholder Return Plan for the
Next Three Years (2023-2025):
Under the premise that the
Company's distributable profit
(i.e., after-tax profit after making
up for losses and withdrawing
statutory reserves) is positive in a
given year or semi-annual period,
and that the Company has
Other
sufficient cash flow to ensure that
commitments Changchai Dividend Co
cash dividend distribution will not May 18, 2023 -
made to Company, Commitm mpl
affect its sustainable operations, 2023 2025
minority Limited ent eted
the Company shall distribute no
shareholders
less than 10% of the annual
distributable profit of the parent
company in cash each year.
Additionally, the cumulative cash
dividends distributed over any
three consecutive fiscal years
shall be no less than 30% of the
average annual distributable profit
during those three years.
Fulfilled on
Yes
time or not
Specific
reasons for
failing to
fulfill
N/A
commitments
on time and
plans for next
step (if any)
within the forecast period, explain why the forecast has been reached for the Reporting Period.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related Parties for
Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Changchai Company, Limited Annual Report 2025
IV Explanations Given by the Board of Directors Regarding the Independent Auditor's “Modified Opinion”
on the Financial Statements of the Latest Period
□ Applicable √ Not applicable
V Explanations Given by the Board of Directors, the Supervisory Board and the Independent Directors (if
any) Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of the
Reporting Period
□ Applicable √ Not applicable
VI YoY Changes to Accounting Policies, Estimates and Correction of Material Accounting Errors
□ Applicable √ Not applicable
No such cases for the Reporting Period.
VII YoY Changes to the Scope of the Consolidated Financial Statements
√ Applicable □Not applicable
During the reporting period, Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. (hereinafter referred to
as "Changchai Robin"), a wholly-owned subsidiary, inherited all assets, liabilities, businesses, and all other rights
and obligations of Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. (hereinafter referred to as
"Horizon Agricultural Equipment") through a comprehensive merger. In February 2025, the company received the
Registration Notice (Deng Zi [2025] No. 02270081) issued by the Government Service Management Office of
Changzhou High-tech Industrial Development Zone (Xinbei District), indicating that Horizon Agricultural
Equipment had cancelled its independent legal person status, marking the completion of the merger between the
two wholly-owned subsidiaries.
The wholly-owned subsidiary Changzhou Changniu Machinery Co., Ltd. (hereinafter referred to as "Changniu
Company") has merged all assets, liabilities, businesses, and all other rights and obligations of its wholly-owned
subsidiary Changzhou Changchai Benniu Diesel Engine Parts Co., Ltd. (hereinafter referred to as "Changben
Company") through a comprehensive merger and absorption process, inheriting the registered capital, equity
structure, and governance structure of the original Changben Company. In September 2025, the company received
the "Registration Notice" (Deng Zi [2025] No. 09080200) and "Registration Notice" (Deng Zi [2025] No.
Development Zone (Xinbei District). The deregistration procedures for Changben Company and the change
procedures for Changniu Company have been completed, marking the completion of the merger and absorption of
the wholly-owned subsidiary by the wholly-owned subsidiary.
As of the end of the reporting period, the entities included in the consolidated financial statements of the
Company comprised the parent company and seven subsidiaries.
VIII Engagement and Disengagement of Independent Auditor
Current independent auditor:
Name of the domestic independent auditor Zhongxinghua Certified Public Accountants
Changchai Company, Limited Annual Report 2025
(Special General Partnership)
The Company’s payment to the domestic independent auditor
(RMB’0,000)
How many consecutive years the domestic independent auditor
has provided audit service for the Company
Names of the certified public accountants from the domestic
Wang Jun, Li Pengcheng,Lu Xia
independent auditor writing signatures on the auditor’s report
How many consecutive years the certified public accountants Two years for Wang Jun, One year for Li
have provided audit service for the Company Pengcheng,One year for Lu Xia
Whether There Was a Change of Accounting Firms During the Audit Period
□ Yes √ No
Information on the engagement of internal control audit accounting firms, financial advisors, or sponsors
√ Applicable □ Not applicable
During the current year, the Company engaged Zhongxinghua Certified Public Accountants (Special General
Partnership) as its internal control audit firm, with audit fees amounting to RMB 135,000.
IX Possibility of Delisting after Disclosure of this Report
□ Applicable √ Not applicable
X Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Major Legal Matters
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
√ Applicable □ Not applicable
The de facto controller of the Company is SASAC of Changzhou People’s Government and the controlling
shareholder of it is Changzhou Investment Group Co., Ltd. There is no such case that the controlling shareholder
fails to perform any legally effective judgment of courts or to pay off matured debts with a large amount.
Changchai Company, Limited Annual Report 2025
XIV Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
□ Applicable √ Not applicable
The Company did not make deposits in, receive loans or credit from and was not involved in any other finance
business with any related finance company or any other related parties.
□ Applicable √ Not applicable
The finance company controlled by the Company did not make deposits, receive loans or credit from and was not
involved in any other finance business with any related parties.
√Applicable □ Not applicable
approved the proposal to jointly establish an equity investment fund with Changzhou Investment Group Co., Ltd.
The wholly-owned subsidiary Changzhou Horizon Investment Co., Ltd., as a limited partner, invested 30 million
yuan to jointly establish Changzhou Changtou Xinhui No.1 Equity Investment Fund (Limited Partnership) with
the company's controlling shareholder Changzhou Investment Group Co., Ltd. (hereinafter referred to as
"Investment Group") and its wholly-owned subsidiary Changzhou Xinhui Private Equity Fund Management Co.,
Ltd. (hereinafter referred to as "Xinhui Private Equity"), focusing on advanced manufacturing projects, intelligent
Changchai Company, Limited Annual Report 2025
agricultural machinery, new energy, new power, etc. Strategic emerging industries and future industries. In
November 2025, Horizon Investment and Investment Group and Xinhui Private Equity jointly signed the
"Changzhou Changtou Xinhui No.1 Equity Investment Fund (Limited Partnership) Partnership Agreement", with
a paid in initial capital of 3.91 million yuan; Xinhui No.1 Fund has completed the industrial and commercial
registration procedures, obtained the business license issued by the Zhonglou District Government Service
Management Office of Changzhou, completed the private investment fund filing procedures with the China
Securities Investment Fund Industry Association, and obtained the "Private Investment Fund Filing Certificate".
which the "Proposal on the Subsidiary Participating in the Establishment of an Equity Investment Fund and
Related Transactions" was deliberated and approved. Changzhou Housen Investment Co., Ltd., a wholly-owned
subsidiary, served as a limited partner and contributed 50 million yuan to establish Yuanzhi Changtou Xingyu
(Changzhou) Equity Investment Partnership (Limited Partnership) with Changzhou Investment Group Co., Ltd., a
controlling shareholder, Changzhou Xinhui Private Equity Fund Management Co., Ltd., a wholly-owned
subsidiary of the controlling shareholder, Shenzhen Yuanzhi Venture Capital Co., Ltd., Changzhou Xingyu
Industrial Investment Co., Ltd., Changzhou Xingyu Investment Management Co., Ltd., Shenzhen Capital
Operation Group Co., Ltd., Shanghai Zhuiguang Julian Hard Technology Venture Capital Partnership (Limited
Partnership), and Changzhou Zhonglou Science and Technology Innovation Investment Partnership (Limited
Partnership), focusing on the upstream and downstream industrial chain of new energy vehicles and new energy,
including but not limited to equipment, materials, and components.
Related inquiries on the website for temporary disclosure of major related party transactions
Temporary
Temporary Announceme
Temporary Announcement Name announcement nt Disclosure
disclosure date Website
Name
Announcement of Changchai Co., Ltd. Regarding the Joint
Establishment of an Equity Investment Fund with its Controlling 6 November 2025
Shareholder and Related Transactions
Announcement of Changchai Co., Ltd. on the Progress of Jointly
Initiating the Establishment of an Equity Investment Fund with 12 November 2025
Controlling Shareholders and Related Transactions https://www.c
Announcement of Changchai Co., Ltd. on the Progress of Jointly ninfo.com.cn/
Initiating the Establishment of an Equity Investment Fund with 20 November 2025
Controlling Shareholders and Related Transactions
Announcement of Changchai Co., Ltd. Regarding Its Subsidiary's
Participation in the Establishment of an Equity Investment Fund and 5 December 2025
Related Transactions
XV Major Contracts and Execution thereof
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Changchai Company, Limited Annual Report 2025
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(1) Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB’0,000
Balance of entrusted
Specific type Risk characteristics financial management Undue balance
during the reporting period
Bank financial Low risk, good liquidity, high
products security
Broker financial Low risk, good liquidity, high
products security
The specific situation where a company, as a single principal, entrusts a financial institution to conduct asset
management or invest in high-risk entrusted wealth management products with low safety and poor liquidity
□ Applicable √ Not applicable
(2) Entrusted Loans
□ Applicable √ Not applicable
No such cases in the Reporting Period.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Changchai Company, Limited Annual Report 2025
XVI Use of raised funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVII Other Significant Events
√Applicable □ Not applicable
On February 26, 2025, the company received the "Announcement on the Publication of the 'Changzhou Urban
Rail Transit Line 5 Project Xiheng Street Station Project Housing Expropriation Compensation Plan' and
Solicitation of Opinions" issued by the People's Government of Zhonglou District, Changzhou. Due to public
interest requirements, the People's Government of Zhonglou District, Changzhou intends to expropriate part of the
houses at No. 123 Huaide Middle Road, Changzhou (i.e., the company's headquarters street-side shops). On July
meeting of the board of supervisors in 2025, and deliberated and approved the "Proposal on Signing the
'Changzhou State-owned Land Housing Expropriation Compensation Agreement' for the headquarters street-side
shops". This matter was deliberated and approved by the second extraordinary shareholders' meeting in 2025 on
August 6, 2025, agreeing to the company signing a compensation agreement with the Zhonglou District Housing
and Urban-Rural Development Bureau. The total compensation amount agreed upon in the agreement is 48.7877
million yuan. On August 7, 2025, the company signed the "Changzhou State-owned Land Housing Expropriation
Compensation Agreement" with the Housing and Urban-Rural Development Bureau of Zhonglou District,
Changzhou, and received the first installment of compensation totaling 14.6363 million yuan in September 2025.
In November 2025, the company received the remaining compensation amount of 34.1514 million yuan. As of the
end of the reporting period, the company has received the full amount of compensation for the headquarters
street-side shops.
On March 6, 2025, the company received the "Decision on the Expropriation of Houses on State-owned Land by
the People's Government of Xinbei District, Changzhou" (Changxin Zheng [2025] No. 1) issued by the People's
Government of Xinbei District, Changzhou. Due to the public interest of the reconstruction of the old urban area,
the People's Government of Xinbei District, Changzhou, decided to expropriate the houses within the scope of the
old urban area reconstruction project (Phase I) of the foundry plant and surrounding plots in Sanjing Street. On
May 8, 2025, the company held the second extraordinary meeting of the board of directors and the second
extraordinary meeting of the board of supervisors in 2025, and deliberated and approved the "Proposal on Signing
the Foundry Plant's 'Changzhou Xinbei District Non-Residential House Expropriation Compensation Agreement'".
This matter was deliberated and approved by the first extraordinary shareholders' meeting in 2025 on May 26,
Urban-Rural Development Bureau and Sanjing Street. The total compensation amount agreed upon in the
agreement is 346.8569 million yuan, and the expropriation compensation agreement is yet to be signed.
XVIII Significant Events of Subsidiaries
√ Applicable □ Not applicable
Changchai Company, Limited Annual Report 2025
On November 22, 2024, the Company convened the Fifth Interim Board Meeting of 2024 and reviewed and
approved the "Proposal on the Merger between Changzhou Changchai Horizon Agricultural Equipment Co., Ltd.
and Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd." The Board agreed that the wholly-owned
subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd. would acquire all assets, liabilities,
business operations, and other rights and obligations of the wholly-owned subsidiary Changzhou Changchai
Horizon Agricultural Equipment Co., Ltd. through statutory absorption merger. Post-merger, Changchai Robin
continues normal operations while Horizon Agricultural Equipment's legal entity status has been deregistered. In
February 2025, the Company received the Registration Notice (No. Dengzi [2025] 02270081) issued by the
Government Services Management Office of Changzhou High-Tech Industrial Development Zone (Xinbei
District), confirming completion of Horizon Agricultural Equipment's industrial and commercial deregistration
procedures.
On June 9, 2025, the company held the third extraordinary meeting of the board of directors in 2025, which
deliberated and approved the "Proposal on the Merger of Changzhou Changchai Benniu Diesel Engine Parts Co.,
Ltd. and Changzhou Changniu Machinery Co., Ltd.". The board of directors agreed that Changzhou Changniu
Machinery Co., Ltd. (hereinafter referred to as "Changniu Company") would merge with Changzhou Changchai
Benniu Diesel Engine Parts Co., Ltd. (hereinafter referred to as "Changben Company") through an overall merger,
incorporating all assets, liabilities, businesses, and all other rights and obligations of Changben Company, and
inheriting the original registered capital, equity structure, and governance structure of Changben Company. In
September 2025, the company received the "Registration Notice" (Deng Zi [2025] No. 09080200) and
"Registration Notice" (Deng Zi [2025] No. 09080101) issued by the Government Service Management Office of
Changzhou High-tech Industrial Development Zone (Xinbei District). Changben Company completed the
industrial and commercial deregistration, and Changniu Company completed the industrial and commercial
change registration, marking the completion of the merger.
In August 2025, the company acquired a 3% equity stake held by six individual shareholders of Zhenjiang Siyang,
a controlling subsidiary, for a price of RMB 3.06 million. As of the end of the reporting period, the company held
a total of 52% equity in Zhenjiang Siyang, remaining its largest shareholder.
Changchai Company, Limited Annual Report 2025
Part VI Share Changes and Shareholder Information
I Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares
Shares
as
as
dividend
Percenta New dividend Percenta
Number converte Other Subtotal Number
ge (%) issues converte ge (%)
d from
d from
capital
profit
reserves
Restricte 0 0.00% 0 0 0 0 0 0 0.00%
d shares
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
governm
ent
Shares
held by
state-ow 0 0.00% 0 0 0 0 0 0 0.00%
ned
legal
persons
Shares
held by
other
domesti
c
investor
s
Among
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domesti
c legal
persons
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domesti
c natural
Changchai Company, Limited Annual Report 2025
persons
Shares
held by
foreign
investor
s
Among
which:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
foreign
legal
persons
Shares
held by
foreign 0 0.00% 0 0 0 0 0 0 0.00%
natural
persons
Unrestri 705,692, 100.00 705,692, 100.00
cted 507 % 507 %
shares
RMB-de
nominat 555,692, 555,692,
ed 507 507
ordinary
shares
Domesti
cally 150,000, 150,000,
listed 000 000
foreign
shares
Oversea
listed 0 0.00% 0 0 0 0 0 0 0.00%
foreign
shares
Other
shares 507 % 507 %
Reasons for the share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share Ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the
Changchai Company, Limited Annual Report 2025
Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period,
respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
□ Applicable √ Not applicable
II Issuance and Listing of Securities
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
III Shareholders and Actual Controller
Unit: share
Number of
Number of
ordinary
Number of preferred
shareholders
Number of preferred shareholders with
at the
ordinary shareholders resumed voting
shareholder with rights at the
prior to the
s resumed month-end prior
disclosure
voting rights to the disclosure
of this
of this Report
Report
Shares in
Increase/d pledge or
Shareh
Total shares ecrease in Restricte Unrestricte frozen
Name of Nature of olding
held at the the d shares d shares
shareholder shareholder percent Sh
period-end Reporting held held
age Status are
Period
s
Changzhou State-owned 227,663,41
Investment legal person 7
Changchai Company, Limited Annual Report 2025
Group Co.,
Ltd
Domestic
Chen Jian natural 0.71% 4,988,800 1,361,000 0 4,988,800
person
KGI ASIA Foreign legal
LIMITED person
BARCLAYS Foreign legal
BANK PLC person
Bank of
China
Limited -
Huashang
Zhenxuan
Other 0.41% 2,895,200 2,895,200 0 2,895,200
Return
Hybrid
Securities
Investment
Fund
Domestic
Dai Xuerong natural 0.34% 2,396,600 2,396,600 0 2,396,600
person
Domestic
Lv Qiang natural 0.34% 2,383,800 2,383,800 0 2,383,800
person
Goldman
Sachs Foreign legal
International person
- Own Funds
China
Minsheng
Banking
Corp., Ltd. -
Jinyuan
Shun'an
Yuanqi Other 0.29% 2,072,600 872,600 0 2,072,600
Flexible
Allocation
Hybrid
Securities
Investment
Fund
Domestic
Li Suinan natural 0.23% 1,602,000 1,700 0 1,602,000
person
Strategic investor or general
legal person becoming a
N/A
top-10 ordinary shareholder
due to rights issue (if any)
Related or acting-in-concert It is unknown whether there is among the top 10 public shareholders and the
parties among the top 10 unrestricted public shareholders any related parties or acting-in-concert
shareholders above parties as defined in the Administrative Measures for Information Regarding
Changchai Company, Limited Annual Report 2025
Shareholding Alteration.
Above shareholders involved
in entrusting/being entrusted
N/A
with voting rights and giving
up voting rights
Special account for share
repurchases (if any) among N/A
the top 10 shareholders
Top 10 unrestricted shareholders
Unrestricted shares held at the Shares by type
Name of shareholder
period-end Type Shares
Changzhou Investment RMB-denominated
Group Co., Ltd ordinary share
RMB-denominated
Chen Jian 4,988,800 4,988,800
ordinary share
Domestically listed
KGI ASIA LIMITED 3,100,195 3,100,195
foreign share
RMB-denominated
BARCLAYS BANK PLC 3,042,917 3,042,917
ordinary share
Bank of China Limited -
Huashang Zhenxuan Return RMB-denominated
Hybrid Securities Investment ordinary share
Fund
RMB-denominated
Dai Xuerong 2,396,600 2,396,600
ordinary share
RMB-denominated
Lv Qiang 2,383,800 2,383,800
ordinary share
Goldman Sachs International RMB-denominated
- Own Funds ordinary share
China Minsheng Banking
Corp., Ltd. - Jinyuan Shun'an
RMB-denominated
Yuanqi Flexible Allocation 2,072,600 2,072,600
ordinary share
Hybrid Securities Investment
Fund
Domestically listed
Li Suinan 1,602,000 1,602,000
foreign share
Related or acting-in-concert
parties among top 10
It is unknown whether there is among the top 10 public shareholders and the
unrestricted public
top 10 unrestricted public shareholders any related parties or acting-in-concert
shareholders, as well as
parties as defined in the Administrative Measures for Information Regarding
between top 10 unrestricted
Shareholding Alteration.
public shareholders and top
Top 10 ordinary shareholders
Shareholders Chen Jian hold 4,988,800 shares of the Company's stock
involved in securities margin
through margin credit accounts.
trading (if any)
Top 10 shareholders involved in refinancing shares lending
□ Applicable √ Not applicable
Changes in Top 10 Shareholders Due to Securities Lending/Return Activities
□ Applicable √ Not applicable
Changchai Company, Limited Annual Report 2025
Repurchase Agreements Involving Top 10 Shareholders During Reporting Period
□ Yes √ No
No such cases in the Reporting Period.
Nature of the controlling shareholder: Controlled by a local state-owned legal person
Type of the controlling shareholder: Legal person
Legal
Name of controlling representati Date of Unified social credit
Principal activity
shareholder ve/person establishment code
in charge
Property
Changzhou Investment
Yao Xiang 20 June 2002 91320400467283980X investment and
Group Co., Ltd.
management
Controlling shareholder’s
holdings in other listed
companies at home or Nil
abroad in the Reporting
Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Nature of the actual controller: Local institution for state-owned assets management
Type of the actual controller: Legal person
Legal
representativ Date of
Name of actual controller Unified social credit code Principal activity
e/person in establishment
charge
State-owned Assets
Supervision and
Administration
Shi Jiangshui 11320400014110251M Not applicable
Commission of
Changzhou Municipal
People’s Government
Other listed companies at
home or abroad
None
controlled by the actual
controller in the
Changchai Company, Limited Annual Report 2025
Reporting Period
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset
management.
□ Applicable √ Not applicable
Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held
by Them
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Reorganizer and Other Commitment Makers
□ Applicable √ Not applicable
IV Specific Implementation of Share Repurchase during the Reporting Period
Progress on any share repurchase
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable √ Not applicable
Changchai Company, Limited Annual Report 2025
V Information related to preferred shares
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Changchai Company, Limited Annual Report 2025
Part VII Bonds
□ Applicable √ Not applicable
Changchai Company, Limited Annual Report 2025
Part VIII Financial Statements
I Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 13 April 2026
Zhongxinghua Certified Public Accountants (Special
Name of the independent auditor
General Partnership)
No. of the auditor’s report Zhongxinghua Audit (2026) No. 00005705
Name of the certified public accountants Wang Jun, Li Pengcheng,Lu Xia
Text of the Independent Auditor’s Report
To the Shareholders of Changchai Company, Limited,
I Opinion
We have audited the accompanying financial statements of Changchai Company, Limited. (together with its
consolidated subsidiaries included in the consolidated financial statements, the “Changchai Company”), which
comprise the parent’s and consolidated balance sheets as at 31 December 2025, the parent’s and consolidated
income statements for 2025, the parent’s and consolidated cash flow statements, the parent’s and consolidated
statements of changes in shareholders’ equity for the year then ended, as well as the notes to the financial
statements.
In our opinion, the financial statements attached were prepared in line with the regulations of Accounting
Standards for Business Enterprises in all significant aspects which gave a true and fair view of the consolidated
and parent financial position of Changchai Company. As at 31 December 2025 and the consolidated and parent
business performance and cash flow for 2025.
II Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for Audit of Financial
Statements section of our report. We are independent of the Company in accordance with the Independence
Standards and China Code of Ethics for Certified Public Accountants, and we have fulfilled our other ethical
responsibilities in accordance with the said Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
III Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements for the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and we do not provide a separate opinion on these matters. We have determined
the following matters to be the key audit matters to be communicated in the audit report.
(I) Revenue Recognition
Changchai Company's operating revenue primarily derives from the sales of diesel engines and related
components. For details on the accounting policies for revenue recognition and the analysis of revenue, please
Changchai Company, Limited Annual Report 2025
refer to the accounting policies described in Note III.27 "Significant Accounting Policies and Estimates" and Note
V.38 "Consolidated Financial Statement Items" in the notes to the consolidated financial statements. For the year
As operating revenue is one of Changchai Company’s key performance indicators, there is an inherent risk that
management (hereinafter referred to as "Management") may recognize revenue inappropriately to achieve specific
targets or expectations. Therefore, we identified the recognition and measurement of Changchai Company’s
revenue as a key audit matter.
(1) Gained an understanding of key internal controls related to revenue recognition, evaluated the design of these
controls, determined whether they were implemented, and tested the operating effectiveness of relevant internal
controls;
(2) Conducted interviews with Management to understand Changchai Company’s revenue recognition policies;
(3) Reviewed sales contracts to understand key contractual terms and conditions and assessed whether the revenue
recognition methods were appropriate;
(4) Performed analytical procedures on operating revenue and gross profit margin by month, product, and
customer to identify any significant or unusual fluctuations and investigated the reasons for such fluctuations;
(5) Examined supporting documents related to revenue recognition on a sample basis, including but not limited to
sales contracts, purchase orders, sales invoices, delivery notes, customer acknowledgments, settlement documents,
export declarations, and bills of lading;
(6) Conducted confirmations of sales revenue and accounts receivable balances with major customers to verify the
authenticity and accuracy of revenue recognition;
(7) Performed sample testing on sales revenue recognized around the balance sheet date to assess whether revenue
was recorded in the appropriate period;
(8) Obtained business registration information of Changchai Company’s major customers and inquired with
relevant personnel to confirm whether any related-party relationships existed between major customers and
Changchai Company;
(9) Reviewed whether information related to operating revenue was appropriately presented in the financial
statements.
(II) Impairment of Accounts Receivable
As of December 31, 2025, the gross carrying amount of accounts receivable in the consolidated balance sheet of
Changchai Company was RMB 595,409,718.16, with an allowance for doubtful accounts of RMB 143,661,185.82,
resulting in a net carrying amount of RMB 451,748,532.34.
Management of Changchai Company measures the allowance for impairment based on the expected credit losses
over the lifetime of the receivables, either individually or collectively, according to the credit risk characteristics
of the accounts receivable. For accounts receivable measured individually for expected credit losses, Management
considers reasonable and supportable information about past events, current conditions, and forecasts of future
economic conditions to estimate the expected collectible cash flows, thereby determining the appropriate
allowance. For accounts receivable measured collectively for expected credit losses, they are grouped based on
aging, and the allowance is determined by referencing historical credit loss experience adjusted for
forward-looking estimates. An aging analysis of accounts receivable is prepared and matched with expected credit
loss rates to calculate the allowance. Given the materiality of accounts receivable and the significant management
Changchai Company, Limited Annual Report 2025
judgment involved in impairment assessment, we identified the impairment of accounts receivable as a key audit
matter.
(1) Gained an understanding of key internal controls related to accounts receivable impairment, evaluated their
design, determined whether they were implemented, and tested the operating effectiveness of relevant controls;
(2) Reviewed subsequent actual write-offs or reversals of allowances for doubtful accounts from prior years to
assess the accuracy of Management’s past estimates;
(3) Evaluated Management’s considerations and supporting evidence in assessing the credit risk of accounts
receivable to determine whether credit risk characteristics were appropriately identified;
(4) For individually assessed accounts receivable, obtained and examined Management’s cash flow projections,
assessed the reasonableness of key assumptions and data accuracy, and corroborated them with external evidence;
(5) For collectively assessed accounts receivable, evaluated the appropriateness of grouping based on credit risk
characteristics and assessed the reasonableness of the aging analysis and expected credit loss rates by comparing
them with historical loss experience and forward-looking adjustments;
(6) Tested the accuracy and completeness of data used by Management and verified the correctness of the
allowance calculation;
(7) Performed confirmations on a sample of year-end accounts receivable balances, discussed collection status and
potential risks with Management, and examined subsequent collections to assess the reasonableness of the
allowance;
(8) Reviewed whether disclosures related to accounts receivable impairment were appropriately presented in the
financial statements.
IV. Other Information
The management of Changchai Company (hereinafter referred to as "Management") is responsible for the other
information. The other information comprises the information included in the 2025 Annual Report of Changchai
Company, but does not include the financial statements and our audit report.
Our opinion on the financial statements does not cover the other information, nor do we express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
Based on the work we have performed, if we conclude that there is a material misstatement in the other
information, we are required to report that fact. In this regard, we have nothing to report.
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
the Accounting Standards for Business Enterprises, and for the design, implementation, and maintenance of
internal control relevant to the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing Changchai Company’s ability to
continue as a going concern, disclosing matters related to going concern (as applicable), and using the going
concern basis of accounting unless Management either intends to liquidate the Company, cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Changchai Company, Limited Annual Report 2025
VI. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objective is 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 auditing 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.
In conducting the audit in accordance with auditing standards, we exercised professional judgment and maintained
professional skepticism. Furthermore, we:
(1) Identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or
error; designed and performed audit procedures responsive to those risks; and obtained sufficient and appropriate
audit evidence as a basis for our audit 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 controls.
(2) Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluated the appropriateness of accounting policies used by management and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Concluded on the appropriateness of management’s use of the going concern basis of accounting. Based on the
audit evidence obtained, we concluded whether a material uncertainty exists related to events or conditions that
may cast significant doubt on Changchai Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, auditing standards require us to draw attention in our audit report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the information available to us up to the date of the audit report. However, future events
or conditions may cause Changchai Company to cease to continue as a going concern.
(5) Evaluated the overall presentation, structure, and content of the financial statements, and assessed whether the
financial statements represent the underlying transactions and events fairly.
(6) Obtained sufficient and appropriate audit evidence regarding the financial information of the entities or
business activities within Changchai Company to express an opinion on the financial statements. We were
responsible for directing, supervising, and performing the group audit and remain solely responsible for our audit
opinion.
We communicated with those charged with governance regarding, among other matters, the planned scope and
timing of the audit, significant audit findings, and any significant deficiencies in internal control identified during
our audit.
We also provided those charged with governance with a statement that we complied with relevant ethical
requirements regarding independence, and communicated all relationships and other matters that may reasonably
be thought to bear on our independence, including relevant safeguards (where applicable).
From the matters communicated with those charged with governance, we determined those matters that were of
most significance in the audit of the financial statements of the current period and were therefore the key audit
matters. We describe these matters in our audit report unless law or regulation precludes public disclosure, or in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits.
Changchai Company, Limited Annual Report 2025
Zhongxinghua Certified Public Accountants LLP Chinese CPA: Wang Jun
(Special General Partnership) (Engagement Partner)
Chinese CPA: Li Pengcheng,Lu Xia
Beijing · China 13 April 2026
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
Prepared by Changchai Company, Limited
Unit: RMB
Item 31 December 2025 1 January 2025
Current assets:
Monetary assets 1,338,231,792.64 1,063,700,492.59
Settlement reserve
Interbank loans granted
Held-for-trading financial assets 372,184,689.98 303,667,459.65
Derivative financial assets
Notes receivable 386,557,535.74 318,814,017.13
Accounts receivable 451,748,532.34 444,254,240.02
Accounts receivable financing 165,125,708.93 223,261,002.76
Prepayments 22,389,102.11 12,725,958.70
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 5,495,898.75 9,847,441.82
Including: Interest receivable
Dividends receivable 0.00 7,165,080.00
Financial assets purchased under
resale agreements
Inventories 757,083,436.15 819,201,998.42
Including: Data resources
Contract assets
Assets held for sale
Changchai Company, Limited Annual Report 2025
Current portion of non-current
assets
Other current assets 19,020,727.98 54,605,021.67
Total current assets 3,517,837,424.62 3,250,077,632.76
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity investments
Investments in other equity
instruments
Other non-current financial assets 337,118,757.03 377,869,217.49
Investment property 35,644,130.99 37,740,844.55
Fixed assets 550,316,120.80 615,414,505.40
Construction in progress 2,801,650.98 3,376,866.69
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 133,751,352.61 142,805,785.86
Including: Data resources
Development costs
Including: Data resources
Goodwill
Long-term prepaid expense 2,597,472.39 2,664,557.06
Deferred income tax assets 7,350,047.87 6,458,337.99
Other non-current assets 9,503,046.92 4,373,097.30
Total non-current assets 2,060,443,875.40 2,131,823,271.06
Total assets 5,578,281,300.02 5,381,900,903.82
Current liabilities:
Short-term borrowings 88,926,344.09 94,471,787.41
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial
liabilities
Changchai Company, Limited Annual Report 2025
Derivative financial liabilities
Notes payable 562,313,345.98 491,643,629.88
Accounts payable 793,473,800.05 690,733,575.75
Advances from customers 30,112,510.00 30,183,376.84
Contract liabilities 40,040,496.36 31,640,879.59
Financial assets sold under
repurchase agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Employee benefits payable 56,773,482.39 48,792,254.98
Taxes payable 5,305,526.88 4,214,324.70
Other payables 134,619,772.83 117,736,961.52
Including: Interest payable
Dividends payable 3,891,433.83 3,891,433.83
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 72,672,756.98 175,064,677.93
Total current liabilities 1,784,238,035.56 1,684,481,468.60
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
Changchai Company, Limited Annual Report 2025
payable
Provisions 83,448,865.86 73,002,860.52
Deferred income 25,976,437.56 29,386,167.02
Deferred income tax liabilities 159,449,521.13 154,449,852.33
Other non-current liabilities
Total non-current liabilities 268,874,824.55 256,838,879.87
Total liabilities 2,053,112,860.11 1,941,320,348.47
Shareholders’ equity:
Share capital 705,692,507.00 705,692,507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 641,070,433.90 640,509,675.84
Less: Treasury stock
Other comprehensive income 677,272,601.44 643,067,549.91
Specific reserve 23,936,408.22 21,959,066.35
Surplus reserves 370,454,881.23 367,826,665.27
General reserve
Retained earnings 1,024,763,845.76 983,627,999.95
Total equity attributable to
Shareholders of the Company as 3,443,190,677.55 3,362,683,464.32
the parent
Non-controlling interests 81,977,762.36 77,897,091.03
Total shareholders’ equity 3,525,168,439.91 3,440,580,555.35
Total liabilities and shareholders’
equity
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item 31 December 2025 1 January 2025
Current assets:
Monetary assets 1,184,168,481.94 932,456,827.90
Held-for-trading financial assets 250,280,555.56 200,209,027.78
Derivative financial assets
Notes receivable 367,314,112.02 291,060,042.38
Accounts receivable 422,352,840.72 424,946,666.41
Accounts receivable financing 158,773,143.84 215,854,639.00
Prepayments 20,288,875.23 8,720,127.77
Other receivables 20,239,727.26 24,288,767.65
Including: Interest receivable
Dividends receivable 0.00 7,165,080.00
Inventories 491,497,389.92 551,350,588.20
Including: Data resources
Contract assets
Assets held for sale
Current portion of non-current
assets
Other current assets 9,472,115.44 31,935,179.39
Total current assets 2,924,387,241.93 2,680,821,866.48
Non-current assets:
Investments in debt obligations
Investments in other debt
obligations
Long-term receivables
Long-term equity investments 871,339,449.94 868,279,449.94
Investments in other equity
instruments
Other non-current financial assets 337,118,757.03 377,869,217.49
Investment property 35,644,130.99 37,740,844.55
Fixed assets 158,326,289.42 188,539,011.23
Construction in progress 2,046,605.11 3,132,433.82
Productive living assets
Changchai Company, Limited Annual Report 2025
Oil and gas assets
Right-of-use assets
Intangible assets 49,915,087.13 56,046,446.22
Including: Data resources
Development costs
Including: Data resources
Goodwill
Long-term prepaid expense
Deferred income tax assets 5,803,319.96 5,814,276.42
Other non-current assets 4,491,336.83 3,755,279.00
Total non-current assets 2,446,046,272.22 2,482,297,017.39
Total assets 5,370,433,514.15 5,163,118,883.87
Current liabilities:
Short-term borrowings 64,945,571.32 49,843,838.91
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 568,770,609.52 652,752,618.33
Accounts payable 728,400,988.92 572,396,386.79
Advances from customers 30,112,510.00 30,183,376.84
Contract liabilities 30,984,771.72 23,493,204.39
Employee benefits payable 40,323,108.47 39,221,119.16
Taxes payable 2,104,226.06 2,116,355.96
Other payables 130,050,726.29 111,060,096.07
Including: Interest payable
Dividends payable 3,243,179.97 3,243,179.97
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 76,701,145.43 39,139,067.15
Total current liabilities 1,672,393,657.73 1,520,206,063.60
Non-current liabilities:
Long-term borrowings
Bonds payable
Changchai Company, Limited Annual Report 2025
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions 77,950,061.03 70,293,055.65
Deferred income 25,976,437.56 29,386,167.02
Deferred income tax liabilities 147,441,091.25 147,506,745.60
Other non-current liabilities
Total non-current liabilities 251,367,589.84 247,185,968.27
Total liabilities 1,923,761,247.57 1,767,392,031.87
Shareholders’ equity:
Share capital 705,692,507.00 705,692,507.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 659,418,700.67 659,418,700.67
Less: Treasury stock
Other comprehensive income 677,272,601.44 643,067,549.91
Specific reserve 16,632,391.87 19,117,263.36
Surplus reserves 370,454,881.23 367,826,665.27
Retained earnings 1,017,201,184.37 1,000,604,165.79
Total shareholders’ equity 3,446,672,266.58 3,395,726,852.00
Total liabilities and shareholders’
equity
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item 2025 2024
Including: Operating revenue 2,476,325,822.68 2,415,869,028.32
Interest income
Insurance premium income
Handling charge and commission income
Including: Cost of sales 2,179,995,775.46 2,119,300,466.07
Interest expense
Handling charge and commission expense
Surrenders
Net insurance claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 18,422,612.74 16,181,617.86
Selling expense 52,818,923.00 60,617,254.43
Administrative expense 108,081,816.30 115,466,341.90
R&D expense 83,676,763.37 83,401,477.60
Finance costs -4,959,323.92 -23,423,038.69
Including: Interest expense 591,180.17 341,136.21
Interest income 12,531,332.63 17,940,638.39
Add: Other income 26,921,508.33 23,621,255.14
Return on investment (“-” for loss) 9,829,843.17 24,265,851.27
Including: Share of profit or loss of joint ventures and associates
Income from the derecognition of financial assets at
-2,660,696.74 -3,313,989.60
amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) -19,942,996.94 -65,938,196.89
Credit impairment loss (“-” for loss) -264,721.24 1,229,820.12
Asset impairment loss (“-” for loss) -23,624,390.85 -14,403,371.83
Changchai Company, Limited Annual Report 2025
Asset disposal income (“-” for loss) 36,192,896.62 304,377.71
Add: Non-operating income 211,724.94 2,838,603.42
Less: Non-operating expense 1,375,295.13 886,507.69
Less: Income tax expense 8,263,402.18 -9,260,824.48
loss)
loss)
the parent
Attributable to shareholders of the Company as the parent 34,205,051.53 -24,112,771.91
schemes
to profit or loss under the equity method
instruments
credit risk
profit or loss under the equity method
obligations
reclassification of financial assets
obligations
Changchai Company, Limited Annual Report 2025
currency-denominated financial statements
Attributable to non-controlling interests
Attributable to shareholders of the Company as the parent 85,026,038.37 -5,622,875.91
Attributable to non-controlling interests 7,153,435.61 6,127,668.88
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item 2025 2024
Less: Cost of sales 2,093,897,153.32 2,025,918,153.26
Taxes and surcharges 10,516,019.91 9,757,870.85
Selling expense 47,342,234.43 54,333,372.12
Administrative expense 80,547,956.74 86,953,834.51
R&D expense 74,653,286.03 74,555,192.15
Finance costs -3,969,578.81 -26,393,666.49
Including: Interest expense 476,056.61 14,172.26
Interest income 10,857,622.39 21,371,554.39
Add: Other income 25,986,486.83 22,448,967.24
Return on investment (“-” for loss) 8,858,078.70 22,651,325.15
Including: Share of profit or loss of joint ventures and
associates
Income from the derecognition of financial assets at
-2,207,083.32 -2,778,698.46
amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) -40,469,904.90 -34,836,331.53
Credit impairment loss (“-” for loss) 16,627,724.52 621,287.63
Asset impairment loss (“-” for loss) -22,185,309.99 -11,574,638.78
Asset disposal income (“-” for loss) 36,380,125.65 428,278.54
Add: Non-operating income 906.36 1,069,126.99
Less: Non-operating expense 299,902.91 7,440.00
Less: Income tax expense 941,685.26 -4,038,225.54
schemes
Changchai Company, Limited Annual Report 2025
to profit or loss under the equity method
instruments
credit risk
profit or loss under the equity method
obligations
reclassification of financial assets
obligations
currency-denominated financial statements
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item 2025 2024
Proceeds from sale of commodities and rendering of services 2,533,072,955.35 2,238,358,650.77
Net increase in customer deposits and interbank deposits
Net increase in borrowings from the central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
Net proceeds from reinsurance
Net increase in deposits and investments of policy holders
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase transactions
Net proceeds from acting trading of securities
Tax rebates 77,575,536.41 19,164,629.21
Cash generated from other operating activities 74,929,597.75 67,860,339.28
Subtotal of cash generated from operating activities 2,685,578,089.51 2,325,383,619.26
Payments for commodities and services 1,896,984,328.77 1,962,599,108.34
Net increase in loans and advances to customers
Net increase in deposits in the central bank and in interbank
loans granted
Payments for claims on original insurance contracts
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 336,970,892.13 327,926,688.72
Taxes paid 54,835,475.71 50,158,557.19
Cash used in other operating activities 107,224,843.83 138,992,233.71
Subtotal of cash used in operating activities 2,396,015,540.44 2,479,676,587.96
Net cash generated from/used in operating activities 289,562,549.07 -154,292,968.70
Proceeds from disinvestment 1,208,296,869.30 1,118,117,547.48
Return on investment 12,823,600.00 11,949,697.38
Changchai Company, Limited Annual Report 2025
Net proceeds from the disposal of fixed assets, intangible
assets and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities
Subtotal of cash generated from investing activities 1,257,662,835.71 1,206,915,907.12
Payments for the acquisition of fixed assets, intangible assets
and other long-lived assets
Payments for investments 1,252,153,606.00 1,179,550,000.00
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities
Subtotal of cash used in investing activities 1,264,029,638.05 1,198,878,172.96
Net cash generated from/used in investing activities -6,366,802.34 8,037,734.16
Capital contributions received
Including: Capital contributions by non-controlling interests to
subsidiaries
Borrowings raised 88,595,514.02 94,412,090.20
Cash generated from other financing activities
Subtotal of cash generated from financing activities 88,595,514.02 94,412,090.20
Repayment of borrowings
Interest and dividends paid 7,056,925.07 33,168,340.22
Including: Dividends paid by subsidiaries to non-controlling
interests
Cash used in other financing activities 3,060,000.00
Subtotal of cash used in financing activities 10,116,925.07 33,168,340.22
Net cash generated from/used in financing activities 78,478,588.95 61,243,749.98
-6,288,299.08 6,063,845.94
equivalents
Add: Cash and cash equivalents, beginning of the period 892,681,884.84 971,629,523.46
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item 2025 2024
Proceeds from sale of commodities and rendering of services 2,158,653,514.05 1,986,603,574.57
Tax rebates 51,538,623.76 13,751,464.43
Cash generated from other operating activities 28,582,980.94 27,621,885.18
Subtotal of cash generated from operating activities 2,238,775,118.75 2,027,976,924.18
Payments for commodities and services 1,693,424,795.18 1,860,419,699.59
Cash paid to and for employees 188,033,529.29 188,575,870.97
Taxes paid 35,008,597.84 30,952,518.43
Cash used in other operating activities 77,807,296.60 86,011,290.15
Subtotal of cash used in operating activities 1,994,274,218.91 2,165,959,379.14
Net cash generated from/used in operating activities 244,500,899.84 -137,982,454.96
Proceeds from disinvestment 1,056,257,229.80 1,004,382,432.65
Return on investment 12,182,040.00 11,093,937.38
Net proceeds from the disposal of fixed assets, intangible
assets and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities 17,680,030.95 1,177,096.12
Subtotal of cash generated from investing activities 1,122,385,686.54 1,093,112,927.99
Payments for the acquisition of fixed assets, intangible assets and
other long-lived assets
Payments for investments 1,103,060,000.00 1,056,000,000.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 6,000,000.00
Subtotal of cash used in investing activities 1,109,001,868.66 1,071,040,777.20
Net cash generated from/used in investing activities 13,383,817.88 22,072,150.79
Capital contributions received
Borrowings raised 64,625,675.80 49,829,666.65
Changchai Company, Limited Annual Report 2025
Cash generated from other financing activities
Subtotal of cash generated from financing activities 64,625,675.80 49,829,666.65
Repayment of borrowings
Interest and dividends paid 7,056,925.07 33,167,547.83
Cash used in other financing activities
Subtotal of cash used in financing activities 7,056,925.07 33,167,547.83
Net cash generated from/used in financing activities 57,568,750.73 16,662,118.82
-6,120,229.04 5,173,303.38
equivalents
Add: Cash and cash equivalents, beginning of the period 805,614,858.63 899,689,740.60
Legal representative: Xie Guozhong General Manager: Xie Guozhong
Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
Unit: RMB
Equity attributable to shareholders of the Company as the parent
Other equity
instruments Less: Other Gen Non-contr Total
Item
Share Prefe Capital Treas comprehe Specific Surplus eral Retained Ot olling shareholde
Perpe Subtotal
capital rred Ot reserves ury nsive reserve reserves reser earnings her interests rs’ equity
tual
share her stock income ve
bonds
s
Balance
as at the 705,692,5 640,509,6 643,067,5 21,959,0 367,826,6 983,627,99 3,362,683, 77,897,09 3,440,580,
end of 07.00 75.84 49.91 66.35 65.27 9.95 464.32 1.03 555.35
the prior
year
Add:
Adjustme
nt for
change in
accountin
g policy
Changchai Company, Limited Annual Report 2025
Adjustme
nt for
correctio
n of
previous
error
Other
adjustme
nts
Balance
as at the 705,692,5 640,509,6 643,067,5 21,959,0 367,826,6 983,627,99 3,362,683, 77,897,09 3,440,580,
beginnin 07.00 75.84 49.91 66.35 65.27 9.95 464.32 1.03 555.35
g of the
year
Increase/
decrease
in the
period
(“-” for
decrease)
compreh 34,205,05 50,820,986 85,026,038 7,153,435 92,179,473
ensive 1.53 .84 .37 .61 .98
income
Changchai Company, Limited Annual Report 2025
Capital
increased
and 560,758.0 -3,620,75 -3,060,000
reduced 6 8.06 .00
by
sharehold
ers
Ordinary
shares
increased
by
sharehold
ers
Capital
increased
by
holders
of other
equity
instrume
nts
Changchai Company, Limited Annual Report 2025
Share-ba
sed
payments
included
in
sharehold
ers’
equity
Other 6 8.06 .94
distributi
.96 .03 .07 .07
on
Appropri
ation to
.96 .96
surplus
reserves
Appropri
ation to
general
reserve
Changchai Company, Limited Annual Report 2025
Appropri
-7,056,925 -7,056,925 -7,056,925
ation to
.07 .07 .07
sharehold
ers
Other
Transfers
within
sharehold
ers’
equity
Increase
in capital
(or share
capital)
from
capital
reserves
Changchai Company, Limited Annual Report 2025
Increase
in capital
(or share
capital)
from
surplus
reserves
Loss
offset by
surplus
reserves
Changes
in
defined
benefit
schemes
transferre
d to
retained
earnings
Changchai Company, Limited Annual Report 2025
Other
compreh
ensive
income
transferre
d to
retained
earnings
Other
Specific
reserve
Increase 7,170,17 7,170,174. 728,318.8 7,898,493.
in the 4.83 83 9 72
period
Used in 5,192,83 5,192,832. 180,325.1 5,373,158.
the 2.96 96 1 07
period
Changchai Company, Limited Annual Report 2025
Balance
as at the 705,692,5 641,070,4 677,272,6 23,936,4 370,454,8 1,024,763, 3,443,190, 81,977,76 3,525,168,
end of 07.00 33.90 01.44 08.22 81.23 845.76 677.55 2.36 439.91
the
period
Unit: RMB
Equity attributable to shareholders of the Company as the parent
Other equity
instruments Less: Other Gen Non-contr Total
Item
Share Prefe Capital Treas comprehe Specific Surplus eral Retained Ot olling shareholde
Perpe Subtotal
capital rred Ot reserves ury nsive reserve reserves reser earnings her interests rs’ equity
tual
share her stock income ve
bonds
s
Balance
as at the 705,692,5 640,509,6 667,180,3 19,432,0 363,695,5 1,002,436, 3,398,946, 71,121,20 3,470,068,
end of 07.00 75.84 21.82 89.52 92.34 724.71 911.23 8.35 119.58
the prior
year
Changchai Company, Limited Annual Report 2025
Add:
Adjustme
nt for
change in
accountin
g policy
Adjustme
nt for
correctio
n of
previous
error
Other
adjustme
nts
Balance
as at the 705,692,5 640,509,6 667,180,3 19,432,0 363,695,5 1,002,436, 3,398,946, 71,121,20 3,470,068,
beginnin 07.00 75.84 21.82 89.52 92.34 724.71 911.23 8.35 119.58
g of the
year
Changchai Company, Limited Annual Report 2025
Increase/
decrease
-24,112,7 2,526,97 4,131,072 -18,808,72 -36,263,44 6,775,882 -29,487,56
in the
period
(“-” for
decrease)
Total
-24,112,7 18,489,896 -5,622,875 6,127,668
compreh 504,792.97
ensive
income
Capital
increased
and
reduced
by
sharehold
ers
Ordinary
shares
increased
by
sharehold
ers
Changchai Company, Limited Annual Report 2025
Capital
increased
by
holders
of other
equity
instrume
nts
Share-ba
sed
payments
included
in
sharehold
ers’
equity
Other
distributi
.93 0.76 7.83 7.83
on
Changchai Company, Limited Annual Report 2025
Appropri
ation to
.93 .93
surplus
reserves
Appropri
ation to
general
reserve
Appropri
-33,167,54 -33,167,54 -33,167,54
ation to
sharehold
ers
Other
Transfers
within
sharehold
ers’
equity
Changchai Company, Limited Annual Report 2025
Increase
in capital
(or share
capital)
from
capital
reserves
Increase
in capital
(or share
capital)
from
surplus
reserves
Loss
offset by
surplus
reserves
Changchai Company, Limited Annual Report 2025
Changes
in
defined
benefit
schemes
transferre
d to
retained
earnings
Other
compreh
ensive
income
transferre
d to
retained
earnings
Other
Specific
reserve
Changchai Company, Limited Annual Report 2025
Increase 9,958,01 9,958,016. 912,151.3 10,870,167
in the 6.52 52 0 .82
period
Used in 7,431,03 7,431,039. 263,937.5 7,694,977.
the 9.69 69 0 19
period
Balance
as at the 705,692,5 640,509,6 643,067,5 21,959,0 367,826,6 983,627,99 3,362,683, 77,897,09 3,440,580,
end of 07.00 75.84 49.91 66.35 65.27 9.95 464.32 1.03 555.35
the
period
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
Unit: RMB
Other equity instruments Other
Less: Total
Item Preferr Perpetu Capital comprehen Specific Surplus Retained Othe
Share capital Othe Treasur shareholders’
ed al reserves sive reserve reserves earnings r
r y stock equity
shares bonds income
as at the end 705,692,507. 659,418,700. 643,067,5 367,826,665. 1,000,604,165. 3,395,726,852.
of the prior 00 67 49.91 27 79 00
year
Add:
Adjustment
for change
in
accounting
policy
Adjustment
for
correction of
previous
error
Changchai Company, Limited Annual Report 2025
Other
adjustments
as at the 705,692,507. 659,418,700. 643,067,5 367,826,665. 1,000,604,165. 3,395,726,852.
beginning of 00 67 49.91 27 79 00
the year
decrease in
the period -2,484,871.49 2,628,215.96 16,597,018.58 50,945,414.58
(“-” for
decrease)
comprehensi 26,282,159.61 60,487,211.14
ve income
increased
and reduced
by
shareholders
Ordinary
shares
increased by
shareholders
Changchai Company, Limited Annual Report 2025
increased by
holders of
other equity
instruments
Share-based
payments
included in
shareholders
’ equity
distribution
Appropriatio
n to surplus
reserves
Appropriatio
-7,056,925.07 -7,056,925.07
n to
shareholders
Changchai Company, Limited Annual Report 2025
Transfers
within
shareholders
’ equity
Increase in
capital (or
share
capital) from
capital
reserves
Increase in
capital (or
share
capital) from
surplus
reserves
offset by
surplus
reserves
Changchai Company, Limited Annual Report 2025
Changes in
defined
benefit
schemes
transferred
to retained
earnings
comprehensi
ve income
transferred
to retained
earnings
-2,484,871.49 -2,484,871.49
reserve
Increase in
the period
in the period
as at the end 16,632,391.87
of the period
Changchai Company, Limited Annual Report 2025
Unit: RMB
Other equity instruments
Less: Other Total
Item Preferr Perpetu Capital Specific Surplus Retained Othe
Share capital Othe Treasur comprehensi shareholders’
ed al reserves reserve reserves earnings r
r y stock ve income equity
shares bonds
as at the end 705,692,507. 659,418,700. 667,180,321. 19,010,793. 363,695,592. 996,592,057.2 3,411,589,972.
of the prior 00 67 82 43 34 5 51
year
Add:
Adjustment
for change
in
accounting
policy
Adjustment
for
correction of
previous
error
Other
adjustments
Changchai Company, Limited Annual Report 2025
as at the 705,692,507. 659,418,700. 667,180,321. 19,010,793. 363,695,592. 996,592,057.2 3,411,589,972.
beginning of 00 67 82 43 34 5 51
the year
decrease in
-24,112,771. -15,863,120.5
the period 106,469.93 4,131,072.93 4,012,108.54
(“-” for
decrease)
-24,112,771.
comprehensi 41,310,729.30 17,197,957.39
ve income
Capital
increased
and reduced
by
shareholders
Ordinary
shares
increased by
shareholders
Changchai Company, Limited Annual Report 2025
increased by
holders of
other equity
instruments
Share-based
payments
included in
shareholders
’ equity
distribution 6 3
Appropriatio
n to surplus
reserves
Appropriatio -33,167,547.8 -33,167,547.8
n to 3 3
shareholders
Other
Changchai Company, Limited Annual Report 2025
Transfers
within
shareholders
’ equity
Increase in
capital (or
share
capital) from
capital
reserves
Increase in
capital (or
share
capital) from
surplus
reserves
Loss offset
by surplus
reserves
Changchai Company, Limited Annual Report 2025
Changes in
defined
benefit
schemes
transferred
to retained
earnings
Other
comprehensi
ve income
transferred
to retained
earnings
Other
reserve
Increase in 4,667,120.91
the period
Used in the 4,560,650.98
period
Changchai Company, Limited Annual Report 2025
as at the end
of the period
Legal representative: Xie Guozhong General Manager: Xie Guozhong Head of the accounting department: Jiang He
Changchai Company, Limited Annual Report 2025
III. Company Profile
Changchai Company, Limited (hereinafter referred to as “the Company”) was founded on 5 May 1994, which is a
company limited by shares promoted solely by Changzhou Diesel Engine Plant through the approval by the State
Commission for Restructuring the Economic Systems with document TGS [1993] No. 9 on 15 January 1993 by
way of public offering of shares. With the approval of the People’s Government of Jiangsu Province SZF [1993]
No. 67, as well as reexamined and approved by China Securities Regulatory Commission (“CSRC”) through
document ZJFSZ (1994) No. 9, the Company initially issued A shares to the public from 15 March 1994 to 30
March 1994. As approved by the Shenzhen Stock Exchange through document SZSFZ (1994) No. 15, such
tradable shares of the public got listing on 1 July 1994 at Shenzhen Stock Exchange with “Changchai” for short of
stock, as well as “0570” as stock code (present stock code is “000570”).
In 1996, upon recommendation by Document No. 13 [1996] of the General Office of Jiangsu Provincial People's
Government, preliminary review by Document No. 24 [1996] of Shenzhen Securities Regulatory Office, and
approval by Document No. 27 [1996] of the State Council Securities Commission, the Company privately placed
September 13, 1996, with the stock abbreviation "Changchai B" and stock code "2570" (current stock code:
"200570").
Through years of bonus share distributions, rights offerings, capital reserve conversions, and additional share
issuances, as of December 31, 2025, the Company's total issued share capital reached 705,692,507 shares, with
registered capital of RMB 705,692,507.
Registered Address: 123 Huaide Middle Road, Changzhou, Jiangsu Province
Headquarters Address: 123 Huaide Middle Road, Changzhou, Jiangsu Province
Unified Social Credit Code: 91320400134792410W
The Company operates in the manufacturing industry, with its business scope primarily covering: the
manufacturing and sales of diesel engines, diesel engine components and castings, gasoline engines, gasoline
engine components, grain harvesting machinery, rotary tillers, walking tractors, molds, and fixtures, as well as the
assembly and sales of diesel engine units and gasoline engine units.
The Company's main products or services include: the production and sales of small and medium-sized
single-cylinder and multi-cylinder diesel engines under the "Changchai" brand. The diesel engines produced and
sold by the Company are mainly used in tractors, combine harvesters, light commercial vehicles, agricultural
equipment, small construction machinery, generator sets, and marine engines.
During the reporting period, there were no changes to the Company's core business operations.
The financial report has been approved to be issued by the Board of Directors on April 13, 2026.
IV. Basis for Preparation of the Financial Report
The financial statements of our company are prepared on the basis of the going concern assumption, based on
Changchai Company, Limited Annual Report 2025
actual transactions and events, in accordance with the "Accounting Standards for Business Enterprises - Basic
Standards" issued by the Ministry of Finance, as well as various specific accounting standards, application
guidelines for enterprise accounting standards, interpretations of enterprise accounting standards, and other
relevant regulations (hereinafter collectively referred to as "Accounting Standards for Business Enterprises").
Additionally, they comply with the "No. 15 Rules for the Preparation and Reporting of Information Disclosure by
Companies that Offer Securities to the Public - General Provisions on Financial Reports" (revised in 2023) issued
by the China Securities Regulatory Commission.
In accordance with the relevant provisions of enterprise accounting standards, the Company's accounting is based
on the accrual basis. Except for certain financial instruments, the financial statements are measured on the
historical cost basis. Non-current assets held for sale are priced at the lower of fair value less estimated expenses
and the original book value when they meet the conditions for holding for sale. If an asset is impaired, the
corresponding impairment provision is made in accordance with relevant regulations.
These financial statements are prepared on a going concern basis. The Company has the ability to continue as a
going concern for at least 12 months from the end of the reporting period.
V. Important Accounting Policies and Estimations
Notification of specific accounting policies and accounting estimations:
The Company and its subsidiaries are principally engaged in the production and sales of small-to-medium sized
single-cylinder and multi-cylinder diesel engines under the 'Changchai' trademark. In accordance with their actual
production and operating characteristics and the relevant Accounting Standards for Business Enterprises, the
Company and its subsidiaries have formulated specific accounting policies and accounting estimates for various
transactions and events, as detailed in the following descriptions.
The financial statements prepared by the Company comply with the requirements of the Accounting Standards for
Business Enterprises (ASBE) and present fairly, in all material respects, the consolidated and parent company's
financial position as of December 31, 2025, and the consolidated and parent company's operating results and cash
flows for the year then ended.
The fiscal periods are divided into fiscal year and metaphase, the fiscal year is from January 1 to December 31
and as the metaphase included monthly, quarterly and semi-yearly periods.
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or
cash equivalents. An operating cycle for the Group is 12 months, which is also the classification criterion for the
liquidity of its assets and liabilities.
Changchai Company, Limited Annual Report 2025
Renminbi is the functional currency of the Company.
under the Same Control
Business Combination refers to transactions or events that integrate two or more separate enterprises into a single
reporting entity. Business combinations are categorized into Business Combinations under the Same Control and
Business Combinations not under the Same Control.
(1) Business combinations under the same control
The enterprises involved in combination are ultimately controlled by the same party or parties before and after the
combination. The control is not temporary, and the combination is under the same control. For business
combination under the same control, the party that obtains control over other participating enterprises on the
purchase date is the acquirer, and other enterprises that participate in the combination are the acquirees.
Combination date refers to the date on which the combing party actually obtains control to the combined party.
The Company measures the assets and liabilities obtained from consolidation of enterprises, according to the book
value of consolidated party’s assets and liabilities (including the goodwill arising from ultimate controller’s
acquisition of the consolidated party) in the ultimate controller’s consolidated financial statement on the
consolidation date; adjusts the capital premium in capital reserve, by the difference between obtained net asset
book value and paid consolidated consideration book value (or total par value of shares issued), and adjusts
retained earnings, if the capital premium in capital reserve is insufficient to offset.
The direct expenses generated by the acquirer for the purpose of business combinations shall be recorded into the
profits and losses for the current period.
(2) Business combinations not under the same control
A business combination involving enterprises that are not ultimately controlled by the same party or parties both
before and after the combination is a business combination not under common control. In a business combination
not under common control, the party that obtains control over the other combining enterprises on the acquisition
date is the acquirer, and the other enterprises participating in the combination are the acquirees. The acquisition
date is the date on which the acquirer effectively obtains control of the acquiree.
For a business combination not under common control, the cost of combination includes the fair value, at the
acquisition date, of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer in
exchange for control of the acquiree. Professional fees such as audit, legal, valuation and consulting services, as
well as other administrative costs related to the business combination, are expensed as incurred. Transaction costs
incurred by the acquirer in issuing equity or debt instruments as consideration for the combination are included in
the initial recognition amount of the equity or debt instruments. Any contingent consideration is included in the
cost of combination at its fair value at the acquisition date. If new or additional evidence relating to circumstances
existing at the acquisition date arises within twelve months after the acquisition date and results in an adjustment
to the contingent consideration, the amount of goodwill is adjusted accordingly. The acquirer measures the cost of
combination and the identifiable assets and liabilities acquired at their fair values at the acquisition date. The
excess of the cost of combination over the acquirer's interest in the fair value of the identifiable net assets of the
acquiree at the acquisition date is recognized as goodwill. If the cost of combination is less than the acquirer's
interest in the fair value of the identifiable net assets of the acquiree, the acquirer first reassesses the measurement
of the identifiable assets, liabilities and contingent liabilities acquired and the cost of combination. If the cost of
Changchai Company, Limited Annual Report 2025
combination remains less than the acquirer's interest in the fair value of the identifiable net assets of the acquiree
after the reassessment, the difference is recognized in profit or loss for the period.
If the acquirer obtains deductible temporary differences of the acquiree that do not meet the recognition criteria
for deferred tax assets at the acquisition date and are therefore not recognized, and if within twelve months after
the acquisition date new or additional information becomes available indicating that the relevant circumstances
existed at the acquisition date and that the economic benefits associated with the deductible temporary differences
of the acquiree at the acquisition date are probable, the related deferred tax assets are recognized with a
corresponding decrease in goodwill. If the goodwill is insufficient to absorb the decrease, the excess is recognized
in profit or loss. In all other cases, deferred tax assets arising from a business combination are recognized in profit
or loss.
A business combination not under common control achieved in stages through multiple transactions is accounted
for by reference to the preceding paragraphs and Note V.14 "Long-term equity investments" if the transactions are
part of a single arrangement. If the transactions are not part of a single arrangement, the accounting treatment is
differentiated between the separate financial statements and the consolidated financial statements:
In the separate financial statements, the initial cost of the investment is the sum of the carrying amount of the
equity investment in the acquiree held prior to the acquisition date and the cost of the additional investment
incurred on the acquisition date. If the equity investment in the acquiree held prior to the acquisition date involves
other comprehensive income, the related other comprehensive income is accounted for on the same basis as if the
acquiree had directly disposed of the related assets or liabilities when the investment is disposed of (i.e., except
for the relevant share of changes arising from the acquiree's remeasurement of defined benefit plan net liabilities
or assets accounted for under the equity method, the remainder is reclassified to investment income in the current
period).
In the consolidated financial statements, the equity investment in the acquiree held prior to the acquisition date is
remeasured at its fair value on the acquisition date, with any difference between the fair value and the carrying
amount recognized in investment income for the period. If the equity investment in the acquiree held prior to the
acquisition date involves other comprehensive income, the related other comprehensive income is accounted for
on the same basis as if the acquiree had directly disposed of the related assets or liabilities (i.e., except for the
relevant share of changes arising from the acquiree's remeasurement of defined benefit plan net liabilities or assets
accounted for under the equity method, the remainder is reclassified to investment income in the period in which
the acquisition date falls).
(1) Criteria for Determining Control
The scope of consolidation is determined based on control. Control means that the Company has power over an
investee, is exposed, or has rights, to variable returns from its involvement with the investee, and has the ability to
use its power over the investee to affect the amount of the returns. This generally includes situations where: the
parent holds more than half of the voting rights of the investee; or the parent holds half or less of the voting rights
but has more than half of the voting rights through agreements with other investors; or has the power to govern the
financial and operating policies of the investee under the investee’s articles of association or agreements; or has
the power to appoint or remove the majority of the members of the board of directors of the investee; or has the
majority of voting rights at the board of directors of the investee.
(2) Methods for Preparing Consolidated Financial Statements
The Company includes subsidiaries in the consolidated financial statements from the date on which it obtains
Changchai Company, Limited Annual Report 2025
control over the subsidiaries’ net assets and operating decisions, and excludes them from the date on which such
control ceases. For subsidiaries disposed of, the results of operations and cash flows prior to the disposal date are
properly included in the consolidated income statement and consolidated cash flow statement; for subsidiaries
disposed of during the period, the opening balances of the consolidated balance sheet are not adjusted. For
subsidiaries acquired in business combinations not under common control, their results of operations and cash
flows after the acquisition date are properly included in the consolidated income statement and consolidated cash
flow statement, and the opening balances and comparative figures in the consolidated financial statements are not
adjusted. For subsidiaries acquired in business combinations under common control and entities acquired through
mergers, their results of operations and cash flows from the beginning of the period in which the combination
occurs to the combination date are properly included in the consolidated income statement and consolidated cash
flow statement, and the comparative figures in the consolidated financial statements are adjusted accordingly.
When preparing the consolidated financial statements, if the accounting policies or reporting periods adopted by a
subsidiary differ from those of the Company, the subsidiary’s financial statements are adjusted to conform to the
Company’s accounting policies and reporting periods. For subsidiaries acquired in business combinations not
under common control, their financial statements are adjusted based on the fair values of the identifiable net assets
at the acquisition date.
All significant intercompany balances, transactions and unrealized profits are eliminated in full in the consolidated
financial statements.
The portion of equity and net profit or loss of subsidiaries attributable to non-controlling interests is presented
separately in the consolidated financial statements under equity and net profit, respectively. The portion of net
profit or loss of subsidiaries attributable to non-controlling interests is presented as “non-controlling interests”
under net profit in the consolidated income statement. Losses attributable to non-controlling interests in a
subsidiary that exceed the non-controlling interests’ share of equity in the subsidiary at the beginning of the period
are allocated against non-controlling interests.
When control over a former subsidiary is lost due to disposal of part of the equity investment or other reasons, the
remaining equity interest is remeasured at its fair value at the date when control is lost. The difference between the
sum of the consideration received from the disposal and the fair value of the remaining equity interest, and the
share of the carrying amount of the former subsidiary’s net assets attributable to the original equity interest from
the acquisition date, is recognized in profit or loss for the period in which control is lost. Other comprehensive
income related to the equity investment in the former subsidiary is accounted for on the same basis as if the
investee had directly disposed of the related assets or liabilities when control is lost (i.e., except for the relevant
share of changes arising from the investee’s remeasurement of defined benefit plan net liabilities or assets, the
remainder is reclassified to profit or loss for the current period). Subsequently, the remaining equity interest is
accounted for in accordance with the relevant provisions of Accounting Standards for Business Enterprises No. 2
– Long-term Equity Investments or Accounting Standards for Business Enterprises No. 22 – Recognition and
Measurement of Financial Instruments. For details, see Note 5.14 “Long-term Equity Investments” or Note V.10
“Financial Instruments”.
When the Company loses control over a subsidiary through multiple transactions that involve disposing of equity
investments in the subsidiary step by step, it is necessary to determine whether the transactions should be
accounted for as a single transaction. The terms, conditions and economic effects of the transactions meet one or
more of the following circumstances, which generally indicate that the transactions should be accounted for as a
single transaction: (1) the transactions are entered into simultaneously or in contemplation of one another; (2) the
transactions form a single transaction to achieve an overall commercial effect; (3) the occurrence of one
transaction depends on the occurrence of at least one other transaction; or (4) one transaction considered alone is
Changchai Company, Limited Annual Report 2025
not economically justified, but is economically justified when considered together with other transactions. If the
transactions are not part of a single transaction, each transaction is accounted for separately as appropriate under
the principles applicable to “partial disposal of long-term equity investments in subsidiaries without loss of
control” and “loss of control over former subsidiaries due to disposal of part of equity investments or other
reasons”. If the transactions are part of a single transaction, they are accounted for as a single transaction
involving disposal of the subsidiary and loss of control; however, the difference between the consideration
received from each disposal before the loss of control and the share of the subsidiary’s net assets attributable to
the disposed investment is recognized as other comprehensive income in the consolidated financial statements and
reclassified to profit or loss for the period in which control is lost.
A joint arrangement is an arrangement of which two or more parties have joint control. The Company classifies
joint arrangements into joint operations and joint ventures based on the rights and obligations arising from the
arrangement. A joint operation is a joint arrangement whereby the Company has rights to the assets and
obligations for the liabilities relating to the arrangement. A joint venture is a joint arrangement whereby the
Company has rights to the net assets of the arrangement.
The Company accounts for its investments in joint ventures using the equity method, applying the accounting
policies described in Note V.14(2) ② "Long-term Equity Investments Accounted for Using the Equity Method".
As a joint operator in a joint operation, the Company recognizes its individually held assets and assumed liabilities,
as well as its share of jointly held assets and jointly assumed liabilities; recognizes revenue from the sale of its
share of the output from the joint operation; recognizes its share of revenue arising from the sale of output by the
joint operation; and recognizes expenses it incurs individually as well as its share of expenses incurred by the joint
operation.
When the Company, as a joint operator, contributes or sells assets (which do not constitute a business, the same
below) to a joint operation, or purchases assets from a joint operation, the Company only recognizes the portion of
gains or losses arising from the transaction that is attributable to the other joint operators until such assets are sold
to third parties. If these assets meet the criteria for impairment losses as stipulated in Accounting Standards for
Business Enterprises No. 8 - Impairment of Assets and other relevant standards, the Company fully recognizes
such losses for assets contributed or sold to the joint operation by the Company, and recognizes its share of such
losses for assets purchased from the joint operation by the Company.
The Company’s cash and cash equivalents include cash on hand, deposits that can be used for payment at any time,
investments that are owned by the Company which are in short-term (usually due within three months from the
purchase date), highly liquid, easy to convert to a known amount of cash, low risk of value change.
(1) Translation Methods for Foreign Currency Transactions
The Company translates foreign currency transactions into the functional currency amount at the spot exchange
rate on the transaction date upon initial recognition. However, for foreign currency exchange transactions or
transactions involving currency exchange conducted by the Company, the actual exchange rate adopted is used for
Changchai Company, Limited Annual Report 2025
translation into the functional currency amount.
(2) Translation Methods for Foreign Currency Monetary Items and Non-monetary Items
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate on that date.
The resulting exchange differences are recognized in profit or loss, except for: ① exchange differences arising
from foreign currency-specific borrowings related to the acquisition or construction of qualifying assets, which
are accounted for in accordance with the principles for capitalizing borrowing costs; and ② exchange differences
arising from changes in the carrying amount of available-for-sale foreign currency monetary items other than
amortized cost, which are recognized in other comprehensive income.
Non-monetary items denominated in foreign currency and measured at historical cost continue to be translated
using the spot exchange rate on the transaction date. Non-monetary items denominated in foreign currency and
measured at fair value are translated using the spot exchange rate on the date when the fair value is determined.
The difference between the translated functional currency amount and the original functional currency amount is
treated as a fair value change (including exchange rate effects) and recognized in profit or loss or other
comprehensive income.
A financial asset or financial liability is recognized when the Company becomes a party to the financial
instrument contract.
(1) Classification, confirmation and measurement of financial assets
Based on business model of managing financial assets and contractual cash flow characteristics of financial assets,
the Company divides financial assets into: financial assets measured at amortized cost; financial assets measured
at fair value with changes included in other comprehensive income; financial assets measured at fair value through
profit and loss.
Financial assets are measured at fair value at initial recognition. For the financial assets at fair value and through
current profit or loss, the transaction expenses thereof should be recognized directly in profit or loss; for other
categories of financial assets, the transaction expenses thereof should be recognized into initially recognized
amount. For the accounts receivable or bills receivable arising from product sales or labor service provision
excluding or not considering significant financing components, the Company regards the amount of consideration
expected to charge as the initial recognition amount.
① Financial assets measured at amortized costs
The corporate business model for managing financial assets measured at amortized cost aims at charging
contractual cash flow, and the contractual cash flow characteristics of such financial assets are consistent with
basic borrowing and loan arrangements, namely cash flow is generated on a specific date, only for payment of
principal and interests based on outstanding principal amount. The Company utilizes effective interest rate method
for such financial assets, and performs subsequent measurement as per amortized cost, with gains or losses arising
from amortization or impairment included in current profits and losses.
② Financial assets measured at fair value with changes included in other comprehensive income
The corporate business model for managing such financial assets aims at both contractual cash flow charging and
sales, and the contractual cash flow characteristics of such financial assets are consistent with basic borrowing and
loan arrangements. The Company measures such financial assets at fair value with changes included in other
comprehensive income, but impairment losses or gains, exchange gains and losses, and interest income calculated
according to the actual interest rate method are included in current profits and losses.
Changchai Company, Limited Annual Report 2025
In addition, the Company designates some non-trading equity instrument investments as financial assets measured
at fair value with changes included in other comprehensive income. The Company records relevant dividend
income of such financial assets into current profits and losses, and records fair value changes into other
comprehensive income. When such financial assets are derecognized, the cumulative gains or losses previously
recorded in other comprehensive income will transfer from other comprehensive income into retained earnings,
excluded in current profits and losses.
③ Financial Liabilities measured at fair value through profit and loss
The Company classifies the above financial assets measured at amortized cost and the financial assets other than
the financial assets measured at fair value with changes included in other comprehensive income as the financial
assets measured at fair value through profit and loss. In addition, during initial recognition, in order to eliminate or
significantly reduce accounting mismatches, the Company designates some financial assets as financial assets
measured at fair value through profit and loss. For such financial assets, the Company uses fair value for
subsequent measurement, and fair value changes are included in current profits and losses.
(2) Classification, recognition and measurement of financial liabilities
Financial liabilities are classified during initial recognition as the financial liabilities measured at fair value
through profit and loss, and other financial liabilities. For financial liabilities at fair value through profit or loss,
the transaction expenses thereof should be recognized directly in current profit or loss, and for other financial
liabilities, the transaction expenses thereof should be recognized into initially recognized amount.
① Financial liabilities measured at fair value through profit and loss
Financial liabilities measured at fair value through profit and loss contain transactional financial liabilities
(including derivatives that belong to financial liabilities) and financial liabilities designated as measured at fair
value during initial recognition with changes included in current profits and losses.
Transactional financial liabilities (including derivatives that belong to financial liabilities) are subsequently
measured at fair value, and except for those related to hedge accounting, the fair value changes are included in
current profits and losses.
The financial liabilities designated as measured at fair value with changes included in current profits and losses,
such liabilities are caused by the Company’s own credit risk changes, with fair value changes included in other
comprehensive income, and when the liabilities are derecognized, they are included in other comprehensive
income, caused by own credit risk changes, with cumulative fair value changes transferred into retained earnings.
The remaining fair value changes are included in current profits and losses. If treatment of own credit risk change
impact of such financial liabilities in the above manner will cause or expand accounting mismatch in profits and
losses, the Company includes all gains or losses of such financial liabilities (including the amount of corporate
own credit risk change impact) in current profits and losses.
② Other financial liabilities
Except the financial liabilities and financial guarantee contract arising from financial asset transfer at variance
with derecognition conditions or continuous involvement of transferred financial assets, other financial liabilities
are classified as financial liabilities measured at amortized cost, and subsequently measured at amortized cost,
with gains or losses resulting from derecognition or amortization included in current profits and losses.
(3) Recognition basis and measurement method of financial assets transfer
Financial assets are derecognized in one of the following conditions: ① the contractual right to receive cash flow
of such financial assets is terminated; ② such financial assets have been transferred, and almost all risks and
rewards on the financial asset Ownership are transferred to the transferee; ③ such financial assets have been
transferred, and although the Company has neither transferred nor retained almost all risks and rewards on the
Changchai Company, Limited Annual Report 2025
financial asset Ownership, it has given up control of such financial assets.
If the enterprise neither transfers nor retains substantially all the risks and rewards of Ownership of a financial
asset, and it has not abandoned the control of that financial asset, the relevant financial asset is recognized at the
extent of continuing involvement in the transferred financial asset and the corresponding liability is recognized
accordingly. The degree of continuous involvement in the transferred financial asset refers to the risk level that the
enterprise faces due to the change of the value of the financial asset.
Where a transfer of a financial asset in its entirety meets the criteria of de-recognition, the difference between the
carrying amount of the financial asset transferred and the sum of the consideration received from the transfer and
any cumulative change in fair value that has been recognized in other comprehensive income is recognized in
current profit or loss.
Where a transfer of financial asset partly meets the criteria of de-recognition, the carrying amount of the financial
asset transferred should be amortized between the part that is derecognized and the part that is not derecognized
according to the fair value, and the difference between the sum of the consideration received from the transfer and
any cumulative change in fair value that has been recognized in other comprehensive income and should be
amortized to the derecognized part, and the above-mentioned amortized carrying amount,shall be recorded into
current profit or loss.
When the Company uses financial assets sold with recourse or sells financial assets held in an endorsement, it
must determine whether all risks and rewards of Ownership of the financial assets have been almost transferred. If
all the risks and rewards of Ownership of the financial asset are almost transferred to the transferee, and the
financial asset is derecognized; if all the risks and rewards on the Ownership of the financial asset are retained, the
financial asset is not derecognized; all the risks and rewards of Ownership of financial assets are not almost
transferred or retained, continue to determine whether the Company retains the control over the assets and
perform the accounting operation based on the principles described in the preceding paragraphs.
(4) De-recognition of financial liabilities
If current obligations of financial liabilities (or a part thereof) are removed, the Company derecognizes such
financial liabilities (or a part thereof). If the Company (borrower) signs an agreement with the lender, to replace
the original financial liabilities by bearing new financial liabilities, and contract clauses of new financial liabilities
and original financial liabilities are substantially different, the original financial liabilities are derecognized, while
recognizing a new financial liability. If the Company makes substantial modification to the contractual clauses of
original financial liabilities (or a part thereof), the original financial liabilities are derecognized, and a new
financial liability is recognized according to the clauses after modification.
If financial liabilities (or a part thereof) are derecognized, the Company records the difference between their book
value and consideration paid (including non-cash assets transferred out or liabilities assumed) into current profits
and losses.
(5) Offset of financial assets and financial liabilities
When the Company has legal right to offset financial assets and financial liabilities of the recognized amount, and
such legal rights are currently enforceable, meanwhile, the Company plans to settle by net assets or concurrently
liquidate such financial assets and repay such financial liabilities, financial assets and financial liabilities are
presented in the balance sheet by net amounts after mutual offset. In addition, financial assets and financial
liabilities are separately presented in the balance sheet, which are not offset by each other.
(6) Determining method of the fair value of financial assets and financial liabilities
Fair value refers to the price that a market participant can receive for the sale of an asset or the price he needs to
pay for transferring a liability in an orderly transaction occurring on the measurement date. Where the financial
Changchai Company, Limited Annual Report 2025
instruments exist on active market, the Company determines their fair value by using quotation on active market.
Quoted market prices in an active market refer to the prices that are readily available regularly from the exchange,
the broker, the trade association, pricing services institution, etc., and they represent the actual market transaction
prices in the fair transactions. Where the financial instruments do not exist on active market, the Company
determines their fair value by using valuation techniques. Valuation techniques include the prices used in recent
market transactions by the parties that are familiar to the situation and are voluntary to participate in the
transaction, refers to the current fair values of other essentially the same financial instruments, discount cash flow
valuation, option pricing models, etc. At the time of valuation, the Company leverages valuation techniques that
are applicable in the current circumstances and adequately supported by available data and other information,
chooses the input value consistent with the characteristics of assets or liabilities considered by market participants
in transaction of relevant assets or liabilities, and prefers to use the relevant observable input value. The value that
cannot be inputted is utilized, when the relevant observable input value is unavailable or unfeasible to obtain.
The Company assesses impairment losses for the following financial assets: Financial assets measured at
amortized cost; Debt instruments measured at fair value through other comprehensive income (FVOCI); These
primarily include: Notes receivable; Accounts receivable; Contract assets; Other receivables; Debt investments;
Other debt investments; Long-term receivables; Additionally, impairment provisions and credit impairment losses
for certain financial guarantee contracts are recognized in accordance with the accounting policies outlined below.
(1) Method for Recognizing Impairment Provisions
The Company measures expected credit losses (ECL) for the above items using either the general approach or the
simplified approach, depending on their applicability, and recognizes corresponding credit impairment losses.
Credit loss refers to the present value of all contractual cash flows the Company is entitled to receive under the
contract, discounted at the original effective interest rate, minus the present value of all expected cash flows to be
collected. For purchased or originated credit-impaired (POCI) financial assets, the discount rate applied is the
credit-adjusted effective interest rate.
General Approach for ECL Measurement
At each reporting date, the Company assesses whether the credit risk of a financial asset has increased
significantly since initial recognition:
If credit risk has increased significantly, the Company measures the loss allowance at an amount equal to lifetime
ECL.
If credit risk has not increased significantly, the loss allowance is measured at 12-month ECL.
The assessment incorporates all reasonable and supportable information, including forward-looking data.
For financial instruments with low credit risk at the reporting date, the Company assumes no significant increase
in credit risk since initial recognition and applies the 12-month ECL approach.
(2) Criteria for Determining Significant Increase in Credit Risk
A significant increase in credit risk is presumed if the probability of default (PD) over the remaining lifetime at
the reporting date is substantially higher than the PD estimated at initial recognition. Unless exceptional
circumstances exist, the Company uses changes in the 12-month PD as a reasonable proxy for lifetime PD
changes to determine whether credit risk has increased significantly.
Factors considered in assessing significant increases in credit risk:
Changchai Company, Limited Annual Report 2025
reduce the debtor’s economic incentive to repay or affect PD;
As of the balance sheet date, if the Company determines that a financial instrument carries only a low credit risk,
it presumes that the credit risk of that financial instrument has not significantly increased since its initial
recognition. A financial instrument is considered to have low credit risk if its default risk is low, the borrower's
ability to fulfill its contractual cash flow obligations is strong in the short term, and even if there are adverse
changes in the economic situation and operating environment over a longer period of time, it may not necessarily
reduce the borrower's ability to fulfill its contractual cash obligations.
(3) Portfolio-Based Assessment of Expected Credit Risk
The company evaluates the credit risk of individual financial assets with significantly different credit risks, such
as accounts receivable that are in dispute with the counterparty or involve litigation or arbitration; accounts
receivable where there are clear indications that the debtor is likely to be unable to fulfill its repayment obligations,
etc.
In addition to financial assets with individual credit risk assessments, the Company categorizes financial assets
into different groups based on common risk characteristics. The common credit risk characteristics adopted by the
Company include: type of financial instrument, credit risk rating, aging portfolio, overdue aging portfolio, etc.
Credit risk is assessed on a portfolio basis.
(4) Accounting Treatment for Financial Asset Impairment
At period-end, the Company calculates ECL for each category of financial assets:
If the ECL exceeds the current carrying amount of the impairment allowance, the difference is recognized as an
impairment loss;
If the ECL is lower than the current allowance, the difference is recognized as an impairment gain.
(5) Method for recognizing credit losses of various financial assets
① Bills receivable
The Company measures loss provision for bills receivable based on the amount equivalent to expected credit
losses throughout the existence period. Based on credit risk characteristics of bills receivable, they are divided into
different portfolios:
Items Basis of determining the portfolio
Bank acceptance bill Acceptors are banks with low credit risks
Bank Acceptance Draft (Issued by Finance Companies) Issued by Finance Companies
Commercial acceptance bill All of commercial acceptance bill
② Accounts receivable and contract assets
With regard to accounts receivable and contract assets excluding major financing components, the Company
measures loss reserve at the amount equivalent to the expected credit loss throughout the duration.
With regard to accounts receivable and contract assets including major financing components, the Company
chooses to always measure loss reserve at the amount equivalent to the expected credit loss throughout the
duration.
In addition to accounts receivable with individual assessment of credit risks, they are divided into different
Changchai Company, Limited Annual Report 2025
portfolios based on their credit risk characteristics:
Items Basis of determining the portfolio
Credit risk characteristics portfolio Portfolio based on aging of receivables as credit risk characteristic
Related party within consolidation scope Related party within consolidation scope
a. The aging of the Company's receivables is calculated from the date of occurrence.
For the portfolio, the aging-based grouping method is adopted to measure expected credit losses (ECL):
Provision ratios of notes Provision ratios of Provision ratios of Provision ratios of other
Aging
Receivable (%) accounts receivable (%) contract assets (%) receivables (%)
Within 1 2.00 2.00 2.00 2.00
year
Over 5 100.00 100.00 100.00 100.00
years
b. Criteria for Recognizing Individually Assessed Bad Debt Provisions:
A financial asset is considered credit-impaired when one or more events that have a detrimental impact on the
asset's expected future cash flows occur. Observable evidence of credit impairment includes, but is not limited to,
the following:
forgiveness) that would not otherwise be considered due to the debtor's financial distress.
Credit impairment may result from a combination of factors and does not necessarily stem from a single
identifiable event.
③Receivables Financing
Financial assets classified as notes receivable and accounts receivable measured at fair value through other
comprehensive income (FVTOCI) shall be presented as follows:
"Receivables financing" for portions with original maturities of one year or less from the date of acquisition;
"Other debt investments" for portions with original maturities exceeding one year from the date of acquisition.
Except for individually assessed accounts receivable, these financial assets are grouped into different portfolios
based on their credit risk characteristics.
Item Basis of determining the portfolio
Notes receivable Bank acceptance drafts issued by banks with high credit ratings
Changchai Company, Limited Annual Report 2025
Item Basis of determining the portfolio
Accounts receivable This portfolio uses the aging of receivables as the credit risk characteristic.
④ Other receivables
The Company measures impairment losses based on whether the credit risks of other receivables have increased
significantly since initial recognition, by using the amount equivalent to expected credit losses within the next 12
months or throughout the existence period. In addition to other receivables with individual assessment of credit
risks, they are divided into different portfolios based on their credit risk characteristics:
Item Basis of determining the portfolio
Aging portfolio Other receivables excluding related parties
Related party within consolidation
Other receivables from related parties within the scope of consolidation
scope
(1) Classification of Inventories
Inventories mainly include raw materials, materials in outside processing, work in progress, finished goods, and
low-value consumables.
(2) Measurement Method for Issuance
All categories of inventories are purchased and received at planned costs, and issued using the weighted average
method. Finished goods costs are transferred at actual costs incurred during the period, while cost of sales is
recognized using the weighted average method.
(3) Inventory Counting System
The perpetual inventory system is adopted.
(4) Amortization Method for Low-Value Consumables and Packaging Materials
Low-value consumables are fully amortized upon issuance (one-time amortization method). Packaging materials
are fully amortized upon issuance (one-time amortization method).
(5) Recognition Criteria and Provision Method for Inventory Write-Down
The net realizable value (NRV) of inventory refers to the estimated selling price in the ordinary course of business,
minus the estimated costs to complete, selling expenses, and related taxes. The determination of NRV is based on
reliable evidence, while also considering the purpose of holding the inventory and the impact of events after the
reporting period.
At the balance sheet date, inventories are measured at the lower of cost or NRV. Based on a comprehensive
year-end physical count, provisions are made for inventories that are damaged, obsolete, priced below cost, or
otherwise unrecoverable. Write-downs are recognized for individual inventory items where cost exceeds NRV,
with the loss recorded in profit or loss.
Methods for Determining NRV:
Finished goods, merchandise, and materials held for sale: NRV = Estimated selling price ? Estimated selling
expenses ? Related taxes.
Materials requiring further processing: NRV = Estimated selling price of finished products ? Estimated costs to
complete ? Estimated selling expenses ? Related taxes.
Partial contract pricing: If part of an inventory item has a contract price while the remainder does not, NRV is
Changchai Company, Limited Annual Report 2025
determined separately.
Aggregate assessment: For inventories with similar use or produced/sold in the same region, write-downs are
assessed collectively if individual valuation is impractical.
High-volume, low-cost items: Write-downs are assessed by inventory category.
If the factors that previously caused inventory write-downs no longer exist, resulting in NRV exceeding the
carrying amount, the reversal (limited to the original provision amount) is recognized in profit or loss.
(1) Non-current Assets and Disposal Groups Held-for-sale
The Company classifies a non-current asset or disposal group as held-for-sale if its carrying amount will be
recovered principally through a sale transaction (including non-monetary asset exchanges with commercial
substance, the same applies below) rather than through continuing use. The specific criteria are that all of the
following conditions are met: (i) the non-current asset or disposal group is available for immediate sale in its
present condition subject only to terms that are usual and customary for sales of such assets or disposal groups; (ii)
the Company has approved the sale plan and obtained a firm purchase commitment; and (iii) the sale is expected
to be completed within one year. A disposal group refers to a group of assets to be disposed of, by sale or
otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will
be transferred in the transaction. If the goodwill acquired in a business combination was allocated to a
cash-generating unit or group of cash-generating units to which the disposal group belongs under Accounting
Standards for Business Enterprises No. 8—Impairment of Assets, the disposal group shall include the goodwill
allocated to it.
When initially measuring or remeasuring non-current assets or disposal groups classified as held-for-sale at the
balance sheet date, if their carrying amount exceeds their fair value less costs to sell, the carrying amount is
written down to fair value less costs to sell. The amount of the write-down is recognized as an impairment loss in
profit or loss for the current period, and a provision for impairment of held-for-sale assets is made. For disposal
groups, the recognized impairment loss is first allocated to reduce the carrying amount of any goodwill in the
disposal group, and then to reduce the carrying amounts of the other non-current assets in the disposal group that
are subject to the measurement requirements of Accounting Standards for Business Enterprises No.
standards") on a pro-rata basis. If the fair value less costs to sell of a held-for-sale disposal group increases in
subsequent balance sheet dates, the previously recognized impairment loss shall be reversed. The reversal is
limited to the cumulative impairment loss recognized for the non-current assets in the disposal group that are
subject to the measurement requirements of the held-for-sale standards after classification as held-for-sale, and the
reversal amount is recognized in profit or loss for the current period. The carrying amounts of the non-current
assets in the disposal group that are subject to the measurement requirements of the held-for-sale standards
(excluding goodwill) are increased on a pro-rata basis according to their relative carrying amounts. The carrying
amount of goodwill that has been reduced, as well as impairment losses recognized for non-current assets subject
to the measurement requirements of the held-for-sale standards before classification as held-for-sale, shall not be
reversed.
Non-current assets in a disposal group classified as held-for-sale are not depreciated or amortized, while interest
and other expenses on liabilities in a held-for-sale disposal group continue to be recognized.
When a non-current asset or disposal group no longer meets the criteria for classification as held-for-sale, the
Company ceases to classify it as held-for-sale or removes the non-current asset from the held-for-sale disposal
Changchai Company, Limited Annual Report 2025
group, and measures it at the lower of: (i) its carrying amount before classification as held-for-sale, adjusted for
any depreciation, amortization, or impairment that would have been recognized had it not been classified as
held-for-sale; and (ii) its recoverable amount.
(2) Criteria for Identifying and Presentation Methods for Discontinued Operations
A discontinued operation is a component of the Company that either has been disposed of or is classified as
held-for-sale and meets any of the following criteria: (i) the component represents a separate major line of
business or geographical area of operations; (ii) the component is part of a single coordinated plan to dispose of a
separate major line of business or geographical area of operations; or (iii) the component is a subsidiary acquired
exclusively with a view to resale.
The Company presents the relevant profit or loss from discontinued operations in the income statement and
discloses the effects of discontinued operations in the notes.
The long-term equity investments referred to in this section are those in which the Company has control, joint
control, or significant influence over the investee. Long-term equity investments in which the Company does not
have control, joint control, or significant influence are accounted for as financial assets measured at fair value
through profit or loss. For non-trading investments, the Company may elect at initial recognition to classify them
as financial assets measured at fair value through other comprehensive income, as detailed in Note V.10 "Financial
Instruments."
Joint control refers to the Company's shared control over an arrangement in accordance with relevant agreements,
where decisions regarding the relevant activities of the arrangement require unanimous consent from all parties
sharing control. Significant influence refers to the Company's power to participate in the financial and operating
policy decisions of the investee but not to control or jointly control those policies with other parties.
(1) Determination of Investment Cost
For long-term equity investments acquired through business combinations under common control, the initial
investment cost is measured at the share of the carrying value of the acquiree's equity in the consolidated financial
statements of the ultimate controlling party on the combination date. The difference between the initial investment
cost and the sum of the cash paid, the carrying value of non-cash assets transferred, and liabilities assumed is
adjusted against capital reserve. If capital reserve is insufficient, the remaining difference is adjusted against
retained earnings. If equity instruments are issued as consideration, the initial investment cost is measured at the
share of the carrying value of the acquiree's equity in the consolidated financial statements of the ultimate
controlling party on the combination date, with the total par value of the shares issued recognized as share capital.
The difference between the initial investment cost and the total par value of the shares issued is adjusted against
capital reserve. If capital reserve is insufficient, the remaining difference is adjusted against retained earnings. For
step-by-step acquisitions of equity in an acquiree under common control that ultimately result in a business
combination under common control, the transactions are accounted for separately based on whether they
constitute a "package transaction." If they constitute a "package transaction," the transactions are treated as a
single transaction to obtain control. If not, the initial investment cost on the combination date is measured at the
share of the carrying value of the acquiree's equity in the consolidated financial statements of the ultimate
controlling party. The difference between the initial investment cost and the sum of the carrying value of the
long-term equity investment before the combination and the carrying value of additional consideration paid on the
combination date is adjusted against capital reserve. If capital reserve is insufficient, the remaining difference is
adjusted against retained earnings. Other comprehensive income recognized for equity investments held before the
Changchai Company, Limited Annual Report 2025
combination date under the equity method or as financial assets measured at fair value through other
comprehensive income is not accounted for at this stage.
For long-term equity investments acquired through business combinations not under common control, the initial
investment cost is measured at the combination cost on the acquisition date. The combination cost includes the
sum of the fair value of assets paid, liabilities incurred or assumed, and equity instruments issued by the acquirer.
For step-by-step acquisitions of equity in an acquiree that ultimately result in a business combination not under
common control, the transactions are accounted for separately based on whether they constitute a "package
transaction." If they constitute a "package transaction," the transactions are treated as a single transaction to obtain
control. If not, the initial investment cost of the long-term equity investment accounted for under the cost method
is the sum of the carrying value of the previously held equity investment and the additional investment cost. Other
comprehensive income related to the previously held equity investment accounted for under the equity method is
not accounted for at this stage.
Intermediary fees such as audit, legal, and valuation consulting services, as well as other related administrative
expenses incurred by the combining or acquiring party for the business combination, are recognized in profit or
loss when incurred.
For other equity investments not formed through business combinations, the initial measurement is based on cost,
which is determined according to the actual cash purchase price paid by the Company, the fair value of equity
instruments issued by the Company, the value agreed in the investment contract or agreement, the fair value or
original carrying value of assets exchanged in non-monetary asset exchanges, or the fair value of the long-term
equity investment itself. Directly attributable costs, taxes, and other necessary expenses are also included in the
investment cost. For additional investments that enable the Company to exert significant influence or joint control
over the investee (but not control), the cost of the long-term equity investment is the sum of the fair value of the
previously held equity investment determined in accordance with Accounting Standards for Business Enterprises
No. 22—Recognition and Measurement of Financial Instruments and the additional investment cost.
(2) Subsequent Measurement and Profit/Loss Recognition Methods
Long-term equity investments in which the Company has joint control (excluding joint operations) or significant
influence are accounted for using the equity method. Additionally, the Company's financial statements use the cost
method to account for long-term equity investments that enable the Company to control the investee.
① Long-term Equity Investments Accounted for Using the Cost Method
Under the cost method, long-term equity investments are measured at initial investment cost, with adjustments
made for additional investments or disposals. Investment income for the period is recognized based on the
Company's share of cash dividends or profits declared by the investee, excluding any dividends or profits declared
but not yet distributed at the time of investment.
② Long-term Equity Investments Accounted for Using the Equity Method
Under the equity method, if the initial investment cost exceeds the Company's share of the investee's identifiable
net assets at fair value at the investment date, the initial investment cost is not adjusted. If the initial investment
cost is less than the Company's share of the investee's identifiable net assets at fair value at the investment date,
the difference is recognized in profit or loss, and the cost of the long-term equity investment is adjusted
accordingly.
Under the equity method, the Company recognizes investment income and other comprehensive income based on
its share of the investee's net profit or loss and other comprehensive income, adjusting the carrying value of the
long-term equity investment accordingly. The carrying value is reduced by the Company's share of profits or cash
dividends declared by the investee. For other changes in the investee's equity not included in net profit or loss,
Changchai Company, Limited Annual Report 2025
other comprehensive income, or profit distribution, the carrying value of the long-term equity investment is
adjusted and recognized in capital reserve. When recognizing the share of the investee's net profit or loss, the
investee's net profit is adjusted based on the fair value of identifiable assets at the investment date. If the investee's
accounting policies or reporting periods differ from the Company's, the investee's financial statements are adjusted
to align with the Company's policies and periods before recognizing investment income and other comprehensive
income.
For transactions between the Company and its associates or joint ventures where the assets contributed or sold do
not constitute a business, unrealized internal transaction profits or losses attributable to the Company are
eliminated based on the Company's share, and investment income is recognized after this adjustment. However,
unrealized internal transaction losses attributable to impairment losses on the transferred assets are not eliminated.
If the Company contributes assets constituting a business to a joint venture or associate and obtains long-term
equity investment without control, the fair value of the contributed business is used as the initial investment cost
of the new long-term equity investment. The difference between the initial investment cost and the carrying value
of the contributed business is fully recognized in profit or loss. Similarly, if the Company sells assets constituting
a business to a joint venture or associate, the difference between the consideration received and the carrying value
of the business is fully recognized in profit or loss. If the Company purchases assets constituting a business from
an associate or joint venture, the transaction is accounted for under Accounting Standards for Business Enterprises
No. 20—Business Combinations, with gains or losses fully recognized.
When recognizing the share of the investee's net losses, the carrying value of the long-term equity investment and
other long-term interests that substantially constitute a net investment in the investee are reduced to zero. If the
Company has an obligation to assume additional losses, a provision is recognized for the estimated obligation and
included in investment losses for the period. If the investee subsequently reports net profits, the Company resumes
recognizing its share of profits after offsetting unconfirmed loss shares.
③ Acquisition of Minority Interests
When preparing consolidated financial statements, the difference between the additional long-term equity
investment from acquiring minority interests and the share of the subsidiary's net assets calculated based on the
additional Ownership percentage, continuously measured from the acquisition date (or combination date), is
adjusted against capital reserve. If capital reserve is insufficient, the remaining difference is adjusted against
retained earnings.
④ Disposal of Long-term Equity Investments
In consolidated financial statements, if the parent partially disposes of its long-term equity investment in a
subsidiary without losing control, the difference between the disposal proceeds and the share of the subsidiary's
net assets corresponding to the disposed long-term equity investment is recognized in equity. If the partial disposal
results in loss of control over the subsidiary, the relevant accounting policy described in Note V.6(2) "Preparation
Methods for Consolidated Financial Statements" applies.
For other disposals of long-term equity investments, the difference between the carrying value of the disposed
equity and the actual proceeds is recognized in profit or loss.
For long-term equity investments accounted for under the equity method, if the remaining equity after disposal
continues to be accounted for under the equity method, the portion of other comprehensive income previously
recognized in equity is accounted for on the same basis as if the investee had directly disposed of the related assets
or liabilities. Changes in equity recognized due to other changes in the investee's equity (excluding net profit or
loss, other comprehensive income, and profit distribution) are proportionally reclassified to profit or loss.
For long-term equity investments accounted for under the cost method, if the remaining equity after disposal
Changchai Company, Limited Annual Report 2025
continues to be accounted for under the cost method, other comprehensive income recognized before obtaining
control under the equity method or financial instrument standards is accounted for on the same basis as if the
investee had directly disposed of the related assets or liabilities and proportionally reclassified to profit or loss.
Changes in equity recognized under the equity method due to other changes in the investee's equity (excluding net
profit or loss, other comprehensive income, and profit distribution) are proportionally reclassified to profit or loss.
If the Company loses control of an investee due to partial disposal of equity investments, in its separate financial
statements, the remaining equity that enables the Company to exert joint control or significant influence over the
investee is reclassified to the equity method, with adjustments made as if the equity method had been applied from
the initial acquisition. If the remaining equity does not enable joint control or significant influence, it is
reclassified under the financial instrument standards, with the difference between fair value and carrying value at
the date of losing control recognized in profit or loss. Other comprehensive income recognized before obtaining
control under the equity method or financial instrument standards is accounted for on the same basis as if the
investee had directly disposed of the related assets or liabilities. Changes in equity recognized under the equity
method due to other changes in the investee's equity (excluding net profit or loss, other comprehensive income,
and profit distribution) are reclassified to profit or loss at the date of losing control. For remaining equity
accounted for under the equity method, other comprehensive income and other equity changes are proportionally
reclassified. For remaining equity reclassified under the financial instrument standards, other comprehensive
income and other equity changes are fully reclassified.
If the Company loses joint control or significant influence over an investee due to partial disposal of equity
investments, the remaining equity is reclassified under the financial instrument standards, with the difference
between fair value and carrying value at the date of losing joint control or significant influence recognized in
profit or loss. Other comprehensive income recognized under the equity method is accounted for on the same
basis as if the investee had directly disposed of the related assets or liabilities when the equity method is
discontinued. Changes in equity recognized due to other changes in the investee's equity (excluding net profit or
loss, other comprehensive income, and profit distribution) are fully reclassified to investment income when the
equity method is discontinued.
If the Company disposes of its equity investments in a subsidiary step-by-step through multiple transactions until
control is lost, and these transactions constitute a "package transaction," they are treated as a single transaction to
dispose of the subsidiary's equity investments and lose control. Before losing control, the difference between the
disposal proceeds and the carrying value of the disposed equity corresponding to the long-term equity investment
is initially recognized in other comprehensive income and reclassified to profit or loss at the time control is lost.
Investment properties refer to properties held to earn rental income or for capital appreciation, or both. These
include leased land use rights, land use rights held for future appreciation and transfer, and leased buildings.
Investment properties are initially measured at cost. Subsequent expenditures related to investment properties are
capitalized if it is probable that future economic benefits associated with the property will flow to the Company
and the cost can be measured reliably. All other subsequent expenditures are recognized in profit or loss as
incurred.
The Company applies the cost model for subsequent measurement of investment properties and depreciates or
amortizes them using policies consistent with those applied to buildings or land use rights.
The impairment testing method and provision method for investment properties are detailed in Note V.20
"Impairment of Long-term Assets."
Changchai Company, Limited Annual Report 2025
When owner-occupied properties or inventories are converted to investment properties, or vice versa, the carrying
amount prior to conversion is used as the post-conversion carrying amount.
When the use of an investment property changes to owner-occupied, the property is reclassified as fixed assets or
intangible assets from the date of change. When the use of owner-occupied property changes to rental or capital
appreciation purposes, the fixed asset or intangible asset is reclassified as an investment property from the date of
change.
For conversions:
To investment properties measured using the cost model, the pre-conversion carrying amount is used as the
post-conversion carrying amount.
To investment properties measured using the fair value model, the fair value at the conversion date is used as the
post-conversion carrying amount.
An investment property is derecognized when disposed of or permanently withdrawn from use with no expected
future economic benefits. Gains or losses from the sale, transfer, retirement, or damage of investment properties
are calculated as the disposal proceeds minus the carrying amount and related taxes/expenses, and are recognized
in profit or loss.
(1) Recognition Criteria for Fixed Assets
Fixed assets are tangible assets held for the production of goods, provision of services, rental, or administrative
purposes with a useful life exceeding one accounting year. Fixed assets are recognized only when it is probable
that related economic benefits will flow to the Company and their costs can be reliably measured. Fixed assets are
initially measured at cost, taking into account the effects of estimated abandonment costs.
(2) Depreciation Methods for Various Categories of Fixed Assets
Depreciation of fixed assets is calculated on a straight-line basis over their useful lives, commencing from the
month following the date when the assets are ready for intended use. The useful lives, estimated residual values,
and annual depreciation rates for each category of fixed assets are as follows:
Estimated useful life
Category Depreciation method Depreciation rate (%)
(years)
Houses and buildings Straight-line method 20-40 2.50-5
Machinery equipment Straight-line method 6-15 6.67-16.67
Transportation equipment Straight-line method 5-10 10-20
Other equipment Straight-line method 5-10 10-20
Estimated residual value refers to the amount that the Company currently expects to obtain from disposal of the
asset, after deducting estimated disposal expenses, assuming the fixed asset has reached the end of its expected
useful life and is in the expected condition at that time.
(3) The impairment testing method and provision method for fixed assets are detailed in Note V.20 "Impairment of
Long-term Assets."
(4) Other Disclosures
Subsequent expenditures related to fixed assets are capitalized if it is probable that future economic benefits
associated with the fixed asset will flow to the Company and the cost can be measured reliably. The carrying
Changchai Company, Limited Annual Report 2025
amount of replaced parts is derecognized. All other subsequent expenditures are recognized in profit or loss as
incurred.
A fixed asset is derecognized when it is disposed of or when no future economic benefits are expected from its use
or disposal. Gains or losses arising from the sale, transfer, retirement or damage of fixed assets are calculated as
the disposal proceeds minus the carrying amount and related taxes/expenses, and are recognized in profit or loss.
The Company reviews the useful lives, estimated residual values and depreciation methods of fixed assets at least
at each financial year-end. Changes in estimates are accounted for as changes in accounting estimates.
The Company classifies construction in progress into two types: self-constructed and contractor-constructed.
Construction in progress is transferred to fixed assets when the project is completed and reaches the intended
usable condition. The criteria for determining the intended usable condition shall meet any of the following
circumstances:
The physical construction (including installation) of the fixed asset has been fully completed or substantially
completed;
Trial production or test operation has been conducted, and the results indicate that the asset can operate normally
or stably produce qualified products, or the test operation results show that it can operate or function normally;
The amount of expenditures on the construction of the fixed asset is minimal or almost no longer occurs;
The constructed or acquired fixed asset has met or substantially met the design or contract requirements.
When construction in progress reaches the intended usable condition, it is transferred to fixed assets at the actual
project cost. For projects that have reached the intended usable condition but have not yet completed final
settlement, they are first transferred to fixed assets at an estimated value. After final settlement is completed, the
original provisional value is adjusted to the actual cost, but no adjustment is made to previously calculated
depreciation.
The impairment testing method and provision method for construction in progress are detailed in Note V.20
"Impairment of Long-term Assets."
Borrowing costs include interest expenses on borrowings, amortization of discounts or premiums, ancillary costs,
and exchange differences arising from foreign currency borrowings. Borrowing costs directly attributable to the
acquisition, construction or production of a qualifying asset are capitalized when:
Expenditures for the asset have been incurred;
Borrowing costs have been incurred; and
Activities necessary to prepare the asset for its intended use or sale have commenced.
Capitalization ceases when the qualifying asset reaches its intended usable or saleable condition. All other
borrowing costs are recognized as expenses in the period in which they are incurred.
For specific borrowings, the amount to be capitalized is the actual interest expense incurred during the period, less
any interest income earned on the unused portion of the borrowings deposited in banks or from temporary
investments.
For general borrowings, the amount to be capitalized is determined by multiplying the weighted average of
accumulated expenditures on the qualifying asset in excess of specific borrowings by the capitalization rate
Changchai Company, Limited Annual Report 2025
applicable to the general borrowings. The capitalization rate is calculated based on the weighted average interest
rate of the general borrowings.
During the capitalization period, exchange differences on foreign currency specific borrowings are fully
capitalized, while exchange differences on foreign currency general borrowings are recognized in profit or loss.
A qualifying asset refers to assets such as fixed assets, investment properties and inventories that require a
substantial period of time for their acquisition, construction or production before they are ready for their intended
use or sale.
If the acquisition, construction or production of a qualifying asset is interrupted abnormally and the interruption
lasts for more than three consecutive months, the capitalization of borrowing costs shall be suspended until the
acquisition, construction or production activities recommence.
A qualifying asset refers to assets such as fixed assets, investment properties and inventories that require a
substantial period of time for their acquisition, construction or production before they are ready for their intended
use or sale.
(1) Intangible Assets
Intangible assets refer to identifiable non-monetary assets without physical form that are owned or controlled by
the Company.
Intangible assets are initially measured at cost. Expenditures related to intangible assets are capitalized if it is
probable that future economic benefits will flow to the Company and the costs can be reliably measured. All other
expenditures are recognized as expenses when incurred.
Land use rights acquired are normally accounted for as intangible assets. For self-constructed buildings such as
factories, the related land use rights expenditures and building construction costs are accounted for as intangible
assets and fixed assets separately. For purchased buildings, the purchase price is allocated between the land use
rights and buildings. If the allocation cannot be made reasonably, the entire amount is accounted for as fixed
assets.
Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives
from the date when they are available for use, based on the original cost less estimated residual value and
accumulated impairment losses. Intangible assets with indefinite useful lives are not amortized.
At the end of each period, the useful lives and amortization methods of intangible assets with finite useful lives
are reviewed. Any changes are treated as changes in accounting estimates. In addition, the useful lives of
intangible assets with indefinite useful lives are reviewed. If evidence indicates that the period of economic
benefits from the intangible asset is foreseeable, its useful life is estimated and amortized according to the policy
for intangible assets with finite useful lives.
(2) Research and Development Expenditures
The Company classifies internal research and development project expenditures into research phase expenditures
and development phase expenditures.
Expenditures in the research phase are recognized as expenses when incurred.
The Company's R&D expenditures include materials consumed, labor and service costs, amortization of R&D
equipment, amortization of other intangible assets and fixed assets used in the development process, and utilities
expenses.
The Company's specific criteria for distinguishing between research phase and development phase expenditures:
Changchai Company, Limited Annual Report 2025
The research phase refers to the stage of original and planned investigation undertaken to gain new scientific or
technical knowledge. The development phase refers to the stage of applying research findings or other knowledge
to a plan or design to produce new or substantially improved materials, devices, products, etc. before commercial
production or use.
Development phase expenditures are recognized as intangible assets only when all the following conditions are
met. Otherwise, they are recognized as expenses when incurred:
① Technical feasibility of completing the intangible asset for use or sale;
② Intention to complete and use or sell the intangible asset;
③ Ability to generate economic benefits, including demonstrating a market for products using the intangible asset
or for the intangible asset itself, or its usefulness for internal use;
④ Availability of adequate technical, financial and other resources to complete development and to use or sell the
intangible asset;
⑤ Ability to reliably measure expenditures attributable to the development phase.
The Company's specific conditions for capitalizing development phase expenditures: technical feasibility of
completion; intention to complete and use/sell; ability to generate economic benefits; availability of adequate
resources; and reliable measurement of attributable expenditures.
If research phase and development phase expenditures cannot be distinguished, all R&D expenditures are
recognized as expenses when incurred.
(3) Impairment Testing Method and Provision Method for Intangible Assets
The impairment testing method and provision method for intangible assets are detailed in Note V.20 "Impairment
of Long-term Assets."
For non-current non-financial assets such as fixed assets, construction in progress, intangible assets with finite
useful lives, right-of-use assets, investment properties measured at cost model, and long-term equity investments
in subsidiaries, joint ventures and associates, the Company assesses at each balance sheet date whether there is
any indication of impairment. If any such indication exists, the recoverable amount of the asset is estimated to
determine the impairment loss. Goodwill, intangible assets with indefinite useful lives and intangible assets not
yet available for use are tested for impairment annually, regardless of whether there is any indication of
impairment.
When the recoverable amount is less than the carrying amount, an impairment loss is recognized for the difference.
The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Fair value
is determined based on the price in the sales agreement under fair transactions; if there is no sales agreement but
an active market exists, fair value is determined based on the asset's bid price; if neither exists, fair value is
estimated based on the best available information. Costs of disposal include legal fees, related taxes,
transportation costs and other direct costs to bring the asset to a saleable condition. Value in use is determined by
discounting the estimated future cash flows expected from the asset's continuing use and ultimate disposal at an
appropriate discount rate. Impairment losses are calculated and recognized for individual assets. If it is difficult to
estimate the recoverable amount of an individual asset, the recoverable amount is determined for the
cash-generating unit to which the asset belongs. A cash-generating unit is the smallest identifiable group of assets
that generates cash inflows independently.
For goodwill presented separately in the financial statements, the carrying amount of goodwill is allocated to
Changchai Company, Limited Annual Report 2025
cash-generating units or groups of cash-generating units expected to benefit from the synergies of the business
combination when performing impairment tests. If the recoverable amount of a cash-generating unit or group of
units including allocated goodwill is less than its carrying amount, the impairment loss is recognized. The
impairment loss is first allocated to reduce the carrying amount of goodwill allocated to the unit or group, then to
other assets of the unit or group pro rata based on their carrying amounts.
Once recognized, impairment losses for the above assets are not reversed in subsequent periods.
Long-term deferred expenses refer to expenses incurred but to be amortized over more than one year in the current
and future periods. The Company measures long-term deferred expenses at actual cost and amortizes them evenly
over the expected benefit period. For long-term deferred expenses that will not benefit future accounting periods,
their carrying amounts are fully recognized in profit or loss when determined.
Contract liabilities represent the Company's obligation to transfer goods or services to customers for which
consideration has been received or is receivable. If the customer has paid consideration or the Company has
obtained an unconditional right to payment before transferring goods or services, the Company presents the
amount received or receivable as a contract liability at the earlier of when payment is actually received or when
payment is due. Contract assets and liabilities under the same contract are presented net, while those under
different contracts are not offset.
The Company's employee benefits mainly include short-term employee benefits, post-employment benefits and
termination benefits.
Short-term benefits mainly include wages, bonuses, allowances and subsidies, employee welfare expenses,
medical insurance, maternity insurance, work injury insurance, housing provident fund, labor union funds and
employee education funds, and non-monetary benefits. The Company recognizes actual short-term employee
benefits as liabilities during the accounting periods when employees render services, and charges them to profit or
loss or relevant asset costs. Non-monetary benefits are measured at fair value.
Post-employment benefits mainly include basic pension insurance and unemployment insurance.
Post-employment benefit plans include defined contribution plans. For defined contribution plans, the
corresponding payable amounts are charged to relevant asset costs or profit or loss when incurred.
Termination benefits are recognized as employee benefit liabilities when the Company can no longer unilaterally
withdraw the termination benefits offered under the redundancy plan or proposal, or when the Company
recognizes costs related to restructuring involving termination benefits, whichever is earlier, and charged to profit
or loss. However, termination benefits expected to be paid more than twelve months after the reporting period are
treated as other long-term employee benefits.
Internal retirement plans are accounted for using the same principles as termination benefits above. The Company
recognizes salaries and social insurance contributions to be paid to internally retired employees from the date they
stop rendering services to the normal retirement date as profit or loss (termination benefits) when the recognition
criteria for provisions are met.
Changchai Company, Limited Annual Report 2025
Other long-term employee benefits provided by the Company are accounted for as defined contribution plans if
they meet the criteria; otherwise, they are accounted for as defined benefit plans.
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.
Provisions are initially measured at the best estimate of the expenditure required to settle the present obligation,
and the carrying amounts are reviewed at each balance sheet date.
If all or part of the expenditure required to settle a provision is expected to be reimbursed by a third party, the
reimbursement is recognized as a separate asset when its receipt is virtually certain, and the amount recognized
does not exceed the carrying amount of the provision.
(1) Accounting Treatment for Share-based Payment
Share-based payment refers to transactions in which equity instruments are granted or liabilities based on equity
instruments are assumed in exchange for services provided by employees or other parties. Share-based payments
are classified into equity-settled share-based payments and cash-settled share-based payments.
① Equity-settled Share-based Payment
For equity-settled share-based payments to obtain employee services, the fair value of the equity instruments
granted is measured at the grant date.
If the vesting of the equity instruments is conditional upon completing a specified service period or meeting
performance conditions, the fair value is recognized over the vesting period on a straight-line basis, based on the
best estimate of the number of instruments expected to vest, with corresponding increases in capital reserves.
If the equity instruments vest immediately upon grant, the fair value is recognized as an expense on the grant date,
with a corresponding increase in capital reserves.
At each balance sheet date during the vesting period, the Company revises its estimate of the number of equity
instruments expected to vest based on the latest information (e.g., changes in the number of employees eligible for
vesting). Any adjustments are recognized in the current period’s costs or expenses, with corresponding
adjustments to capital reserves.
For equity-settled share-based payments to obtain services from non-employees:
If the fair value of the services received can be reliably measured, the expense is recognized based on the fair
value of the services at the acquisition date.
If the fair value of the services cannot be reliably measured but the fair value of the equity instruments can, the
expense is recognized based on the fair value of the equity instruments at the service acquisition date, with a
corresponding increase in shareholders’ equity.
② Cash-settled Share-based Payment
Cash-settled share-based payments are measured at the fair value of the liability incurred, determined based on
shares or other equity instruments.
If the instruments vest immediately upon grant, the liability is recognized on the grant date as an expense.
If vesting is conditional upon completing a service period or meeting performance conditions, the expense is
Changchai Company, Limited Annual Report 2025
recognized over the vesting period based on the best estimate of the number of instruments expected to vest, with
a corresponding increase in liabilities.
At each balance sheet date until settlement, the liability is remeasured at fair value, with changes recognized in
profit or loss.
(2) Accounting for Modifications or Terminations of Share-based Payment Plans
If a modification increases the fair value of the equity instruments granted, the incremental fair value (i.e., the
difference between the fair value before and after modification) is recognized as additional service cost.
If a modification reduces the total fair value or is otherwise unfavorable to employees, the original accounting
treatment continues as if the modification never occurred, unless the equity instruments are partially or fully
canceled.
If granted equity instruments are canceled during the vesting period, the remaining unvested amount is recognized
immediately in profit or loss as an accelerated vesting expense, with a corresponding adjustment to capital
reserves. If employees or other parties fail to meet non-vesting conditions (despite having the option to do so), the
grant is treated as canceled.
(3) Accounting for Share-based Payments Involving the Company’s shareholders or Controlling Parties
For share-based payment transactions between the Company and its shareholders or controlling parties, where one
party (the settlement entity) is within the Company’s consolidated scope and the other (the service recipient) is
outside:
Consolidated Financial Statements Treatment:
If the settlement entity settles using its own equity instruments, the transaction is treated as an equity-settled
share-based payment. Otherwise, it is treated as a cash-settled share-based payment.
If the settlement entity is an investor in the service recipient, it recognizes a long-term equity investment at the
grant-date fair value of the equity instruments or liability, with a corresponding increase in capital reserves (other
capital reserves) or liabilities.
If the service recipient has no settlement obligation or grants its own equity instruments to employees, the
transaction is treated as equity-settled. If the service recipient has a settlement obligation and grants instruments
other than its own equity, the transaction is treated as cash-settled.
Individual Financial Statements Treatment:
For transactions between entities within the Company’s consolidated scope where the service recipient and
settlement entity differ, each entity accounts for the transaction in its individual financial statements following the
above principles.
(1) Classification of Perpetual Bonds and Preference Shares
Financial instruments such as perpetual bonds and preference shares issued by the Company shall be classified as
equity instruments only if they meet all of the following conditions:
① The instrument does not impose any contractual obligation to deliver cash or other financial assets to another
party, or to exchange financial assets or liabilities under potentially unfavorable conditions;
② If settlement may or must occur using the Company’s own equity instruments in the future:
For non-derivative instruments, there is no contractual obligation to deliver a variable number of the Company’s
own equity instruments for settlement;
For derivative instruments, settlement can only be made by exchanging a fixed number of the Company’s own
equity instruments for a fixed amount of cash or other financial assets.
Changchai Company, Limited Annual Report 2025
Financial instruments issued by the Company that do not meet the above conditions shall be classified as financial
liabilities.
For compound financial instruments issued by the Company:
The liability component is measured at fair value and recognized as a liability.
The residual amount (total proceeds received minus the fair value of the liability component) is recognized as
"other equity instruments."
Transaction costs are allocated between the liability and equity components in proportion to their respective shares
of the total issuance proceeds.
(2) Accounting Treatment for Perpetual Bonds and Preference Shares
For perpetual bonds and preference shares classified as financial liabilities:
Interest, dividends, gains/losses, and gains/losses from redemption or refinancing are recognized in profit or loss,
except for borrowing costs eligible for capitalization (see Note III.18 "Borrowing Costs").
For perpetual bonds and preference shares classified as equity instruments:
Issuance (including refinancing), repurchase, sale, or cancellation is treated as a change in equity, with related
transaction costs deducted from equity.
Distributions to holders of equity instruments are treated as profit distributions.
The Company does not recognize changes in the fair value of equity instruments.
The Company recognizes revenue when control of the relevant goods is transferred to the customer, provided all
the following conditions are met: the contract has been approved by all parties who are committed to fulfilling
their respective obligations; the contract clearly specifies the rights and obligations of each party regarding the
goods or services to be transferred; the contract contains clear payment terms related to the goods to be transferred;
the contract has commercial substance, meaning its performance will change the risk, timing or amount of the
Company's future cash flows; and the consideration to which the Company is entitled for transferring goods to the
customer is probable of collection.
At contract inception, the Company identifies the distinct performance obligations in the contract and allocates the
transaction price to each performance obligation based on the relative stand-alone selling prices of the goods or
services promised. In determining the transaction price, the Company considers the effects of variable
consideration, significant financing components in the contract, non-cash consideration, and consideration payable
to customers.
For each performance obligation, the Company recognizes revenue over time by measuring progress toward
complete satisfaction of that performance obligation if any of the following criteria are met: the customer
simultaneously receives and consumes the benefits as the Company performs; the customer controls the asset as it
is created or enhanced; or the asset has no alternative use and the Company has an enforceable right to payment
for performance completed to date. Progress is measured using an input method appropriate to the nature of the
goods transferred. When progress cannot be reasonably measured, revenue is recognized to the extent of costs
incurred that are expected to be recoverable until progress can be reasonably measured.
If none of the above criteria are met, revenue is recognized at the point in time when control of the goods is
transferred to the customer. In assessing whether control has transferred, the Company considers indicators
including: the Company's present right to payment; transfer of legal title; physical possession; transfer of
significant risks and rewards of Ownership; customer acceptance; and other indicators of control transfer.
Changchai Company, Limited Annual Report 2025
For contracts with variable consideration, the Company estimates the amount using either the expected value or
most likely amount method. The transaction price including variable consideration does not exceed the amount for
which it is highly probable that cumulative revenue recognized will not reverse when uncertainty is resolved. At
each reporting date, the Company reassesses estimates of variable consideration included in the transaction price.
Consideration payable to a customer is deducted from the transaction price unless it is for distinct goods or
services, with the reduction recognized at the later of revenue recognition or payment (or commitment to pay)
date.
The Company assesses whether it is a principal or agent based on whether it controls the goods or services before
transfer to the customer. As principal, revenue is recognized at the gross amount of consideration; as agent,
revenue is recognized at the net amount retained after paying other parties.
The Company's specific revenue recognition methods are as follows:
Sales contracts typically contain a single performance obligation to transfer goods, satisfied at a point in time.
Domestic sales revenue is recognized when: goods are delivered and accepted per contract; payment is received or
collectability is probable; significant risks/rewards are transferred; and legal title passes.
Export sales revenue is recognized when: goods are cleared through customs with bill of lading obtained; payment
is received or collectability is probable; significant risks/rewards are transferred; and legal title passes.
Interest income is recognized based on time and effective interest rate.
Contract costs comprise costs to fulfill and costs to obtain contracts.
The costs incurred by the Company for the performance of a contract, which simultaneously meet the following
conditions, shall be recognized as an asset as contract performance costs:
(1) Directly related to a contract (labor, materials, overhead, client-reimbursable costs);
(2) Enhance resources for future performance; and
(3) Probable of recovery.
Incremental costs to obtain contracts are capitalized if probable of recovery, unless the amortization period would
be one year or less.
Capitalized contract costs are amortized consistently with revenue recognition.
Impairment losses are recognized when carrying amount exceeds the higher of:
(1) Expected remaining consideration; and
(2) Estimated costs to complete transfer.
Reversals cannot exceed the carrying amount that would have existed without impairment.
Government grants refer to monetary or non-monetary assets obtained by the Company from the government
without compensation, excluding capital contributions made by the government as an investor with corresponding
Ownership rights. Government grants are classified into asset-related government grants and income-related
government grants. Grants obtained for the acquisition or construction of long-term assets through other means
are defined as asset-related government grants; other government grants are defined as income-related
government grants. If government documents do not explicitly specify the grant recipient, the following methods
Changchai Company, Limited Annual Report 2025
are used to classify the grants:
(1) For government documents that specify particular projects, classification is based on the relative proportion of
expenditures forming assets versus expenses in the project budget, with this proportion reviewed at each balance
sheet date and adjusted if necessary;
(2) For government documents that only provide general descriptions of usage without specifying particular
projects, the grants are treated as income-related government grants.
Government grants in the form of monetary assets are measured at the amount received or receivable.
Government grants in the form of non-monetary assets are measured at fair value; if fair value cannot be reliably
determined, they are measured at nominal amount. Government grants measured at nominal amount are directly
recognized in current period profit or loss.
The Company generally recognizes and measures government grants based on the actual amount received.
However, at period-end, if there is conclusive evidence that the Company meets the relevant conditions of fiscal
support policies and expects to receive fiscal support funds, the grants are measured at the receivable amount.
Government grants measured at receivable amount must simultaneously meet the following conditions:
(1) The receivable grant amount has been confirmed by the competent government authority or can be reasonably
estimated based on officially released fiscal fund management regulations, with no significant uncertainty
expected in the amount;
(2) The grants are based on fiscal support projects and corresponding fiscal fund management regulations
officially released by local finance departments in accordance with the "Government Information Disclosure
Regulations," and such regulations must be universally applicable (available to any enterprise meeting the
specified conditions) rather than specifically designed for particular enterprises;
(3) The relevant grant approval documents clearly specify the payment timeline, and the payment is supported by
corresponding fiscal budgets, thereby reasonably ensuring receipt within the stipulated period.
Asset-related government grants are recognized as deferred income and systematically amortized into current
period profit or loss over the useful life of the relevant assets. Income-related government grants used to
compensate for future related costs, expenses, or losses are recognized as deferred income and amortized into
current period profit or loss when the related costs, expenses, or losses are recognized; those used to compensate
for already incurred related costs, expenses, or losses are directly recognized in current period profit or loss.
Government grants containing both asset-related and income-related components are accounted for separately by
component; if the components cannot be reasonably distinguished, the entire grant is classified as income-related.
Government grants related to the Company's ordinary activities are recognized in other income or offset against
related costs and expenses based on the economic substance of the transaction; grants unrelated to ordinary
activities are recognized in non-operating income or expenses.
When recognized government grants need to be returned, any remaining deferred income balance is first offset,
with any excess recognized in current period profit or loss; in other cases, the return is directly recognized in
current period profit or loss.
Deferred tax assets or deferred tax liabilities are recognized based on the differences between the carrying
amounts and tax bases of assets and liabilities (including items not recognized as assets or liabilities but having
determinable tax bases under tax laws), calculated using the applicable tax rates expected to apply when the assets
are recovered or liabilities are settled.
Changchai Company, Limited Annual Report 2025
Deferred tax assets are recognized only to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences can be utilized. At the balance sheet date, if there is conclusive
evidence indicating sufficient taxable profit will likely be available in future periods to utilize deductible
temporary differences, previously unrecognized deferred tax assets are recognized.
At each balance sheet date, the carrying amounts of deferred tax assets are reviewed. If it is no longer probable
that sufficient taxable profit will be available to realize the benefit of the deferred tax asset, the carrying amount is
reduced. The reduction is reversed when it becomes probable that sufficient taxable profit will be available.
The Company's current tax and deferred tax are recognized as income tax expense or income in profit or loss,
except for income taxes arising from: business combinations; and transactions or events recognized directly in
equity.
When the Company has a legally enforceable right to settle current tax assets and liabilities on a net basis and
intends either to settle on a net basis or to realize the asset and settle the liability simultaneously, current tax assets
and current tax liabilities are presented net.
(1) The Company as a Lessee
The Company's leased assets are primarily buildings.
At the commencement date of the lease term, the Company recognizes right-of-use assets and lease liabilities for
leases other than short-term leases and leases of low-value assets, and recognizes depreciation expenses and
interest expenses separately during the lease term.
For short-term leases and leases of low-value assets, the Company recognizes lease payments on a straight-line
basis as expenses in the respective periods of the lease term.
① Right-of-use Assets
Right-of-use assets represent the lessee's right to use the leased asset during the lease term. At the commencement
date of the lease term, right-of-use assets are initially measured at cost, which includes:
The initial measurement amount of the lease liability;
Lease payments made at or before the commencement date, less any lease incentives received;
Initial direct costs incurred by the lessee;
Estimated costs to be incurred by the lessee for dismantling and removing the leased asset, restoring the site where
the asset is located, or returning the asset to the condition required by the lease terms.
The Company depreciates right-of-use assets using the straight-line method by category. For assets where
Ownership is reasonably certain to be obtained at the end of the lease term, depreciation is calculated over the
remaining useful life of the leased asset. For assets where Ownership cannot be reasonably determined,
depreciation is calculated over the shorter of the lease term or the remaining useful life of the leased asset.
The Company determines whether right-of-use assets are impaired and accounts for them in accordance with the
relevant provisions of Accounting Standards for Business Enterprises No. 8—Impairment of Assets.
② Lease Liabilities
Lease liabilities are initially measured at the present value of lease payments not yet paid at the commencement
date of the lease term. Lease payments include:
Fixed payments (including in-substance fixed payments), less any lease incentives;
Variable lease payments that depend on an index or rate;
Changchai Company, Limited Annual Report 2025
Amounts expected to be payable under residual value guarantees provided by the lessee;
The exercise price of purchase options, if the lessee is reasonably certain to exercise the option;
Payments required to exercise termination options, if the lease term reflects the lessee exercising the termination
option.
The Company uses the interest rate implicit in the lease as the discount rate; if this cannot be reasonably
determined, the Company's incremental borrowing rate is used. Interest expenses on lease liabilities are calculated
using a fixed periodic interest rate and recorded in financial expenses. The periodic interest rate is the discount
rate or revised discount rate used by the Company.
Variable lease payments not included in the measurement of lease liabilities are recognized in profit or loss when
incurred.
When the Company's assessment of renewal options, termination options, or purchase options changes, the lease
liability is remeasured at the present value of the revised lease payments using the revised discount rate, with
corresponding adjustments to the carrying amount of the right-of-use asset. When in-substance fixed payments,
expected payments under residual value guarantees, or variable lease payments dependent on an index or rate
change, the lease liability is remeasured at the present value of the revised lease payments using the original
discount rate, with corresponding adjustments to the carrying amount of the right-of-use asset.
③ Short-term Leases and Leases of Low-value Assets
For short-term leases (leases with a term of 12 months or less at commencement date) and leases of low-value
assets (value below RMB 2,000), the Company applies a simplified approach by not recognizing right-of-use
assets or lease liabilities, and instead recognizes lease payments on a straight-line basis or another systematic and
rational basis as expenses in the respective periods of the lease term.
(2) The Company as a Lessor
① Operating Leases
The Company recognizes lease receipts from operating leases as rental income on a straight-line basis over the
lease term. Variable lease payments not included in lease receipts are recognized in profit or loss when incurred.
② Finance Leases
At the commencement date of the lease term, the Company recognizes finance lease receivables and derecognizes
the leased assets. Finance lease receivables are initially measured at the net investment in the lease (the sum of the
unguaranteed residual value and the present value of lease receipts not yet received at the commencement date,
discounted using the interest rate implicit in the lease), with interest income recognized during the lease term
using a fixed periodic interest rate. Variable lease payments not included in the measurement of the net investment
in the lease are recognized in profit or loss when incurred.
√ Applicable □ Not applicable
Disclosure Matters Involving Materiality Materiality Threshold Determination Methods and Selection
Judgment Criteria Basis
Significant individually assessed receivables
Receivables with ending balance exceeding RMB 1,000,000
with specific bad debt provisions
Construction in progress projects either transferred to fixed
Material construction in progress
assets or with ending balance exceeding RMB 3,000,000
Changchai Company, Limited Annual Report 2025
Significant accounts payable aged over one Accounts payable with ending balance exceeding RMB
year or past due 1,000,000
Advance receipts with ending balance exceeding RMB
Material advance receipts aged over one year
Contract liabilities with ending balance exceeding RMB
Material contract liabilities aged over one year
Other payables with ending balance exceeding RMB
Material other payables aged over one year
Significant cash receipts related to investing Individual investing activities with cash inflows exceeding
activities RMB 3,000,000
Significant cash payments related to investing Individual investing activities with cash outflows exceeding
activities RMB 3,000,000
Subsidiaries whose total assets exceed 5% of consolidated
Material non-wholly owned subsidiaries
total assets
Debt Restructuring
(1) Timing of Recognizing Debt Restructuring Gains and Losses
The Company may derecognize the relevant receivables and payables and recognize gains and losses related to
debt restructuring only on the debt restructuring completion date when the derecognition conditions for financial
assets and financial liabilities are met. The debt restructuring completion date refers to the date when the board of
directors and shareholders' meeting resolutions have been approved, the debt restructuring agreement has been
signed or the court ruling has been issued, the relevant assets have been transferred to the creditor, the debt has
been converted into capital, or the modified debt terms have commenced execution.
For debt restructuring through asset settlement, the recognition point is when the relevant assets have been
delivered and the Ownership transfer procedures have been completed. For debt restructuring through conversion
of debt into equity, the recognition point is when the industrial and commercial registration procedures or the
equity registration with the registration authority have been completed. For debt restructuring through
modification of debt terms, the recognition point is when it is determined that the terms can be performed and
execution has commenced. Debt restructuring negotiations that commenced during the reporting period but were
completed after the balance sheet date are not treated as post-balance-sheet events.
(2) Accounting Treatment by the Creditor
When the Company acts as a creditor, the difference between the fair value of the relinquished claim and its
carrying amount is recognized in profit or loss.
(3) Accounting Treatment by the Debtor
A. For debt restructuring through asset settlement, the relevant assets and the settled debt are derecognized when
the derecognition conditions are met. The difference between the carrying amount of the settled debt and the
carrying amount of the transferred assets is recognized in profit or loss.
B. For debt restructuring through conversion of debt into equity instruments, the settled debt is derecognized when
the derecognition conditions are met. The difference between the carrying amount of the settled debt and the
Changchai Company, Limited Annual Report 2025
amount determined based on the fair value of the equity instruments is recognized in profit or loss.
C. For debt restructuring through modification of other terms, the restructured debt is re-recognized and
remeasured. The difference between the remeasured debt and the original debt is recognized in profit or loss.
D. For debt restructuring through settlement with multiple assets or a combination of methods, the equity
instruments and restructured debt are recognized and measured in accordance with the Accounting Standards for
Business Enterprises. The difference between the carrying amount of the settled debt and the sum of the carrying
amounts of the transferred assets and the recognized amounts of the equity instruments and restructured debt is
recognized in profit or loss.
(1) Change of Accounting Policies
□ Applicable √ Not applicable
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation of the New
Accounting Standards Implemented since 2025
□ Applicable √ Not applicable
VI. Taxation
Category of taxes Tax rate
Output VAT is calculated on taxable revenue at rates of 13%, 9%, 6%
VAT and 5%, with VAT payable being the balance after deducting input VAT
credits allowable in the current period.
Urban maintenance and Payment is calculated and made in accordance with local tax regulations
construction tax applicable to each tax-paying unit.
Enterprise income tax See the table below for details.
Notes of the disclosure situation of the taxpaying bodies with different enterprise income tax rate
Name Income tax rate
Changchai Company, Limited 15%
Changchai Wanzhou Diesel Engine Co., Ltd. 15%
Changzhou Changchai Benniu Diesel Engine Fittings
Co., Ltd.
Changzhou Horizon Investment Co., Ltd. 25%
Changzhou Changchai Horizon Agricultural
Equipment Co., Ltd.
Changzhou Fuji Changchai Robin Gasoline Engine 15%
Changchai Company, Limited Annual Report 2025
Co., Ltd.
Jiangsu Changchai Machinery Co., Ltd. 25%
Changzhou Xingsheng Real Estate Management Co.,
Ltd.
Zhenjiang Siyang Diesel Engine Manufacturing Co.,
Ltd.
Changzhou Changniu Machinery Co., Ltd. 25%
(1)On November 6, 2024, the Company was re-certified as a High-Tech Enterprise and continues to enjoy a
preferential corporate income tax rate of 15% during the reporting period.
(2)The controlling subsidiary Changchai Wanzhou Diesel Engine Co., Ltd. qualifies for the Western Development
tax incentive under:
Notice on Tax Policies for the Implementation of Western Development Strategy (jointly issued by the Ministry of
Finance, GAC, and SAT) Announcement No. 23 [2020] of the Ministry of Finance (extending the Western
Development corporate income tax policy) from January 1, 2011 to December 31, 2030, it is subject to a reduced
tax rate of 15%.
(3)On November 6, 2023, the wholly-owned subsidiary Changzhou Fuji Changchai Robin Gasoline Engine Co.,
Ltd. was re-certified as a High-Tech Enterprise and applies a 15% preferential tax rate during the reporting period.
(4)The wholly-owned subsidiary Changzhou Xingsheng Real Estate Management Co., Ltd. qualifies as an eligible
small and low-profit enterprise and is taxed at 5% during the reporting period.
(5)On November 18, 2025, the subsidiary Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd. obtained
High-Tech Enterprise certification and benefits from a 15% tax rate during the reporting period.
VII．Notes to Major Items in the Consolidated Financial Statements of the Company
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 164,159.29 84,482.59
Bank deposits 1,267,225,051.01 933,972,475.61
Other monetary assets 70,842,582.34 129,643,534.39
Total 1,338,231,792.64 1,063,700,492.59
Including: Total amount of funds
deposited overseas
Total amount of funds with usage
restrictions due to mortgage, 90,163,871.20 171,018,607.75
pledge, freezing or other reasons
Changchai Company, Limited Annual Report 2025
Other Disclosures:
Restricted funds:
? Bills guarantee deposits: RMB 69,220,383.90
? Bid/tender bonds and performance bonds: RMB 880,980.45
? Time deposits and accrued interest (restricted): RMB 20,062,506.85
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value
through profit or loss
Of which:
Stocks 73,740,010.00 52,598,990.00
Financial products 298,444,679.98 251,068,469.65
Of which:
Total 372,184,689.98 303,667,459.65
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 386,557,535.74 318,814,017.13
Total 386,557,535.74 318,814,017.13
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Carryi Carry
Category Withdr Withdr
ng ing
Amou Propor Amou awal Amoun Proport Amoun awal
value value
nt tion nt propor t ion t proport
tion ion
Notes
receivable for 0.00 0.00% 0.00 0.00% 0.00 0.00 0.00% 0.00 0.00% 0.00
which bad
Changchai Company, Limited Annual Report 2025
debt
provision
separately
accrued
Of which:
Notes
receivable for
which bad 386,55 386,55 318,81 318,8
debt 7,535. 0.00 0.00% 7,535. 4,017.1 0.00 0.00% 14,01
% %
provision 74 74 3 7.13
accrued by
group
Of which:
Bank 386,55 386,55 318,81 318,8
acceptance 7,535. 0.00 0.00% 7,535. 4,017.1 0.00 0.00% 14,01
% %
bills 74 74 3 7.13
Total 7,535. 0.00 0.00% 7,535. 4,017.1 —— 0.00 0.00% 14,01
%
Provision for Bad Debts by Portfolio: the provision for bad debts is calculated based on the bank acceptance bills
portfolio
Unit: RMB
Ending balance
Category
Carrying amount Bad debt provision Withdrawal proportion
Bank acceptance bill 386,557,535.74 0.00 0.00%
Total 386,557,535.74 0.00
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes receivable:
□Applicable √ Not applicable
(3) Notes Receivable Pledged by the Company at the Period-end: None
(4) Notes Receivable which Had Endorsed by the Company or had Discounted but had not Due on the
Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination Amount of not terminated
Item
at the period-end recognition at the period-end
Bank acceptance bill 0.00 136,251,951.53
Total 0.00 136,251,951.53
Changchai Company, Limited Annual Report 2025
(5) Notes Transferred to Accounts Receivable Due to Non-performance by Issuers at Period-end
As of the period-end, there were no notes transferred to accounts receivable due to non-performance by issuers.
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 458,742,679.98 441,388,545.87
Over 3 years 134,667,210.39 140,104,147.16
Over 5 years 130,084,586.05 131,139,981.24
Total 595,409,718.16 589,230,509.70
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Categ
Withd Carrying Withd Carrying
ory
Propo rawal value Propo rawal value
Amount Amount Amount Amount
rtion propor rtion propor
tion tion
Changchai Company, Limited Annual Report 2025
Accou
nts
receiv
able
withdr
awal
of
Bad 0.00 0.00
debt
provis
ion
separa
tely
accrue
d
Of
which
:
Accou
nts
receiv
able
withdr
awal 567,080, 95.24 115,331, 20.34 451,748, 562,373, 95.44 118,119, 21.00 444,254,
of bad 408.09 % 875.75 % 532.34 721.01 % 480.99 % 240.02
debt
provis
ion of
by
group
Of
which
:
Changchai Company, Limited Annual Report 2025
Accou
nts
receiv
able
for
which
bad
debt
provis
ion
accrue
d by
credit
risk
featur
es
group
Total —— —— —— ——
Individually Assessed Bad Debt Provisions: RMB28,329,310.07, including significant impairment items of
RMB26,122,839.39. The details are presented below:
Unit: RMB
Beginning balance Ending balance
Withdraw
Reason
Name Carrying Bad debt Carrying Bad debt al
for
amount provision amount provision proportio
withdraw
n
Difficult
Customer 1 5,972,101.90 5,972,101.90 5,972,101.90 5,972,101.90 100.00%
to recover
Difficult
Customer 2 4,592,679.05 4,592,679.05 4,592,679.05 4,592,679.05 100.00%
to recover
Difficult
Customer 3 0.00 0.00 3,543,464.15 3,543,464.15 100.00%
to recover
Difficult
Customer 4 2,584,805.83 2,584,805.83 2,584,805.83 2,584,805.83 100.00%
to recover
Difficult
Customer 5 2,797,123.26 2,797,123.26 2,254,860.60 2,254,860.60 100.00%
to recover
Difficult
Customer 6 2,025,880.18 2,025,880.18 2,025,880.18 2,025,880.18 100.00%
to recover
Difficult
Customer 7 1,902,326.58 1,902,326.58 1,902,326.58 1,902,326.58 100.00%
to recover
Changchai Company, Limited Annual Report 2025
Difficult
Customer 8 1,759,397.30 1,759,397.30 1,682,721.03 1,682,721.03 100.00%
to recover
Difficult
Customer 9 1,564,000.07 1,564,000.07 1,564,000.07 1,564,000.07 100.00%
to recover
Total 23,198,314.17 23,198,314.17 26,122,839.39 26,122,839.39 -- --
Withdrawal of bad debt provision by group: Provision for bad debts by credit risk characteristic group
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 458,540,131.91 9,170,802.64 2.00%
Over 5 years 105,368,032.91 105,368,032.91 100.00%
Total 567,080,408.09 115,331,875.75 --
If the provision for bad debts of accounts receivable is calculated and withdrawn according to the general model
of expected credit losses:
□ Applicable √ Not applicable
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning
Category Reversed or Ending balance
balance Withdrawal Verification Others
recovered
Bad debt
provision
separately
accrued
Withdrawal
of bad debt
provision by
group
Total 144,976,269.68 708,289.44 553,262.66 1,470,110.64 143,661,185.82
Changchai Company, Limited Annual Report 2025
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Accounts receivable with actual verification 1,470,110.64
Of which the verification of significant accounts receivable:
Unit: RMB
Arising from
Nature of the Verification
Verified Reason for related-party
Name of the entity accounts procedures
amount verification transactions or
receivable performed
not
The part that
Accounts cannot be
Internal
Customer 1 receivable for 1,470,110.64 recovered in No
approval
goods bankruptcy
liquidation
Total 1,470,110.64
(5)Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according to
Arrears Party
Unit: RMB
Ending balance
Proportion to of bad debt
Ending balance total ending provision of
Ending balance Ending balance
Name of the of accounts balance of accounts
of accounts of contract
entity receivable and accounts receivable and
receivable assets
contract assets receivable and impairment
contract assets provision for
contract assets
Customer 1 268,525,021.53 0.00 268,525,021.53 45.10% 5,370,500.43
Customer 2 32,598,371.99 0.00 32,598,371.99 5.47% 651,967.44
Customer 3 24,345,164.30 0.00 24,345,164.30 4.09% 486,903.29
Customer 4 18,747,411.60 0.00 18,747,411.60 3.15% 374,948.23
Customer 5 16,814,723.38 0.00 16,814,723.38 2.82% 336,294.47
Total 361,030,692.80 0.00 361,030,692.80 60.63% 7,220,613.86
(1)Accounts Receivable Financing Listed by Category
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 165,125,708.93 223,261,002.76
Total 165,125,708.93 223,261,002.76
(2) Notes Receivable Pledged by the Company at the Period-end: None
(3) Accounts receivable financing which had been endorsed by the Company or had discounted but had not due at
the period-end
Unit: RMB
Amount of recognition termination Amount of not terminated
Category
at the period-end recognition at the period-end
Bank acceptance bill 579,965,650.49
Total 579,965,650.49
(4)Changes in Receivables Financing and Fair Value Fluctuations During the Reporting Period
Unit: RMB
Beginning balance Changes in the current period Ending balance
Fair
Item Fair Value Fair Value
Cost Cost Cost Value
Changes Changes
Changes
Notes
Receivable
Unit: RMB
Item Ending balance Beginning balance
Dividend receivable 0.00 7,165,080.00
Other receivables 5,495,898.75 2,682,361.82
Total 5,495,898.75 9,847,441.82
(1) Dividend receivable
Unit: RMB
Projects (or Investee Entities) Ending balance Beginning balance
Jiangsu Bank 2024 Interim
Dividend Announcement
Total 0.00 7,165,080.00
(2) Other Receivables
Unit: RMB
Changchai Company, Limited Annual Report 2025
Nature Ending carrying value Beginning carrying value
Margin and cash pledge 1,300.00 1,300.00
Intercompany funds 23,131,823.56 23,292,830.56
Accounts receivable for
compensation
Petty cash and borrowings by
employees
Other 13,929,431.10 14,177,743.14
Total 41,207,718.24 38,337,126.78
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within 1 year (including 1 year) 5,218,085.95 2,514,999.73
Over 3 years 35,711,822.20 35,363,896.55
Over 5 years 35,522,534.44 35,051,949.19
Total 41,207,718.24 38,337,126.78
√Applicable □Not applicable
Provision for bad debts based on general model of expected credit losses
Unit: RMB
First stage Second stage Third stage
Expected loss in Expected loss in
Expected credit
Bad debt provision the duration (credit the duration Total
loss of the next
impairment not (credit impairment
occurred) occurred)
Balance of 1 January
Balance of 1 January
Period
--Transfer to Second
-3,475.02 3,475.02
stage
-- Transfer to Third stage -18,000.00 18,000.00
Changchai Company, Limited Annual Report 2025
-- Reverse to Second
stage
-- Reverse to First stage
Withdrawal of the
Current Period
Reversal of the Current
Period
Write-offs of the Current
Period
Verification of the
Current Period
Other changes
Balance of 31 December
The basis for the division of each stage and the withdrawal proportion of bad debt provision: None
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning Ending
Category Reversed or Charged-off/
balance Withdrawal Others balance
recovered Written-off
Bad debt
provision
separately
accrued
Withdrawal
of bad debt
provision by
group
Total 35,654,764.96 123,599.48 13,905.02 52,639.93 35,711,819.49
Unit: RMB
Item Write-off Amount
Write-off of Other Receivables 52,639.93
Unit: RMB
Changchai Company, Limited Annual Report 2025
Proportion to
total ending Ending
Ending
Name of the entity Nature Aging balance of balance of bad
balance
other debt provision
receivables %
Housing Expropriation
and Compensation Accounts
Service Center, Sanjing receivable for 3,348,087.00 Within 1 year 8.12% 66,961.74
Street, Xinbei District, compensation
Changzhou
Changzhou Compressor Intercourse Over 5 years
Factory funds
Changchai Group Imp. Intercourse Over 5 years
& Exp. Co., Ltd. funds
Changzhou New Intercourse Over 5 years
District Accounting funds 1,626,483.25 3.95% 1,626,483.25
Center
Changchai Group Intercourse Over 5 years
Settlement Center funds
Total 11,896,434.43 28.87% 8,615,309.17
(1) Prepayment Listed by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 21,279,375.93 95.05% 11,874,660.61 93.32%
Over 3 years 6,850.00 0.03% 6,850.00 0.05%
Total 22,389,102.11 -- 12,725,958.70 --
(2)Top 5 Prepayment in Ending Balance Collected according to the Prepayment Target
Unit: RMB
Proportion of Total Prepayment
Name of the entity Ending balance
Balance at Period-End (%)
Changchai Company, Limited Annual Report 2025
Supplier 1 13,543,309.70 60.49%
Supplier 2 3,305,039.00 14.76%
Supplier 3 745,914.20 3.33%
Supplier 4 686,364.94 3.07%
Supplier 5 672,454.04 3.00%
Total 18,953,081.88 84.65%
Whether the Company needs to comply with the disclosure requirements for the real estate industry
No
(1)Category of Inventory
Unit: RMB
Ending balance Beginning balance
Depreciation Depreciation
reserves of reserves of
inventories inventories
or or
Item Carrying Carrying Carrying Carrying
impairment impairment
amount value amount value
provision for provision for
contract contract
performance performance
costs costs
Raw 217,633,853. 14,119,489.7 203,514,363. 210,549,278. 201,282,988.
materials 60 2 88 77 32
Materials
processed on 0.00 0.00
commission
Goods in 73,699,810.2 70,294,566.6 79,357,978.3 75,229,833.6
process 7 4 4 8
Finished 499,741,040. 33,057,275.5 466,683,764. 559,878,239. 32,330,091.1 527,548,148.
goods 42 9 83 54 6 38
Low priced
and easily 1,437,928.10 0.00 1,437,928.10 1,542,344.91 0.00 1,542,344.91
worn articles
Total
(2)Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs
Changchai Company, Limited Annual Report 2025
Unit: RMB
Increase Decrease
Beginning Transferred-ba
Item Other Ending balance
balance Withdrawal Others ck or
s
charged-off
Raw materials 9,266,290.45 9,636,664.94 4,783,465.67 14,119,489.72
Goods in
process
Finished goods 32,330,091.16 13,696,256.86 12,969,072.43 33,057,275.59
Total 45,724,526.27 24,029,625.40 19,172,142.73 50,582,008.94
Unit: RMB
Item Ending balance Beginning balance
The VAT tax credits 16,444,311.47 51,823,671.46
Prepaid corporate income tax 2,492,261.30 2,705,816.46
Prepaid expense 84,155.21 75,533.75
Total 19,020,727.98 54,605,021.67
Unit: RMB
Reason
for
Accumula assigning
Gains Accumulat
Losses tive losses to
recorded ive gains
recorded recorded Dividend measure
in other recorded
in other in other income in fair
comprehe in other
Ending Beginning comprehe comprehe recogniz value of
Item nsive comprehe
balance balance nsive nsive ed in which
income in nsive
income in income in current changes
the income in
the current the year included
current the current
period current other
period period
period comprehe
nsive
income
Non-tra Non-tradi
ding ng equity
equity investmen
Changchai Company, Limited Annual Report 2025
investm t
ent
Total
Non-trading equity instrument investment disclosed by category
Unit: RMB
Reason for
assigning to
measure by
fair Reason for
Amount of
value,Reason other
other
Dividend for assigning comprehensiv
Accumulated Accumulate comprehensiv
Item income to measure by e income
gains d losses e transferred
recognized fair value, transferred to
to retained
with changes retained
earnings
included in earnings
other
comprehensiv
e income
Changzhou
Synergetic
Innovation
Private Non-trading
Equity 216,061,295.81 equity
Fund investment
(Limited
Partnership
)
Beijing
Non-trading
Foton
Motor Co.,
investment
Ltd
Bank of Non-trading
Jiangsu 200,574,000.00 equity
Co., Ltd. investment
Unit: RMB
Begin Beginn Increase/decrease Endi Ending
Invest
ning ing Additi Reduc Gain Adjustm Cha Cash Withdr Ot ng balanc
ees
balan balanc onal ed or ent of nges bonus awal her balan e of
Changchai Company, Limited Annual Report 2025
ce e of invest invest loss other in or of ce depreci
(carry depreci ment ment recog compreh othe profit depreci (carr ation
ing ation nized ensive r annou ation ying reserve
value reserve under income equit nced reserve value s
) s the y to s )
equity issue
metho
d
I. Joint venture
Subtot
al
II. Associated enterprises
II.
Assoc
iated 0.00 0.00
.50 .50
enterp
rises
Subtot 44,182 44,182
al .50 .50
Total 0.00 0.00
.50 .50
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
Unit: RMB
Item Ending balance Beginning balance
Financial Assets at Fair Value Through Profit or
Loss (Including: Equity Instrument Investments)
Total 337,118,757.03 377,869,217.49
Changchai Company, Limited Annual Report 2025
(1)Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Total
I. Original carrying value 93,077,479.52 93,077,479.52
(1) Outsourcing
(2) Transfer from inventories/fixed
assets/construction in progress
(3) Enterprise combination increase
(1) Disposal 5,444,908.38 5,444,908.38
(2) Other transfer
II. Accumulative depreciation and
accumulative amortization
(1) Withdrawal or amortization 2,096,713.56 2,096,713.56
(1) Disposal 5,444,908.38 5,444,908.38
(2) Other transfer
III. Depreciation reserves
(1) Withdrawal
(1) Disposal
(2) Other transfer
IV. Carrying value
Changchai Company, Limited Annual Report 2025
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 550,316,120.80 615,414,505.40
Disposal of fixed assets
Total 550,316,120.80 615,414,505.40
(1)List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation Other
Item Total
buildings equipment equipment equipment
I. Original
carrying value
balance
amount of the 507,996.24 8,902,995.47 485,482.00 2,270,938.60 12,167,412.31
period
(1) Purchase 224,592.52 1,732,258.11 48,672.57 707,605.90 2,713,129.10
(2) Transfer
from
construction in
progress
(3) Enterprise
combination
increase
Changchai Company, Limited Annual Report 2025
amount of the 7,087,285.73 75,133,766.83 1,677,803.90 685,596.68 84,584,453.14
period
(1) Disposal or
scrap
(2) Transfer
from
construction in
progress
(3) Others
(Note 1)
balance
II. Accumulated
Depreciation
balance
amount of the 19,538,916.60 49,455,305.05 1,286,140.12 5,583,245.68 75,863,607.45
period
(1) Withdraw 19,538,916.60 49,455,305.05 1,286,140.12 5,583,245.68 75,863,607.45
amount of the 6,391,678.99 74,206,267.61 1,625,532.10 676,954.28 82,900,432.98
period
(1) Disposal or
scrap
(2) Others
(Note 1)
balance
III. Impairment
Provision
balance
amount of the
period
(1) Withdraw
Changchai Company, Limited Annual Report 2025
amount of the 281,830.70 281,830.70
period
(1) Disposal or
scrap
balance
IV. Carrying
value
carrying value
carrying value
Note 1: The "Other Disposals" of fixed assets relate to buildings and equipment demolished for the urban
redevelopment project at the Changchai Co., Ltd. Sanjing Branch site (see Note VII. 19 for details).
(2)List of Temporarily Idle Fixed Assets
Unit: RMB
Original Accumulative Depreciation
Item Carrying value Note
carrying value depreciation reserves
Houses and
buildings
Transportation Note 2
equipment
Other equipment 1,059,544.05 1,052,562.88 6,981.17
Machinery
equipment
Note 2: Due to public interest requirements for urban redevelopment, the Xinbei District People's Government of
Changzhou has decided to implement the expropriation of buildings within the Phase I scope of the Sanjing
Subdistrict Foundry Plant and surrounding area urban renewal project. The expropriation area covers the
Company's former foundry production base, where portions of the fixed assets were in an idle state.
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 2,801,650.98 3,376,866.69
Engineering materials
Total 2,801,650.98 3,376,866.69
Changchai Company, Limited Annual Report 2025
(1)List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Provision Provision
Item Carrying Carrying Carrying Carrying
for for
amount value amount value
impairment impairment
Technology
Center
Innovation
Capability
Construction
Project
Equipment
Installation
Pending
Project
Minor works 755,045.87 755,045.87
Total 2,801,650.98 2,801,650.98 3,376,866.69 3,376,866.69
(2)Significant Changes in Construction-in-Progress Projects During the Current Period
Unit: RMB
Transfers to
Beginning Transfers to Ending Sources of
Item New additions intangible
balance fixed assets balance Funds
assets
Equipme
nt Equity
Installatio Funds
n Works
Total 2,478,825.09 9,477,700.77 8,881,870.39 1,625,395.36 1,449,260.11 --
(3)Impairment Test of Construction in Progress
□Applicable Not applicable
(1)List of Intangible Assets
Unit: RMB
Trademark use
Item Land use right Software License fee Total
right
Changchai Company, Limited Annual Report 2025
I. Original carrying
value
the period
(1) Purchase 53,097.34 53,097.34
(2) Internal R&D
(3) Business
combination increase
(4) Transfer from
construction in 1,625,395.36 1,625,395.36
progress
of the period
(1) Disposal
(2) Reduction in
demolition and 7,879,391.75 7,879,391.75
relocation
II. Accumulated
amortization
the period
(1) Withdrawal 4,159,498.86 3,108,274.63 548,799.96 165,661.32 7,982,234.77
the period
(1) Disposal
(2) Reduction in
demolition and 5,128,700.57 5,128,700.57
relocation
III. Depreciation
reserves
the period
(1) Withdrawal
Changchai Company, Limited Annual Report 2025
the period
(1) Disposal
IV. Carrying value
value
value
Unit: RMB
Beginning Amortized Ending
Item Increase Decrease
balance amount balance
Trademark renewal
fee
External power line
access project
Total 2,664,557.06 303,890.33 370,975.00 2,597,472.39
(1) Deferred Income Tax Assets that Had not Been Offset
Unit: RMB
Ending balance Beginning balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Bad debt provision 11,785,788.50 1,762,815.70 12,526,884.12 1,949,082.99
Provisions 65,000.00 9,750.00 61,700.00 9,255.00
Prepaid tax on
advance receipts 30,000,000.00 4,500,000.00 30,000,000.00 4,500,000.00
from demolition
Unrealized internal
transaction losses
Total 48,459,960.88 7,350,047.87 42,588,584.12 6,458,337.99
Changchai Company, Limited Annual Report 2025
(1) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Assets evaluation
appreciation for
business
combination not
under the same
control
Changes in fair
value
Total 1,034,733,889.15 159,449,521.13 1,013,998,748.38 154,449,852.33
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary differences 218,964,615.72 214,123,380.22
Deductible tax losses 73,431,275.08 94,504,005.70
Total 292,395,890.80 308,627,385.92
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will be Due in the Following Years
Unit: RMB
Years Ending balance Beginning balance
Total 73,431,275.08 94,504,005.70
Changchai Company, Limited Annual Report 2025
Unit: RMB
Ending balance Beginning balance
Provision Provision
Item Carrying Carrying Carrying Carrying
for for
amount value amount value
impairment impairment
Prepayments for
the acquisition of 1,941,866.73 1,941,866.73 1,448,809.45 1,448,809.45
long-term assets
Assets held for
disposal
Investment in
Changzhou
Changtou Xinhui
No.1 Equity 3,903,834.51 3,903,834.51
Investment Fund
(Limited
Partnership)
Total 9,503,046.92 9,503,046.92 4,373,097.30 4,373,097.30
Other Notes:
project at Changchai Co., Ltd.'s Changzhou Sanjing Branch (see Note XVII.2). The company has currently
received the first compensation payment of RMB 30,000,000.00, which is expected to cover the associated
demolition losses. Since the related expropriation process is anticipated to take more than one year to complete,
the company has reclassified the carrying value of the demolished fixed assets to other non-current assets.
initiated by the company's subsidiary, Changzhou Horizon Investment Co., Ltd., along with Changzhou
Investment Group Co., Ltd. and Changzhou Xinhui Private Equity Fund Management Co., Ltd. Due to significant
influence on the fund, the equity method was adopted for accounting. As of December 31, 2025, Changzhou
Changtou Xinhui No.1 Equity Investment Fund (Limited Partnership) had not yet made any external investments.
Unit: RMB
Ending balance Beginning balance
Type
Type of
Item Carrying Carrying Status of Carrying Carrying of Status of
restricti
amount value restriction amount value restrict restriction
on
ion
Moneta 90,163,87 90,163,87 Occupie Bank 171,018,6 171,018,6 Occup Bank
Changchai Company, Limited Annual Report 2025
ry 1.20 1.20 d as acceptance 07.75 07.75 ied as acceptance
assets cash bill guarantee cash bill guarantee
deposit deposits,Lette deposi deposits,Lette
r of guarantee t r of guarantee
deposits,Perfo deposits,Perfo
rmance bond rmance bond
deposits,Term deposits,Term
deposits and deposits and
accrued accrued
interest interest
Discounted
Notes Payment Payme
by the
receiva obligati nt
Company at Discounted
ble -- ons for obligat
the bills not yet
outstan 77,099,60 77,099,60 undisco 70,878,20 70,878,20 ion for
period-end matured at the
ding 0.00 0.00 unted 0.00 0.00 undue
and not due balance sheet
discou but discou
on the date
nted discount nted
balance sheet
notes ed bills bills
date
Payme
Notes Payment Endorsed by
nt
receiva obligati the Company
obligat Endorsed bills
ble -- ons for at the
ion of not yet
outstan 59,152,35 59,152,35 undisco period-end 163,858,1 163,858,1
transfe matured at the
ding 1.53 1.53 unted and not due 35.20 35.20
rred balance sheet
transfer but on the
bill not date
red transferr balance sheet
yet
notes ed bills date
due
Total
(1)Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills with
financing nature
Total 88,926,344.09 94,471,787.41
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 562,313,345.98 491,643,629.88
Total 562,313,345.98 491,643,629.88
(1)List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 793,473,800.05 690,733,575.75
Total 793,473,800.05 690,733,575.75
(2)Significant Accounts Payable Aging over One Year or Overdue
Unit: RMB
Item Ending balance Unpaid/ Uncarry-over reason
Payables for goods and services 64,104,304.10 Not yet settled
Total 64,104,304.10
(3)Any overdue payment to small and medium-sized enterprises that has not been made
Is it a large enterprise
√Yes □No
Is there any overdue payment to small and medium-sized enterprises that has not been made
□Yes √No
Unit: RMB
Item Ending balance Beginning balance
Dividends payable 3,891,433.83 3,891,433.83
Other payables 130,728,339.00 113,845,527.69
Total 134,619,772.83 117,736,961.52
Changchai Company, Limited Annual Report 2025
(1)Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 3,243,179.97 3,243,179.97
Dividends for non-controlling
shareholders
Total 3,891,433.83 3,891,433.83
The reason for non-payment for over one year: Not received by shareholders yet.
(2) Other Payables
Unit: RMB
Item Ending balance Beginning balance
Margin & cash pledged 2,623,449.83 2,595,993.50
Intercompany balances 10,899,458.04 14,989,385.23
Personal advances and receivables 576,193.19 647,001.19
Sales discounts and product
warranties
Other 19,738,589.89 16,960,943.91
Total 130,728,339.00 113,845,527.69
The significant other payables with aging over one year at period-end mainly consist of unsettled temporary
receipts and outstanding payables.
(1)List of Advances from customers
Unit: RMB
Item Ending balance Beginning balance
Advance rental receipts 112,510.00 183,376.84
Advance receipts for land
compensation
Total 30,112,510.00 30,183,376.84
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item Ending balance Beginning balance
Contract liabilities 40,040,496.36 31,640,879.59
Total 40,040,496.36 31,640,879.59
(1) List of employee benefits payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 48,792,254.98 308,187,961.05 300,206,733.64 56,773,482.39
II.
Post-employment
benefit-defined
contribution plans
III. Termination
benefits
IV. Current portion
of other benefits
Total 48,792,254.98 343,269,775.80 335,288,548.39 56,773,482.39
(2) List of Short-term Salary
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
allowance, subsidy
Of which: Medical
insurance premiums
Work-related injury
insurance
Maternity insurance 1,579,763.11 1,579,763.11
Changchai Company, Limited Annual Report 2025
and employee education 8,099,920.17 4,505,662.60 5,140,549.80 7,465,032.97
budget
with salary
sharing scheme
Total 48,792,254.98 308,187,961.05 300,206,733.64 56,773,482.39
(3) List of Defined Contribution Plans
Unit: RMB
Beginning
Item Increase Decrease Ending balance
balance
benefits
insurance
Total 35,060,082.75 35,060,082.75
Unit: RMB
Item Ending balance Beginning balance
VAT 1,069,751.94 239,602.32
Corporate income tax 916,971.53 611,800.65
Personal income tax 76,698.17 210,290.78
Urban maintenance and
construction tax
Property tax 1,699,964.72 1,715,080.20
Land use tax 943,261.64 943,261.64
Stamp duty 447,535.62 437,390.87
Education Surcharge 55,007.72 14,240.95
Environmental protection tax 19,278.44 22,673.70
Total 5,305,526.88 4,214,324.70
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item Ending balance Beginning balance
Sale service fee 180,123.89 485,055.17
Transportation storage fee 353,692.31
Electric charge 5,274,196.04 2,530,866.25
Tax to be transferred 4,422,202.18 3,818,328.30
Estimated share value added tax 1,661,977.36 745,360.75
Obligation to pay bills transferred
before maturity
Other withholding expenses 1,981,905.98 3,273,239.95
Total 72,672,756.98 175,064,677.93
Unit: RMB
Item Ending balance Beginning balance Reason for formation
Estimated after-sales
Product warranty 83,448,865.86 73,002,860.52
expenses
Total 83,448,865.86 73,002,860.52
Unit: RMB
Beginning Reason for
Item Increase Decrease Ending balance
balance formation
Government Government
grants appropriation
Total 29,386,167.02 3,409,729.46 25,976,437.56 --
Note:
Liability items involving government grants
Unit: RMB
Amount
recorded into
Related to
Beginning Amount of other income Other
Item Ending balance assets/related
balance new subsidy in the changes
income
reporting
period
Changchai Company, Limited Annual Report 2025
National major project
special allocations-
Flexible processing Related to
production line for assets
cylinders of diesel
engines
Related to
Remove compensation 16,515,843.12 665,973.62 15,849,869.50
assets
Research and
development and
industrialization
allocations of national Related to
III/IV standard assets
high-powered efficient
diesel engine for
agricultural use
Total 29,386,167.02 3,409,729.46 25,976,437.56 ——
Unit: RMB
Increase/decrease (+/-)
Beginning Bonus Ending
New shares Bonus
balance issue from Other Subtotal balance
issued shares
profit
The sum of 705,692,50 705,692,50
shares 7.00 7.00
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
(premium on stock)
Other capital reserves 20,171,432.63 20,171,432.63
Total 640,509,675.84 560,758.06 641,070,433.90
Other notes, including changes in the current period and explanations for the reasons for such changes: The
company acquired a minority shareholder's equity in its subsidiary, Zhenjiang Siyang Diesel Engine
Manufacturing Co., Ltd., during the current period. The difference between the newly acquired long-term equity
investment cost and the share of identifiable net assets that the company is entitled to, calculated based on the
newly increased shareholding ratio and continuously calculated from the date of merger, is recorded in capital
Changchai Company, Limited Annual Report 2025
reserves.
Unit: RMB
Reporting Period
Less:
Less:
Recorded
Recorded
in other
in other
comprehe
comprehe
nsive
Income nsive Attributa Attributab
income in
before income in Less: ble to the le to
Beginning prior Ending
Item taxation prior Income Company non-contr
balance period and balance
in the period and tax as the olling
transferre
Current transferre expense parent interests
d in
Period d in profit after tax after tax
retained
or loss in
earnings
the
in the
Current
Current
Period
Period
I. Other
comprehe
nsive
income
that will
not be
reclassifie
d to profit
or loss
Changes
in fair
value of
other
equity
instrumen
t
investmen
t
Changchai Company, Limited Annual Report 2025
Total of
other
comprehe
nsive
income
Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized
amount: None
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Safety production
cost
Total 21,959,066.35 7,170,174.83 5,192,832.96 23,936,408.22
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
reserves
Discretional surplus
reserves
Total 367,826,665.27 2,628,215.96 370,454,881.23
Surplus reserve explanation: Pursuant to the Company Law of the People's Republic of China and the company's
articles of association, the Company appropriates 10% of its net profit as statutory surplus reserve.
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained
earnings before adjustments
Total retained earnings at the
beginning of the adjustment period
(“+” means up, “-” means down)
Beginning balance of retained
earnings after adjustments
Add: Net profit attributable to 50,820,986.84 18,489,896.00
Changchai Company, Limited Annual Report 2025
shareholders of the Company as
the parent
Less: Withdrawal of statutory
surplus reserves
Withdrawal of discretional
surplus reserves
Withdrawal of general
reserve
Dividend of ordinary shares
payable
Dividends of ordinary shares
transferred as share capital
Ending retained earnings 1,024,763,845.76 983,627,999.95
Adjustments to opening retained earnings details:
(1) Retrospective adjustment due to the Accounting Standards for Business Enterprises and related new
regulations: RMB 0.00 impact on opening retained earnings.
(2) Change in accounting policies: RMB 0.00 impact on opening retained earnings.
(3) Correction of material accounting errors: RMB 0.00 impact on opening retained earnings.
(4) Changes in consolidation scope due to transactions under common control: RMB 0.00 impact on opening
retained earnings.
(5) Other adjustments, net impact on opening retained earnings: RMB 0.00.
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 2,425,736,833.58 2,131,368,875.08 2,371,931,691.41 2,084,092,192.19
Other operations 50,588,989.10 48,626,900.38 43,937,336.91 35,208,273.88
Total 2,476,325,822.68 2,179,995,775.46 2,415,869,028.32 2,119,300,466.07
Whether the lower of the audited net profit before and after deduction of non-recurring gains and losses is
negative
□ Yes √No
Revenue-related information:
Unit: RMB
Contract Segment revenue 1 Total
Classification Operating revenue Operating revenue Operating revenue Cost of sales
By business type
Changchai Company, Limited Annual Report 2025
Of which:
Diesel Engines -
Single-Cylinder
Diesel Engines -
Multi-Cylinder
Other Products 193,555,001.11 168,359,195.06 193,555,001.11 168,359,195.06
Parts &
Accessories
By geographical
segment
Of which:
Domestic Sales 1,975,928,365.78 1,722,227,357.27 1,975,928,365.78 1,722,227,357.27
Export sales 449,808,467.80 409,141,517.81 449,808,467.80 409,141,517.81
Total 2,425,736,833.58 2,131,368,875.08 2,425,736,833.58 2,131,368,875.08
The revenue amount corresponding to performance obligations under contracts signed as of the end of the
reporting period that have not yet been fulfilled or partially fulfilled is RMB 0.00.
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and
construction tax
Education surcharge 1,736,055.83 1,230,223.15
Property tax 7,027,502.36 7,045,665.54
Land use tax 4,013,319.52 4,013,319.52
Vehicle and vessel use tax 2,803.52 2,803.52
Stamp duty 2,076,582.82 2,043,184.49
Environment tax 1,135,359.24 124,057.13
Total 18,422,612.74 16,181,617.86
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 62,982,000.21 61,402,397.77
Office expenses 7,635,302.01 10,322,299.02
Changchai Company, Limited Annual Report 2025
Depreciation and amortization 16,474,658.91 16,092,889.89
Safety expenses 2,793,121.34 5,823,550.54
Repair charge 147,715.40 196,736.76
Inventory scrap and inventory loss
(profit)
Consulting fees 3,006,329.20 4,933,152.81
Insurance premiums 1,676,219.08 1,852,716.96
Utilities expenses 2,324,416.75 2,438,996.99
Other 10,111,280.53 12,553,588.10
Total 108,081,816.30 115,466,341.90
Unit: RMB
Item Reporting Period Same period of last year
Employee benefits 40,318,480.98 45,964,550.56
Office expenses 9,793,639.89 11,079,843.97
Advertising and exhibition
expenses
Depreciation and amortization 726,097.68 716,473.37
Other 582,785.94 1,362,023.61
Total 52,818,923.00 60,617,254.43
Unit: RMB
Item Reporting Period Same period of last year
Direct input expense 48,019,192.91 46,708,069.23
Employee benefits 22,514,941.63 24,323,024.76
Depreciation and amortization 5,491,356.08 5,756,990.16
Entrusted development charges 250,000.00 704,000.00
Other 7,401,272.75 5,909,393.45
Total 83,676,763.37 83,401,477.60
Unit: RMB
Changchai Company, Limited Annual Report 2025
Item Reporting Period Same period of last year
Interest expense 591,180.17 341,136.21
Less: Interest income 12,531,332.63 17,940,638.39
Net foreign exchange gains or
losses
Other 692,529.46 240,309.43
Total -4,959,323.92 -23,423,038.69
Unit: RMB
Amount included in
Same period of last non-recurring profit or
Sources Reporting Period
year loss for the current
period
VAT additional deduction 7,326,129.81 16,017,274.94
Withholding individual income
tax handling fee refund
Government grants recognized
directly in current period profit 16,126,311.88 4,143,565.38 15,437,236.88
or loss
Government grants related to
deferred income
The details of government subsidies are as follows:
Unit: RMB
Asset-related
grants/
Items Reporting Period
Income-related
grants
Income-related
Government subsidies and incentives for land acquisition 14,391,707.00
grants
National Major Special Fund Allocation - Flexible Machining
Production Line for Diesel Engine Cylinder Blocks
Grant for R&D and Industrialization of High-Efficiency
Agricultural Diesel Engines Meeting National Phase III/IV 1,224,489.84 Asset-related grants
Emission Standards
Income-related
Employment Stabilization Subsidy 689,075.00
grants
Award for Capability Improvement of the State-owned Assets 400,000.00 Income-related
Changchai Company, Limited Annual Report 2025
Asset-related
grants/
Items Reporting Period
Income-related
grants
Supervision and Administration Commission grants
Demolition Compensation - Hehai Road Base Main Workshop 398,640.13 Asset-related grants
Demolition Compensation - Hehai Road Land 267,333.49 Asset-related grants
The third batch of science and technology plan projects (industrial Income-related
innovation technology support special projects) in Changzhou grants
Income-related
Provincial special funds for business development 109,300.00
grants
Changzhou Innovation and Development Special Fund (Innovation Income-related
Subject Cultivation) grants
Income-related
Labor employment subsidy 53,375.70
grants
Income-related
Talent funding for the Financial Settlement Center 50,000.00
grants
Changzhou Innovation and Development Special Fund (Supporting Income-related
the 2024 New Technology and New Product Awards) grants
Subsidies for disabled personnel in proportion and rewards for Income-related
exceeding the proportion grants
Income-related
Job expansion subsidy 24,000.00
grants
Income-related
High-tech Enterprise Application Award 20,000.00
grants
Deduction of value-added tax for employment of people who have Income-related
been lifted out of poverty grants
Income-related
Internship allowance 2,750.60
grants
Income-related
Fourth-grade unit statistical quality assessment reward 1,200.00
grants
Financial subsidies for special funds for safety production and Income-related
emergency disaster relief grants
Exemption of urban construction tax and education surcharge for Income-related
people who have been lifted out of poverty grants
Total 19,536,041.34 ——
Changchai Company, Limited Annual Report 2025
Unit: RMB
Sources Reporting Period Same period of last year
Held-for-trading financial assets 20,807,463.52 -30,892,837.58
Other non-current financial assets -40,750,460.46 -35,045,359.31
Total -19,942,996.94 -65,938,196.89
Unit: RMB
Item Reporting Period Same period of last year
Investment income from holding of trading
financial assets
Investment income from disposal of trading
financial assets
Dividend income from holding of other equity
instrument investment
Interest income from holding of investment in debt
obligations
Debt restructuring gains -42,868.87 267,434.70
Securities lending and borrowing business income 95,937.38
Investment income from wealth management
products
Accounts receivable financing - Discount interest
-2,617,827.87 -3,313,989.60
on bank acceptance bills
Investment income accounted for using the equity
-6,165.49
method
Total 9,829,843.17 24,265,851.27
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of accounts
-155,026.78 1,583,599.71
receivable
Bad debt loss of other receivables -109,694.46 -353,779.59
Total -264,721.24 1,229,820.12
Changchai Company, Limited Annual Report 2025
Unit: RMB
Item Reporting Period Same period of last year
Loss on inventory valuation and
-23,624,390.85 -14,383,249.32
contract performance cost
Impairment loss on property,
-20,122.51
plant and equipment
Total -23,624,390.85 -14,403,371.83
Unit: RMB
Amount included in
Same period of last non-recurring profit or
Sources Reporting Period
year loss for the current
period
Disposal income of fixed assets
and intangible assets
Unit: RMB
Amount included in
Item Reporting Period Same period of last year non-recurring profit or
loss for the current period
Income from penalty 125,150.00 97,216.00 125,150.00
Accounts not required to be
paid
Other 13,326.18 1,185,262.22 13,326.18
Total 211,724.94 2,838,603.42 211,724.94
Unit: RMB
Amount included in
Item Reporting Period Same period of last year non-recurring profit or
loss for the current period
Losses on impairment and
scrapping of non-current
Changchai Company, Limited Annual Report 2025
assets
Of which：fixed assets 1,241.36 418,860.88 1,241.36
Donation 360,000.00 250,000.00 360,000.00
Delayed payment penalty 783,746.26 86.67 783,746.26
Other 230,307.51 217,560.14 230,307.51
Total 1,375,295.13 886,507.69 1,375,295.13
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 10,191,628.82 8,816,925.87
Deferred income tax expense -1,928,226.64 -18,077,750.35
Total 8,263,402.18 -9,260,824.48
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 66,237,824.63
Current income tax expense accounted at statutory/applicable tax rate 9,935,673.69
Influence of applying different tax rates by subsidiaries 3,686,608.46
Influence of income tax before adjustment 613,909.32
Influence of non-taxable income -911,392.63
Impact of non-deductible costs, expenses and losses 922,721.10
Impact of utilizing previously unrecognized deductible tax losses -9,571,928.47
Impact of unrecognized deductible temporary differences and tax losses in
current period
Impact of super-deduction incentives on income tax -5,970,545.75
Income tax expense 8,263,402.18
See Note VII 34 for details.
Changchai Company, Limited Annual Report 2025
(1) Cash Related to Operating Activities
Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Subsidy and appropriation 16,106,811.88 4,121,465.38
Other intercourses in cash 1,075,516.45 6,834,709.31
Interest income 12,433,299.58 17,560,515.91
Recovery of time deposits at
maturity
The net amount of the guarantee
and bid bond received
Other 2,398,434.29 3,343,648.68
Total 74,929,597.75 67,860,339.28
Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Selling and administrative expense
paid in cash
Time deposits withdrawn 20,000,000.00 42,000,000.00
Other transactions 738,465.99 851,981.36
Other 1,365,099.94 479,361.32
Total 107,224,843.83 138,992,233.71
(2) Cash Related to Investing Activities
Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Cash paid for acquiring minority
shareholders' equity of subsidiaries
Total 3,060,000.00
Changes in liabilities arising from financing activities
□Applicable √Not applicable
Changchai Company, Limited Annual Report 2025
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Same period of last
Supplemental information Reporting Period
year
operating activities:
Net profit 57,974,422.45 24,617,564.88
Add: Provision for impairment of assets 23,624,390.85 14,403,371.83
Credit impairment loss 264,721.24 -1,229,820.12
Depreciation of fixed assets, of investment properties 77,960,321.01 84,324,061.52
Depreciation of right-of-use assets
Amortization of intangible assets 7,982,234.77 6,806,448.55
Amortization of long-term deferred expenses 370,975.00 352,927.75
Losses on disposal of fixed assets, intangible assets and other
-36,192,896.62 -304,377.71
long-term assets (gains by “-”)
Losses on the scrapping of fixed assets (gains by “-”) 1,241.36 418,860.88
Losses on the changes in fair value (gains by “-”) 19,942,996.94 65,938,196.89
Financial expenses (gains by “-”) 6,879,479.25 -5,722,709.73
Investment losses (gains by “-”) -12,447,671.04 -27,579,840.87
Decrease in deferred income tax assets (increase by “-”) -891,709.88 -4,939,342.20
Increase in deferred income tax liabilities (decrease by “-”) -1,036,516.76 -13,138,408.15
Decrease in inventory (increase by “-”) 38,494,171.42 -44,365,062.06
Decrease in accounts receivable from operating activities
(increase by “-”)
Increase in payables from operating activities (decrease by “-”) 54,591,560.15 264,499,562.26
Other 24,842,951.28 -3,204,931.85
Net cash flows generated from operating activities 289,562,549.07 -154,292,968.70
receipts and payment:
Debt transferred as capital
Convertible corporate bond due within one year
Fixed assets from financing lease
Changchai Company, Limited Annual Report 2025
Ending balance of cash 1,248,067,921.44 892,681,884.84
Less: Beginning balance of cash 892,681,884.84 971,629,523.46
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents 355,386,036.60 -78,947,638.62
(2) Cash Flows from Significant Investing Activities Received or Paid
Unit: RMB
Item Reporting Period
Cash received from significant investing activities
Including: Cash Received from Redemption of Wealth 1,208,296,869.30
Management Products, Structured Deposits, and Debt
Investments
Cash paid for significant investing activities
Including: Cash paid for purchase of wealth management 1,252,153,606.00
products and structured deposits
(3) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 1,248,067,921.44 892,681,884.84
Including: Cash on hand 164,159.29 84,482.59
Bank deposit on demand 1,247,225,051.01 891,972,475.61
Other monetary assets on demand 678,711.14 624,926.64
Accounts deposited in the central bank
available for payment
Deposits in other banks
Accounts of interbank
II. Cash equivalents
Of which: Bond investment expired within
three months
III. Ending balance of cash and cash
equivalents
Of which: Cash and cash equivalents with
restriction in use for the Company as the
parent or subsidiaries of the Group
Changchai Company, Limited Annual Report 2025
(4) Disclosure of changes in financing-related liabilities from opening to closing balances by category
Unit: RMB
Increase Decrease
Cash Closing
Item Opening balance Non-cash Non-cash
Cash changes change balance
changes changes
s
Short-term 88,248,895.7 94,471,787.4
borrowings 7 1
Other
payables-dividen 3,891,433.83 3,891,433.83
ds payable
Total 98,363,221.24 677,448.32 92,817,777.92
Note: The company's short-term borrowings are all formed by the discounting of undue bills. The increase in the
current period is due to cash obtained from discounting and changes in discount interest, while the decrease in the
current period is due to the maturity of bills.
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance converted
Item Exchange rate
balance to RMB
Monetary assets 186,930,889.19
Of which: USD 26,542,835.33 7.029 186,564,280.96
HKD 405,890.29 0.903 366,608.23
Accounts receivable 95,036,209.38
Of which: USD 13,520,168.47 7.029 95,036,209.38
Accounts payable 2,126.92
Of which: USD 302.60 7.029 2,126.92
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable √ Not applicable
Changchai Company, Limited Annual Report 2025
(1) The Company Was Lessor:
Operating leases with the Company as lessor
√Applicable Not applicable
Unit: RMB
Of which: income related to
Item Rental income variable lease payments not
included in lease receipts
Lease income 2,271,487.77
Total 2,271,487.77
Finance leases with the Company as lessor
Applicable √Not applicable
Undiscounted lease receipts for each of the next five years
Applicable √Not applicable
Reconciliation of undiscounted lease receipts to net investment in leases: Not applicable
VIII. Research and Development Expenditure
Unit: RMB
Item Amount for the current period Amount for the previous period
Direct input 48,019,192.91 46,708,069.23
Employee remuneration 22,514,941.63 24,323,024.76
Depreciation and amortization 5,491,356.08 5,756,990.16
Outsourcing development fees 250,000.00 704,000.00
Others 7,401,272.75 5,909,393.45
Total 83,676,763.37 83,401,477.60
Of which: Expensed research and
development expenditure
Capitalized research
and development expenditure
IX. Change in consolidation scope
Explain the changes in the consolidation scope caused by other reasons (such as the establishment of new
subsidiaries, liquidation of subsidiaries, etc.) and their related circumstances:
Changchai Company, Limited Annual Report 2025
On November 22, 2024, our company held the fifth extraordinary meeting of the board of directors for 2024, at
which the "Proposal on the Merger of Changzhou Changchai Horizon Agricultural Equipment Co., Ltd. and
Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd." was deliberated and approved. The board of
directors agreed that Changzhou Fuji Changchai Robin Gasoline Engine Co., Ltd., a wholly-owned subsidiary,
would inherit all assets, liabilities, businesses, and all other rights and obligations of Changzhou Changchai
Horizon Agricultural Equipment Co., Ltd., a wholly-owned subsidiary, through an overall merger. After the
merger is completed, Changchai Robin will continue to operate normally, and the independent legal entity status
of Horizon Agricultural Equipment will be cancelled.
On June 9, 2025, our company held the third extraordinary meeting of the board of directors for 2025, at which
the "Proposal on the Merger of Changzhou Changchai Benniu Diesel Engine Parts Co., Ltd. and Changzhou
Changniu Machinery Co., Ltd." was deliberated and approved. The board of directors agreed that Changzhou
Changniu Machinery Co., Ltd., a wholly-owned subsidiary, would merge with Changzhou Changchai Benniu
Diesel Engine Parts Co., Ltd., another wholly-owned subsidiary, through an overall merger by absorption,
inheriting all assets, liabilities, businesses, and all other rights and obligations of the original Changben Company.
After the merger, Changniu Company will continue its normal operations, while the independent legal entity
status of Changben Company will be cancelled.
X. Equity in Other Entities
(1) Subsidiaries
Unit: RMB
Nature Holding percentage
Main Registra
Registere of Way of
Name operating tion Indirect
d capital busine Directly gaining
place place ly
ss
Changchai Wanzhou Diesel 85,000,00 Chongqi Chongqi Indust
Engine Co., Ltd. 0.00 ng ng ry
Changzhou Changchai
Benniu Diesel Engine 99.00% 1.00% Set-up
Fittings Co., Ltd.
Changzhou Horizon 40,000,00 Changzh Changz Servic
Investment Co., Ltd. 0.00 ou hou e
Combinati
Changzhou Fuji Changchai on not
Robin Gasoline Engine Co., 100.00% under the
Ltd. same
control
Jiangsu Changchai 300,000,0 Changzh Changz Indust
Machinery Co., Ltd. 00.00 ou hou ry
Changchai Company, Limited Annual Report 2025
Changzhou Xingsheng
Property Management Co., 100.00% Set-up
.00 ou hou e
Ltd.
Combinati
Zhenjiang Siyang Diesel on not
Engine Manufacturing Co., 52.00% under the
.00 g ng ry
Ltd. same
control
Note: The Company holds a 49% equity interest in Zhenjiang Siyang, making it the largest shareholder. With
other shareholders being relatively dispersed, and given that the Company appoints 4 out of the 7 board members
of Zhenjiang Siyang (including the Chairman), the Company is the de facto controlling party of Zhenjiang Siyang,
meeting the consolidation criteria.The company acquired 3% of the shares of Zhenjiang Siyang held by its
minority shareholders during the current period, and at the end of the period, the company's shareholding ratio in
Zhenjiang Siyang was 52%.
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Declaring
Shareholding The profit or loss Balance of
dividends
proportion of attributable to the non-controlling
Name distributed to
non-controlling non-controlling interests at the
non-controlling
interests interests period-end
interests
Changchai
Wanzhou Diesel 40.00% 748,155.81 21,428,861.12
Engine Co., Ltd.
Zhenjiang Siyang
Diesel Engine
Manufacturing Co.,
Ltd.
Holding proportion of non-controlling interests in subsidiary different from voting proportion: Not applicable
Other notes: The company acquired 3% of the equity of Zhenjiang Siyang Diesel Engine Manufacturing Co., Ltd.,
a subsidiary held by minority shareholders, during the current period. For details, please refer to Note VII, 33.
(3) The Main Financial Information of Significant Not Wholly-Owned Subsidiary
Unit: RMB
Name Ending balance Beginning balance
Changchai Company, Limited Annual Report 2025
Non- Non-
Curre Curre
Curre Non-c curre Total Curre Non-c curre Total
Total nt Total nt
nt urrent nt liabili nt urrent nt liabili
assets liabili assets liabili
assets assets liabil ties assets assets liabil ties
ties ties
ity ity
Chan
gchai
Wanz
hou
Diesel
Engin
e Co.,
Ltd.
Zhenj
iang
Siyan
g
Diesel
Engin 84,67
e 7.08
Manu
factur
ing
Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash
Cash
Total Total flows
flows
Name Operating comprehe Operating comprehe from
Net profit from Net profit
revenue nsive revenue nsive operatin
operating
income income g
activities
activities
Changcha
i
Wanzhou 51,637,85 1,870,389 1,870,389. -1,701,21 40,738,28 679,056.4 679,056.4 2,764,33
Diesel 6.67 .53 53 8.61 4.52 1 1 5.63
Engine
Co., Ltd.
Changchai Company, Limited Annual Report 2025
Zhenjiang
Siyang
Diesel
Engine
Manufact
uring Co.,
Ltd.
still controls the subsidiary
(1) Explanation of changes in the owner's equity share of subsidiaries
At the beginning of the period, our company held 49% of the shares in Zhenjiang Siyang. During the current
period, we acquired 3% of the shares in Zhenjiang Siyang held by minority shareholders. At the end of the period,
our company's shareholding ratio in Zhenjiang Siyang was 52%.
(2) The impact of transactions on minority shareholders' equity and owner's equity attributable to the
parent company
Unit: RMB
Items Amount
Purchase cost/disposal consideration 3,060,000.00
--Cash
-- Fair value of non-cash assets
Total of purchase cost/disposal consideration 3,060,000.00
Less: Share of net assets of subsidiaries calculated based on
the proportion of equity acquired/disposed
Difference
Of which：Adjusted capital reserves 560,758.06
Adjusted surplus reserves
Adjusted undistributed profits
Notes to the structured entity excluded in the scope of consolidated financial statements:
Synergetic Innovation Fund Management Co., Ltd. through joint investment. On 18 October 2018 and 3
December 2020, new partners were respectively added. Partnership Shares transfer was made on 29 December
Innovation Fund Management Co., Ltd., and the limited partners are Changchai Company, Limited, Changzhou
Changchai Company, Limited Annual Report 2025
Zhongyou Petroleum Sales Co., Ltd., Changzhou Fuel Co., Ltd., Tong Yinzhu, Tong Yinxin, Anhui Haiyunzhou
Equity Investment Partnership Enterprise (Limited), Shenzhen Jiaxin One Venture Capital Partnership (limited
partnership),Zhong Wende and Qingdao Yinjiahui Industrial Investment Partnership Enterprise (Limited
Partnership). In accordance with the Partnership Agreement, the limited partner does not execute the partnership
affairs. Thus, the Company does not control Changzhou Xietong Private Equity Fund (Limited Partnership) and
did not include it into the scope of consolidated financial statements.
Group Co., Ltd. and Changzhou Xinhui Private Equity Fund Management Co., Ltd., jointly initiated the
establishment of Changzhou Changtou Xinhui No.1 Equity Investment Fund (Limited Partnership). According to
the Partnership Agreement, the company has significant influence over Changzhou Changtou Xinhui No.1 Equity
Investment Fund (Limited Partnership), and therefore adopts the equity method for accounting and includes it in
other non-current assets.
XI. Government Grants
□Applicable Not applicable
Reasons for failing to receive government grants in the estimated amount at the estimated point in time
□Applicable Not applicable
Applicable □Not applicable
Unit: RMB
Amount
Amount
recorded
recorded
into
Amount of into other Related to
Accounting Beginning non-operati Other Ending
new income in assets/relat
items balance ng income changes balance
subsidy the ed income
in the
Reporting
Reporting
Period
Period
Deferred 29,386,167 3,409,729. 25,976,437 Related to
income .02 46 .56 assets
Applicable □Not applicable
Unit: RMB
Accounting items Amount for the current period Amount for the previous period
Other income 19,536,041.34 7,553,294.84
Changchai Company, Limited Annual Report 2025
XII. The Risk Related to Financial Instruments
The Company’s principal financial instruments include financial assets at fair value through profit or loss, other
equity instrument investments, other non-current financial assets, accounts receivable, accounts payable, etc.
Detailed disclosures of these financial instruments are provided in the relevant sections of Note VII. The risks
associated with these financial instruments, as well as the Company’s risk management policies to mitigate such
risks, are described below. The Company’s management manages and monitors these risk exposures to ensure
they remain within defined limits.
The Company employs sensitivity analysis to assess the potential impact of reasonably possible changes in risk
variables on current period profit or loss or shareholders’ equity. Since risk variables rarely change in isolation and
the correlation between variables significantly influences the ultimate impact of changes in any single variable,
the following analysis assumes each variable changes independently.
The Company’s risk management objectives are to achieve an appropriate balance between risk and return,
minimize the adverse impact of risks on operational performance, and maximize the interests of shareholders and
other equity investors. Based on these objectives, the Company’s fundamental risk management strategy involves
identifying and analyzing risks, establishing risk tolerance thresholds, implementing risk management measures,
and conducting reliable monitoring to maintain risks within defined limits.
(1) Market Risk
① Foreign Exchange Risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations. The Company is primarily
exposed to foreign exchange risk related to USD and EUR. Apart from overseas operations denominated in USD
and EUR, the Company’s other major business activities are settled in RMB. As of December 31, 2025, the
Company’s foreign currency monetary items include cash and cash equivalents, accounts receivable, and accounts
payable (see Note VII.56). The foreign exchange risk arising from these assets and liabilities may impact the
Company’s financial performance.
The Company closely monitors the effects of exchange rate fluctuations on its foreign exchange risk exposure.
② Interest Rate Risk – Cash Flow Variability Risk
The Company’s exposure to cash flow variability due to interest rate changes primarily relates to floating-rate
bank deposits. The Company’s policy is to maintain these deposits at floating rates.
③ Other Price Risk
The Company’s investments classified as financial assets at fair value through profit or loss or fair value through
other comprehensive income are measured at fair value at the balance sheet date. Consequently, the Company is
exposed to price volatility in the securities market. The Company mitigates equity price risk by maintaining a
diversified portfolio of equity securities.
(2) Credit Risk
Credit risk refers to the risk that one party to a financial instrument fails to fulfill its obligations, resulting in
financial loss to the other party.
Changchai Company, Limited Annual Report 2025
The Company’s credit risk primarily arises from receivables. To manage this risk, the Company has implemented
the following measures.
The company only conducts transactions with approved and reputable third parties. In accordance with the
company's policy, we conduct credit checks on all customers who request to conduct transactions on credit.
Additionally, the company continuously monitors the balance of accounts receivable to ensure that we do not face
significant bad debt risks.
Since the counterparties for monetary funds and bank acceptance bills receivable are banks with good reputations
and high credit ratings, the credit risk associated with these financial instruments is relatively low.
The Company's other financial assets include accounts receivable, other receivables, etc. The credit risk of these
financial assets arises from default by the counterparty, with the maximum exposure to risk equal to the carrying
amount of these instruments.
As the company only conducts transactions with approved and reputable third parties, there is no need for
collateral. Credit risk concentration is managed on a customer-by-customer basis. As of December 31, 2025, the
company had specific credit risk concentrations, with 60.63% (December 31, 2024: 60.75%) of the company's
accounts receivable balance coming from its top five customers. The company does not hold any collateral or
other credit enhancements for its accounts receivable balance.
Judgment criteria for significant increase in credit risk
The Company assesses whether the credit risk of relevant financial instruments has significantly increased since
initial recognition on each balance sheet date. In determining whether credit risk has significantly increased since
initial recognition, the Company considers obtaining reasonable and well-founded information without
unnecessary additional cost or effort, including qualitative and quantitative analysis based on the Company's
historical data, external credit risk ratings, and forward-looking information. The Company determines the change
in default risk during the expected lifespan of financial instruments by comparing the risk of default on the
balance sheet date with the risk of default on the initial recognition date, based on individual financial instruments
or portfolios of financial instruments with similar credit risk characteristics.
When one or more of the following quantitative and qualitative criteria are triggered, the Company believes that
the credit risk of financial instruments has significantly increased:
The quantitative criterion primarily involves the increase in the probability of default during the remaining
duration as of the reporting date exceeding a certain percentage compared to the initial recognition
Qualitative criteria: Major adverse changes in the primary debtor's operational or financial situation, early warning
customer list, etc
Definition of assets with credit impairment
To determine whether credit impairment has occurred, the criteria adopted by our company are consistent with our
internal credit risk management objectives for relevant financial instruments, taking into account both quantitative
and qualitative indicators. When assessing whether a debtor has experienced credit impairment, our company
primarily considers the following factors:
·The issuer or debtor encounters significant financial difficulties;
·The debtor breaches the contract, such as defaulting on or delaying the payment of interest or principal;
·The creditor, due to economic or contractual considerations related to the debtor's financial difficulties, grants
concessions that the debtor would not otherwise make;
·The debtor is highly likely to go bankrupt or undergo other financial restructuring;
·The disappearance of an active market for the financial asset due to financial difficulties of the issuer or debtor;
Changchai Company, Limited Annual Report 2025
·Purchasing or originating a financial asset at a significant discount, which reflects the fact of credit losses
incurred;
The credit impairment of financial assets may be caused by the combined effects of multiple events, and it is not
necessarily due to a single identifiable event.
Parameters for the measurement of expected credit losses
Based on whether there has been a significant increase in credit risk and whether credit impairment has occurred,
the Company measures the impairment provision for different assets using the expected credit losses over a
probability of default, loss given default, and exposure at default. The Company considers quantitative analysis of
historical statistical data (such as counterparty rating, guarantee method, collateral type, repayment method, etc.)
and forward-looking information to establish models for probability of default, loss given default, and exposure at
default.
The relevant definitions are as follows:
·Default probability refers to the likelihood that a debtor will be unable to fulfill its repayment obligations within
the next 12 months or throughout the remaining duration. The default probability of our company is adjusted
based on the results of the credit loss model, incorporating forward-looking information to reflect the default
probability of debtors in the current macroeconomic environment;
·Default loss rate refers to the expectation of the company regarding the extent of loss incurred due to default risk
exposure. Depending on the type of counterparty, the method and priority of recourse, as well as the difference in
collateral, the default loss rate varies. The default loss rate is the percentage of risk exposure loss at the time of
default, calculated based on the next 12 months or the entire duration;
·Exposure at default refers to the amount that the company should be repaid in the event of default, either within
the next 12 months or throughout the remaining duration.
Forward-looking information
The assessment of significant increases in credit risk and the calculation of expected credit losses both involve
forward-looking information. The Company identifies key economic indicators that affect credit risk and expected
credit losses across various business types through historical data analysis.
The impact of these economic indicators on default probability and default loss rate varies across different
business types. In this process, our company utilizes expert judgment. Based on the results of expert judgment, we
make annual predictions for these economic indicators and determine their impact on default probability and
default loss rate through regression analysis.
(3) Liquidity Risk
The Company manages liquidity risk by maintaining sufficient cash and cash equivalents, monitored to meet
operational needs and mitigate cash flow volatility. Management ensures compliance with borrowing agreements
and monitors bank loan utilization.
(1) Classification of Transfer Methods
Applicable □Not applicable
Unit: RMB
Changchai Company, Limited Annual Report 2025
Nature of Amount of Recognition
Transfer
transferred transferred termination or Basis for recognition termination
method
financial assets financial assets not
The Company retains substantially all
Endorsement Notes Not
/discount receivable derecognized
risk of default associated with its
Accounts
Endorsement The Company transfers almost all the
receivable 579,965,650.49 Derecognized
/discount risks and rewards
financing
Total 716,217,602.02
(2) Financial Assets Derecognized due to Transfer
Applicable □Not applicable
Unit: RMB
Transfer method of Amount of derecognized Gains or losses related to
Item
financial assets financial assets derecognition
Accounts
receivable Endorsement 33,922,886.93
financing
Accounts
receivable Discount 546,042,763.56 -2,617,827.87
financing
Total 579,965,650.49 -2,617,827.87
(3) Continued Involvement in the Transfer of Assets Financial Assets
Applicable □Not applicable
Unit: RMB
Transfer method of Amount of assets resulting from Amount of liabilities resulting
Item
assets continued involvement from continued involvement
Notes receivable Endorsement 59,152,351.53 59,152,351.53
Notes receivable Discount 77,099,600.00 77,099,600.00
Total 136,251,951.53 136,251,951.53
XIII. The Disclosure of Fair Value
Unit: RMB
Ending fair value
Item Fair value Fair value Fair value
Total
measurement items measurement items measurement items
Changchai Company, Limited Annual Report 2025
at level 1 at level 2 at level 3
I. Consistent fair
-- -- -- --
value measurement
(I) Trading financial
assets
at fair value through
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument 73,740,010.00 73,740,010.00
investment
(3) Derivative
financial assets
(4) Wealth
management 298,444,679.98 298,444,679.98
investments
designated to be
measured at fair
value and the
changes included
into the current
profit or loss
(1) Debt instrument
investment
(2) Equity
instrument
investment
(II) Other
investments in debt
obligations
(III)Other equity
instrument 665,300,000.00 316,061,295.81 981,361,295.81
investment
(IV) Investment
property
for lease
Changchai Company, Limited Annual Report 2025
out
held and planned to
be transferred once
appreciating
(V) Living assets
living assets
assets
Accounts receivable
financing
Other non-current
financial assets
Total assets
consistently
measured by fair
value
(VI) Trading
financial liabilities
Of which: Issued
trading bonds
Derivative financial
liabilities
Other
(VII) Financial
liabilities
designated to be
measured at fair
value and the
changes recorded
into the current
profit or loss
Total liabilities
consistently
measured by fair
value
II. Inconsistent fair
value measurement
Changchai Company, Limited Annual Report 2025
(1) Assets held for
sale
Total assets
inconsistently
measured by fair
value
Total liabilities
inconsistently
measured by fair
value
For the listed company stocks held by the company in the held-for-trading financial assets measured at fair value,
the closing market price on the balance sheet date was the basis for the measurement of fair value.
Consistent and Inconsistent Fair Value Measurement Items at Level 2
Wealth management and investment: The underlying assets of investment in wealth management products include
bond assets, deposit assets, fund assets, etc. The portfolio of investment assets should be dynamically managed.
The fair value of wealth management products should be adjusted according to the yield of similar products
provided by the counterparty.
Consistent and Inconsistent Fair Value Measurement Items at Level 3
(1) Accounts receivable financing: Accounts receivable financing is a bank acceptance with high credit rating,
short maturity and low risk. The par amount is close to the fair value and is used as the fair value.
(2) Among other non-current financial assets:
The equity instrument investment in Jiangsu Horizon New Energy Technology Co., Ltd. (a manufacturer of
lithium battery separators whose main products include coated products and base films, primarily used in new
energy vehicle power batteries, 3C consumer batteries, and energy storage batteries) is characterized by high
technical complexity, lengthy R&D cycles, and substantial capital investment. The company is in a rapid
development phase, with numerous investment projects still under construction that have not yet generated stable
revenue or profits. However, financing activities have been frequent, with five equity financings conducted in the
past three years. Accordingly, the Company has determined the fair value of this equity investment using the most
recent financing price adjustment method and engaged an appraisal firm to validate the valuation.
(3) Among other equity instrument investments, the investments in Chengdu Changwan Diesel Engine Sales Co.,
Ltd., Chongqing Wanzhou Changwan Diesel Engine Parts Co., Ltd., Changzhou Economic and Technological
Development Company, Changzhou Tractor Company, Changzhou Industrial Capital Mutual Aid Association of
the Economic Commission, and Beijing Engineering Machinery Agricultural Machinery Company, totaling RMB
Changchai Company, Limited Annual Report 2025
For Changzhou Collaborative Innovation Equity Investment Partnership (Limited Partnership), established in
October 2017, the year-end partners' equity has increased due to fair value changes in its equity holdings. No
material changes have occurred in its operating environment, business conditions, or financial position. Thus, the
Company has determined its fair value based on the partnership’s net asset value at the period-end.
Transfers and Policies for Determining Transfer Timing
During the current year, no transfers occurred between Level 1 and Level 2 of the fair value hierarchy for the
Company’s financial assets and liabilities, nor were there any transfers into or out of Level 3.
No changes were made to valuation techniques during the reporting period.
The financial assets and liabilities measured at amortization cost mainly include notes receivable, accounts
receivable, other receivables, short-term borrowings, accounts payable, other payables, etc. The difference
between the carrying value and fair value for financial assets and liabilities not measured at fair value is small.
XIV. Related Party and Related-party Transactions
Proportion of Proportion of
share held by voting rights
Regist
Registered the Company as owned by the
Name ration Nature of business
capital the parent Company as the
place
against the parent against
Company the Company
Investment and operations of
state-owned assets, assets
Changzhou
management (excluding
Investment Chang RMB1.2
financial business), investment 32.26% 32.26%
Group Co., zhou billion
consulting (excluding
Ltd.
consulting on investment in
securities and options), etc.
Information about the parent company of the enterprise:
The parent company of the enterprise is Changzhou Investment Group Co., Ltd. According to the
"Implementation Plan for Transferring Part of State-owned Capital to Enrich Social Security Funds in Jiangsu
Province" (Su Zhengfa [2020] No. 27) issued by the provincial government, the "Notice on Transferring Part of
State-owned Capital in Cities and Counties to Enrich Social Security Funds" (Su Caigongmao [2020] No. 139)
Changchai Company, Limited Annual Report 2025
issued by Jiangsu Provincial Department of Finance and five other departments, and the "Notice on Transferring
Part of Municipal (District) State-owned Capital to Enrich Social Security Funds" (Chang Caigongmao [2020] No.
the Investment Group held by the People's Government of Changzhou was transferred to Jiangsu Provincial
Department of Finance without compensation. After the equity transfer, the People's Government of Changzhou
holds 90% of the state-owned equity of Changzhou Investment Group Co., Ltd., and Jiangsu Provincial
Department of Finance holds 10% of the state-owned equity of Changzhou Investment Group Co., Ltd. According
to the document of the People's Government of Changzhou (Chang Zhengfa [2006] No. 62), Changzhou
Investment Group Co., Ltd. is an enterprise where the State-owned Assets Supervision and Administration
Commission of Changzhou performs the investor's responsibilities as authorized by the People's Government of
Changzhou. Therefore, Changzhou Investment Group Co., Ltd. is the controlling shareholder of the company, and
the State-owned Assets Supervision and Administration Commission of Changzhou remains the actual controller
of the company. The ultimate controlling party of the enterprise is the State-owned Assets Supervision and
Administration Commission of Changzhou.
Refer to Note X for details.
Refer to Note VII, 11, Long-term equity investment for details.
Name of other related parties Relationship with the Company
Changzhou Synergetic Innovation Private Equity Participated in establishing the industrial investment
Fund (Limited Partnership) fund
The industrial investment fund established with the
Changzhou Changtou Xinhui No.1 Equity Investment
participation of our subsidiary, Changzhou Horizon
Fund (Limited Partnership)
Investment Co., Ltd.
Jiangsu Horizon New Energy Technology Co., Ltd. Shareholding enterprise of the Company
(1) Compensation for key management personnel
Unit: RMB
Amount incurred in the previous
Item Current amount incurred
period
Compensation for key
management personnel
(2) Other related-party transactions
Changchai Company, Limited Annual Report 2025
Our subsidiary, Changzhou Horizon Investment Co., Ltd., jointly invested with Changzhou Investment Group Co.,
Ltd. and Changzhou Xinhui Private Equity Fund Management Co., Ltd. to establish the Changzhou Changtou
Xinhui No.1 Equity Investment Fund (Limited Partnership) in the current period. As of December 31, 2025, our
company has paid a total investment of RMB 3.91 million to the Changzhou Changtou Xinhui No.1 Equity
Investment Fund (Limited Partnership). Apart from this matter, our company has no other related-party
transactions during the reporting period.
There were no related-party receivables or payables during the reporting period.
XV. Commitments and Contingency
Significant commitments on balance sheet date
As of 31 December 2025, there was no significant commitment for the Company to disclose.
(1) Significant Contingency on Balance Sheet Date
None.
(2) Despite no Significant Contingency to Disclose, the Company Shall Also Make Relevant Statements
There was no significant contingency in the Company.
XVI. Events after Balance Sheet Date
Unit: RMB
Dividend to be distributed for every 10 shares (RMB) 0.22
Bonus shares to be distributed for every 10 shares
(share)
Additional shares to be converted from capital reserve
for every 10 shares (share)
Dividend for every 10 shares (RMB) declared after
review and approval
Bonus shares to be distributed for every 10 shares
(share) declared after review and approval
Additional shares to be converted from capital reserve 0
Changchai Company, Limited Annual Report 2025
for every 10 shares (share) declared after review and
approval
It is proposed to distribute a cash dividend of RMB
based on the total share capital of 705,692,507 shares
as of December 31, 2025. No bonus shares will be
Profit distribution plan issued, and no capital reserves will be converted into
share capital. The total cash distribution amounts to
RMB 15,525,235.15. The above distribution plan still
needs to be reviewed and approved by the
shareholders' meeting.
There was no other event after balance sheet date.
XVII. Other Significant Events
(1) Basis for Determining Reportable Segments and Accounting Policies
As the Company and its major subsidiaries operate similar business activities under unified management without
separate business units, the Company operates as a single reportable segment.
The People's Government of Xinbei District, Changzhou, in its "Announcement of the Decision on the
Expropriation of Houses on State-owned Land by the People's Government of Xinbei District, Changzhou"
(Changxin Zhenggao [2022] No. 6), has decided to expropriate the houses within the scope of the old city
reconstruction project of the single-cylinder engine factory of Changchai Co., Ltd. (hereinafter referred to as "the
Company"), specifically the Changzhou Sanjing Branch of Changchai Co., Ltd. On November 29, 2023, the
Company signed a compensation agreement with the Housing and Urban-Rural Development Bureau of
Changzhou National Hi-Tech District (Xinbei) and the Housing Expropriation and Compensation Service Center
of Sanjing Subdistrict, Xinbei District, Changzhou (hereinafter referred to as "Sanjing Subdistrict"), with a total
agreed compensation amount of RMB 99,929,868. According to the payment terms stipulated in the
Compensation Agreement, the Company has received the first installment of compensation (30% of the
compensation amount) of RMB 30,000,000 (including RMB 1,000,000 received on December 29, 2023 and RMB
Changchai Company, Limited Annual Report 2025
XVIII. Notes of Main Items in the Financial Statements of the Company as the Parent
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including 1 year) 428,915,050.18 421,962,024.85
One to two years 838,239.49 6,757,507.16
Two to three years 1,013,190.45 936,696.44
More than three years 94,742,934.74 99,831,716.27
Three to four years 895,540.14 4,041,196.12
Four to five years 3,627,859.05 4,363,228.39
Over 5 years 90,219,535.55 91,427,291.76
Total 525,509,414.86 529,487,944.72
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Categor
Withd Carrying Withd Carrying
y
Propo rawal value Propo rawal value
Amount Amount Amount Amount
rtion propor rtion propor
tion tion
Accoun
ts
receiva
ble
withdra
wal of
Bad 0.00 0.00
debt
provisio
n
separate
ly
accrued
Changchai Company, Limited Annual Report 2025
Of
which:
Accoun
ts
receiva
ble
withdra
wal of
bad
debt
provisio
n of by
group
Of
which:
Accoun
ts
receiva
ble with
provisio
n for
bad
debts 509,925, 97.03 87,572,5 17.17 422,352, 514,704, 97.21 90,433,2 17.57 424,270,
based 399.52 % 58.80 % 840.72 286.47 % 95.55 % 990.92
on
credit
risk
charact
eristics
portfoli
o
Total —— —— —— ——
Provision for bad debts assessed individually: RMB15,584,015.34, including significant impairment items totaling
RMB13,532,178.26. The details are as follows:
Unit: RMB
Beginning balance Ending balance
Withdraw
Reason
Name Carrying Bad debt Carrying Bad debt al
for
amount provision amount provision proportio
withdraw
n
Changchai Company, Limited Annual Report 2025
Difficult
Customer 1 0.00 0.00 3,543,464.15 3,543,464.15 100.00%
to recover
Difficult
Customer 2 2,584,805.83 2,584,805.83 2,584,805.83 2,584,805.83 100.00%
to recover
Difficult
Customer 3 2,797,123.26 2,797,123.26 2,254,860.60 2,254,860.60 100.00%
to recover
Difficult
Customer 4 1,902,326.58 1,902,326.58 1,902,326.58 1,902,326.58 100.00%
to recover
Difficult
Customer 5 1,759,397.30 1,759,397.30 1,682,721.03 1,682,721.03 100.00%
to recover
Difficult
Customer 6 1,564,000.07 1,564,000.07 1,564,000.07 1,564,000.07 100.00%
to recover
Total 10,607,653.04 10,607,653.04 13,532,178.26 13,532,178.26 -- --
Withdrawal of bad debt provision by group:
Unit: RMB
Ending balance
Item
Carrying amount Bad debt provision Withdrawal proportion
Within 1 year 428,712,502.11 8,574,250.04 2.00 %
Over 5 years 78,248,277.14 78,248,277.14 100.00%
Total 509,925,399.52 87,572,558.80
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if
adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period
Unit: RMB
Changes in the current period
Beginning
Category Reversed or Ending balance
balance Withdrawal Verification Others
recovered
Bad debt
provision
accrued by
item
Changchai Company, Limited Annual Report 2025
Withdrawal
of bad debt
provision by
group
Total 104,541,278.31 638,669.13 553,262.66 1,470,110.64 103,156,574.14
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Accounts receivable with actual verification 1,470,110.64
Of which the verification of significant accounts receivable:
Unit: RMB
Arising from
Nature of the Verification
Name of the Reason for related-party
accounts Verified amount procedures
entity verification transactions or
receivable performed
not
The portion
Accounts
unrecoverable Minutes of the
Customer 1 receivable for 1,470,110.64 No
after mutual Executive Office
goods
mediation
Total 1,470,110.64
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according to
Arrears Party
Unit: RMB
Ending balance
Proportion to of bad debt
Ending balance total ending provision of
Ending balance Ending balance
Name of the of accounts balance of accounts
of accounts of contract
entity receivable and accounts receivable and
receivable assets
contract assets receivable and impairment
contract assets provision for
contract assets
Customer 1 268,525,021.53 0.00 268,525,021.53 51.10% 5,370,500.43
Customer 2 32,598,371.99 0.00 32,598,371.99 6.20% 651,967.44
Customer 3 24,345,164.30 0.00 24,345,164.30 4.63% 486,903.29
Customer 4 18,747,411.60 0.00 18,747,411.60 3.57% 374,948.23
Customer 5 16,814,723.38 0.00 16,814,723.38 3.20% 336,294.47
Changchai Company, Limited Annual Report 2025
Total 361,030,692.80 0.00 361,030,692.80 68.70% 7,220,613.86
Unit: RMB
Item Ending balance Beginning balance
Dividend receivable 7,165,080.00
Other receivables 20,239,727.26 17,123,687.65
Total 20,239,727.26 24,288,767.65
(1) Dividend receivable
Unit: RMB
Projects (or Investee Entities) Ending balance Beginning balance
Jiangsu Bank 2024 Interim
Dividend Announcement
Total 7,165,080.00
(2) Other Receivables
Unit: RMB
Nature Ending carrying value Beginning carrying value
Related-party transactions within
the consolidation scope
Margin and cash pledge 1,300.00 1,300.00
Other entity current accounts 20,326,696.60 20,438,842.07
Accounts receivable for
compensation
Petty cash and borrowings by
employees
Other 13,683,078.59 13,697,080.26
Total 53,132,928.53 66,730,019.91
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Changchai Company, Limited Annual Report 2025
Within 1 year (including 1 year) 4,957,985.45 5,982,988.63
Over 3 years 41,898,472.99 32,497,907.41
Over 5 years 32,709,185.23 32,185,960.05
Total 53,132,928.53 66,730,019.91
Provision for bad debts based on general model of expected credit losses
Unit: RMB
First stage Second stage Third stage
Expected loss in the
Expected credit Expected loss in the
Bad debt provision duration (credit Total
loss of the next 12 duration (credit
impairment not
months impairment occurred)
occurred)
Balance of 1
January 2025
Balance of 1
January 2025 in the —— —— —— ——
Current Period
--Transfer to
-8,620.55 8,620.55
Second stage
-- Transfer to Third
stage
-- Reverse to
Second stage
-- Reverse to First
stage
Withdrawal of the
Current Period
Reversal of the
Current Period
Write-offs of the
Current Period
Changchai Company, Limited Annual Report 2025
Verification of the
Current Period
Other changes
Balance of 31
December 2025
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning Charged-o Ending
Category Reversed or
balance Withdrawal ff/Written- Others balance
recovered
off
Bad debt
provision
separately
accrued
Withdrawal
of bad debt
provision by
group
Total 49,606,332.26 129,731.98 16,842,862.97 32,893,201.27
Unit: RMB
Proportion to
Ending
total ending
balance of
Name of the entity Nature Ending balance Aging balance of
bad debt
other
provision
receivables %
Related-party
Changzhou Changchai transactions
Benniu Diesel Engine within the 15,000,000.00 2-4 years 28.23%
Fittings Co., Ltd. consolidation
scope
Changchai Company, Limited Annual Report 2025
Changzhou Xinbei
Accounts
District Sanjing Street
receivable for Within 1
Housing Expropriation 3,348,087.00 6.30% 66,961.74
compensatio year
and Compensation
n
Service Center
Changzhou Compressor Current
Factory accounts
Changchai Group Imp. Current
& Exp. Co., Ltd. accounts
Changzhou New District Current
Accounting Center accounts
Total 25,767,758.27 48.49% 7,486,633.01
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserves value amount reserves value
Investment to 871,339,449. 871,339,449. 875,279,449. 868,279,449.
subsidiaries 94 94 94 94
Investment to
joint ventures
and 44,182.50 44,182.50 44,182.50 44,182.50
associated
enterprises
Total 44,182.50 7,044,182.50
(1) Investment to Subsidiaries
Unit: RMB
Beginni Increase/decrease for the current period
Ending
ng Withdra
Beginning Ending balance
balance Addition wal of
balance Reduced balance of
Investee of al impair
(carrying investmen Others (Carrying deprecia
deprecia investme ment
value) t value) tion
tion nt provisi
reserve
reserve on
Changchai Company, Limited Annual Report 2025
Changchai
Wanzhou 51,000,00 51,000,00
Diesel Engine 0.00 0.00
Co., Ltd.
Changzhou
Changchai
Benniu Diesel 0.00
Engine Fittings
Co., Ltd.
Changzhou
Changniu 96,466,5 96,466,50
Machinery 00.00 0.00
Co., Ltd.
Changzhou
Horizon 40,000,00 40,000,00
Investment 0.00 0.00
Co., Ltd.
Changzhou
Changchai
Horizon 7,000,00 7,000,000. 7,000,00
Agricultural 0.00 00 0.00
Equipment
Co., Ltd.
Changzhou
Fuji Changchai
Robin 47,286,23 47,286,23
Gasoline 0.03 0.03
Engine Co.,
Ltd.
Jiangsu
Changchai 591,835,9 591,835,9
Machinery 19.91 19.91
Co., Ltd.
ChangzhouXin
gsheng
Property
Management
Co., Ltd.
Changchai Company, Limited Annual Report 2025
Zhenjiang
Siyang Diesel
Engine
Manufacturing
Co., Ltd.
Total 0.00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease for the current period
Gains
Begin Begin Cash Endi Endin
and
ning ning Cha bonus Withd ng g
losses Adjustm
balan balanc nges or rawal balan balanc
Additi Reduc recog ent of
Investe ce e of of profit of ce e of
onal ed nized other Oth
e (carry deprec othe s impair (Carr deprec
invest invest under compreh ers
ing iation r annou ment ying iation
ment ment the ensive
value reserv equit nced provis value reserv
equity income
) e y to ion ) e
metho
issue
d
I. Joint ventures
Subtot
al
II. Associated enterprises
Beijing
Tsingh
ua
Xingye
Industr
ial 44,182 44,182
Invest .50 .50
ment
Manag
ement
Co.,
Ltd.
Subtot 44,182 44,182
al .50 .50
Total 0.00 44,182 0.00 44,182
Changchai Company, Limited Annual Report 2025
.50 .50
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□ Applicable √ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□ Applicable √ Not applicable
The reason for the discrepancy between the foregoing information and the information used in the impairment
tests in prior years or external information: Not applicable
The reason for the discrepancy between the information used in the Company's impairment tests in prior years and
the actual situation of those years: Not applicable
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 2,177,379,746.49 1,975,496,043.13 2,152,289,877.26 1,923,630,912.50
Other operations 127,932,965.74 118,401,110.19 109,306,807.66 102,287,240.76
Total 2,305,312,712.23 2,093,897,153.32 2,261,596,684.92 2,025,918,153.26
Breakdown information of operating income and operating cost:
Unit: RMB
Category of Segment 1 Total
contracts Operating Revenue Operating cost Operating Revenue Operating cost
Business Type
Of which:
Single-cylinder
diesel engines
Multi-cylinder
diesel engines
Other products 57,176,337.41 52,482,133.87 57,176,337.41 52,482,133.87
Fittings 44,467,192.92 34,936,189.35 44,467,192.92 34,936,189.35
Classification by
operating region
Of which:
Sales in domestic
market
Export sales 375,546,447.34 344,135,564.85 375,546,447.34 344,135,564.85
Total 2,177,379,746.49 1,975,496,043.13 2,177,379,746.49 1,975,496,043.13
Information in relation to the transaction price apportioned to the residual contract performance obligation:
Changchai Company, Limited Annual Report 2025
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not
fully performed yet was RMB0 at the period-end.
Unit: RMB
Item Reporting Period Same period of last year
Investment income from disposal of
held-for-trading financial assets
Dividend income from holding of other equity
instrument investment
Interest income from holding of debt obligation
investments
Accounts receivable financing-discount interest of
-2,155,823.30 -2,778,698.46
bank acceptance bills
Income from refinancing operations 95,937.38
Gains and losses from debt restructuring -51,260.02
Total 8,858,078.70 22,651,325.15
XIX. Supplementary Materials
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gain or loss on disposal of non-current assets 36,192,896.62
During the reporting period, the
company recognized government
subsidies amounting to RMB
and loss. After deducting
Government subsidies charged to current profit or loss
government subsidies related to
(exclusive of government subsidies given in the
assets transferred from deferred
Company’s ordinary course of business at fixed 15,437,236.88
income amounting to RMB
quotas or amounts as per the government’s uniform
standards)
subsidies amounting to RMB
subsidies recognized in
non-recurring profit and loss for
the current period amounted to
Changchai Company, Limited Annual Report 2025
RMB 15,437,236.88.
Gains or losses from changes in fair value of financial
assets and liabilities held by non-financial enterprises,
and gains or losses from disposal of financial assets -13,253,234.92
and liabilities, except for effective hedging activities
related to the company's normal business operations
Gains or losses from entrusting others with
investments or asset management
Reversal of impairment provisions for receivables that
have undergone separate impairment testing
Gains or losses from debt restructuring -42,868.87
Other non-operating income and expenses other than
-1,163,570.19
the above
Less: Income tax effects 8,030,670.45
Non-controlling interests effects (after tax) 249,531.51
Total 30,247,408.62
Others that meet the definition of non-recurring gain/loss:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses as a recurrent gain/loss item
□ Applicable √ Not applicable
Weighted average ROE EPS (Yuan/share)
Profit as of Reporting Period
(%) EPS-basic EPS-diluted
Net profit attributable to ordinary
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
deduction of non-recurring profit
or loss
Changchai Company, Limited Annual Report 2025
(1) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with
International Accounting Standards and Chinese Accounting Standards
□ Applicable Not applicable
(2) Differences between Disclosed Net Profits and Net Assets in Financial Report in accordance with
Overseas Accounting Standards and Chinese Accounting Standards
□ Applicable Not applicable
(3) Explain Reasons for the Differences between Accounting Data Under Domestic and Overseas
Accounting Standards; for Any Adjustment Made to the Difference Existing in the Data Audited by the
Foreign Auditing Agent, Such Foreign Auditing Agent's Name Shall Be Clearly Stated
□ Applicable Not applicable
Changchai Company, Limited
The Board of Directors
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