Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd.
April, 2026
Section 1 Important Notice, Table of Contents, and Definitions
The directors and the Board of Directors and Senior staff members of Bingshan
Refrigeration & Heat Transfer Technologies Co., Ltd. (hereinafter referred to as
the Company) hereby confirm that there are not any important omissions,
fictitious statements or serious misleading carried in this report, and shall take
all responsibilities, individual and/or joint, for the reality, accuracy and
completeness of the whole contents.
Chairman of the Board of Directors of the Company Mr. Ji Zhijian, Financial
Majordomo Mrs. Wang Jinxiu and the head of Accounting Department Mrs. Wu
Bin hereby confirm that the financial report of the annual report is true and
complete.
All the directors have attended this Board meeting of the Company.
There is no significant risk having adverse influence on attainment of the
Company's future development strategy and business targets. The paragraph "
The prospect of the Company's future development " in Section 3 of this Annual
Report describes major risks the Company may be confronted with, including
the risk of Increasing market competition risk, and the Accounts receivable is on
the high side. See the related sections for the countermeasures to be taken by the
Company.
The profit distribution proposal reviewed and adopted at this Board meeting of
the Company is: Based on the total capital stock of 843,212,507 shares, the
dividend of RMB 0.5 in cash (including tax) will be distributed for every 10
shares; The Company will not transfer the capital reserve to increase capital
stock.
This report is written respectively in Chinese and in English. In the event of any
discrepancy between the two above-mentioned versions, the Chinese version
shall prevail.
CONTENTS
Section 6 Change in Share Capital and Shareholders' Information…………………………………… ...……... ...30
Reference Documents
The accounting statements bearing the signatures and seals of the legal representative, the financial majordomo
and the accountants in charge.
newspapers designated by the China Securities Regulatory Commission in the report period.
Liaison persons: Mr. Song Wenbao, Ms Du Yu
Tel: 0086-411-87968130
Fax: 0086-411-87968125
Definitions
Defined item Stands for Meaning
Reporting period Stands for From Jan. 1, 2025 to Dec. 31 2025
The Company, this Company Stands for Bingshan Refrigeration & Heat Transfer Technologies Co.,Ltd.
Dalian Bingshan Group Engineering Co., Ltd., one of the subsidiaries of the Company where
Bingshan Engineering Stands for
the Company holds 100% of its shares.
Sonyo Compressor (Dalian) Co., Ltd., one of the subsidiaries of the Company, where the
Sonyo Compressor Stands for
Company holds100% of its shares.
Sonyo Refrigeration (Dalian) Co., Ltd., one of the subsidiary of the Company, where the
Sonyo Refrigeration Stands for
Company holds 100% of its shares indirectly.
Wuhan New World Refrigeration Industry Co., Ltd., one of the subsidiaries of the Company
Wuxin Refrigeration Stands for
where the Company holds 100% of its shares.
Dalian Bingshan Guardian Automation Co., Ltd. one of the subsidiaries of the Company
Bingshan Guardian Stands for
where the Company holds 100% of its shares.
Sonyo Refrigeration System (Dalian) Co., Ltd., one of the subsidiary of the Company,
Sonyo Refrigerator Stands for
where the Company holds 100% of its shares indirectly.
Section 2 About the Company and Main Financial Indicators
Company information
Short form of the stock Bingshan; Bingshan B
Stock code 000530; 200530
Listed stock exchange Shenzhen Stock Exchange
Legal name in Chinese 冰山冷热科技股份有限公司
Legal name abbreviation in Chinese 冰山冷热
Legal English name Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
Legal English name abbreviation Bingshan
Legal representative Ji Zhijian
Registered address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Registered address 116630
Due to the overall relocation, the registered address of the Company was changed
Historical changes of the Company's
from 888 Southwest Road, Shahekou District, Dalian to 106 Liaohe East Road,
registered address
Dalian Economic and Technological Development Zone in March 2017.
Office address No.106, Liaohe East Road, Dalian Economic and Technological Development Zone
Post code of Office address 116630
Internet web site of the Company www.bingshan.cn
E-mail of the Company 000530@bingshan.com
II. Contact persons and information
Secretary of the Board of Directors Authorized representative for securities affairs
Name Song Wenbao Du Yu
Bingshan Securities﹠Legal Affairs No.106, Liaohe Bingshan Securities﹠Legal AffairsNo.106, Liaohe
Address East Road, Dalian Economic and Technological East Road, Dalian Economic and Technological
Development Zone Development Zone
Tel. 0411-87968130 0411-87968822
Fax 0411-87968125 0411-87968125
E-mail 000530@bingshan.com 000530@bingshan.com
III. Information disclosure and place of preparation for inquiry
Stock exchange website where companies disclose annual
Shenzhen Stock Exchange
reports
Name of the newspaper designated the address of the China Securities Daily, Securities Times and
website for publishing this Annual Report http://www.cninfo.com.cn
Place where this Annual Report was prepared for inquiry Securities﹠Legal Affairs Department of the Company
IV. Alteration to the registration
Organization code 912102002423613009
Change in main business since the Company was listed No change
Changes in the holding shareholder No change
V. Other related information
Accounting firm engaged by the Company
Name of accounting firm ShineWing CPAs (Special General Partnership)
Office location of accounting firm 9/F,A Building No.,8 north street of Chao Yang Men, Dong Cheng District Beijing, China
Name of signing certified public accountant Sui Guojun, Zhang Shizhuo
Sponsor the Company appointed for performance of the consistent supervision duty in the reporting period
□ Applicable √ Not applicable
Financial consultant the Company appointed for performance of the consistent supervision duty in the reporting
period
□ Applicable √ Not applicable
VI. Main accounting data and financial indicators
Did the Company retroactively adjust or restate the accounting data of previous years due to change in the
accounting policy and correction of accounting mistakes?
□Applicable √ Not applicable
Increase/decrease compared with
previous year
Operating revenue 4,398,094,389.06 4,531,147,208.98 -2.94% 4,815,941,467.70
Net profit attributable to shareholders of listed
companies
Net profit belonging to the shareholders of
listed companies after the deduction of 44,012,772.84 34,268,377.84 28.44% 16,483,449.17
non-recurring profit and loss
Net cash flow from operating activities 122,211,684.48 237,154,274.44 -48.47% -24,440,667.74
Basic earnings per share 0.07 0.13 -46.15% 0.06
Diluted earnings per share 0.07 0.13 -46.15% 0.06
Weighted average return on net asset yield 1.94% 3.57% Decrease 1.63 percentage points 1.63%
Increase/decrease compared with
previous year
Total assets 7,596,536,378.75 7,628,315,487.35 -0.42% 8,162,848,294.25
Owner's equity attributable to shareholders of
listed companies
In 2025, the net profit attributable to shareholders of the listed company decreased by 43.77% compared to the
same period last year. This was mainly due to the fact that in the same period last year, the company sold a portion
of its holdings in Guotai Junan Securities, which contributed approximately 51.38 million yuan to the Company's
net profit for 2024.
The lower of the Company’s net profit before and after deduction of non-recurring gains and losses in the most
recent three fiscal years are all negative, and the audit report in the last year shows that the Company's ability to
continue operations is uncertain
□ Applicable √ Not applicable
The lower of the net profit before and after non-recurring gains and losses is negative
□ Applicable √ Not applicable
VII.1.Difference of accounting data between as per Chinese accounting standards and as per
International Accounting Standards
□ Applicable √ Not applicable
Foreign Accounting Standards
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
accounting standards
√Applicable □Not applicable
The difference of accounting data between as per Chinese Accounting Standards and as per International
Accounting Standards was 0.
VIII. The quarter main financial indicators
the first quarter the second quarter the third quarter the fourth quarter
Operating revenue 1,158,154,461.40 1,222,166,320.51 1,232,737,829.79 785,035,777.36
Net profit attributable to shareholders of listed companies 29,358,147.33 48,932,290.45 12,002,679.43 -28,254,323.51
Net profit belonging to the shareholders of listed companies
after the deduction of non-recurring profit and loss
Net cash flow from operating activities -187,028,757.61 185,996,243.15 -14,186,761.54 137,430,960.48
IX. Non-recurring profits and losses and their amounts
item 2025 2024 2023
Disposal gains and losses of non-current asset -1,787,313.71 -758,256.80 -6,656,241.40
Government subsidies included in current profit or loss 16,749,857.95 19,490,628.71 8,263,130.89
Debt restructuring gains and losses 470,096.32 2,154,769.80 1,791,602.29
Profit or loss arising from contingencies unrelated to the
-402,140.00 10,206,786.86
normal operation of the company
Disposal gains from investments on financial assets
available for sale, and gains from fair value change of 60,482,638.34 14,073,910.32
financial assets available for sale
Reversal of impairment provisions for accounts receivable
subject to separate impairment testing
The one-time expenses incurred by the enterprise due to the
-4,513,028.93 -6,774,379.53 3,928,060.93
discontinuation of related business activities
Other non-operating revenue or expense 4,142,445.41 2,831,968.96
Other profit and loss items that meet the definition of non
recurring profit and loss
Influence on income tax 1,347,472.62 10,575,731.10 5,162,725.13
Influence on minority shareholders -110,745.07 27,843.47 168,249.63
Total 18,026,020.86 76,066,761.22 32,892,451.66
Section 3 Management discussion and analysis
The industry situation of the Company during the reporting period
I. The Company’s Main business during the reporting period
Focusing on the hot and cold business, the Company is committed to the development of industrial
refrigeration and heating business, commercial refrigeration business, air conditioning and environment
business, engineering and service business and new business fields, covering the key areas of the hot and
cold industry chain and creating a complete hot and cold industry chain.
The Company's main products include piston type, screw type, vortex type, lithium bromide absorption
refrigeration machines/units, as well as pressure vessels, combination warehouses, controlled atmosphere
fresh-keeping warehouses, refrigeration stations, quick freezing machine, heat pump, etc. The Company
provides product sales and comprehensive solutions for both domestic and international markets, with self
operated sales as the main focus and channel sales as a supplement.
In 2025, rigid demands such as food safety, energy security, energy conservation and carbon reduction will
benefit the refrigeration and air conditioning industry; At the same time, the refrigeration and air
conditioning industry is also facing challenges such as intensified market competition, difficulties in
improving efficiency, and difficulties in recovering payments. In the face of opportunities and challenges, the
company focuses on the hot and cold business, continues to deeply cultivate advantageous segmented
markets such as cold chain logistics, petrochemicals, beer and dairy products, ship refrigeration, ice and
snow venues, and environmental simulation, vigorously expands new businesses such as energy storage
thermal management and CCUS, and actively expands and seizes the domestic market.
Industrial refrigeration is an important field reflecting the core technology of the Company. After years of
development, the Company has been close to the technical level of the main international competitors in the
field of industrial refrigeration, and has achieved catching up in some fields. Based on the traditional
refrigeration, the Company realizes the balance of cold and heat through the utilization of heat, which greatly
improves the energy utilization rate.
During the reporting period, the Company actively served high-end customers and won bids for multiple
high standard projects such as CNOOC Shell, Petro China Jilin Petrochemical, and Sinopec Maoming
Petrochemical. The industry influence of the Bingshan brand continued to increase.
Commercial refrigeration is the Company's core business. In China, the Company takes the lead in opening
up the green intelligent cold chain from the first kilometer of the field to the last 100 meters of the residential
community, which is the competitive advantage of the Company.
Focusing on food refrigeration, the Company has patented products pre-cooling from the field, all kinds of
quick freezing equipment and refrigeration facilities of various specifications, and China's leading experience
in the design and installation of large-scale ammonia and carbon dioxide refrigerators. On the basis of
absorbing the relevant experience of Japan, Europe and the United States, combined with China's new needs,
to provide newer products, better solutions and fresher experience for the field of food freezing and
refrigeration.
During the reporting period, the Company signed multiple key projects, including the Guangzhou East Rail
Intermodal Hub Phase I Project and the Shenzhen International Group Comprehensive Cold Chain Logistics
Project.
In recent years, relying on the complete industrial chain, the Company has continuously carried out
transformation and upgrading in the field of air conditioning and environment, developed more
energy-saving and environmental protection products around the blue sky project, and accelerated the
transformation and upgrading from air treatment to environmental governance.
At present, the Company has developed a series of innovative products around the market segments of
commercial air conditioning, central air conditioning and special air conditioning, and provides
corresponding solutions in different segments around these innovative products. For hospitals, electronic
factories, high-end real estate, rail transit and other fields, provide targeted solutions.
During the reporting period, the Company's project "Research and Demonstration Application of Key
Technologies for Purification Environment System in Special Cryogenic Wind Tunnel" won the first prize of
the China Refrigeration Society's 2025 Science and Technology Progress Award.
Cold and hot engineering and service are the Company's advantageous business fields. In recent years, the
Company has realized transformation and upgrading from the manufacturer of cold and hot equipment to the
service provider of comprehensive solution of cold and hot through the development of engineering and
service industry, and realized the dual wheel drive of the enterprise, and provided more professional and
accurate services to each segment market, and constantly created new value for customers and realized
common growth.
At present, the Company focuses on petrochemical technology, refrigeration, central air conditioning, ice and
snow engineering, artificial environment and other market segments. Relying on the enterprise's industrial
chain, value chain and ecosystem, the Company provides services from consulting, planning, design to
manufacturing, installation, commissioning and service in the whole process and life cycle. At the same time,
according to the needs of customers, promote the combination of industry and finance, and provide services
for customers through the form of project general contracting and financial leasing.
During the reporting period, the Company signed multiple key projects, including the BYD Intelligent New
Energy Vehicle Comprehensive Testing Field Project .
With the deepening of China's economic transformation and upgrading, as well as the continuous
introduction of environmental governance policies, the domestic industrial energy conservation and
environmental protection industry is growing rapidly, the level of energy conservation and consumption
reduction of enterprises and the comprehensive utilization of resources is constantly improving, and the
energy industrial structure has changed. Strengthening the optimal utilization of energy has become a
development trend. For low-grade energy recycling, the Company provides customers with a series of
energy-saving, environmental protection, efficient new products, in line with the national strategic
requirements of energy conservation, carbon reduction and sustainable development, and contributes
professional wisdom to the national carbon peak and carbon neutral strategy.
During the reporting period, the Company's new business orders such as energy storage thermal management
and CCUS continued to grow.
II. Industry development trend
In recent years, the refrigeration and air conditioning industry has played an increasingly prominent role in
national strategies such as food safety, energy security, consumption upgrading, energy conservation and carbon
reduction. The high-end, digital, green, and service-oriented development of the industry has been rapid.
In 2025, the refrigeration and air conditioning industry is still facing a complex domestic and international market
situation, with intensified market competition, difficulties in improving efficiency, and high accounts receivable,
which continue to plague the operation and development of the industry.
In 2026, industry development will continue to differentiate and competition will ease. The transformation and
upgrading of leading enterprises in the industry will continue to advance, new quality productivity will be
cultivated in an orderly manner, and high-quality development will become increasingly stable.
(1)Opportunities faced by the Company
Energy conservation, carbon reduction, and improving energy efficiency have become a consensus in the whole
society; The overall orderly promotion of the national "dual carbon" strategy; Guided by the development plan of
cold chain logistics, the demand for cold chain equipment in the market is expected to increase; The issuance of
new cold storage design standards has increased the opportunities for the use of ammonia refrigerants; The ice and
snow economy will receive policy support, and the construction projects of ice and snow venues will increase;
empowered by artificial intelligence, there is a growing demand for upgrading cold and hot control systems. With
its strong technological foundation, innovative business model, and institutional advantages, the Company can
better seize the above opportunities.
(2)Challenges faced by the Company
The cultivation of energy conservation and emission reduction market still needs time; the transformation and
upgrading process is complex.
III. Analysis of core competence
The Company focuses on main business of refrigeration and heating; independent R&D and joint venture
partnerships are cooperate with each other effectively; capital resources integration and business model innovation
are in a positive interaction; the community of business and interest are being multi-storey created; the develop
mode with Bingshan characteristic are formed.
The Company has the integrated refrigeration and heating industrial chain for offering kinds of comprehensive
solution services, including design, manufacture, installation and maintenance etc., and can satisfy individual
requirements preferably.
The Company possesses a mature and solid marketing networks and after-sale service network on/off-line, and
can offer high quality and high value-added services more initiative and faster for clients from around the city.
The Company follows the technical route of thermal balance and has independently developed a series of
energy-saving, environmentally friendly, efficient, and intelligent thermal technologies and products,
professionally empowering food safety and energy security, and actively fulfilling its dual carbon responsibility.
While promoting the transformation and upgrading of its inherent business in an orderly manner, the Company
actively cultivates new momentum for development, and the path of sustainable growth is increasingly clear.
During the reporting period, the Company focused on the hot and cold business, deeply cultivated the market
segment, and steadily improved its sales force, product force, technical force, engineering force and service force,
so as to further enhance its core competitiveness.
IV. Analysis of main business
In 2025, the Company focuses on the hot and cold business, deeply cultivates segmented markets, solidly
enhances core competitiveness, effectively expands industry influence, and continuously strengthens its main
business. In 2025, the Company achieved operating revenue of 4,398.09 million yuan, with a year-on-year
decrease of 2.94%; net profit attributable to shareholders of the listed company was 62.04 million yuan, also
decreasing by43.77% year-on-year; and net profit attributable to shareholders of the listed company after
deducting non-recurring gains and losses was 44.01 million yuan, showing a year-on-year increase of
During the reporting period, the Company continued to strive for progress and maintain steady development.
The second phase of the rooftop photovoltaic project at the new factory was officially connected to the grid
and generated electricity, earning a five-star Zero Carbon Factory (Type I) certification from China
Classification Society. The drop-film opening screw chiller began mass production and was introduced to the
market. The cross-critical CO2 refrigeration and heat integration coupling unit and the OCCS liquefaction
unit were selected as an "Innovative Product" for the 2025 China Refrigeration Exhibition. The project "Key
Technology R&D and Demonstration Application of Special Deep Cryogenic Wind Tunnel Purification
Environment System" was awarded the 2025 China Refrigeration Society Science and Technology Progress
Prize, Category I.
During the reporting period, the Company's subsidiary, Bingshan Engineering, continued to deepen its focus
on niche markets. In the product sector, it actively served high-end clients, securing bids for several
high-standard projects such as the CNOOC Shell Project, the Jilin Petrochemical Project of CNPC, and the
Maoming Petrochemical Project of Sinopec. In the engineering sector, it undertook key projects including
the Phase I Project of the Guangzhou Eastern Rail-Road Intermodal Hub, the Comprehensive Cold Chain
Logistics Project of Shenzhen International Group, the BYD Intelligent New Energy Vehicle Integrated Test
Site Project. In the energy sector, orders for energy storage thermal management projects and CCUS projects
continued to grow.
During the reporting period, the subsidiary of the Company, Wuhan New World Refrigeration, continuously
optimized its products and solutions. The development of oil-free compressors is progressing in an orderly
manner. Focusing on the advantages of natural gas pressure energy generation, mining explosion-proof
refrigeration equipment, process gas compression and other segmented markets, we will solidly explore with
the help of professional groups. The customer system construction continues to be strengthened, and the
sales of innovative products have achieved incremental growth.
During the reporting period, the subsidiary of the Company, Bingshan Guardian, focused on energy-saving
and intelligent control of cold and hot systems, and innovated and iterated development. The large-scale
implementation of energy storage products and the two-way breakthrough of industrial energy-saving
technology standardization continue to strengthen the leading advantage. Energy storage customers are
expanding in an orderly manner, and energy storage orders continue to grow. Efficient development of a new
generation control system based on AI applications, with a good start to customer applications.
During the reporting period, the subsidiary of the Company, Sonyo Compressor, achieved independent
innovation and qualitative growth. The large-scale vortex intelligent workshop has been officially put into
operation, accelerating the development of overseas markets and steadily increasing market share. Selected
for the "2025 5G Factory List" by the Ministry of Industry and Information Technology of China. The 160cc
high-efficiency variable frequency scroll compressor for energy storage has been selected as an "innovative
product" at the 2025 China Refrigeration Exhibition. Selected as the "Liaoning Province Manufacturing
Industry Single Champion Enterprise" for its main product, the vortex compressor for light commercial air
conditioning.
During the reporting period, the subsidiary of the Company, Sonyo Refrigeration, focused on industrial
energy conservation and strengthened innovative growth. The intelligent hybrid air source heat pump unit
has been selected as an "innovative product" at the 2025 China Refrigeration Exhibition. The seawater
cooled absorption unit under all operating conditions has been selected for the 2025 "Recommended
Catalogue of Energy saving and Carbon Reduction Technologies and Products for Refrigeration and Air
Conditioning Applications". Selected as the "Liaoning Province Manufacturing Industry Single Champion
Enterprise" with its main product lithium bromide chiller.
During the reporting period, the subsidiary of the Company, Sonyo Refrigerator, focused on product
development and focused on the dual carbon and energy storage fields. The research and development of
energy storage units is progressing in an orderly manner, and breakthroughs have been made in expanding
energy storage customers. The carbon dioxide trans critical refrigeration system is widely used in
commercial applications, and multiple projects of the sixth generation trans critical full injection
refrigeration unit have been successfully delivered. Refined management improves quality and efficiency,
with monthly output repeatedly reaching new highs.
(1) Sales income structure
Year-on-year
Proportion to the Proportion to the
Amount Amount increase/decrease
Sales costs Sales costs
Total sales income 4,398,094,389.06 100% 4,531,147,208.98 100% -2.94%
By industry
Refrigeration and
air-conditioning 4,326,967,344.65 98.38% 4,435,315,179.34 97.89% -2.44%
equipment
Others 71,127,044.41 1.62% 95,832,029.64 2.11% -25.78%
By product
Industrial product 3,299,601,997.34 75.02% 3,322,992,841.50 73.34% -0.70%
Installation works 1,027,365,347.31 23.36% 1,109,728,685.33 24.49% -7.42%
Others 71,127,044.41 1.62% 98,425,682.15 2.17% -27.74%
Domestic sales 3,805,541,621.25 86.53% 3,915,157,033.71 86.41% -2.80%
Foreign sales 592,552,767.81 13.47% 615,990,175.27 13.59% -3.80%
(2) Main business structure
Increase/decrease of Increase/decrease
operating revenues of operating costs Increase/decrease of gross profit on
Operating revenue Operating costs Gross profit
on a year-on-year on a year-on-year a year-on-year basis
basis basis
By industry
Refrigeration and
air-conditioning
By product
Industrial product 3,299,601,997.34 2,667,228,466.38 19.17% -0.70% 0.30% Decrease0.81percentage points
Installation works 1,027,365,347.31 957,983,635.60 6.75% -7.42% -9.25% Increase 1.87 percentage points
By region
Domestic sales 3,734,414,576.84 3,160,385,853.78 15.37% -2.22% -2.41% Increase 0.16 percentage points
Foreign sales 592,552,767.81 464,826,248.20 21.56% -3.80% -2.56% Decrease 0.99 percentage points
By sales model
Total 4,326,967,344.65 3,625,212,101.98 16.22% -2.44% -2.43% Decrease 0.01 percentage points
（3）Was the Company's sales income on material objects more than that on labor service?
√ Yes □ No
Year-on-year
Industry category Item 2025 2024
increase/decrease
Sales volume 842,847 914,435 -7.83%
Main refrigeration unit for
Production output 839,434 919,335 -8.69%
industrial or commercial use
Inventory level 101,836 109,973 -7.40%
Reason for change in the related data by 30% or higher on a year-on-year basis
? Applicable √ Not applicable
（4）Performance of major sales contracts and major procurement contracts signed by the company up to
the reporting period
? Applicable √ Not applicable
（5）Sales cost structure
Proportion to the Year-on-year
Industry category Item Proportion to the
Amount Amount increase/decrease
operating costs operating costs
Direct materials 3,048,776,095.75 83.37% 3,152,291,175.61 83.75% -3.28%
Labor wages 396,719,508.42 10.85% 398,210,368.01 10.58% -0.37%
Refrigeration and Depreciation 63,909,944.46 1.75% 61,579,139.06 1.64% 3.79%
air-conditioning Utilities 25,910,672.22 0.71% 27,430,609.69 0.73% -5.54%
Others 121,429,115.29 3.32% 124,296,923.81 3.30% -2.31%
Total operating costs 3,656,745,336.14 100.00% 3,763,808,216.19 100.00% -2.84%
(6) Was the Company's consolidated range change during the reporting period?
√ Applicable □Not applicable
During the reporting period, the company absorbed and merged its wholly-owned subsidiary, Dalian Group Sales
Co., Ltd., resulting in the reduction of one subsidiary. The Company's subsidiary, Dalian Bingshan Engineering &
Trading Co., Ltd. established a new subsidiary, Bingshan Engineering & Trading (Hong Kong)Co., Ltd., which
led to the addition of one subsidiary as an affiliate.
(7) Major change or adjustment in the Company's products or service in the reporting period
□ Applicable √ Not applicable
(8) Information on the Company's major customers and major suppliers
Information on the Company's major customers
Total sales volume from top five customers (yuan) 1,022,061,411.37
Proportion of the total sales volume from top five customers to the annual sales volume 23.24%
Proportion of the related party total sales volume from top five customers to the annual sales
volume
Proportion to the annual
No. Name of customer Sales volume (yuan)
sales volume
Total —— 1,022,061,411.37 23.24%
Information on the Company's major suppliers
Total purchase volume from top five suppliers (yuan) 569,502,481.50
Proportion of the total purchase volume from top five suppliers to the annual purchases volume 14.18%
Proportion of the related party total purchase volume from top five suppliers to the annual purchases volume 2.70%
Information on the Company's top five suppliers
Purchase volume Proportion to the annual
No. Name of supplier
(yuan) purchase volume
Total —— 569,502,481.50 14.18%
Increase/decrease of gross
profit on a year-on-year basis
Selling expenses 211,903,469.07 240,710,529.95 -11.97% Financial expenses have significantly
Administrative decreased, mainly due to a reduction in
expenses bank loans and interest rate cuts during
Financial expenses 17,966,145.28 23,001,855.93 -21.89% the reporting period, resulting in a
R&D expenses 149,965,827.16 155,526,315.57 -3.58% decrease in interest expenses.
Information on R&D expenditure
Increase/decrease on a year-on-year
basis
The quantity of the person engaged in R&D 584 548 6.57%
The quantity proportion of the person engaged in R&D 13.76% 12.96% Increase 0.80 percentage points
The spending amount on R&D（yuan） 149,965,827.16 155,526,315.57 -3.58%
R&D spending accounts for the proportion of revenue 3.41% 3.43% Decrease 0.02 percentage points
The amount of R&D investment capitalization（yuan） 0.00 0.00 0.00%
Capitalize R&D investment for the proportion of R&D
spending
Reasons for the remarkable change in R&D spending accounts for the proportion of revenue compared with the
previous year
□ Applicable √ Not applicable
Reasons for the substantial changes in the capitalization rate of R&D investment and its rationality
□ Applicable √ Not applicable
Year-on-year
Item 2025 2024
increase/decrease
Sub-total of cash inflows from operating activities 4,179,153,419.53 4,283,305,967.55 -2.43%
Sub-total of cash outflows from operating activities 4,056,941,735.05 4,046,151,693.11 0.27%
Net amount of cash flow generated in operating
activities
Sub-total of cash inflows from investing activities 82,407,009.06 598,921,586.65 -86.24%
Sub-total of cash outflows from investing activities 294,796,925.42 228,719,169.31 28.89%
Net amount of cash flow generated in investing -212,389,916.36 370,202,417.34 -
activities
Sub-total of cash inflows from financing activities 268,719,885.85 345,199,909.07 -22.16%
Sub-total of cash outflows from financing activities 411,938,697.54 675,023,781.75 -38.97%
Net amount of cash flow generated in financing
-143,218,811.69 -329,823,872.68 142.51%
activities
Net increase in cash and cash equivalents -231,136,962.76 281,139,347.62 -
Reason for change in the related data by 30% or higher on a year-on-year basis
√ Applicable □ Not applicable
the reduction in collection of receivables during the reporting period.
disposal of the company's holdings in Guotai Junan Securities last year and the reduction in the bank deposits of
the subsidiaries during the reporting period.
reduction in repayment of bank loans during the reporting period, resulting in a decrease in cash outflows from
financing activities.
Reason for remarkable difference between the cash flows from the Company's operating activities in the reporting
period and the net annual profit.
□Applicable √ Not applicable
V. Analysis of the non-main business
□ Applicable √ Not applicable
VI. Analysis of assets & liabilities
Monetary unit: RMB yuan
Proportion to Proportion to Proportion increase/decrease
Amount Amount
the total assets the total assets
Monetary funds 880,381,966.11 11.59% 1,042,143,744.67 13.66% Decrease 2.07 percentage points
Accounts receivable 1,634,732,296.46 21.52% 1,492,234,348.90 19.56% Increase 1.96 percentage points
Contract assets 161,816,928.39 2.13% 184,760,940.32 2.42% Decrease 0.29 percentage points
Inventories 1,435,592,266.21 18.90% 1,393,653,788.81 18.27% Increase 0.63 percentage points
Investment property 121,350,188.47 1.60% 117,931,720.24 1.55% Increase 0.05 percentage points
Long-term equity
investment
Fixed assets 1,258,712,033.63 16.57% 1,211,794,069.63 15.89% Increase 0.68 percentage points
Construction in
progress
Use right assets 17,479,863.29 0.23% 23,318,732.46 0.31% Decrease 0.08 percentage points
Short-term loans 201,836,464.89 2.66% 167,283,407.26 2.19% Increase 0.47 percentage points
Contract liabilities 525,086,822.72 6.91% 645,711,808.53 8.46% Decrease 1.55 percentage points
Long-term loans 368,328,245.18 4.85% 547,346,541.25 7.18% Decrease 2.33 percentage points
Lease liabilities 16,563,173.78 0.22% 19,071,845.78 0.25% Decrease 0.03 percentage points
√ Applicable □ Not applicable
Other non-current financial asset measured in fair value is 1,683,852.59 yuan at the year beginning ， and
Restrictions on asset rights as of the end of the reporting period
By the end of reporting period, the Company’s asset rights 198,653,576.38 yuan was limited, the reason for the
limitation: the deposit and the bank account were frozen; bank pledge; mortgage.
VII. Analysis of investments
√ Applicable □ Not applicable
Investment in 2025(yuan) Investment in 2024(yuan) Amount of variation
□Applicable √Not applicable
□Applicable √Not applicable
(1) The securities investment
□Applicable √Not applicable
(2) Derivative investment
□Applicable √ Not applicable
During the reporting period, the Company does not exist derivative investment.
□Applicable √ Not applicable
VIII. The material assets and equity sale
□Applicable √Not applicable
□Applicable √Not applicable
IX. Analysis of major subsidiary companies and mutual shareholding companies
√ Applicable □ Not applicable
Unit: ten thousand yuan (except for registered capital)
registered Operating
Company name Type The main business total assets net assets Net profit
capital income
Manufacture and
RMB
Sonyo sales of gas
subsidiary 442.3967milli 178,400.10 114,598.60 135,566.49 11,381.55
Compressor compression
on
machinery
High-grade
mutual
building hardware, USD 8,064.5
Bingshan Metal shareholding 30,291.29 24,381.71 43,599.98 6,336.83
plumbing thousand
company
equipment
Subsidiary companies obtained or disposed in the reporting period
√ Applicable □ Not applicable
During the reporting period, the company absorbed and merged its wholly-owned subsidiary, Dalian Group Sales
Co., Ltd., resulting in the reduction of one subsidiary. The Company's subsidiary, Dalian Bingshan Engineering &
Trading Co., Ltd. established a new subsidiary, Bingshan Engineering & Trading (Hong Kong)Co., Ltd., which
led to the addition of one subsidiary as an affiliate.
X. The structured corporate bodies which the Company controlled
□Applicable √Not applicable
XI. Development prospect of the Company
Major risks faced and countermeasures adopted by the Company
(1)Increasing market competition risk
Countermeasures: focus on hot and cold industries, deeply cultivate segmented markets; quickly enhance product
and engineering capabilities; orderly improving the level of intelligent manufacturing and service-oriented
manufacturing; accelerate the transformation and upgrading of inherent undertakings, improve quality and
efficiency; accelerate the cultivation of new driving forces and increase differentiated competitive advantages.
(2)Risk of high level of trade receivables
Countermeasures: strictly implement the project management system and further strengthen the management of
accounts receivable; enhance quality of contract through intensified customer credit assessment and contract
appraisal; effective control of increase in trade receivables by reduction of guarantee deposits, and taking bank
credit instruments as guarantee deposits; improve contract execution through stricter review on goods delivery,
intensified control on project construction and acceptance, and post-sale service; prepare special composition
solutions and incentive policy to accelerate settlement of trade receivables with relatively long aging.
In 2026, the Company will follow the business policy of " gather inner strength • focus sharp energy • win the
future ", focus on cold and hot business, and further develop segmented markets such as cold chain logistics,
petrochemical industry, ship refrigeration, ice and snow venues，energy storage and thermal management, solidly
enhancing core competitiveness, effectively expanding industry influence, continuously strengthening main
business, and striving to achieve rapid growth.
XII. Record of investigation, communication, and other activities in the reporting period
√Applicable □Not applicable
For details, please see
http://irm.cninfo.com.cn/ircs/company/companyDetail?stockcode=000530&orgId=gssz0000530
XIII. Implementation of Market Value Management System and Valuation Enhancement
Plan
Has the Company established a market value management system.
□Applicable √Not applicable
Has the Company disclosed a plan to increase its valuation.
√Applicable □Not applicable
Due to the fact that the B-share prices have been consistently lower than the net asset value, the company has
formulated the "Valuation Enhancement Plan", aiming to increase the company's valuation from several
dimensions such as business improvement, mergers and acquisitions, cash dividends, information disclosure,
investor relations management, and social responsibility. For detailed information, please refer to the relevant
announcement disclosed by the Company on April 24, 2026.
XIIII. Implementation of the Action Plan for "Double Improvement of Quality and Return"
Has the Company disclosed the announcement of the "Double Improvement of Quality and Return" action plan.
□Applicable √Not applicable
Section 4 Corporate governance Environmental and Social
Responsibility
I. Basic situation of corporate governance
Within the reporting period, the Company centered around the operation subject as “Leading innovation, Creating
value”, relying on the opportunity of overall relocation and transformation of the Company, to further deepen and
perfect the normative internal control system and upgrade the governing level of the Company continuously.
There were no problems with the Company concerning horizontal competition caused by restructures and other
reasons. The main normal associated transactions between the Company and the associated companies included
purchasing the supporting products for package projects from the associated companies, and selling the supporting
parts and components to the associated companies and providing them with the labor service. Associated
transactions between the Company and the associated companies are necessary for normal production and
operation and helpful for the Company’s healthy development, and therefore will continue. The Company will
strictly follow the related decision-making procedures and fulfill the obligation in information disclosure in order
to further regulate associated transactions.
During the reporting period, the Dalian Securities Regulatory Bureau conducted a on-site inspection of the
Company. On March 2, 2026, the Dalian Securities Regulatory Bureau issued an administrative regulatory
measure notice ordering the Company to make corrections. The notice contained some issues related to the
Company's governance, including: inadequate disclosure of related parties and related transactions, and the lack of
independence in the Company's governance. The Company has submitted a rectification report within the
rectification period and has promptly made the necessary corrections. As of the date of this report's disclosure, all
the aforementioned issues have been rectified. Through this rectification, the company has continuously improved
and further strengthened its governance level.
Was there any deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations?
□ Yes √ No
There was no deviation of the Company's corporate governance from the requirements in the Company Law and
China Securities Regulatory Commission's regulations.
II. Status of the Company's business, staff, asset, organization and finance separations from
the holding shareholder
The Company and its controlling shareholder have been separated in terms of business, assets, and finance, and
possess independent and complete business operations and the ability to operate independently.
However, there are issues regarding personnel and institutions that affect the independence of the Company.
Effective measures have been taken to rectify these problems:
Group Co., Ltd., hereinafter referred to as Bingshan Group) official seals and legal seals simultaneously.
[Measures for rectification] Starting from March 10, 2026, the relevant employees of the Company will no longer
hold and affix the official seals and legal seals of Bingshan Group.
[Progress of rectification] The rectification has been completed and will continue to be implemented in a
standardized manner.
Bingshan Group, and several employees of the Company provide assistance in the corresponding department
functions for the Bingshan Group.
[Measures for rectification] Starting from January 1, 2026, the original technical innovation center, digital
promotion department, brand management department, and legal affairs department of the Company that were
responsible for platform management functions no longer overlap with the Iceberg Group, and the relevant
employees of the Company no longer provide assistance in the corresponding department functions for the
Bingshan Group.
Starting from March 20, 2026, the Party and Mass Work Department of the Company no longer overlaps with the
Iceberg Group, and the relevant employees of the Company no longer provide assistance in the corresponding
department functions for the Bingshan Group.
[Progress of rectification] The rectification has been completed and will continue to be implemented in a
standardized manner.
Bingshan Group since January 2018.
[Measures for rectification] Starting from January 1, 2026, the Company's board secretary no longer exercises the
authority of the legal affairs director of Bingshan Group.
[Progress of rectification] The rectification has been completed and will continue to be implemented in a
standardized manner.
III. Horizontal competitions
□ Applicable √ Not applicable
IV Information on the Company’s Directors, Supervisors, Senior Management and Staff
Shares Increase on Decrease in
Shares held
Starting Ending held at holding of holding of
Office-holdi at the end of
Name Position Sex Age date of date of beginning shares in this shares in this
ng state period
office term office term of period period period
(shares)
(shares) (shares) (share)
Dec.27, Dec.26,
Ji Zhijian Chairman Incumbent M 58 1,528,830 0 0 1,528,830
Vice chairman/ Jan.1, Dec.26,
Cai Liyong Incumbent M 52 0 0 0 0
General manager 2024 2027
Dec.27, Dec.26,
Xu Wei Director Incumbent M 47 0 0 0 0
Kinoshita May 23, Apr.7,
Director Incumbent M 53 0 0 0 0
Ayumu 2024 2026
Nishimoto Jun.5, Dec.26,
Director Incumbent M 59 0 0 0 0
Shigeyuki 2019 2027
Nov,14 Dec.26,
Li Sheng Employee Director Incumbent M 46 0 0 0 0
May 14, May 13,
Zhai Yunling Independent director Incumbent M 62 0 0 0 0
May 14, May 13,
Liu Yuanyuan Independent director Incumbent F 51 0 0 0 0
Incumbent May 14, May 13,
Yao Hong Independent director F 52 0 0 0 0
Jan.12, Nov,13
Song Wenbao Director Resignation M 52 0 0 0 0
Chairman of the
Jan.17, Sep.4,
Hu Xitang board of Resignation M 57 0 0 0 0
Supervisors
Jan.21, Sep.4,
Dai Yuling Supervisor Resignation F 47 0 0 0 0
Li Sheng Supervisor Resignation M 46 May 15, Sep.4,
Deputy general Jan.12, Dec.26,
Yang Fuhua Incumbent M 54 0 0 0 0
manager 2022 2027
Chief Financial May 14, Dec.26,
Wang Jinxiu Incumbent F 55 5,000 0 0 5,000
Officer 2021 2027
Feb.5, Dec.26,
Song Wenbao Board secretary Incumbent M 52 593,880 0 0 593,880
Total 2,127,710 0 0 2,127,710
During the reporting period, whether any directors or supervisors leave office or senior
managers are dismissed
√Applicable □Not applicable
Due to the adjustment of the Company's governance structure, the Company has abolished the board of
supervisors. The original Company supervisors, Hu Xitang, Dai Yuling and Li Sheng, left their positions during
the reporting period. According to the revised Company charter, Li Sheng was elected as a representative director
of the Company's employees. The original director, Song Wenbao, resigned during his term of office. After his
resignation, he continued to serve as the Company's secretary of the board of directors.
Changes of directors, supervisors, senior managers of the Company
Name Position held Type Date Reason
Hu Xitang Chairman of the board of Supervisors Resignation Sep.4,2025 Board of Supervisors Reform
Li Sheng Supervisor Resignation Sep.4,2025 Board of Supervisors Reform
Dai Yuling Supervisor Resignation Sep.4,2025 Board of Supervisors Reform
Li Sheng Employee Director Elected Nov,14 2025 Optimization of the corporate governance structure
Song Wenbao Director Resignation Nov,13 2025 Optimization of the corporate governance structure
Office holding
Professional background, main work experiences and the main duties and responsibilities of incumbent directors,
supervisors, senior managers of the Company
main duties and
Name Position held Professional background Main work experience
responsibilities
doctorate degree in
Successively acting as GM, Chairman of Panasonic Cold-Chain.; Related
management of the
Ji Zhijian Chairman Chairman and President of Dalian Bingshan Group Co., Ltd.; responsibilities of
Dalian University of
Chairman of the Company. the Chairman
Technology
served as the General Manager of Dalian Bingshan Ryosetsu Quick
Heilongjiang University
Freezing Equipment Co., Ltd., the General Manager of Wuhan New Related
Vice chairman of Commerce majoring
Cai Liyong World Refrigeration Industry Co., Ltd., and the General Manager of responsibilities of
GM in refrigeration and
Bingshan Sonyo Refrigeration (Dalian) Co., Ltd. Starting from GM
freezing
January 1, 2024, appointed as the General Manager of the Company.
Master of Thermal Formerly served as the General Manager of Dalian Bingshan Wisdom Related
Xu Wei Director
Energy and Power Park Development Co., Ltd. From January 2021 to December 2023, responsibilities of
Engineering, Xi'an served as the Assistant to the President of Dalian Bingshan Group the Director
Jiaotong University Co., Ltd. From January 2024, appointed as Vice President of Dalian
Bingshan Group Co., Ltd.
graduated from Dalian acting as the Director of Operation Management Department of Related
Employee
Li Sheng University of Dalian Bingshan Group Company Ltd；chief of the Financial Dept. of responsibilities of
Director
Technology the Company. the Director
served as the director of Financial Planning Room and Finance
Department System Overall Room of Panasonic Corporation Related
Nishimoto graduated from Meiji
Director Headquarter; the director of Regional Financial Integration Room, responsibilities of
Shigeyuki university
CFO of Panasonic Corporation China & Northeast Asia Company; the the Director
supervisor of Dalian Bingshan Group Co., LTD.
Professor of Law School of Dalian Maritime University, lawyer of Related
Independent Doctor of Law, Beijing Jincheng Tongda (Dalian) Law Firm, legal adviser of Dalian responsibilities of
Zhai Yunling
director professor, lawyer Municipal People's Government, member/arbitrator of Dalian the Independent
Arbitration Commission director
Professor of Accounting School of Dongbei University of Finance
Related
and Economics, Director of Sino-German Management Control
Independent responsibilities of
Liu Yuanyuan Doctor of Accounting Research Center, independent director of China Railway Tielong
director the Independent
Container Logistics Co., LTD.,; independent director of Kincai
director
(Liaoning) Life Science and Technology Co., LTD.
graduate from China Doctor of Management, School of Economics and Management, Related
Independent University of Political Dalian University of Technology, Independent director of Harbin responsibilities of
Yao Hong
director Science and Law， Hattou Investment Co., LTD., Independent director of Fushun Special the Independent
professor of law Steel Co., Ltd. director
served as engineer, deputy director and director of complete set
graduated from Xi 'an design Department of the Company; served as deputy General Related
Yang Fuhua DGM Jiaotong University, Manager of Dalian Bingshan Group Engineering Co., LTD; served as responsibilities of
Senior Engineer chief engineer of the Company's business Headquarters and deputy DGM
Head of the Research and development Headquarters.
served as cost accountant in finance Department of the Company and
Minister of Finance Department of DalianBingshan Air Conditioning Related
Wang Jinxiu CFO Senior accountant Equipment Co., LTD.; served as the Director of the Financial responsibilities of
Management Department of the Company. served as Chief Financial CFO
Officer since May 2021.
Related
Board graduate from Zhejiang Successively acting as representative for securities affairs, board
Song Wenbao responsibilities of
Secretary University，CFA secretary of the Company.
Board Secretary
Office holding in shareholder unit
√ Applicable □ Not applicable
If receiving remuneration or allowance from
Name of office holder Shareholder unit name Position held in shareholder unit
shareholder unit
Ji Zhijian Dalian Bingshan Group Co., Ltd. Chairman of the Board, President Yes
Xu Wei Dalian Bingshan Group Co., Ltd. Director, Vice President Yes
Nishimoto Shigeyuki Dalian Bingshan Group Co., Ltd. Supervisor No
Song Wenbao Dalian Bingshan Group Co., Ltd. Minister of Legal Affairs No
Office holding in other units
√ Applicable □ Not applicable
If receiving
remuneration or
name unit name Position held in other unit
allowance from other
unit
Dalian Zhong Huida Refrigeration Technology Co., Ltd. Chairman No
Dalian Fu Lida Refrigeration Technology Co., Ltd. Chairman No
Dalian Bo Lida Refrigeration Technology Co., Ltd. Chairman No
Ji Zhijian
Dalian Bingshan Enterprise Management Co., Ltd. Chairman No
Dalian Shenglid Refrigeration Technology Co., Ltd. Chairman No
Dalian Huilida Refrigeration Technology Co., Ltd. Chairman No
Wuhan New World Refrigeration Industrial Co., Ltd. Chairman No
Dalian Bingshan Engineering & Trading Co., Ltd Chairman No
Dalian Bingshan-RYOSETSU Quick Freezing Equipment Co., Ltd. Chairman No
Dalian Universe Thermal Technology Co.,Ltd. Chairman No
Cai Liyong Dalian Bingshan Air-conditioning Equipment Co., Ltd. Chairman No
Bingshan Technology Services (Dalian) Co., Ltd. Chairman No
Sonyo Refrigeration (Dalian) Co., Ltd. Chairman No
Sonyo Refrigeration System (Dalian) Co., Ltd. Chairman No
Dalian Bingshan Group Construction Co., Ltd. Chairman No
Xu Wei Dalian Bingshan Wisdom Park Co., Ltd Chairman No
China Railway Tielong Container Logistics Co., Ltd. Independent director Yes
Liu Yuanyuan
Kincai (Liaoning) Life Science and Technology Co., Ltd. Independent director Yes
Harbin Hattou Investment Co., Ltd. Independent director Yes
Yao Hong
Fushun Special Steel Co. Ltd. Independent director Yes
Decision-making procedure, decision-making basis and actual payment of remuneration for directors, supervisors
and senior management
Decision-making procedure: the Company's remuneration plan for directors and supervisors was proposed by the
Company's Remuneration and Evaluation Committee of the Board of Directors, and after approval by the Board
of Directors, submitted to the general meeting for adoption and put into effect. The Company’s remuneration plan
for senior management was put into effect after approval by the Company’s Board of Directors.
Decision-making basis: it was decided on the basis of main responsibilities and importance of the concerned
position and the remuneration level of similar positions in other similar enterprises and evaluated and rewarded
through the Company’s examination procedure for assets operation performance.
The total amount of remunerations actually ( pre-tax ) paid by the Company to directors, supervisors, and senior
management was 4,620,500 yuan.
Particulars about the annual remuneration of directors, supervisors and senior staff members
Annual remuneration and allowance( pre-tax )paid by the Company
Name
(ten thousand yuan)
Ji Zhijian 0
Cai Liyong 114.69
Xu Wei 0
Li Sheng 41.34
Kinoshita Ayumu 0
Nishimoto Shigeyuki 0
Song Wenbao 67.43
Zhai Yunling 8
Liu Yuanyuan 8
Yao Hong 8
Hu Xitang 82.78
Dai Yuling 0
Yang Fuhua 66.17
Wang Jinxiu 65.64
Total 462.05
V. Performance of directors' duties during the reporting period
During the reporting period, all directors were present in person at all board meetings where they were required to
be present.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
VI. Execution of duties of the special committees under the Board of Directors in the
reporting period
□ Applicable √ Not applicable
VIII Status of the Company's staff
engaged in production; 563 persons engaged in marketing; 584persons engaged in engineering and technology; 71
persons engaged in financing; and 644 persons engaged in management.
educational background of Master or higher; 1,318 persons have the educational background of university; 1,315
persons have the educational background of junior college; and 1,466 persons have the educational background of
secondary technical school or lower.
performance of an employee.
of his/her post requirement.
□ Applicable √ Not applicable
IV. Profit distribution and dividend payment
By giving consideration to both the return to shareholders and the Company's long-term development, and in
combination of the Company's profit made in this year, the Company formulated the 2024 annual dividend
distribution plan of paying the cash of 0.5 yuan for every 10 shares. Reviewed and adopted at the Company's
general meeting, the Company's Board of Directors has implemented the plan in July 2025.
Formulation and implementation of the Company's cash dividend distribution policy in the reporting period
complied with the Company's Articles of Association and the general meeting's resolution, and the dividend
distribution standard and proportion were defined and clear and the applicable decision-making procedure and
system were complete. The independent directors agreed on it and the legal rights and interests of minority
shareholders were well protected.
Special notes to cash dividend payout policy
If the regulations of the Articles of Association or the requirements of the shareholders of
Yes
the company meeting are met:
If the dividend payout standard and proportion is definite and clear-cut: Yes
If relevant decision-making procedure and mechanism is complete: Yes
If the independent directors have performed their duties and played their due role: Yes
If small and medium shareholders have the opportunity to sufficiently express their
Yes
opinions and appeals and if their legal rights and interests are sufficiently protected:
If the condition and procedure for adjusting or changing the cash dividend payout policy
Yes
is compliant and transparent:
The Company made profit in the reporting period and the undistributed profit of the parent company was positive
but no cash dividend distribution plan was proposed.
□ Applicable √ Not applicable
Profit distribution preplan, and preplan of share-granting with capital accumulation fund of the Company
Bonus shares to be presented for every 10 shares (shares) 0
Dividend to be distributed for every 10 shares (RMB yuan) (including tax) 0.5
Equity base for distribution preplan (shares) 843,212,507
Total amount of cash dividend distribution (RMB yuan) (including tax) 42,160,625.35
Profit distributable to the shareholders in the current year 1,067,063,837.17
Proportion of cash dividend distribution accounting for total profit distribution 100%
Cash dividend distribution policy:
When the development stage of the company belongs to a growth period with important fund disbursement arrangement(s), the
proportion of cash dividend distribution accounting for this profit distribution should reach 20% at minimum when conducting profit
distribution.
Notes to details about preplan for profit distribution or capital stock increase with capital reserve
According to the audit by ShineWing CPAs (Special General Partnership), the net profit made by the parent company of the Company
in 2025 was RMB 123.718 million and 10% of the net profit (RMB123.72 million) was drawn as the legal surplus reserve. Therefore,
the profit distributable to the shareholders in the current year was RMB 111.346 million.
Plus the initial undistributed profit of RMB1,013.09 million and minus the dividend of RMB 42.161million of common shares paid in
The Company’s profit distribution preplan for 2025:
Based on the net profit made by the parent Company of the Company in 2025 ( 123.718 million), 20% of the net profit (RMB 24.744
million) will be drawn as the free surplus reserve; Based on the total capital stock of 843,212,507 shares, the dividend of RMB 0.5 in
cash (including tax) will be distributed for every 10 shares, the total cash dividend is RMB 42.161 million, and the cash dividend for
B share is converted and paid in Hong Kong dollars.
The above preplan shall be submitted to the 2025 shareholders’ general meeting for review and approval.
XI．The implementation and effect of equity incentive
□ Applicable √ Not applicable
XII．Internal control system construction and implementation during the reporting period
During the reporting period, the Company made positive innovation, took the initiative to change, and vigorously
promoted organizational strengthening. Implement market-centered integrated operation through organizational
restructuring, business process reengineering and management system revision. Through the project management
system, fully implement the project budget, control the whole process of operation, ensure profits and prevent
risks.
on self-evaluation of internal control.
□ Applicable √ Not applicable
There was no material weakness in the internal control found in the reporting period.
XIII．Management and control of subsidiaries during the reporting period
During the reporting period, the Company focused on strengthening the management control of subsidiaries from
the following aspects:
(1) The Company carefully identified, strictly managed and dynamically adjusted the directors, supervisors and
senior managers assigned to subsidiaries;
(2) The Company participated in the whole process of the preparation of the annual business plan of its
subsidiaries, made reasonable suggestions and gave appropriate guidance;
(3) The Company conducted monthly/quarterly tracking and annual assessment on the implementation of business
plans and compliance operations of subsidiaries.
XIV．Report on self-evaluation of internal control or internal control audit report
Details of material weakness in the internal control found in the reporting period described in the report on
self-evaluation of internal control
There was no material weakness in the internal control found in the reporting period.
Date of disclosing the full text of the report on
Apr. 24, 2026
self-evaluation of internal control
Disclosure reference to the full text of the For the 2025 annual report on self-evaluation of internal control
report on self-evaluation of internal control of the Company, visit the website www.cninfo.com.cn.
Description of the deliberation opinions in the internal control audit report
We think that as of Dec. 31, 2025, Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd. had
maintained an effective internal control over the financial reports in all material aspects according to Basic
Enterprise Internal Control Specification and relevant regulations.
Date of disclosing the full text of
Apr. 24, 2026
the internal control audit report
Disclosure reference to the full text For the 2025 annual internal control audit report of the Company, visit the
of the internal control audit report website www.cninfo.com.cn.
Did the accounting firm issue the internal control audit report with nonstandard opinions?
□ Applicable √ Not applicable
Was the internal control audit report issued by the accounting firm consistent with the opinion in the
self-evaluation report of the Board of Directors?
√Yes □ No
XV. Rectification of problems in self inspection of special actions for governance of listed
companies
None
Section 5 Important items
I Implementation of commitments
period or carried to the reporting period
√Applicable □Not applicable
According to the relevant provisions of the "Self regulatory Guidelines for Listed Companies on the Shenzhen
Stock Exchange No. 8- Major Asset Restructuring", the important commitments and performance made by
relevant parties during the 2022 major asset restructuring process of the Company are detailed in the Company's
announcement on the performance of commitments made by relevant parties during the major asset restructuring
disclosed on CNINFO on April 24, 2026.
earnings forecasts. The company explains the reasons why the assets or projects have reached the original
earnings forecasts.
□Applicable √Not applicable
II. Non-operation capital occupation by holding shareholders and their related parties in the
listed company
□Applicable √Not applicable
The Company had no capital occupation by the holding shareholders and their related parties in the listed
company within this reporting period.
III. Foreign guarantee in violation of regulations
□ Applicable √ Not applicable
IV. Explain to the “non standard audit report” last year from the board of directors of the
Company
□Applicable √Not applicable
V. Explain to the “non standard audit report” from the board of directors, board of
supervisors of the Company
□Applicable √Not applicable
VI. Change in accounting policies, accounting estimates and accounting methods or correction
of major accounting mistakes in the reporting period, which should be retroactively restated
compared with the financial statements of the previous year
□Applicable √Not applicable
VII. Change in the range of consolidated statements compared with the financial statements
of the previous year
√Applicable □Not applicable
During the reporting period, the company absorbed and merged its wholly-owned subsidiary, Dalian Group Sales
Co., Ltd., resulting in the reduction of one subsidiary. The Company's subsidiary, Dalian Bingshan Engineering &
Trading Co., Ltd. established a new subsidiary, Bingshan Engineering & Trading (Hong Kong)Co., Ltd., which
led to the addition of one subsidiary as an affiliate.
VIII. Engagement and dismissal of the accounting firm
Currently engaged accounting firm
Name of domestic accounting firm ShineWing CPAs (Special General Partnership)
Remuneration paid to the domestic accounting firm (in 10 thousand yuan) 107
Continuous audit service years of the domestic accounting firm 10
Name of certified public accountants with the domestic accounting firm Sui Guojun, Zhang Shizhuo
Continuous audit service years of the certified public accountants Sui Guojun 3 years, Zhang Shizhuo 5 years
If the CPA firm retaining was changed in this period
□Applicable √Not applicable
Employment of internal control audit accounting firm, financial advisor or sponsor
√ Applicable □ Not applicable
During the reporting period, the Company hired ShineWing CPAs (Special General Partnership) as the Company's
IX. Facing suspend and terminate listing after the annual report disclosure
□ Applicable √ Not applicable
X. Bankruptcy restructuring related matters
□ Applicable √ Not applicable
XI. Major lawsuit and arbitration issues
□ Applicable √ Not applicable
XII. Punishment and rectification
□ Applicable √ Not applicable
XIII．The credibility of companies and its controlling shareholder, actual controller
√ Applicable □ Not applicable
The controlling shareholder of the Company and the Company don’t exist situation such as unfulfilled the court’s
effective judgments or failed to pay duly a large amount of debt during the reporting period.
XIV．Important associated transactions
During the reporting period, the total amount of normal associated transactions between the Company and
associated parties was 920.75 million yuan, accounting for 94.63% of the budgeted amount for the year 2025. This
included 280.58 million yuan, accounting for 89.64% of the budgeted amount for the year 2025, for purchasing
supporting products for package projects from associated parties, and 640.17 million yuan, accounting for 96.99%
of the budgeted amount for the year 2025, from selling supporting parts and components to associated parties.
Associated transactions related to purchases or sales of assets
□Applicable √ Not applicable
Important associated transactions with joint external investments
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
√ Applicable □ Not applicable
order to address the issue of the non-integration of the factory building and land, participated in the bidding for the
land use rights of this plot of land which was put up for sale by Dalian City State-owned Assets Investment and
Operation Group Co., Ltd. This land was successfully bid for and the transfer was completed within the reporting
period.
pumps and energy storage thermal management, the Company purchased some idle factory buildings and
supporting structures and machinery and equipment, as well as electronic equipment from the subsidiary of the
Company's controlling shareholder, Dalian Bingshan Group Co., Ltd., which is Sonyo Cold chain (Dalian) Co.,
Ltd. Currently, this transaction has been completed and the related factory buildings and equipment have been
transferred.
XVII. Major contract and its performance
(1) the hosting status
□ Applicable √ Not applicable
(2)the contracting status
□ Applicable √ Not applicable
(3) the leasing status
√ Applicable □ Not applicable
The 13th meeting of the 7th board of directors of the Company was held on April 22, 2017, and approved to rent
out the old plant and land located in No 888, South West RD, Shahekou Districit, Dalian to Bingshan Wisdom.
The lease contract is from April 1, 2017 to December 31, 2036. The Company has signed the “estate leasing
contract” with Dalian Bingshan Wisdom based on the requirement of utilization of old land and plant and new
business foster plan. Current year’s lease premium is RMB 9.01 million.
On July 31, 2014, the Company and Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd. signed a supplementary
agreement to modify the house lease contract, and rent out the Building No. 6 of Workshop No. 106, Liaohe East
Road, Dalian Development Zone, to Lingzhong Bingshan Refrigeration (Dalian) Co., Ltd.. The rental area is
√Applicable □ Not applicable
China Development Fund provides support for the Company's cold chain green intelligent equipment and service
industrialization base project, and provides special funds to the controlling shareholder of the Company, Bingshan
Group. The above-mentioned special fund amount is 160 million yuan, with a term of 10 years and a rate of 1.2%.
After the above special funds are in place, Bingshan Group has fully allocated them to the Company in a one-time
manner without increasing the rate. The implementation of the above-mentioned special funds requires the
Company to provide guarantees and continue until the reporting period. This guarantee is in the form of a
guarantee for the controlling shareholder, but in fact, it is a guarantee for the Company to obtain financial support
for itself.
The Company provides guarantees for clients Shandong Jiechuang Energy Technology Co., Ltd., Shaanxi Yiming
Food Co., Ltd., and Jilin Fuyu Agricultural Technology Co., Ltd. based on financing leasing business, which will
continue until the reporting period. In the normal performance of the above-mentioned project, the guaranteed
shareholder and relevant natural persons provided the company with full joint and several liability guarantee and
counter guarantee, and the overall guarantee risk of the Company is controllable.
(1)Trust management
□Applicable √Not applicable
(2)Entrusted loans
□Applicable √Not applicable
(3)Other important contracts
□ Applicable √ Not applicable
XIX. Other important matters
□ Applicable √ Not applicable
XX. Other important matters of subsidiary company
□ Applicable √ Not applicable
Section 6 Change in Share Capital and Shareholders' Information
I. Change in share capital
Shares Shares
（before change） （after change）
items
number proportion number proportion
I. Non-circulating share capital with restricted trade
conditions
II. Circulating share capital 841,538,845 99.80% 841,616,725 99.81%
III. Total shares 843,212,507 100.00% 843,212,507 100.00%
Approval of changes in shares
□ Applicable √Not applicable
The restricted shares changes
□ Applicable √Not applicable
II. Securities issuance and listing
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
III. Shareholders and actual controller
Total number of shareholders in the reporting Total number of shareholders as of the last month
period before disclosure of the annual report
Shareholding of top ten shareholders
Number of
Number of
pledged
shares
Name Nature Proportion Total number shares or
with sale
shares
restriction
frozen
Domestic non-state-owned
Dalian Bingshan Group Co., Ltd. 20.27% 170,916,934 0 0
legal person
Sanyo Electric Co., Ltd. Overseas legal person 8.72% 73,503,150 0 0
Lin Zhenming Foreign natural person 0.80% 6,710,000 0 0
Goldman Sachs International - Own Funds Overseas legal person 0.61% 5,181,813 0 0
BARCLAYS BANK PLC Overseas legal person 0.58% 4,885,813 0 0
Xue Hong Domestic natural person 0.43% 3,660,000 0 0
Chen Peiliang Domestic natural person 0.35% 2,918,000 0 0
MORGAN STANLEY & CO. INTERNATIONAL
Overseas legal person 0.33% 2,802,149 0 0
PLC.
J. P. Morgan Securities PLC－Own Funds Overseas legal person 0.33% 2,759,131 0 0
Han Guangxin Domestic natural person 0.31% 2,595,600 0 0
Shareholding of top ten shareholders without sale restriction
Number of shares without
Name Type of shares
sale restriction
Dalian Bingshan Group Co., Ltd. 170,916,934 RMB denominated ordinary shares
Sanyo Electric Co., Ltd. 73,503,150 Domestically listed foreign shares
Lin Zhenming 6,710,000 Domestically listed foreign shares
Goldman Sachs International - Own Funds 5,181,813 RMB denominated ordinary shares
BARCLAYS BANK PLC 4,885,813 RMB denominated ordinary shares
Xue Hong 3,660,000 Domestically listed foreign shares
Chen Peiliang 2,918,000 RMB denominated ordinary shares
MORGAN STANLEY & CO. INTERNATIONAL PLC. 2,802,149 RMB denominated ordinary shares
J. P. Morgan Securities PLC－Own Funds 2,759,131 RMB denominated ordinary shares
Han Guangxin 2,595,600 RMB denominated ordinary shares
Dalian Bingshan Group Co., Ltd. had the association relationship
Notes to the associated relationship and uniform actions of the with Sanyo Electric Co., Ltd. among the above shareholders.
above shareholders Sanyo Electric Co., Ltd. holds 26.6% of Dalian Bingshan Group
Co., Ltd.'s equity.
At the end of the report period, the total number of shareholders of the Company was66,006, including
Legal Founding Unified social
Name of holding shareholder Main business
representative date credit code
Research, development, manufacture, sales,
service and installation of industrial refrigeration
products, freezing and cold storage products,
Dalian Bingshan Group Co., Ltd. Ji Zhijian Jul. 3, 1985
electronic and electric control products, home
appliance products and environment protection
products.
Shares held by the holding
shareholder in other overseas and
domestic listed companies as the None
holding shareholder or ordinary
shareholder in the reporting period
Change in the holding shareholder in the reporting period
□ Applicable √ Not applicable
The company has no actual controller.
According to the actual situation of the Company and its controlling shareholder, and compared with the related
laws and regulations including Company Law of People’s Republic of China, Management Regulation on Listing
Company Acquisition and Stock Listing Rules of Shenzhen Stock Exchange, with the confirmation of Liaoning
Huaxia law firm, the Company released the Public Notice on Not Having Actual Controller.(No: 2015-025),)
which was published on B04 of China Securities, A19 of HK Commercial Daily and Cninfo website on April 24
Commission ofDalian Municipality Government
State-owned Assets Supervision and Administration
Dalian State-owned Assets Management Co., Ltd.
Dalian Equipment Manufacture Investment
Panasonic Corporation of China
Dalan Zhonghuida Refrigeration
Sanyo Electric Co., Ltd.
Dayang Co., Ltd.
Technology Co., Ltd.
Co., Ltd.
Dalian Bingshan Group Co., Ltd.
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The actual controller controlled the Company through a trust or other asset management
□ Applicable √ Not applicable
□ Applicable √ Not applicable
commitments underweight
□ Applicable √ Not applicable
Section 7 Information on Corporate bonds
□ Applicable √ Not applicable
In the reporting period, the Company didn’t own corporate bonds.
Section 8 Financial Report
To the shareholders of Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd
We have audited the accompanying financial statements of Bingshan Refrigeration & Heat Transfer
Technologies Co., Ltd (“Bingshan Refrigeration & Heat Company”), which comprise the consolidated
and company’s balance sheets as at 31 December 2025, and the consolidated and company’s income
statements, the consolidated and company’s cash flow statements, the consolidated and company’s
statements of changes in equity for the year then ended, and notes to these financial statements.
In our opinion, the accompanying financial statements have been prepared in accordance with the
requirements of Accounting Standards for Business Enterprises, in all material respects and present fairly
the consolidated and the financial position of Bingshan Refrigeration & Heat Company as at 31
December 2025, and of their consolidated and the company’s financial performance and cash flows for
the year then ended.
We conducted our audit in accordance with China Standards on Auditing for Chinese Certified Public
Accountants. Our responsibilities under those standards are further described in the “Auditor’s
Responsibilities for the Audit of the Financial Statements” section of our report. In accordance with the
independence standards for Chinese Certified Public Accountants and the independence requirements
applicable to audits of financial statements of public interest entities set out in the Code of Professional
Ethics for Chinese Certified Public Accountants, we are independent of Bingshan Refrigeration & Heat
Company and have fulfilled other responsibilities relating to independence and professional ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Key audit matters are those matters that we consider, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole and, in forming our audit opinion
thereon, and we do not express a separate opinion on these matters.
Revenue Recognition
Key Audit Matter How the matter was addressed in the audit
As stated in the Note ‘ No.44,V. The main audit procedures carried out for addressing the key audit
Notes to Consolidated Financial matters are as follows:
Statements’, revenue on the 1. Understand and evaluate effectiveness of design and operation
of the management’s internal control over revenue
consolidated statements for the year
ended as of December 31, 2025, is of sales income and gross profit margin by segmenting the business
Bingshan Refrigeration & Heat situation of Bingshan Refrigeration & Heat Company.
Company and its subsidiaries
condition in respect to the contract performance obligation,
mainly come from sales of products
consideration and risk and reward transfer of the ownership.
and installation project. We consider Evaluate the revenue recognition of Bingshan Refrigeration & Heat
the revenue as the key audit matter, Company whether it is in line with the accounting standards.
because of the significance of 4. Sampling select product sales revenue record, reconcile to sales
revenue to the overall financial invoice, contracts, dispatch note, acceptance note; Sampling select
statements, and also the inherent installation sales revenue record, reconcile to invoice, installation
risk of revenue manipulation by the contracts and completion report and Evaluate the recognition of
revenue whether is in line with the accounting standards
management so for the special
purpose.
budget, contract, invoice and supportive document with signature
for the equipment received to evaluate the cost whether it really
incurred.
procedures for key clients
recorded into the appropriate accounting period.
The management of Bingshan Refrigeration & Heat Company (hereinafter referred to as the
“Management”) is responsible for the other information. The other information comprises the
information included in the Bingshan Refrigeration & Heat Company 2025 annual report, but does not
include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of 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.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact. We have nothing to report in this regard.
Statements
The Management is responsible for the preparation of the financial statements in accordance with
Accounting Standards for Business Enterprises to achieve fair presentation; and designing, implementing
and maintaining internal control which is necessary to enable that the financial statements are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing Bingshan
Refrigeration & Heat Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Management either
intends to liquidate Bingshan Refrigeration & Heat Company or to cease operations, or have no realistic
alternative but to do so.
Those charged with governance are responsible to overseeing Bingshan Refrigeration & Heat Company’s
financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 generally considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.
During the course of audit in accordance with auditing standards, we exercise professional judgment and
maintain professional skepticism. We also carry out the following works:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our audit. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of its internal control (this sentence would be deleted in circumstance when we are also
responsible to issue an opinion on the effectiveness of internal control in conjunction with the audit of the
financial statements).
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on Bingshan Refrigeration & Heat Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial statements in accordance with
the auditing standards or, if such disclosures are inadequate, we shall modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause Bingshan Refrigeration & Heat Company to cease to continue as a
going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and also
whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
(6) Obtain sufficient and appropriate audit evidence with respect to the financial information of
Bingshan Refrigeration & Heat entities or business activities, and issue an audit opinion. We are
responsible for guiding, supervising and performing group audits and take full responsibility for audit
opinions.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings etc., including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with those
relevant ethical requirements regarding independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence and related safeguards,
where applicable.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
prohibited public disclosure about the matter or when, in 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 of such communication.
ShineWing Certified Public Accountants( LLP) CPA: Sui Guojun (Engagement Partner)
CPA: Zhang Shizhuo：
China, Beijing April 22, 2026
Consolidated Balance Sheet
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2025 1 January 2025
Current Assets:
Monetary funds
Settlement provision
Loans to banks and other financial institutions
Financial asset held for trading
Derivative financial assets
Notes receivable
Accounts receivable
Receivable financing
Prepayments
Insurance receivables
Reinsurance Receivable
ProVsion of reinsurance contract reserve receivable
Other receivables
including: interest receivable
Dividend receivable
Financial assets purchased under agreement to resell
Inventories
Contractual asset
Held for sale assets
Non-current assets due within 1-year
Other current assets
Total Current Assets
Non-Current Assets：
Loan and payment on other's behalf disbursed
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment
Other equity instrument investment
Other non-current financial assets
Investments properties
Fixed assets
Construction in process
Production biological assets
Oil-gas assets
Right-of-use assets
Intangible assets
Development cost
Goodwill
Long-term prepaid expense
Deferred tax asset
Other non-current assets
Total Non-current Assets
Total Assets
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Wu Bin
Consolidated Balance Sheet (continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2025 1 January 2025
Current Liabilities:
Short-term borrowings 201,836,464.89 167,283,407.26
Loans from central bank
Loans from other banks
Financial liability held for trading
Derivative financial liabilities
Notes payable 665,364,289.18 569,117,426.19
Accounts payable 1,656,812,881.57 1,601,381,790.80
Advance received
Contractual liability 525,086,822.72 645,711,808.53
Financial assets sold under agreements to repurchase
Deposits received and hold for others
Entrusted trading of securities
Entrusted underwriting of securities
Employee pay payables 124,604,217.12 146,734,696.02
Taxes and duties payable 19,716,470.61 30,276,580.76
Other payables 241,468,112.55 227,361,207.96
including: interest payable
dividend payable 533,156.00 533,156.00
Fees and commissions payable
Amount due to reinsurance
Held for sale liabilities
Non-current liabilities due within 1-year 237,380,756.40 161,421,072.72
Other current liabilities 183,999,339.42 191,009,526.67
Total Current Liabilities 3,856,269,354.46 3,740,297,516.91
Non-current Liabilities:
Insurance contract provision
Long-term borrowings 368,328,245.18 547,346,541.25
Bonds Payable
including: preference share
perpetual debt
Lease liability 16,563,173.78 19,071,845.78
Long-term payables 18,845,786.63 12,451,396.59
Long-term employee payables
Provision 2,300,208.22 2,703,369.53
Deferred income 92,793,132.73 90,733,480.29
Deferred Tax liabilities 28,677,754.07 26,601,881.56
Other non-current liabilities
Total Non-current Liabilities 527,508,300.61 698,908,515.00
Total Liabilities 4,383,777,655.07 4,439,206,031.91
Owners Equity(or Shareholders Equity):
Paid-in capital（Share capital) 843,212,507.00 843,212,507.00
Other equity instrument
Including:preference share
perpetual capital securities
Capital reserve 717,097,098.38 717,097,098.38
Less: Treasury stock
Other comprehensive income 2,208,669.73 2,208,669.73
Chartered reserve 1,988,616.80
Surplus reserves 923,202,335.01 895,618,513.69
△Provision for general risk
Undistributed profit 666,260,524.87 673,966,177.84
Equity attributable to equity holders of the Company 3,153,969,751.79 3,132,102,966.64
*Minority interest 58,788,971.89 57,006,488.80
Total Equity 3,212,758,723.68 3,189,109,455.44
Total Liabilities and Equity 7,596,536,378.75 7,628,315,487.35
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Wu Bin
Balance Sheet of Parent Company
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
ITEMS 31 December 2025 01 January 2025
Current Assets:
Monetary funds 168,256,281.11
Tradable financial asset
Derivative financial assets
Notes receivable
Accounts receivable 463,332,443.22
Receivable financing
Prepayments
Other receivables 191,936,403.02
including: interest receivable
dividend receivable 160,000,000.00
Inventories 332,344,633.33
Contractual assets
Held for sale assets
Non-current assets due within 1-year
Other current assets
Total Current Assets 1,388,931,663 .15 1,424,317,534.93
Non-Current Assets：
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment 2,894,643,627.80
Other equity instrument investment
Other non-current financial assets
Investments properties 119,792,927.12
Fixed assets 582,725,753.84
Construction in process
Production biological assets
Oil-gas assets
Right-of-use assets
Intangible assets
Development cost
Goodwill
Long-term unamortized expense 3,315,026.79
Deferred tax asset
Other non-current assets
Total Non-current Assets 3,729,683,471.53 3,720,899,387.35
Total Assets 5,118,615,134.68 5,145,216,922.28
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Wu Bin
Balance Sheet of Parent Company (continued)
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., LtdAmount Unit:RMB
ITEMS 31 December 2025 01 January 2025
Current Liabilities:
Short-term borrowings 138,089,585.21 120,327,137.01
Financial liability held for trading
Derivative financial liabilities
Notes payable 113,282,771.39 108,226,992.06
Accounts payable 387,588,325.46 351,385,116.46
Advance received
Contractual liability 63,052,699.58 104,206,582.50
Employee pay payables 8,535,633.24 11,354,626.22
Taxes and duties payable 3,070,077.04 12,135,282.22
Other payables 150,943,100.70 109,923,634.05
including: interest payable
dividend payable 533,156.00 533,156.00
Held for sale liabilities
Non-current liabilities due within 1-year 215,298,994.11 140,940,549.56
Other current liabilities 64,935,733.49 73,756,610.21
Total Current Liabilities 1,144,796,920.22 1,032,256,530.29
Non-current Liabilities:
Long-term borrowings 368,328,245.18 541,046,541.25
Bonds Payable
including: preference share
perpetual debt
Lease liability 19,917,432.95 8,626,368.06
Long-term payables
Long-term employee payables
Provision for liabilities
Deferred income 55,223,748.78 54,972,980.29
Deferred Tax liabilities
Other non-current liabilities
Total Non-current Liabilities 443,469,426.91 604,645,889.60
Total Liabilities 1,588,266,347.13 1,636,902,419.89
Owners Equity(or Shareholders Equity):
Paid-in capital（Share capital) 843,212,507.00
Other equity instrument
Including:preference share
perpetual capital securities
Capital reserve 695,623,539.31 755,146,592.54
Less: Treasury stock
Other comprehensive income 1,246,569.06 1,246,569.06
Chartered reserve
Surplus reserves 923,202,335.01 895,618,513.69
Undistributed profit 1,067,063,837.17 1,013,090,320.10
Total Equity 3,530,348,787.55 3,508,314,502.39
Total Liabilities and Equity 5,118,615,134.68 5,145,216,922.28
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Wu Bin
Consolidated Income Statement
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit:RMB
Item Current year Last year
Ⅰ、Total operating revenue
Including: Operating revenue
Ⅱ、Total cost of operation
Including: Cost of operation
Taxes and surcharges
Selling and distribution expenses
Administrative expenses
R&D
Financial expenses
Including: Interest expenses
Interest income
add: other income
investment income (Loss listed with "-")
Including: income from investments in associates
and joint ventures 31,082,949.20 30,246,020.75
Gain arising from
derecognition of financial asset measured at amortized cost
Exchange gain (Loss listed with "-")
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-")
Loss on impairment of credit(Loss listed with "-")
-49,563,531.47 -17,220,602.29
Loss on impairment of assets(Loss listed with "-")
-22,088,833.56 -27,575,460.64
Gain on asset disposal(Loss listed with "-")
Ⅲ、Operating profit (Loss listed with "-")
Add: Non-operating income
Less: Non-operating expenses
Ⅳ、 Total profit (Loss listed with "-")
Less: Income tax expenses
Ⅴ、Net profit (Net loss listed with "-")
(I) Classification by continuity
(II) Classification by ownership
the Company 62,038,793.70 110,335,139.06
Ⅵ、 Other comprehensive income net off tax
Net other comprehensive income net off tax attributable to
equity holders(shareholders) of the parent company
(Ⅰ)Items that may not be reclassified subsequently to the
income statement
benefit plan
comprehensive income in invested company that may not be
reclassified subsequently to the income statement
(Ⅱ)Items that may be reclassified subsequently to the income
statement
comprehensive income invested company that may be reclassified
subsequently to the income statement
Net other comprehensive income net off tax attributable to
Minority interest
Ⅶ、Total comprehensive income
Total comprehensive income attributable to parent Company
Total comprehensive income attributable to minority interest
Ⅷ、 Earnings per share
(Ⅰ)Basic earnings per share
(Ⅱ)Diluted earnings per share
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Wu Bin
Income Statement of Parent Company
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item Current year Last year
Ⅰ、Operating revenue
Less: Cost of operation
Taxes and surcharges
Selling and distribution expenses
Administrative expenses
R&D
Financial expenses
Including: Interest expenses
Interest income
Add: Other income
Investment income (Loss listed with "-")
Including: income from investments in associates and joint
ventures 30,662,879.69 29,697,030.53
Gain arising from derecognition of
financial asset measured at amortized cost
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-")
Loss on impairment of credit(Loss listed with "-")
-16,053,053.27 -22,722,877.37
Loss on impairment of assets(Loss listed with "-")
-14,754,441.01 -19,598,707.34
Gain on asset disposal(Loss listed with "-")
-68,923.59 -1,269,088.31
Ⅱ、Operating profit (Loss listed with "-")
Add: Non-operating income
Less: Non-operating expenses
Ⅲ、 Total profit (Loss listed with "-")
Less: Income tax expenses
-5,235,401.92 -17,513,215.19
Ⅳ、Net profit (Net loss listed with "-")
Ⅴ、 Other comprehensive income net off tax
(Ⅰ)Items that may not be reclassified subsequently to the income
statement
plan
income in invested company that may not be reclassified subsequently to
the income statement
(Ⅱ)Items that may be reclassified subsequently to the income
statement
income invested company that may be reclassified subsequently to the
income statement
Ⅵ、Total comprehensive income
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Wu Bin
Consolidated Cash Flow Statement
Name of Enterprise：Bingshan Refrigeration & Heat Transfer Technologies Co., LtAmount Unit:RMB
Item Current year Last year
Cash received from sales of goods and rendering of services
Cash received from taxes refund
Cash received relating to other operating activities
Sub-total of cash inflows from operating activities
Cash paid for goods and services
Cash paid to and on behalf of employees
Payments of taxes and surcharges
Cash paid relating to other operating activities
Sub-total of cash outflows from operating activities
Net cash flows from operating activities
Cash received from return of investments
Cash received from investments income
Net cash received from disposal of fixed assets, intangible assets and
other long-term assets 560,050.31 32,620,564.76
Net cash received from disposal of subsidiaries and other business units
Cash received relating to other investing activities
Sub-total of cash inflows from investing activities
Cash paid to acquire fixed assets, intangible assets and other long-term
assets 192,996,925.42 78,719,169.31
Cash paid for investments
Net increase in pledged deposits
Net cash paid to acquire subsidiaries and other business units
Cash paid relating to other investing activities
Sub-total of cash outflow from investing activities
Net cash flows from investing activities
-212,389,916.36 370,202,417.34
Cash received from investment absorption
Including: Cash received by subsidiaries from investment absorpotion
of non-controlling interest
Cash received from loans granted
Cash received relating to other financing activities
Sub-total of cash inflows from financing activities
Cash paid for settlement of borrowings
Cash paid for dividends, profits appropriation or payments of interest
Including: Dividens and profits paid to non-controlling interest
Cash paid relating to other financing activities
Sub-total of cash outflows from financing activities
Net cash flows from financing activities
-143,218,811.69 -329,823,872.68
-231,136,962.76 281,139,347.62
Add: Cash and cash equivalents at beginning of year
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiuthe person in charge of the accounting office:Wu Bin
Cash Flow Statement of Parent Company
Name of Enterprise： Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd Amount Unit :RMB
Item Current year Last year
Cash receipts from sale of goods or rendering of services 848,888,657.18
Refunds of taxes
Other cash receipts in operating activities 34,563,283.45
Sub-total of cash inflows from operating activities 883,451,940.63
Cash payments for goods and services acquired 713,836,118.74
Cash payments to and on behalf of employees 111,473,766.42
Tax and duties payments 32,861,684.04
Other cash payments for operating activities 53,929,712.27
Sub-total of cash outflows from operating activities 912,101,281.47
Net cash flows from operating activities -28,649,340.84
Cash receipts from return of investments 45,841,618.00
Cash receipts from investments income 368,507,803.12
Net cash receipts from disposal of fixed assets, intangible
assets and other long-term assets 611,082.50
Net cash receipts from disposal of subsidiaries and other
businesses
Other cash receipts in investing activities
Sub-total of cash inflows from investing activities 414,960,503.62
Cash payments for acquired fixed assets, intangible assets
and other long-term assets 79,393,154.60 4,821,677.10
Cash payments for investment 16,000,000.00
Net cash payments for acquisition of subsidiaries and other
businesses
Other cash payments in investing activities
Sub-total of cash outflows from investing activities 20,821,677.10
Net cash flows from investment activities 394,138,826.52
Cash received from capital injection
Cash receipts from borrowings 229,000,000.00
Other cash receipts in financing activities
Sub-total of cash inflows from financing activities 229,000,000.00
Cash paid for settlement of borrowings 447,170,833.33
Cash paid for dividends, profits appropriation or payments
of interest 57,689,422.20
Other cash payments in financing activities 15,648,719.37
Sub-total of cash outflows from financing activities 513,435,614.41
Net cash flows from financing activities -284,435,614.41
-146,298,588.87
equivalents 28,279.96 -171,942.78
-87,581,953.43
Add: the beginning balance of cash and cash equivalent 173,113,251.05
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Wu Bin
Consolidated Statement of Changes in Shareholer's Equity(continued)
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Wu Bin
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Wu Bin
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Wu Bin
legal representative:Ji Zhijian head of the accounting work:Wang Jinxiu the person in charge of the accounting office:Wu Bin
I. General Information
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd (hereinafter referred to as the
“the Company” or “the group” if subsidiaries included ) previously named as Dalian
Refrigeration Company Limited, was reorganized and reformed from main part of former
Dalian Refrigeration Factory. On December 8, 1993, the Company went to the public as a
listed company at Shenzhen Stock Exchange Market. On March 20, 1998, the Company
successfully went to the public at B share market and listed at Shenzhen Stock Exchange
Market with total share capital of RMB350,014,975.00Yuan. The registered address is No.
Province, as same as the headquarters’ address. The unified social credit code is
According to the 13th meeting of the 6th generation of board, extraordinary general meeting
for 2015 fiscal year and ' Restricted share incentive plan (draft)', the Company planned to
introduce an ordinary share to incentive objectives, which was 10,150,000 number of shares
would be granted to 41 share incentive objectives at granted price of RMB5.56Yuan per share.
Up to March 12, 2015, the Company received new added share capital of
RMB10,150,000.00Yuan.
The general meeting for 2015 fiscal year held on April 21, 2016 approved the profit
distribution policy for the year of 2015, which agrees the profit distribution based on the total
every 10 shares through capital reserve. The policy stated above was fully implemented on
May 5, 2016, and the registered capital was altered to 540,247,462.00Yuan.
The 17thmeeting of the 6th generation of board was held on June 4, 2015 and the 2nd interim
shareholders’ meeting was held on June 24, 2015, meeting deliberated and passed the
proposal of non-public offering of ‘A shares’. China’s Securities Regulatory Commission
issued SFC license [2015]3137 on December 30, 2015, approving that new non-public
offering cannot exceeded 38,821,954 numbers of shares. The company implemented the post
meeting procedures for China’s Securities Regulatory Commission, which is regarding
adjustment of bottom price and the number of the shares issued after the implementation of
profit distribution policy of 2015 in May, 2016, and accordingly revised the upper limit of
non-public offering of share to58,645,096 number of new ‘A shares’. The company issued the
non-public offering of 58,645,096 number of ‘A shares’ to 7 investors, and as a result, the
total number of shares of the Company is changed to 598,892,558 shares, and the par value is
According to the ‘Restricted Share Incentive Plan(draft) of Dalian Refrigeration Company
Limited for the year of 2016’ and the ‘Proposal regarding the shareholders’ meeting
authorized the board of directors to implement the Restricted Share Incentive Plan’ approved
on the 3rd provisional general meeting held on September 13, 2016, the 9th meeting of the 7th
generation of board deliberated and passed the ‘Proposal about granting the restricted shares
to incentive targets’ on September 20, 2016 and set September 20 , 2016 as share granted date,
and granted 12,884,000 number of restricted shares to 118 incentive targets at granted price
of 5.62Yuan per share. By November 22, 2016, The Company has actually received the
newly subscribed registered share capital of 12,884,000.00Yuan subscribed by incentive
targets.
On May 19, 2017, the general meeting for 2016 fiscal year was held and profit appropriation
scheme for 2016 FY was approved, which was every 10 shares will be increased by 4 shares
through capital reserve based on the total 611,776,558 number of shares. After the profit
appropriation scheme, the registered capital was changed to RMB856,487,181.00Yuan.
On December 28, 2017, The Company held the 3rd extraordinary shareholders meeting in
Restricted Stocks of the 2016 Restricted Stock Incentive Plan”. On March 8, 2018, after The
Company's repurchase and cancellation, The Company implemented the corresponding
capital reduction procedures according to law. The registered capital of The Company was
changed from 856,487,181.00Yuan to 855,908,981.00 Yuan.
On May 4, 2018, The Company held the 21st meeting of the 7th Board of Directors, and
reviewed and approved the “Proposal on Repurchasing and Retiring Partially Restricted
Stocks of the 2015 Restricted Stock Incentive Plan". On June 29, 2018, after The Company's
repurchase and cancellation, The Company implemented the corresponding capital reduction
procedures according to law. The registered capital of The Company was changed from
On January 17th, 2019, the 1st interim shareholders’ meeting was held and approved for
“Proposal on Termination of the 2016 Restricted Stock Incentive Plan and Repurchasing and
Retiring Restricted Stocks Plan”. Up to February 25th, 2019, The Company has completed the
repurchasing and retiring stocks plan, respectively The Company shall perform the
corresponding capital reduction procedures in accordance with the law and the registered
capital decreased from 855,434,087.00Yuan to 843,212,507.00Yuan.
On December 20th, 2019, The Company held the 7th meeting of the 8th Board of Directors and
approved to change The Company’s name from Dalian Refrigeration Company Limited to
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd.
The company is in general equipment manufacturing industry. The main business activities
are the research and development, production and sales of various industrial refrigeration
components, as well as the design, production and installation of complete engineering
projects. The main products include: scroll type, piston type, screw type compressor units,
cold water machine and other refrigeration equipment and all kinds of complete sets of
refrigeration projects.
This financial report is approved by the board of directors on April 22,2026.
II. Financial Statements Preparation Basis
（1） Preparing basis
The group’s financial statements are prepared according to the actual occurred transactions
and events, and in accordance with ‘Accounting Standards for Business Enterprises’, its
application guidelines, interpretations and other relevant provisions promulgated by the
Ministry of Finance (collectively referred to as "Accounting Standards for Business
Enterprises") and " No. 15 of Information Disclosure and Reporting Rules for Publicly Listed
Companies - General Provisions for Financial Reports" (revised in 2023) promulgated by the
China Securities Regulatory Commission (hereinafter referred to as the "CSRC").
（2） Going concern
The group has assessed the capacity to continually operate within 12 months since December
The Company’s financial statements are prepared on the basis of going concern assumption.
III. Significant Accounting Policies and Accounting Estimates
The financial statements are prepared in line with the requirements of Accounting Standard
for Business Enterprise, and truly and fully reflect the relative information of the financial
position for the year ended as of December 31, 2025, operating performance, cash flow of the
Company and the group for the year then ended.
The group adopts the Gregorian calendar year as accounting period from Jan 1 to Dec 31.
The group sets twelve months for one operating cycle.
The group adopts RMB as functional currency.
The financial statements preparation and disclosure are in line with materiality. For those
matters to be disclosed and need judgement for materiality, materiality criteria set up method
and basis are as follows:
In the notes to
Disclosures involved by the financial Materiality criteria set up method and
materiality judgement statements basis
Significant receivables with Single provision is over 10 million Yuan and
individual provision for bad Note V.3 represents more than 10% of the total
debts provision
Single provision is over 10 million Yuan and
Collection or reverse of
Note V.3 represents more than 10% of the total
significant receivables
provision
Single provision is over 10 million Yuan and
Significant receivables written
Note V.3 represents more than 10% of the total
off
provision
Significant construction in
Note V.16 Single project budget over 30 million Yuan
progress
The book value of long-term equity
investment in a single investee accounts for
more than 10% of the group's net assets and
the amount is greater than 100 million Yuan,
Significant JV or associates Note VIII.3
or the gain or loss on investment under the
long-term equity investment equity method
accounts for more than 10% of the group's
consolidated net profit
Subsidiary’s net assets are more than10% of
Significant subsidiary the group asses and its net profit is more than
（1） Business combination under the same control
Business combination under the same control is the situation where entities participating the
merger are controlled by the same party or controlled by parties under same ultimate control
before and after merger and the control is not temporary.
The group, as an acquirer, the assets and liabilities that the group obtained in a business
combination under the same control should be measured on the basis of their carrying amount
of the acqiree in the ultimate control party’s consolidated financial statements on the
combining date. As for the balance between the carrying amount of the net assets obtained by
the combining party and the carrying amount of the consideration paid by it, the capital
surplus shall be adjusted. If the capital surplus is not sufficient to be offset, the retained
earnings shall be adjusted.
（2） Business combination not under same control
Business combination not under the same control is the situation where entities participating
the merger are not controlled by the same party or not controlled by parties under same
ultimate control before and after merger.
When the group is an acquirer, for a business combination not under same control, the asset,
liability and contingent liability obtained, shall be measured at the fair value on the
acquisition date. The difference, when combination cost exceeds proportionate share of the
fair value of identifiable net assets of acquire should be recognized as goodwill. If the
combination cost is less than proportionate share of the fair value of identifiable net assets of
acquiree, firstly, fair value of identifiable asset, liability or contingent liability shall be
reviewed, and so the fair value of non-monetary assets or equity instruments issued in the
combination consideration , after review, still the combination cost is less than
proportionate share of the fair value of identifiable net assets of acquire, the difference should
be recognized as non-operating income.
If a business consolidation not under common control is finally achieved in stages, when
preparing the consolidated financial statements, the acquirer shall remeasure its previously
held equity interest in the acquiree at its fair value on acquisition date and recognize the gain
or loss as investment income for the current period. Other comprehensive income, under
equity method accounting rising from the interest held in acquiree in relation to the period
before the acquisition, and changes in the value of its other equity other than net profit or loss,
other comprehensive income and profit appropriation shall be transferred to investment gain
or loss for the period in which the acquisition incurs, excluding the other comprehensive
income from the movement on the remeasurement of ne asset or liability of defined benefit
plan.
statements
Consolidation scope is determined on the control basis including the Company and all
subsidiaries controlled by the Company. Control criteria is that the group has the power over
the investees, enjoy the variable return by involving the relative activities of the investees and
also has the impact on the return amount through the power over the investees.
If subsidiaries adopt different accounting policy or have different accounting period from the
parent company, appropriated adjustments shall be made in accordance with the Company
policy in preparation of the consolidated financial statements.
All significant intergroup transactions, outstanding balances and unrealized profit shall be
eliminated in full when preparing the consolidated financial statements. Portion of the
subsidiary’s equity not belonging to the parent, profit, loss for the current period, portion of
other comprehensive income and total comprehensive belonging to minority interest, shall be
presented separately in the consolidated financial statements under “minority interest of
equity”, minority interest of profit and loss”, “other comprehensive income attributed to
minority interest” and “total comprehensive income attributed to minority interest” title.
If a subsidiary is acquired under common control, its operation results and cash flow shall be
consolidated since the beginning of the consolidation period. When preparing the comparative
consolidated financial statements, adjustments shall be made to relevant items of comparative
figures as regarded that reporting entity established through consolidation has been always
existing since the point when the ultimate controlling party starts to have the control.
If a subsidiary is acquired not under common control, its operation results and cash flow shall
be consolidated since the beginning of the consolidation period. In preparation of the
consolidated financial statements, adjustments shall be made to subsidiary’s financial
statements based on the fair value of its all identifiable assets, liability or contingent liability
on the acquisition date.
When the group partially disposes of the long –term equity investment in subsidiary without
losing the control over it, in the consolidated financial statements, the difference, between
disposals price and respective disposed value of share of net assets in the subsidiary since the
acquisition date or combination date, shall be adjusted for capital surplus or share premium,
no enough capital surplus, then adjusted for retained earnings.
When the group partially disposes of the long –term equity investment in subsidiary and lose
the control over it, in preparation of consolidated financial statements, remaining share of
interest in the subsidiary shall be remeasured on the date of losing control. Sum of the share
disposal consideration and fair value of remaining portion of shareholding minus the share of
the net assets in the subsidiary held based on the previous shareholding percentage since the
acquisition date or combination date, the balance of above is recognized as investment
gain/loss for the period and goodwill shall be written off accordingly. Other comprehensive
income relevant to share investment in subsidiary shall be transferred to investment gain /loss
for the period on the date of losing control.
When the group partially disposes of the long –term equity investment in subsidiary and lose
the control over it by stages, if all disposing transactions are bundled, each individual
transaction shall be seen as a transaction of disposal of a subsidiary by losing control. The
difference between the disposal price and the share of the net assets in the subsidiary held
before the date of losing control, shall be recognize as other comprehensive income until the
date of losing control where it is transferred into investment gain/ loss for the current period.
If the equity investment in the subsidiary is disposed of by stages through multiple
transactions until the control is lost, and it is not a bundled transaction, each transaction shall
be accounted for separately according to whether the control is lost.
The cash listed on the cash flow statements of the Company refers to cash on hand and bank
deposit. The cash equivalents refer to short-term (normally with original maturities of three
months or less) and liquid investments which are readily convertible to known amounts of
cash and subject to an insignificant risk of changes in value.
（1） Foreign currency transaction
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank
of China (“PBOC”) on the 1st day of the month when the transactions are accounted initially.
At the balance sheet date, foreign currency monetary items should be converted into reporting
currency at the balance sheet date’s spot exchange rate. Exchange differences should be taken
into the current profits and losses except special foreign currency borrowings for construction
and producing assets which are qualifying for assets capitalization, should be capitalized.
Foreign currency non-monetary items, which are recorded in historical cost, should be still
recorded at the spot exchange rate when the transaction occurred and no change on reporting
currency amount. Foreign currency non-monetary items, which are measured at fair value,
should be recorded in the spot exchange rate at the date measuring the fair value and the
differences should be recognized as profit and loss from fair value changes and included in
the current profits and losses. Invested capital in foreign currency shall be converted into
reporting currency at FX rate at when the investment is received, and no foreign exchange
difference arises between capital received and monetary items.
（1） Recognition and derecognition of financial instruments
The group shall recognize a financial asset or a financial liability when becoming party to the
contractual provisions of the instrument.
An entity shall derecognize a financial asset(or a part of it or a group of similar financial asset)
when, and only when: 1) the contractual rights to the cash flows from the financial asset
expire, or 2) the entity transfers contractual rights to receive the cash flows of a financial asset,
or assumes a contractual obligation to pay those cash flows received to the 3rd party in full
amount in time according to the ‘passing-through’ agreement and the entity substantially
transfers all the risks and rewards of ownership of the financial asset in nature, or the entity
neither transfers nor retains substantially all the risks and rewards of ownership of the
financial asset, but the entity has not retained control.
Financial liabilities shall be derecognized if the obligation of the liability is fulfilled,
cancelled or expired. An exchange between an existing borrower and lender of debt
instruments with substantially different terms shall be accounted for as an extinguishment of
the original financial liability and the recognition of a new financial liability. Similarly, a
substantial modification of the terms an existing financial liability shall be accounted for as an
extinguishment of the original financial liability and the recognition of a new financial
liability. The difference between the carrying amount of a financial liability extinguished and
the consideration paid, including any non- cash assets transferred or liabilities assumed, shall
be recognized in profit or loss.
A regular way purchase or sale of financial assets shall be recognized and derecognized, as
applicable, using trade date accounting or settlement date accounting.
（2） Classification and measurement of financial assets
At initial recognition, the group shall classify financial assets as measured at amortized cost,
fair value through other comprehensive income or fair value through profit or loss on the
basis of both the group’s business model for managing the financial assets and the contractual
cash flow characteristics of the financial asset. Only when the business model for managing
the financial assets is changed, the affected financial assets shall be reclassified.
In determining the business model, the group considers, among others, the way in which the
company evaluates and reports the performance of financial assets to key management
personnel, the risks affecting the performance of financial assets and the way in which they
are managed, and the way in which the relevant business managers are remunerated. In
assessing whether the objective is to collect contract cash flows, the group needs to make an
analytical judgment on the reasons, timing, frequency and value of the sale of the financial
assets before the maturity date.
In determining the contract cash flow characteristics, the group is required to determine
whether the contract cash flow is only the payment of principal and interest based on the
outstanding principal, (including the assessment of the time value of money correction,
judging any significant difference between it and the baseline cash flow/ for financial assets
containing early repayment characteristics, is required to determine whether the fair value of
early repayment features is very small).
Financial assets are measured at fair value at the initial recognition, but accounts receivable or
notes receivable arising from the sale of goods or provision of services, etc., do not contain a
significant financing component or do not consider the financing component of less than one
year, the initial measurement is based on the transaction price.
For financial assets that are measured at fair value, the related transaction costs are directly
included in current profit or loss, and those costs of other categories of financial assets are
included in their initial recognized amounts.
Financial assets subsequent measurement based on the classification
A financial asset shall be measured at amortized cost if both of the following conditions are
met: ①the financial asset is held within a business model whose objective is to hold financial
assets in order to collect contractual cash flows;②the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding. The financial assets of this category include: monetary fund,
receivable, notes receivable and other receivables.
A financial asset shall be measured at fair value through other comprehensive income if both
of the following conditions are met: ① the financial asset is held within a business model
whose objective is achieved by both collecting contractual cash flows and selling financial
assets and ②the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.
The effective interest rate is applied to interest income. A gain or loss arising from a financial
asset measured at fair value through other comprehensive income, which is not part of
hedging relationship shall be recognized in other comprehensive income apart from interest
income, impairment loss and foreign exchange difference. When this type of financial assets
is derecognized, accumulated gain or loss previously in the other comprehensive income shall
be out of it and accounted into retained earnings when the financial asset is derecognized. The
financial assets of this category include: receivable financing.
The group may make an irrevocable election for particular investments in equity instruments
that it would be measured at fair value through other comprehensive income, but once the
election is made, it is irrevocable. The group only recognizes the dividend (apart from the
dividend as investment cost pay back) into profit and loss and fair value movement
subsequently will be recognized into comprehensive income and no need for impairment
provision. When this type of financial assets is derecognized, accumulated gain or loss
previously in the other comprehensive income shall be out of it and accounted into retained
earnings when the financial asset is derecognized. The financial asset of this category is
equity instruments.
Apart from classified as the amortized cost financial assets and as fair value through other
comprehensive income financial assets, a financial asset is classified as fair value through
profit or loss. The group shall subsequently measure this financial asset at its fair value,
except for hedging accounting, any gain or loss on FVTPL shall be accounted into profit and
loss. The financial assets of this category include: tradable financial asset other non-current
financial asset.
A financial asset shall be classified as fair value through profit or loss if it is recognized
contingent consideration through business combination, which is not under same control
situation.
（3） Classification, basis for recognition and measurement of financial liability
Except for the financial guarantee contract, commitments to provide a loan at a below- market
interest rate and financial liabilities that arise when a transfer of a financial asset does not
qualify for derecognition or when the continuing involvement approach applies, the group
shall initially classify all financial liabilities as it measured at amortized cost or financial
liabilities at fair value through profit or loss. For financial liabilities that are measured at fair
value, the related transaction costs are directly included in current profit or loss, and those
costs of other categories of financial assets are included in their initial recognized amounts.
Financial liabilities subsequent measurement based on the classification
Effective interest method is applied to financial liabilities as subsequently measured at
amortized cost
Financial liability measured at fair value through profit or loss including tradable financial
liability (derivative instrument of financial liability included) and designated as financial
liability measured at fair value through profit or loss. Tradeable financial liability (including
derivate instrument of financial liability) are subsequently measured at fair value. The net
gain or loss arising from changes in fair value are recorded in profit or loss for the period in
which they are incurred. Financial liability designated as it measured at fair value through
profit or loss shall be subsequently measured at fair value, except for changes in fair value
caused by changes in the group's own credit risk, which are recognized in other
comprehensive income, other changes in fair value are recognized in profit or loss for the
current period; The group recognizes all fair value changes (including the amount affected by
changes in its own credit risk) in profit or loss if the inclusion of changes in fair value
caused by changes in its own credit risk in other comprehensive income would cause or
widen the accounting mismatch in profit or loss for the current period.
（4） Financial instrument impairment
Based on expected credit loss, the group shall apply the impairment requirements for the
followings: ① a financial asset measured at amortized cost; ② debt investment measured
at fair value and changes in fair value is through other comprehensive income; ③ lease
receivable; ④ a contractual asset and financial guarantee contract.
Expected credit loss is the weighted average of credit losses with the respective risks of a
default occurring as the weights. A credit loss herein is referred to as the present value, at
original effective rate, of the difference between the contractual cash flows that are due to the
group under the contract; and the cash flows that the Company expects to receive, that's the
present value of the total cash shortage. The group shall measure expected credit losses of a
financial instrument in a way that reflects: ①an unbiased and probability- weighted amount
that is determined by evaluating a range of possible outcomes; ② the time value of money;
and ③reasonable and supportable information that is available without undue cost or effort at
the reporting date about past events, current conditions and forecasts of future economic
conditions.
Expected credit loss of financial instrument is assessed individually and portfolio. The group
assesses the expected credit loss based on the portfolio in accordance with the common
characteristics of credit risk which involves type of financial instrument, credit risk grade, and
age of trade receivables.
When assessing expected credit losses, the group considers all reasonable and supportable
information, including that which is forward-looking. In making these judgments and
estimates, the group extrapolates the expected changes in the debtor's credit risk based on
historical repayment data combined with factors such as economic policies, macroeconomic
indicators and industry risks. Different estimates may affect the provision for impairment, and
the provision already made may not equal the actual amount of impairment losses in the
future.
For receivable, notes receivable and contract asset etc., which don’t contain significant
financing component and arise from sales of products and service provision, the group adopts
simplified method to account expected credit loss provision at an amount equal to the whole
lifetime expected credit losses.
For lease premium receivable, trade receivable containing significant financing component,
and contract asset, the group adopts simplified method to account expected credit loss
provision at an amount equal to the whole lifetime expected credit losses.
The group determines the expected credit loss of trade receivable on the basis of portfolios
with common characteristics of credit risk, which are considered by expected credit loss
measurement reflection, by reference to historical experience of credit loss and by
comparison of receivable past due days/ receivable age with default risk rate, unless the single
credit loss is separately recognized for contractual payments that is significant in amount and
credit impaired. If certain client is significant different from others in terms of credit risk
characteristics, or the client’s credit risk has significantly increased, such as experiencing
severe finance difficulty, its expected credit loss is obviously higher than it to be at
accounting age, the group will make separate credit loss provision for this client’s receivable.
① Portfolio category and recognition basis of receivable ( contract asset)
The group classifies accounts receivable (and contract assets) according to the similarity and
relevance of credit risk characteristics based on information such as age, nature of payments,
credit risk exposure, historical debt collection, etc. For accounts receivable (and contract
assets), the group determines that aging is the primary factor affecting its credit risk and
therefore, the group assesses its expected credit losses on the basis of aging portfolios. The
group calculates the overdue age based on the payment date agreed in the contract.
No expected credit loss is recognized for receivables from related party within consolidated
scope as the group assesses its credit risk is relatively low.
② Portfolio category and recognition basis of notes receivable
Portfolio category Expected credit loss accounting estimate policy
Lower credit risk assessed by the management, no
Bank acceptance note portfolio
expected credit loss recognition
Commercial acceptance note Same as receivables portfolio and provided for excepted
portfolio
credit loss allowance based on expected credit loss rate
and financial guarantee contracts
With the exception of financial assets (such as debt investments, other debt investments), loan
commitments and financial guarantee contracts for which the simplified measurement method
is adopted above, the group adopts the general method (three-stage method) for the provision
of expected credit losses. At each balance sheet date, the group assesses whether its credit risk
has increased significantly since the initial recognition, and if the credit risk has not increased
significantly since the initial recognition, in the first stage, the group measures the loss
provision at an amount equivalent to the expected credit loss over the next 12 months and
calculates interest income based on the carrying balance and effective interest rate; If the
credit risk has increased significantly since the initial recognition but no credit impairment
has occurred, in the second stage, the group measures the loss provision at an amount
equivalent to the expected credit loss over the entire duration and calculates interest income
based on the carrying balance and effective interest rate; If credit impairment occurs after
initial recognition, in the third stage, the group measures the loss provision at an amount
equivalent to the expected credit loss over the entire duration and calculates interest income at
amortized costs and effective interest rates. For financial instruments with only low credit risk
at the balance sheet date, the group assumes that their credit risk has not increased
significantly since initial recognition
The whole life expected credit loss refers to the expected credit loss caused by all possible
default events during the whole expected life of the financial instrument. Expected credit
losses over the next 12 months are expected credit losses resulting from defaults on financial
instruments that may occur within 12 months after the balance sheet date (or if the expected
duration of the financial instrument is less than 12 months) and are part of the overall
expected credit losses over the life of the financial instrument.
Criteria of significant increase in credit risk and definition of credit impaired assets are
disclosed on Note XI.1
（5） Recognition and measurement of transfer of financial assets
A financial asset is derecognized when the financial asset has been transferred together with
substantial all risks and rewards to the transferee. A financial asset can not be derecognized
when the substantial all risks and rewards to the financial asset has been retained. When the
all risks and rewards of the financial asset are neither transferred nor retained, but the group
has given up its control of the financial asset, the financial asset shall be derecognized and
recognize the asset and liability originated. Where control of the financial asset is not
relinquished, the relevant financial asset shall be recognized according to the extent to which
it continues to be involved in the transferred financial asset, and the relevant liability shall be
recognized accordingly.
In the case where the financial asset as a whole qualifies for the derecognition conditions, the
difference between the carrying value of transferred financial asset at the derecognition date
and the sum of the consideration received for transfer and the accumulated amount of changes
in fair value in respect of the amount of partial derecognition ( financial assets involved in
transfer must qualify the following conditions: ① the financial asset is held within a
business model whose objective is not only for collecting contractual cash flows but also for
sale; ②the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest based on the principal amount outstanding) ,
that was previously recorded under other comprehensive income is transferred into profit or
loss for the period.
In the case where only part of the financial asset qualifies for derecognition, the carrying
amount of financial asset being transferred is allocated between the portions that to be
derecognized and the portion that continued to be recognized according to their relative fair
value. The difference between the amount of consideration received for the transfer and the
accumulated amount of changes in fair value that was previously recorded in other
comprehensive income for the asset partially qualified for derecognition (financial assets
involved in transfer must qualify the following conditions: ① the financial asset is held
within a business model whose objective is not only for collecting contractual cash flows but
also for sale; ; ②the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest based on the principal amount
outstanding ) and the above-mentioned allocated carrying amount is charged to profit or loss
for the period.
Where the assets continue to be involved by providing financial guarantees for the transferred
financial assets, the assets that continue to be involved in the same form are recognized at the
lower of the carrying value of the financial assets and the amount of the financial guarantees.
Financial guarantee amount means the maximum amount of consideration received that will
be required to be repaid.
（6） Distinguish between financial liability and equity instrument and accounting
Financial liability and equity instrument shall be distinguished in accordance with the
following standards: ① if the group cannot unconditionally avoid paying cash or financial
asset to fulfil a contractual obligation, the contractual obligation is qualified or financial
liability. For certain financial instrument, although there are no clear terms and conditions to
include obligation of paying cash or other financial liability, contractual obligation may
indirectly be formed through other terms and conditions. ② the group’s own equity
instrument shall also be considered whether it is the substitute of cash, financial asset or it is
the remaining equity, after the issuer deducts liability, enjoyed by the equity holder , if it must
or can be used to settle a financial asset. If the former, the instrument is a financial liability of
the issuer, otherwise it is an equity instrument of the issuer. In certain circumstances, financial
instrument contract is classified as financial liability, if financial instrument contract specifies
the Company must or can use its own equity to settle the financial instrument, the contractual
amount of right or obligation equals to that of the numbers of own equity instrument available
or to be paid multiplied by fair value when settling, nevertheless the amount is fixed, or
varied partially or fully based on the its own equity’s market price(such as interest rate,
certain commodity’s or financial instrument’s price variance).
When classifying a financial instrument (or its component) in the consolidated statements, the
group takes all terms and conditions agreed by the its member and instrument holder into
consideration. If the group because of the instrument, as a whole, bears settlement obligation
by paying cash, other financial asset or other means resulted in financial liability, the
instrument shall be classified as financial liability.
（7） Derivative financial instrument
The group uses derivative financial instruments such as foreign exchange forward contracts,
commodity forward contracts and interest rate swaps to hedge exchange rate risk, commodity
price risk and interest rate risk respectively. Derivative financial instruments are initially
measured at their fair value on the date the derivative transaction contract is signed, and are
subsequently measured at their fair value. A derivative instrument with a positive fair value is
recognized as an asset and a negative fair value is recognized as a liability.
Except hedging accounting, all gain or loss from the FV movement of derivative instrument
shall be recognized in the income statement.
（8） Financial asset and financial liability offset
Financial asset and financial liability shall be presented in the balance sheet separately and
cannot be offset, unless the following conditions are all met: ①the Company has the legal
right to recognized offset amount and the right is enforceable. ② the Company plans to
receive or a legal obligation to pay cash at net amount.
Inventories are raw material, low-valuable consumable, goods on transit, working-in-progress,
finished goods, and cost to fulfil the contract etc.
The inventories are processed on perpetual inventory system, and are measured at their actual
cost on acquisition. Weighted average cost method is taken for measuring the inventory
dispatched or used. Low value consumables and packaging materials is recognized in the
income statement by one-off method.
At the balance sheet date, inventory is measured at the lower of cost and net realizable value.
If the cost of the inventory is higher than its net realizable value, a provision is made for the
decline in the price of the inventory and it is accounted in the current profit or loss. Net
realizable value is the amount of the estimated selling price of inventory in daily activities
less the estimated costs to be incurred at completion, estimated selling expenses and related
taxes.
Impairment provision for the group's raw materials/goods in stock/WIP/ cost to fulfil the
contract is made on an individual inventory item, and when determining its net realizable
value, the inventory of goods in stock and materials used for sale are determined at the
estimated selling price of the inventory less estimated selling expenses and related taxes;
Inventory of materials held for use in production is determined at the estimated selling price
of the finished goods produced less the estimated costs to be incurred up to completion,
estimated selling expenses and
(1) Contract asset
Contract asset is an entity’s right to consideration in exchange for goods or services that the
entity has transferred to a customer when that right is conditioned on something other than the
passage of time. For example, the group sold two goods that can be clearly distinguished to
the client, then the group has the right to consideration in exchange of the goods because one
of the goods are delivered, but the consideration’s collection is conditioned on the other
goods delivery, in this case, the right to consideration shall be recognized as contract asset.
Expected credit loss recognition of contract asset is referred to the Note III、10 Provision for
impairment of financial assets.
(2) Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity has
received consideration (or the amount is due) from the customer. If a customer pays
consideration, or the group has a right to an amount of consideration that is unconditional
before the group transfers a good or service to the customer, the group shall present the
contract as a contract liability when the payment is made or the payment is due (whichever is
earlier).
(1) Assets recognition methods in relation to contract cost
Assets relevant to contract cost in the group include cost to fulfill the contract and cost to
obtain a contract. Cost to fulfill the contract is presented under inventory and other
non-current assets. Cost to obtain a contract is presented under other current assets and other
non-current assets.
If the costs incurred in fulfilling a contract with a customer are not within the scope of
another Standard such as inventory , fixed assets or intangible assets , an entity shall
recognize an asset from the costs incurred to fulfill a contract only if those costs meet all of
the following criteria: the costs relate directly to a contract or to an anticipated contract,
including direct labor, direct materials and overheads which is clearly stated to be borne by
the client and any other cost in line with the contract; the costs enhance resources of the group
that will be used in performance obligations in the future; and the costs are expected to be
recovered.
An asset as the incremental costs of obtaining a contract with a customer shall be recognized
if the group expects to recover those costs. The group may recognize the incremental costs of
obtaining a contract as an expense when incurred if the amortization period of the asset t is
one year or less. The incremental costs of obtaining a contract are those costs that the group
incurs to obtain a contract with a customer that it would not have incurred if the contract had
not been obtained (for example, a sales commission). Other expenses incurred in order to
obtain a contract rather than the incremental cost, and expected to be recovered (regardless of
whether the contract is obtained such as travelling expenses) shall be recognized as an
expense when incurred, unless those costs are explicitly chargeable to the customer.
(2) Amortization of asset relevant to contract cost
An asset recognized in accordance with contract cost shall be amortized on a systematic basis
that is consistent with the transfer to the customer of the goods or services to which the asset
relates.
(3) Impairment of asset relevant to contract cost
If the carrying value of the group's assets related to the contract cost is higher than the
following two differences, the group will make the impairment provision for the excessive
part and recognize the asset impairment loss: ① The remaining consideration that the
group is expected to obtain due to the transfer of the commodities related to the asset; ②
Estimate the costs to be incurred for the transfer of the relevant goods
Long term equity investments are the equity investment in subsidiary, in associated company
and in joint venture.
(1) Judgement on control, joint control and significant influence
Equity investments in which the group has a significant impact on the investee are
investments in associates.
Significant influence refers to having the power to participate in the decision-making of the
financial and operational policies of the investee, but not being able to control or jointly
control the formulation of these policies with other parties. Significant influence exists when
the entity directly or indirectly owned 20% or more but less than 50% voting shares in the
investee, unless there is explicit evidence that the company cannot participate in the
production and operation decisions of the investee or have control over the investee.
When having less than 20% voting shares, the group’s significant influence still exists if the
followings are taken into accounts: representation on the board of directors or equivalent
governing body of the investee, participation in financial or operating activities
policy-making processes, material transactions between the investor and the investee,
interchange of managerial personnel or provision of essential technical information etc.
The group’s joint venture investment is an equity investment whereby the parties have jointly
control over it and have rights to the net assets of the investee. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions
about the relevant activities require the unanimous consent of the parties sharing control. The
group’s judgement on joint control is based on the joint arrangement that all participants or
combinations of participants collectively control the arrangement and that decisions relating
to the activities of the arrangement must be made with the unanimous consent of those
participants who collectively control the arrangement.
(2) Accounting
The group initially measures the long-term investment in line with the initial cost for
acquiring the investment.
The initial investment cost for long-term equity investment acquired through business
combination under common control, is the carrying amount presented in the consolidated
financial statements of the share of net assets at the combination date in the acquired
company. If the carrying amount of net assets at the combination date in the acquired
company is negative, investment shall be recognized at zero.
If long-term equity investment is acquired through business combination not under common
control, initial investment cost shall be the combination cost. If the equity investment of
investee not under common control is acquired by stages and it’s not a bundled transaction,
the carrying amount of the equity investment held previously plus newly increased investment
cost are taken as the initial investment cost.
Apart from the long-term equity investments acquired through business combination, the cost
of investment for the long-term equity investments acquired by cash payment is the amount of
cash paid, relevant direct expense, tax and other necessary expenses for the investment. For
long-term equity investment acquired by issuing equity instruments, the cost of investment is
the fair value of the equity instrument issued.
The Company adopts cost model for investment in subsidiary on separate financial statement.
Under cost model, the long-term equity investment is measured at initial investment cost.
When more investment is added, it shall increase the carrying amount of investment by
adjusting the fair value of additional investment and relevant transaction expenses. Cash
dividend or profit declared by investee shall be recognized as investment gain/loss for the
period based on the proportion share in the investee.
The Company adopts equity method for investment in joint venture and affiliate. Under
equity method, if the initial investment cost is greater than the share of fair value of the
identifiable net assets in the investee, the initial investment cost of long-term equity
investment is no need to be adjusted; If the initial investment cost is less than the share of fair
value of the identifiable net assets in the investee , the difference shall be recorded into the
current profit and loss, and the cost of long-term equity investment shall be adjusted at the
same time.
Long-term equity investment subsequently, under equity method, shall be adjusted for it
carrying amount according to the share of equity increase or decrease in the investee. The
Company shall recognize its share of the investee’s net gain or losses after the investee’s net
profit adjustment, based on the fair value of the investee’s individual identifiable assets at
the acquisition date, after making appropriate adjustments thereto in conformity with the
accounting policies and accounting period, and offsetting the unrealized profit or loss from
the inter-group transactions, not constituting the business, between the entity and its
associates and joint ventures according to the shareholding attributable to the group (full
amount of loss shall be recognized if the inter-group transaction is impairment loss). The
group recognizes net losses incurred by investee to the extent that the carrying value of
long-term equity investments and other long-term interests substantially constituting net
investments in investee are written down to zero, except where the group is obliged to bear
additional losses.
The difference between the book value of long-term equity investment and actual acquisition
cost shall be recognized in the gain or loss of investment when the long-term equity
investment is disposed of.
For long-term investments accounted under equity method, other comprehensive income
recorded shall be accounted on the same basis as the investee directly disposing of related
assets or liability when equity method is not used any longer. The movements of
shareholder’s equity, other than the net profit or loss, other comprehensive income and profit
distribution previously recorded in the shareholder’s equity of the Company are recycled to
investment income for the period on disposal.
If the remaining equity after the partially disposal is still accounted for under the equity
method, the relevant other comprehensive income previously recognized under the equity
method, is treated on the same basis as the direct disposal of the relevant assets or liabilities
by the investee and is carried forward on a proportional basis, and the owner's equity, which
is apart from net profit and loss, other comprehensive income and profit distribution of the
investee, shall be recognized and proportionally transfers to current investment income.
Where the entity has no longer joint control or significant influence in the investee company
as a result of partially disposal of the investment, the remaining investment will be accounted
for in line with the Recognition and Measurement of Financial Instruments Standard -No 22
of Accounting Standards for Business Enterprises(No7 Caikuai [2017]), and the difference
between the fair value of remaining investment at the date of losing joint control or
significant influence and its carrying amount shall be recognized in the profit or loss for the
year.
Where the entity has no longer control over the investee company as a result of partially
disposal of the investment, the remaining investment will be changed to be accounted for
using equity method providing remaining joint control or significant influence over the
investee company. The difference between carrying amount of disposed investment and
consideration received actually shall be recognized as investment gain or loss for the period,
and investment shall be adjusted accordingly as if it was accounted for under equity model
since acquisition. Where the entity has on longer joint control or significant influence in the
investee as a result of disposal, the investment shall be accounted for in accordance with the
Recognition and Measurement of Financial Instruments Standard -No 22 of Accounting
Standards for Business Enterprises(No7 Caikuai [2017]), and difference between the carrying
amount and disposal consideration shall be recognized as investment gain or loss for the
period, and the difference between the fair value of remaining investment at the date of losing
control and its carrying amount shall be recognized in the profit or loss for the year.
Investment property is held to earn rentals or for capital appreciation or both and includes
property, building and use right of land. They are measured at cost model.
Investment property is depreciated or amortized on straight line basis and its expected useful
life, net residual value rate and annual depreciation rate is as follows:
Useful life Estimated net residual value Annual
Category
(years) rate (%) depreciation rate
Use right of land 50 0 2
Property and Buildings 20、40 3/10 2.25-4.85
Recognition criteria of fixed assets: defined as the tangible assets which are held for the
purpose of producing goods, rendering services, leasing or for operation & management, and
have more than one year of useful life.
Fixed assets shall be recognized when the economic benefit probably flows into the group and
its cost can be measured reliably. Fixed assets include: building, machinery, transportation
equipment, electronic equipment and others.
All fixed assets shall be depreciated unless the fixed assets had been fully depreciated and are
still being used and land is separately measured. Straight-line depreciation method is adopted
by the group. Estimated net residual value rate, useful life, depreciation rate as follows:
Useful life Estimated net residual Annual depreciation
No Category
(years) value rate (%) rate (%)
The group should review the estimated useful life, estimated net residual value and
depreciation method at the end of each year. If any change has occurred, it shall be regarded
as a change in the accounting estimates.
The cost of construction in progress is determined according to the actual construction
expenditure, including the necessary construction expenditure incurred during the
construction period, the capitalized borrowing cost and other related expenses before the
construction reaches the condition expected for use.
Constructions in progress are transferred to fixed assets based on the construction budget and
actual costs on the date when completing and achieving estimated usable status, and the fixed
assets should be depreciated in the next month. Adjustment will be made upon confirmation
of their actual values after implementing the completion and settlement procedures.
The construction in progress shall be transferred to fixed assets when it reaches the expected
usable state, and the criteria are as follows:
Items Criteria of transferring to FA
Property and Buildings Earlier of actual starting of use and completion of inspection
Machinery equipment Earlier of actual starting of use and completion of installation / inspection
The group’s intangible assets include use right of land, patents, non-patented technologies and
others. They are measured at actual cost at acquisition day. For acquired assets, the actual cost
is measured at actual price paid and relevant other expenses. Invested intangible asset shall be
measured at actual cost as contracted or agreed value, however fair value will be taken if the
contracted or agreed value is not fair.
(1) Useful life and the basis for recognition, estimation, amortization method or review
procedure
Use right of land shall be amortized evenly within the amortization period since the remised
date. Patents, technologies and other intangible assets are amortized over the shortest of their
estimated useful life, contractual beneficial period and useful life specified in the law.
Amortization charge is included in the cost of assets or expenses, as appropriate, for the
period according to the usage of the assets. At the end of the year, for definite life of
intangible assets, their estimated useful life and amortization method shall be assessed. Any
change shall be treated as change on accounting estimate.
(2) The scope and accounting of research and development
The group separates the expenditure on internal research and development projects into
research phase expenditure and development phase expenditure. At research phase,
expenditure are expenses directly relevant to research activity, including R&D employee’s
salary, materials, depreciation, technology cooperation cost and assessment testing fees. At
development phase, expenses can be capitalized only when meeting the following conditions:
(a)the technical feasibility of completing the intangible asset so that it will be available for
use or sale.
(b)its intention to complete the intangible asset and use or sell it.
(c)how the intangible asset will generate probable future economic benefits. Among other
things, the entity can demonstrate the existence of a market for the output of the intangible
asset or the intangible asset itself or, if it is to be used internally, the usefulness of the
intangible asset.
(d)the availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset.
(e)its ability to measure reliably the expenditure attributable to the intangible asset during its
development.
Any expenditure not qualifying for the above conditions shall be accounted into profit and
loss account.
The projects expenditure will go to the development stage and start to be capitalized after
meeting the above conditions, and passing the technical feasibility and economic feasibility
studies, and being approved after evaluation.
The group assesses whether there is any indication that long-term equity investment,
investment property under cost model, fixed assets, construction in progress, right-of-use
asset and intangible assets with definite useful life may be impaired. If there is any indication
that an asset may be impaired, the asset will be tested for impairment. Goodwill and
intangible asset with infinite useful life and development cost not reaching available for use
status, are tested for impairment annually no matter there is any indication of impairment or
not.
(1) Non-current asset impairment excluding financial asset (expect goodwill)
When testing the impairment, the group recognized the recoverable amount of an asset, which
the higher of its fair value less costs to sell and the present value of the future cash flows
expected to be derived from the asset. After impairment test, any difference of carrying
amount over its recoverable amount shall be recognized as impairment loss.
The group estimates recoverable amount based on an individual asset. If it is not possible to
estimate the recoverable amount of an individual asset, the recoverable amount is determined
on the basis of the asset groups or asset portfolio to which the asset belongs. Asset portfolio is
determined based on whether the major cash inflow generated by the asset group is
independent from the cash inflow of other assets or the asset portfolio.
Net amount which FV less disposal cost is reference to the agreed sale price or observable
market price for similar asset within the arm length transaction. When estimating the present
value of future cash flows, management must estimate the expected future cash flows of the
asset or group of assets and select an appropriate discount rate to determine the present value
of future cash flows.
(2) Goodwill impairment
The group allocates the carrying value of the goodwill generated from the business
combination to the relevant asset group or to the relevant asset group combination which is
difficult to allocate to the relevant asset group，in a reasonable way from the date of purchase.
When conducting impairment tests on goodwill contained within the related asset group or
asset group combination, if there are signs of impairment in the asset group or asset group
combination related to goodwill, the impairment test shall firstly be conducted on the asset
group or asset group combination excluding goodwill, and the recoverable amount shall be
calculated and compared with the relevant carrying value so to recognize the corresponding
impairment loss; Then, an impairment test is conducted on the asset group or asset group
combination containing goodwill to compare the carrying value with the recoverable amount.
If the recoverable amount is lower than the carrying value, the impairment loss amount is first
offset against the carrying value of goodwill allocated to the asset group or asset group
combination, and then offset the carrying value of the asset group and asset group
combination based on the proportion of the carrying value of other assets in the asset group or
asset group combination without goodwill.
The methodology, parameters and assumptions of the goodwill impairment test are referred in
Notes VI.19.
Once the impairment loss on the assets is recognized, it can not be reversed in a subsequent
period.
The group's long-term prepaid expense refers to landscape fees, renovation &decoration
expenses and other expenses paid and should be allocated over 1year.It will be amortized
evenly within its beneficial period. The remaining unamortized expense should be charged
into income statement if long-term prepaid expense can not bring the beneficial inflows.
Landscape fees will be amortized for 10 years and renovation& decoration fees will be
amortized for 5-10 years.
Employee’s benefit comprises short-term benefit, post-employment benefit, termination
benefit and other long-term employee’s benefit.
Short-term benefit includes salary, bonus, allowance, welfare, social insurance, housing funds,
labor union expense, staff training expense, during the period in which the service rendered
by the employees, the actually incurred short term employee benefits shall be recognized as
liability and shall be recognized in P&L or related cost of assets based on benefit objective
allocated from the service rendered by employees.
Post-employment benefits include the basic pension scheme and unemployment insurance etc.
Based on the risk and obligation borne by the Company, post-employment benefits are
classified into defined contribution plan and defined benefit plan. For defined contribution
plan, liability shall be recognized based on the contributed amount made by the Company to
separate entity at the balance sheet date in exchange of employee service for the period and it
shall be recorded into current profit and loss account or relevant cost of assets in accordance
with beneficial objective.
Termination benefits are employee benefits payable as a result of either the group’s decision
to terminate an employee’s employment before the contract due date or an employee’s
decision to accept voluntary redundancy in exchange for those benefits. The group shall
recognize the termination benefits as a liability and an expense on the earlier date (1) when
the group cannot unilateral withdraw the termination benefits due to employment termination
plan or due to redundancy suggestion, or (2) when the group can recognize the restricting cost
or expense arising from paying termination benefits.
Other long-term employee’s benefit refers to all other employee benefits other than short-term
benefit, post-employment benefit and termination benefit.
When the Company has transactions such as commitment to externals, discounting the trade
acceptance note, unsettled litigation or arbitration which meets the following criterion,
provision should be recognized: It is the Company's present obligation; carrying out the
obligation will probably cause the Company's economic benefit outflow; the obligation can
be reliably measured.
Provision is originally measured on the best estimate of outflow for paying off the present
obligations. When determining the best estimate, need to consider the risk, uncertainty, time
value of monetary relevant to contingent items. The group needs to review the present best
estimate and accordingly adjust the carrying value of the provision account.
The group recognizes revenue when it has fulfilled its contractual performance obligations, i.e.
when the customer has obtained control of the relevant goods or services. Control right of
goods or services refers to the ability to direct the use of, and obtain substantially all of the
remaining benefits from, the asset.
If the contract between the group and the customer meets the following five conditions at the
same time, the group has fulfilled the performance obligation when the customer obtains the
control of the relevant goods or services, and the revenue is recognized:
obligations;
commodities;
the company's future cash flow risk, time distribution or amount;
customer is likely to be recovered.
When the group transfers control of a good or service over time, it satisfies a performance
obligation and recognizes revenue over time only if one of the following criteria is met,
otherwise it shall be the performance obligation at a point in time.
performance as the entity performs
that the customer controls as the asset is created or enhanced
the entity has an enforceable right to payment for performance completed to date
(1) Revenue policy from sales
The group’s revenue mainly includes income from sale of goods and installation of the whole
set of refrigeration engineering project.
Based on the actual situation, the group recognizes the revenue as the followings；
obligation of transferring goods. The group recognizes the revenue at the time when the
arrival acceptance is completed by customers, having taken all followings into consideration:
present debt collection right entitled to the sales of goods, the transfer of the main risks and
rewards in the ownership of the goods, the transfer of the legal ownership entitled to the
goods, the transfer of physical assets, the acceptance of goods by customers.
declaration and export procedures.
Revenue from installation of the whole set of refrigeration engineering project. In the
refrigeration installation contract between the group and the customer, since the equipment
sales and installation services cannot be distinguished separately, the entire project contract is
regarded as a single performance obligation, and the revenue of the single performance
obligation is recognized at the completion of the customer acceptance. when a performance
obligation over time is satisfied, revenue shall be recognized within the contract term
according to the performance progress, which is determined by the percentage of the
cumulative actual cost to expected total contract cost. When the performance progress can not
be estimated reasonably, the group recognizes the revenue to the extent where the already
incurred cost can be compensated until the performance progress can be decided.
(2) Determining and allocating the transaction price
If the contract includes two or more performance obligations, at the inception date of contract,
the group shall allocate the transaction price to each performance obligation identified in the
contract on a relative standalone selling price ratio basis and measure the revenue at the
allocated transaction price to each performance. If any solid evidence indicates that contract
discount is only relevant to one or some (not all) performance obligations, the discount shall
be allocated into the one or these performance obligations.
An amount of consideration can vary because of cash discounts, price guarantee. The group
determines the best estimate of the variable consideration in line with the expectation or the
amount that most probably incurred, but includes, in the transaction price, the variable
consideration not exceeding the amount that is highly unlikely to result in a material reversal
of cumulative revenue recognized when the relevant uncertainty is eliminated.
The group accounts for consideration payable to a customer as a reduction of the transaction
price and, therefore, of revenue unless the payment to the customer is in exchange for a
distinct good or service. Accordingly, the revenue shall be recognized at the later of the
revenue recognition and the consideration paid to a customer.
For sales with a right of return, the group recognizes the revenue for the consideration
expected to have the right to receive arising from transferring the goods to customers when
the customer receives the control right over the relevant goods, and recognizes the expected
refund amount as provision. At the same time, receivable of return cost, as an asset, shall be
recognized for the carrying value of the returned goods when it is expected to be transferred
less expected cost for getting it back (including decline in value) and net amount of the above
asset cost shall be carried over to the cost. At every balance sheet date, the group will reassess
the future sales returns and remeasure the above assets and liabilities.
Where a significant financing component exists in the contract, the transaction price shall be
measured at the assumed price that the payment is made by cash when the client receives the
control right of goods or services. The difference between the promised consideration and the
determined transaction price shall be amortized within the contract period using effective
interest rate, and it is the discounting rate at which the dominated price of the contract
consideration is discounted to the cash price.
According to the agreement or the regulation etc., the group provide warranty for the goods
sold and it is the quality assurance for promising the goods are in commodity with the agreed
standards and shall be accounted for as Note III、22 provision.
Government grant shall be recognized only when all attached conditions are met and the grant
is possibly received. Where a government grant is in the form of a transfer of monetary asset,
it is measured at the amount received. Where a government grant is made on the basis of
fixed amount or conclusive evidence indicates relevant conditions for financial support are
met and expect to probably receive the fund, it is measured at the amount receivable. Where a
government grant is in the form of a transfer of non-monetary asset, it is measured at fair
value. If fair value cannot be determined reliably, it is measured at a nominal amount of
RMB1 Yuan.
Assets-related government grant is the government fund obtained by the group for the
purpose of long-term assets purchase and construction or establishment in the other forms.
Income-related grants are the grant given by the government apart from the assets-related
grants. If no grant objective indicated clearly in the government documents, the group shall
judge it according to the principle mentioned above. If the grant is difficult to be separated, it
shall be considered as income-related grant as a whole.
Assets-related government grants are recognized as deferred income, which shall be evenly
amortized to profit or loss over the useful life of the related asset. Any assets are sold,
transferred, disposed of or impaired earlier than their useful life expired date, the remaining
balance of deferred income which hasn’t been allocated shall be carried forward to the
income statement when the assets are disposed of.
Income-related government grants that is a compensation for related expenses or losses to be
incurred in subsequent periods are recognized as deferred income and credited to the relevant
period when the related expenses are incurred. Government grants relating to compensation
for related expenses or losses already incurred are charged directly to the profit or loss for the
period. Government grants related to daily business, shall be recognized as other income in
accordance with business nature or offsetting related expenses, otherwise, shall be recognized
as non-operating income or expenses.
The deferred income tax assets or the deferred income tax liabilities should be recognized
according to the differences (temporary difference) between the carrying amount of the assets
or liabilities and its tax base and the difference between the carrying amount of tax base item
and its tax base.
Deferred tax liability shall be recognized for all taxable temporary difference apart from the
followings : (1) temporary differences arise from the initial recognition of goodwill or the
initial recognition of assets or liabilities arising from non-business combinations that do not
affect accounting profits or taxable income (or deductible losses); (2) The group is able to
control the timing of the reversal of taxable temporary differences related to investments in
subsidiaries, associates, and joint ventures, and such temporary differences are likely not to be
reversed in the foreseeable future.
The group recognizes deferred income tax assets for deductible temporary differences,
deductible losses, and tax deductions that are likely to be obtained to offset future taxable
income, except for the following situations: (1) the initial recognition of assets or liabilities
arising from non-business combination transactions where temporary differences do not affect
accounting profits or taxable income (or deductible losses); (2) Deductible temporary
differences related to investments in subsidiaries, associates, and joint ventures that cannot
simultaneously meet the following conditions: temporary differences are likely to be reversed
in the foreseeable future, and taxable income is likely to be obtained in the future to offset
deductible temporary differences.
The group recognizes deferred income tax assets for all unused deductible losses to the extent
that there is likely to be sufficient taxable income to offset the deductible losses. The
management uses plenty of judgment to estimate the timing and amount of future taxable
income, combined with tax planning strategies, to determine the amount of deferred income
tax assets, which results in uncertainty.
On the balance sheet date, deferred income tax assets and deferred income tax liabilities are
measured at the applicable tax rate during the expected period of asset recovery or liability
settlement.
When the following conditions are met simultaneously, the group shall present the deferred
income tax assets and deferred income tax liabilities at the net amount after offsetting: The
group has the legal right to settle the current income tax assets and deferred income tax
liabilities at the net amount; Deferred income tax assets and deferred income tax liabilities are
related to the income tax levied by the same tax collection and management authority on the
same taxpayer or on different taxpayers. However, in the future, within the term when each
significant deferred income tax asset and deferred income tax liability to be reversed, the
involved taxpayers intend to settle the current income tax assets and liabilities on a net basis
or acquire assets and settle debts simultaneously.
(1) Lease identification
Lease: A contract, or part of a contract, that conveys the right to use an asset (the underlying
asset) for a period of time in exchange for consideration.
At inception of a contract, the group shall assess whether the contract is, or contains, a lease.
A contract is, or contains, a lease if the contract conveys the right to control the use of an or
many identified assets for a period of time in exchange for consideration.
For a contract that is, or contains several leases, the group shall separate the contract and
account each lease separately. The group shall account for each lease component separately
from non-lease components of the contract if the contract contains lease and non-lease
components. Each leasing part is accounted for according to the leasing standards, while the
non-leasing part is accounted for according to other applicable accounting standards. If the
contract includes both leasing and non-leasing parts, the group, as the lessor, will split the
leasing and non-leasing parts and conduct accounting treatment separately. Each leasing part
will be accounted for according to the leasing standards, while the non-leasing part will be
accounted for according to other applicable accounting standards. As the lessee, the group
chooses not to separate the lease and non-lease, and joins each leased part and its non- leased
parts separately into a lease, accounting treatment shall be carried out in accordance with
leasing standards; However, if the contract includes embedded derivative instruments that
should be split, the group will not merge them with the leasing portion for accounting
treatment.
(2) As a leasee
At the commencement date, the group as a lessee shall recognize a right-of-use asset and a
lease obligation except short-term lease and low value asset lease.
Right-of-use assets represents a lessee’s right to use an underlying asset for the lease term,
and is initially measured at cost.
The cost of the right-of-use asset shall comprise:
① the amount of the initial measurement of the lease liability,
② any lease payments made at or before the commencement date, less any lease incentives
received, which is the incremental cost for the lease
③ any initial direct costs incurred by the lessee which is the incremental cost
④ an estimate of costs to be incurred by the lessee in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the underlying asset to
the condition required by the terms and conditions of the lease, unless those costs are incurred
to produce inventories. Where the group remeasures the lease liability in accordance with the
relevant provisions of the leasing standard, the carrying value of right-of-use asset is adjusted
accordingly.
The group shall follow the following principles when determining the depreciation life of the
right-of-use asset: if the ownership of the leased asset can be reasonably determined at the
end of the lease term, depreciation shall be calculated and deducted during the remaining
service life of the leased asset; Where it is not certain that the ownership of the leased asset
can be acquired at the end of the lease term, depreciation shall be calculated at the shorter of
the lease term and the remaining service life of the leased asset. The depreciation amount
shall be accounted into cost of assets or profit and loss account.
At the commencement date, a lessee shall measure the lease liability at the present value of
the lease payments that are not paid at that date.
The lease payments included in the measurement of the lease liability comprise the following
payments for the right to use the underlying asset during the lease term that are not paid at the
commencement date: ① fixed payments (including in-substance fixed payments) less any
lease incentives receivable; ② variable lease payments that depend on an index or a rate,
initially measured using the index or rate as at the commencement date;③ the exercise price
of a purchase option if the lessee is reasonably certain to exercise that option ④ payments of
penalties for terminating the lease, if the lessee will certainly exercise an option to terminate
the lease during the lease term. ⑤ amounts expected to be payable by the lessee under
residual value guarantees;
When calculating the present value of the lease payments, interest rate implicit in the lease
shall be used. If the rate cannot be readily determined, the group shall use the lessee’s
incremental borrowing rate. Interest on the lease liability in each period during the lease term
shall be calculated based on a constant periodic rate of interest, and be recognized as in profit
or loss unless its capitalization.
After the lease commencement date, the group increases the carrying amount of lease liability
when recognizing the interest on lease liability and; decreases the carrying amount of lease
liability when making lease payment. The group remeasures the lease liability in accordance
with the present value of revised lease payment, when the followings incur: ① change of
in-substance fixed payments (subject to original discounting rate) ② change of amounts
expected to be payable under residual value guarantees(subject to original discounting rate)
③ change of an index or a rate used for future lease payments(subject to revised discounting
rate) ④ change in assessment of a buy option(subject to revised discounting rate) ⑤
change in assessment of a renew option or termination option or actual situation(subject to
revised discounting rate).
The group has chosen not to recognize the right-of-use asset and lease liability for short-term
lease (lease term less than 12 months) and low value asset (30,000 Yuan) when it is single
leased new asset. In this case, lease payment will be accounted directly in profit or loss or on
the straight-line basis in profit or loss.
The group, as a seller and a lease within the sales and lease back transaction, assesses whether
the transfer of the asset is a sale. If the transfer of assets is not a sale, the group shall continue
to recognize the transferred assets and at the same time recognize a financial liability equal to
the transfer income (Note VI. 34 lease). If the transfer of assets is a sale, the group shall
measure the right-of-use asset arising from the leaseback at the proportion of the previous
carrying amount of the asset that relates to the right of use retained by the group. Accordingly,
the group shall recognize only the amount of any gain or loss that relates to the rights
transferred to the buyer-lessor.
(3) As a lessor
The group, as a lessor, classified it as a finance lease if it transfers substantially all the risks
and rewards incidental to ownership of an underlying asset unless an operating lease.
At the commencement date, the group shall recognize the lease payment receivable and
derecognize of finance lease asset. When initially measuring the lease payment receivable, net
lease investment value shall be used for the lease payment receivable.
Net lease investment value equals to the any residual value guarantees plus the PV of undue
lease receivable discounted at the interest rate implicit in the lease. The group shall recognize
interest income over the lease term based on a constant periodic rate. The variable lease
payment obtained by the group related to operating leases, which are not included in the net
lease investment, shall be accounted for in the current profit and loss when actually incurred
Lease payment received shall be recognized as lease income on a straight-line basis within the
period.
The initial direct expenses incurred by the group in relation to operating leases are capitalized
to the cost of leasing the underlying asset and are recognized in profit or loss by instalments
over the lease period on the same basis as rental income. Variable lease payments made by the
group in relation to operating leases that are not included in lease collections are recognized
in profit or loss for the period when they are actually incurred.
The group shall account for a modification to an operating lease as a new lease from the
effective date of the modification, considering any received in advance or lease payments
receivable relating to the original lease as part of the lease payments receivable for the new
lease
The group measures investment property, derivative financial instruments and equity
instruments at fair value at each balance sheet date. Fair value refers to the price that market
participants can receive by selling an asset or can pay for transferring a liability in an orderly
transaction that takes place on the measurement date.
Assets and liabilities measured or disclosed at fair value in the financial statements are
determined to belong to the different fair value level based on the lowest level of input values
that are significant to the fair value measurement as a whole: level 1 input is the unadjusted
quoted price for identical asset or liability available at the active market on the measurement
date; level 2 input is the directly or indirectly observable input for relevant asset or liability
apart from level 1 input; level 3 input is the unobservable input for relevant asset or liability.
(For levels 1 and 2) For financial instruments traded in an active market, the group determines
their fair value by their active market quotes; For financial instruments that are not traded in
an active market, the group uses valuation techniques to determine their fair value, and the
valuation model used is mainly the discounted cash flow model. The input of valuation
techniques mainly includes: risk-free interest rate of debt, credit premium and liquidity
premium; estimator coefficient. and liquidity discount of equity.
(For level 3) The fair value of level 3 is determined on the basis of the group's valuation
models, such as the discounted cash flow model. The group also considers the initial
transaction price, recent transactions of the same or similar financial instruments, or full
third-party transactions of comparable financial instruments. As at 31 December 2025, level 3
financial assets measured at fair value are valued by using significant unobserved inputs such
as discount rates, but their fair value is not materially sensitive to reasonable changes in these
significant unobserved inputs.
The group uses the market approach to determine the fair value of unlisted equity investments.
This requires the group to determine comparable listed companies, select market coefficient,
estimate liquidity discounts, etc., and is therefore subject to uncertainty.
(1) Change in significant accounting policies
No.
(2) Changes in significant accounting estimates
No.
IV. Taxation
Tax Tax base Tax rate
Value-added tax (VAT) Revenue of sales goods or services 5%、6%、9%、13%、
City construction tax Actual VAT paid 5%、7%
Education surcharge Actual VAT paid 3%
Local education surcharge Actual VAT paid 2%
Current period taxable profit
Enterprise income tax (EIT) 15% or 25%
Real estate tax 1.2% or 12%
revenue from leasing property
Land use tax Land using right area Fixed amount per square meter
According to the relevant
Other tax
provisions of the state and local
Notes for tax entities with different EIT rate
Tax entities EIT rate
Bingshan Refrigeration & Heat Transfer Technologies
Co. ,Ltd
Dalian Bingshan Group Engineering Co., Ltd. 25%
Dalian Bingshan Group Sales Co., Ltd. 25%
Dalian Bingshan Air-conditioning Equipment Co., Ltd. 15%
Dalian Bingshan Guardian Automation Co., Ltd. 15%
Dalian Bingshan-RYOSETSU Quick Freezing
Equipment Co., Ltd.
Wuhan New World Refrigeration Industrial Co., Ltd. 15%
Dalian Bingshan Engineering & Trading Co., Ltd 25%
Dalian Universe Thermal Technology Co.,Ltd. 15%
Chengdu Bingshan Refrigeration Engineering Co., Ltd. 25%
Wuhan New World Air-conditioning Refrigeration
Engineering Co., Ltd
Wuhan Lanning Energy Technology Co., Ltd 25%
Sonyo Compressor (Dalian)Co.,Ltd. 15%
Sonyo Refrigeration System (Dalian) Co., Ltd. 15%
Sonyo Refrigeration (Dalian) Co., Ltd. 15%
Profit in HKD ≤ 2 million, 8.25%
Bingshan Engineering & Trading (Hong Kong)Co., Ltd
Profit in HKD > 2 million,16.5%
(1) The Company obtained the qualification of high and new technology enterprises in
December, 2023. The Certificate No. is GR202321201041. According to the tax bureau
approval, the Company can be granted for the preferential tax policy of enterprise income tax
rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Dalian Bingshan Air-conditioning Equipment Co., Ltd. obtained
the qualification of high and new technology enterprises in December, 2023. The Certificate
No. is GR202321201161. According to the tax bureau approval, the Company can be granted
for the preferential tax policy of enterprise income tax rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Dalian Bingshan Guardian Automation Co., Ltd. obtained the
qualification of high and new technology enterprises in December, 2024 The Certificate No. is
GR202421200978. According to the tax bureau approval, the Company can be granted for the
preferential tax policy of enterprise income tax rate of 15% from FY2024 to FY2026.
The Company’s subsidiary, Wuhan New World Refrigeration Industrial Co., Ltd obtained the
qualification of high and new technology enterprises in November, 2024. The Certificate No.
is GR202442000336. According to the tax bureau approval, the Company can be granted for
the preferential tax policy of enterprise income tax rate of 15% from FY2024 to FY2026.
The Company’s subsidiary, Dalian Universe Thermal Technology Co.,Ltd. obtained the
qualification of high and new technology enterprises in December, 2023. The Certificate No. is
GR202321200114. According to the tax bureau approval, the Company can be granted for the
preferential tax policy of enterprise income tax rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Sonyo Compressor (Dalian)Co.,Ltd.(hereinafter referred to as
“Sonyo Compressor” obtained the qualification of high and new technology enterprises in
December, 2024. The Certificate No. is GR202421200617. According to the tax bureau
approval, the Company can be granted for the preferential tax policy of enterprise income tax
rate of 15% from FY2024 to FY2026.
The Company’s subsidiary, Sonyo Refrigeration System (Dalian) Co., Ltd.(hereinafter referred
to as “Sonyo Refrigeration System” obtained the qualification of high and new technology
enterprises in December, 2023. The Certificate No. is GR202321201152. According to the tax
bureau approval, the Company can be granted for the preferential tax policy of enterprise
income tax rate of 15% from FY2023 to FY2025.
The Company’s subsidiary, Sonyo Refrigeration (Dalian) Co., Ltd.(hereinafter referred to as
“Sonyo Refrigeration” obtained the qualification of high and new technology enterprises in
December, 2024. The Certificate No. is GR202421200850. According to the tax bureau
approval, the Company can be granted for the preferential tax policy of enterprise income tax
rate of 15% from FY2024 to FY2026.
(2) According to the Announcement of the Ministry of Finance and Tax Administration on the
accelerate VAT Deduction for advanced manufacturing enterprise (Announcement No. 43,
are allowed for input VAT deduction at 5% acceleration rate during the current period. The
Company and its subsidiaries, Dalian Bingshan Air-conditioning Equipment,
Dalian Bingshan Guardian Automation, Wuhan New World Refrigeration, Dalian Universe
Thermal, Sonyo Compressor, Sonyo Refrigeration and Sonyo Refrigeration System enjoy the
tax preference.
V. Notes to Consolidated Financial Statements
The following disclosure date on this financial statement without special indication, “opening”
refers to January 1, 2025; “closing” refers to December 31, 2025; “current period” refers to the
period from January 1, 2025 to December 31, 2025; and “last period” refers to the period from
January 1, 2024 to December 31, 2024; with the currency unit RMB.
Item Closing Balance Opening Balance
Cash on hand 11,965.04 28,585.88
Cash in bank 823,429,651.62 1,011,911,100.49
Other cash and cash equivalents 56,940,349.45 30,204,058.30
Total 880,381,966.11 1,042,143,744.67
Including: sum of deposits overseas
Note1: At year-end, cash in bank includes RMB 100,934,791.55 of principal and interest
from time deposits, RMB 219,297.00 of migrant worker security deposit, and RMB
Note2: Other monetary funds are bank acceptance deposit 39,252,702.82 Yuan, deposit for
letter of guarantee is 17,687,646.63 Yuan.
(1) Category of notes receivable
Items Closing Balance Opening Balance
Bank acceptance notes 314,266,079.29 331,617,161.92
Trade acceptance notes 12,067,382.02 21,237,701.56
Total 326,333,461.31 352,854,863.48
(2) Categories according to bad debts provision method
Closing Balance
Items
Booking balance Provision Booking value
Amount % Amount %
Bad debts
provision based on 327,644,277.68 100.00 1,310,816.37 0.40 326,333,461.31
group
Including: bank
acceptance notes
Trade acceptance
notes
Total 327,644,277.68 100.00 1,310,816.37 0.40 326,333,461.31
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debts
provision based on 354,276,459.03 100.00 1,421,595.55 0.40 352,854,863.48
group
Including: bank
acceptance notes
Trade acceptance
notes
Total 354,276,459.03 100.00 1,421,595.55 0.40 352,854,863.48
Closing Balance
Items
Booking balance Provision Provision（%）
Bank acceptance notes 314,266,079.29 - -
Trade acceptance notes 13,378,198.39 1,310,816.37 9.80
Total 327,644,277.68 1,310,816.37 —
(3) Bad debt provision of notes receivable accrued, collected and reversed
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Balance
reversed
Bad debt
provision
Total 1,421,595.55 1,300,625.34 1,411,404.52 - 1,310,816.37
(4) Pledged notes receivable up to the end of year: none
(5) Notes receivable endorsed or discounted but not mature at the end of year
Item Closing amount Closing amount still
derecognized recognized
Bank acceptance notes - 142,037,177.99
Trade acceptance notes - 5,437,790.21
Total - 147,474,968.20
(6) Notes receivable written off: none
(1) Aging of accounts receivable
Account Age Closing Balance Opening Balance
Within 1 year（incl 1 year） 1,092,696,615.62 995,252,568.14
Over 3 years 546,218,423.95 484,919,878.50
Of which: 3-4years 165,231,453.24 113,036,063.46
Over 5 years 314,196,389.14 246,086,205.42
Total 2,261,455,658.30 2,071,854,972.75
(2) Category of accounts receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on individual basis
Bad debt provision
on group
Including: aging as
characteristics of 2,248,418,623.94 99.42 616,493,877.94 27.42 1,631,924,746.00
credit risk
Total 2,261,455,658.30 100.00 626,723,361.84 27.71 1,634,732,296.46
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on individual basis
Bad debt provision
on group
Including: aging as
characteristics of 2,058,783,031.94 99.37 569,356,233.50 27.65 1,489,426,798.44
credit risk
Total 2,071,854,972.75 100.00 579,620,623.85 27.98 1,492,234,348.90
Opening balance Closing Balance
Name Accounts Provision for Accounts Provision for Proportion Reason
receivable bad debts receivable bad debts (%)
Full
recovery
Company 1 6,496,000.00 5,244,096.20 6,496,000.00 5,244,096.20 80.73
is not
expected
Recovery
Other
company 1
expected
Total 13,071,940.81 10,264,390.35 13,037,034.36 10,229,483.90 —
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within 1 year 1,092,696,615.62 50,587,440.59 4.63
Over 5 years 307,741,477.94 307,741,477.94 100.00
Total 2,248,418,623.94 616,493,877.94 —
(3) Bad debt provision of current period
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Others Balance
reversed
Bad debt
provision
Total 579,620,623.85 60,424,205.96 10,916,559.22 6,605,600.12 4,200,691.37 626,723,361.84
(4) Accounts receivable written off in current period
Item Written off amount
Receivable actually written off 6,605,600.12
(5) Top 5 receivables and contract assets
The sum of top 5 of receivables and contract assets is 306,401,965.76Yuan, represents 12.49%
of closing balance of receivables and contract assets and bad debt provision of
(1) contract asset
Closing Balance
Items
Booking balance Provision Carrying amount
Undue warranty 178,324,350.44 22,629,454.12 155,694,896.32
Unsettled receivable of revenue
recognized over time
Total 190,777,994.50 28,961,066.11 161,816,928.39
(continued)
Opening balance
Items
Booking balance Provision Carrying amount
Undue warranty 198,615,784.30 21,724,512.68 176,891,271.62
Unsettled receivable of revenue
recognized over time
Total 215,239,670.94 30,478,730.62 184,760,940.32
(2) Significant change of the account
Items Amount Reason
Undue warranty -20,291,433.86 Change of consolidation scope
Unsettled receivable of revenue
-4,170,242.58 Settled during the year
recognized over time
Total -24,461,676.44
(3) Category of contract asset based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on individual basis
Bad debt provision
on group
Including: aging as
characteristics of 189,068,045.70 99.10 27,251,117.31 14.41 161,816,928.39
credit risk
Total 190,777,994.50 100.00 28,961,066.11 15.18 161,816,928.39
(continued)
Opening Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on individual basis
Bad debt provision
on group
Including: aging as
characteristics of 213,529,722.14 99.21 28,768,781.82 13.47 184,760,940.32
credit risk
Total 215,239,670.94 100.00 30,478,730.62 14.16 184,760,940.32
Opening balance Closing Balance
Name Accounts Provision for Accounts Provision for Proportion Reason
receivable bad debts receivable bad debts (%)
Recovery is not
Other companie2 1,709,948.80 1,709,948.80 1,709,948.80 1,709,948.80 100.00
expected
Total 1,709,948.80 1,709,948.80 1,709,948.80 1,709,948.80 —
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within 1 year 108,250,259.86 6,550,204.80 6.05
Over 5 years 3,264,580.83 3,264,580.83 100.00
Total 189,068,045.70 27,251,117.31 —
(4) Bad debt provision of current period
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Others Balance
reversed
Undue
warranty
Unsettled
receivable of
revenue 9,046,187.62 817,027.40 2,422,605.95 - - 7,440,609.07
recognized
over time
Total 30,478,730.62 4,221,810.65 5,739,475.16 - - 28,961,066.11
(5) Contract asset actually written off
None
(1) Category of finance receivable
Items Closing Balance Opening Balance
Bank acceptance notes 335,460,836.49 382,073,283.27
Total 335,460,836.49 382,073,283.27
(2) Category of accounts receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on group
Including: bank
acceptance notes
Total 335,460,836.49 100.00 - - 335,460,836.49
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on group
Including: aging as
characteristics of 382,073,283.27 100.00 - - 382,073,283.27
credit risk
Total 382,073,283.27 100.00 - - 382,073,283.27
(3) Pledged notes receivable up to the end of year.
Items Closing pledged amount
Bank acceptance notes 2,720,000.00
Total 2,720,000.00
(4) Receivables Financing that have been endorsed or discounted at the year-end and not yet
due on the balance sheet date.
Items Amount Derecognised Amount Not Derecognised
at Year-End at Year-End
Bank acceptance notes 238,072,334.72
Total 238,072,334.72
Items Closing Balance Opening Balance
Dividend receivable - 11,150.00
Other receivables 43,032,866.40 45,748,416.06
Total 43,032,866.40 45,759,566.06
(1) Classification
Company Closing Balance Opening Balance
Wuhan Steel and Electricity Co., Ltd. - 11,150.00
Total - 11,150.00
(1) The categories of other receivable according to nature
Items Closing Balance Opening Balance
Receivables and payables 31,017,128.68 31,791,903.41
Security deposit 38,899,378.49 30,974,881.78
Petty cash 2,363,019.14 3,488,045.56
Others 8,451,091.73 17,138,048.40
Total 80,730,618.04 83,392,879.15
(2) Aging of other receivable
Account Age Closing Balance Opening Balance
Within 1 year（incl 1 year） 26,964,869.71 33,984,236.78
Over 3 years 42,246,170.72 42,015,269.86
Of which: 3-4years 3,197,916.80 6,493,865.77
Over 5 years 33,729,210.39 11,562,464.00
Total 80,730,618.04 83,392,879.15
(3) Category of other receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on individual basis
Bad debt provision
on group
Including: aging as
characteristics of 55,904,037.10 69.25 12,871,170.70 23.02 43,032,866.40
credit risk
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Total 80,730,618.04 100.00 37,697,751.64 46.70 43,032,866.40
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision
on individual basis
Bad debt provision
on group
Including: aging as
characteristics of 58,576,298.21 70.24 12,827,882.15 21.90 45,748,416.06
credit risk
Total 83,392,879.15 100.00 37,644,463.09 45.14 45,748,416.06
Opening balance Closing Balance
Name Accounts Provision for Accounts Provision for Proportion Reason
receivable bad debts receivable bad debts (%)
Transfer of debt Recovery is not
receivables expected
Dalian Shengda
Recovery is not
Construction 3,878,617.15 3,878,617.15 3,878,617.15 3,878,617.15 100.00
expected
Engineering Co., Ltd
QINGDAO FREE
TRADE PORT
ZONE
applied for enforcement
INTERNATIONAL
COLD CHAIN
recovered in full
LOGISTICS
TRADE CENTER
CO.,LTD.
Mudanjiang Preserved in litigation
Zhongnongpi Cold 300,000.00 300,000.00 300,000.00 300,000.00 100.00 and not expected to be
Chain Logistics Co., recovered
Opening balance Closing Balance
Name Accounts Provision for Accounts Provision for Proportion Reason
receivable bad debts receivable bad debts (%)
Ltd
Chengdu Dading
Century Plaza Hotel - - 15,000.00 15,000.00 100.00
Co., Ltd.
Recovery is not
Chen xiujuan 2,000.00 2,000.00 - - 100.00
expected
Recovery is not
Chen yanhao 1,600.00 1,600.00 - - 100.00
expected
Recovery is not
Zheng Jinlian 1,400.00 1,400.00 - - 100.00
expected
Total 24,816,580.94 24,816,580.94 24,826,580.94 24,826,580.94 — —
Closing Balance
Aging Accounts Provision for Drawing proportion
receivable bad debts (%)
Within 1 year 30,327,292.96 1,098,987.67 3.62
Over 5 years 9,744,989.45 8,265,209.56 84.81
Total 55,904,037.10 12,871,170.70 —
Expected credit
Bad debt Expected credit Expected credit loss
loss within the
provision loss within 12 within the whole period
whole period (no
months (impairment incurred)
impairment)
Opening
balance
Opening
balance during — — — —
the year
--transfer to the
--transfer to the
- - - -
--reverse to the
- - - -
----reverse to
- - - -
the 1st stage
Accrued - 876,253.54 876,253.54
Reverse 459,415.90 - 358,549.09 817,964.99
Cancelation - - - -
Written off - - 5,000.00 5,000.00
Other
- - - -
movement
Closing
balance
(4) Provision for bad debt
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Others Balance
reversed
Bad debt
provision
Total 37,644,463.09 876,253.54 817,964.99 5,000.00 - 37,697,751.64
(5) Other receivables written off in current period: none.
Item Amount to be written off
Other receivables written off actually 5,000.00
(6) Other receivables from the top 5 debtors based on closing balance
Closing
Closing % of
Name Category Aging Balance of
Balance total
Provision
Wuhan Xinluhe
Economic and Trade Rent 7,302,220.59 Within 1 year 9.05 267,261.27
Co., Ltd.
Dalian Shahekou
District Tax Bureau, Export Tax
State Taxation Rebate
Administration
Hangzhou Zhonghong
New Energy Deposit 2,476,894.20 4-5years 3.07 1,719,212.26
Technology Co., Ltd
Moyu County Bureau
Deposit 2,049,000.00 Over 5 years 2.54 2,049,000.00
of Agriculture
Within 1 year
Dalian Detai Ganghua
Deposit 1,613,841.02 1-2years 2.00 107,236.58
Gas Co., Ltd.
Over 5 years
Total — 19,643,628.58 — 24.34 4,369,691.33
(1) Aging of prepayments
Closing Balance Opening Balance
Items Amount Percentage Amount Percentage
(%) (%)
Within 1 year 130,263,633.64 83.53 140,193,253.25 85.46
Over 3 years 4,545,568.67 2.91 4,296,563.25 2.62
Total 155,955,569.06 100.00 164,042,640.06 100.00
(2) Prepayments from the top 5 debtors based on closing balance
The sum of top 5 of prepayment is 63,017,743.00Yuan, represents 40.41% of closing
balance of prepayment.
(1) Categories of inventories
Closing Balance
Item
Book value Provision for decline Net book value
Cost to fulfill the contract 521,572,675.61 9,498,861.27 512,073,814.34
Finished goods 503,019,831.34 32,128,363.66 470,891,467.68
Raw materials 249,299,190.00 31,547,632.17 217,751,557.83
Working in progress 195,106,532.38 33,352,936.35 161,753,596.03
Self-manufactured
semi-finished products
Goods on transit 23,330,604.92 351,397.26 22,979,207.66
Materials on consignment
for further processing
Low-value consumable 183,600.81 - 183,600.81
Total 1,542,471,456.92 106,879,190.71 1,435,592,266.21
(Continued)
Opening Balance
Item
Book value Provision for decline Net book value
Cost to fulfill the contract 544,464,520.45 12,895,734.89 531,568,785.56
Merchandise Inventory 453,823,794.09 41,658,999.95 412,164,794.14
Raw materials 264,329,161.20 33,708,343.75 230,620,817.45
Working in progress 172,761,094.92 19,583,788.41 153,177,306.51
Self-manufactured
semi-finished products
Goods Issued 11,060,053.54 - 11,060,053.54
Materials on Consignment
for Processing
Low-value Consumables 213,692.47 - 213,692.47
Total 1,501,500,655.81 107,846,867.00 1,393,653,788.81
(2) Provision for decline in the value of inventories and contract fulfillment costs
Increase Decrease
Opening Closing
Item Others Reverse/ Others
Balance Accrual Balance
transferred Written- off transferred
Raw materials 33,708,343.75 1,516,311.47 - 3,677,023.05 - 31,547,632.17
WIP 19,583,788.41 12,261,501.83 15,064,649.38 13,557,003.27 - 33,352,936.35
Increase Decrease
Opening Closing
Item Others Reverse/ Others
Balance Accrual Balance
transferred Written- off transferred
Finished goods 41,658,999.95 9,477,287.51 - 19,007,923.80 - 32,128,363.66
Cost to fulfill
the contract
Goods Issued - 351,397.26 - - - 351,397.26
Total 107,846,867.00 23,606,498.07 15,064,649.38 39,638,823.74 - 106,879,190.71
Accrual for provision for decline in the value of inventories
Basis for net realizable value Reasons for
Item
recognition reverse/write-off
Raw materials The amount deducting the expected Sold
WIP cost to product completion, selling Sold
Finished goods expense and relative tax from the Sold
Cost to fulfill the contract estimated selling price. Sold
Item Closing Balance Opening Balance
Long term receivable due within 1 year 359,632.86 57,550.43
Total 359,632.86 57,550.43
Item Closing Balance Opening Balance
Input VAT deductible 29,743,674.42 23,990,929.71
Prepaid VAT 3,213,956.72 139,723.58
Prepaid income tax 1,898,839.02 2,123,365.65
Contract acquisition costs 28,301.88 1,267,914.24
Deferred expenses 14,604.88 114,445.28
Total 34,899,376.92 27,636,378.46
(1) Details
Item Closing Balance Discounted rate
Carrying
Provision Book value
amount
Goods sold on installment
receivables
---Unrealized financing income -192,402.25 - -192,402.25 3.5%-4.35%
Reclassified to current portion of
long-term receivables
Total 1,307,612.57 91,794.40 1,215,818.17 -
(continue)
Item Beginning Balance Discounted rate
Carrying amount Provision Book value
Goods sold on installment
receivables
---Unrealized financing
-22,010.37 - -22,010.37 4.35%
income
Reclassified to current
portion of long-term 57,550.43 - 57,550.43 -
receivables
Total 150,589.20 10,571.36 140,017.84 -
(2) Category of long-term receivable based on bad debt provision method
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision on group 1,307,612.57 100 91,794.40 7.02 1,215,818.17
Including: portfolios with aging
as the credit risk characteristic
Reclassified to long-term
receivables due within one year
Total 1,307,612.57 100 91,794.40 7.02 1,215,818.17
Beginning Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Bad debt provision on group 150,589.20 100 10,571.36 7.02 140,017.84
Including: portfolios with aging
as the credit risk characteristic
Reclassified to long-term
receivables due within one year
Total 150,589.20 100 10,571.36 7.02 140,017.84
(3) Provision for bad debts on long-term receivables by group
Closing Balance
Items
Booking balance Provision %
Within one year 1,307,612.57 91,794.40 7.02
Total 1,307,612.57 91,794.40 —
Bad debt Expected credit Expected credit loss Expected credit loss
Total
provision loss within 12 within the whole period within the whole period
months (no impairment) (impairment incurred)
Opening
balance
Opening
balance during — — — —
the year
--transfer to the
- - - -
--transfer to the
- - - -
--reverse to the
- - - -
----reverse to
- - - -
the 1 stage
st
Accrued 81,223.04 - - 81,223.04
Reverse - - - -
Cancelation - - - -
Written off - - - -
Other
- - - -
movement
Closing balance 91,794.40 - - 91,794.40
(4) Bad debt provision of long-term receivable for the year
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Others Balance
reversed
Bad debt
provision
Change during the year
Opening Closing
Category Accrued Collected/
balance Written-off Others Balance
reversed
Total 10,571.36 81,223.04 - - - 91,794.40
Increase/Decrease
Gains and
losses Adjustment of Cash bonus Provision for Provision for
Investee Beginning balance recognized other Change of or profits impairment Ending balance
Increased Decreased Others impairment
under the comprehensive other equity announced to of the current
equity income issue period
method
Associates
Dalian Honjo Chemical
Co., Ltd
Keihin-Grand Ocean
Thermal Technology 53,322,286.73 -3,708,228.87 49,614,057.86
(Dalian)Co.,Ltd.
Dalian Fuji Bingshan
Vending Machine Co., 67,096,098.78 23,465.56 67,119,564.34
Ltd.
MHI Bingshan
Refrigeration (Dalian) 16,746,474.97 306,576.57 17,053,051.54
Co.,Ltd.
Dalian Fuji Bingshan
Vending Machine Sales -
Co., Ltd
Jiangsu Jingxue
Insulation Technology 145,535,400.55 *.** 3,220,344.00 *.**
Co.,Ltd (N4)
Dalian Bingshan Metal
Technology Co.,Ltd.
Dalian Bingshan Group
Huahuida Financial 46,632,671.24 *.** 547,301.29 *.**
Leasing Co., Ltd
Wuhan Sikafu Power
Control Equipment Co., 6,486,685.87 322,459.13 6,809,145.00
Ltd
Increase/Decrease
Gains and
losses Adjustment of Cash bonus Provision for Provision for
Investee Beginning balance recognized other Change of or profits impairment Ending balance
Increased Decreased Others impairment
under the comprehensive other equity announced to of the current
equity income issue period
method
Indonesia PT
BINGSHAN MAKMUR 1,800,000.00 31,853.68 1,831,853.68
INDONESTA
Total 481,973,415.36 1,800,000.00 31,082,949.20 31,827,446.25 483,028,918.31
Item Closing Balance Opening Balance
Financial assets classified as FVTPL 1,683,852.59 1,683,852.59
Including: equity instruments 1,683,852.59 1,683,852.59
Total 1,683,852.59 1,683,852.59
(1) Investment property measured as cost model
Property&
Item Land-use-rights Total
building
I. Initial cost
(1) Purchased externally - - -
(2) Transferred from inventory /
fixed assets / construction in 22,647,581.31 - 22,647,581.31
progress
(1) disposal - - -
(2) others 14,181,496.72 - 14,181,496.72
II. Accumulated depreciation — — —
(1) accrued/amortization 6,090,935.17 521,888.76 6,612,823.93
(2) Transferred from inventory /
fixed assets / construction in 325,973.08 - 325,973.08
progress
(1) disposal - - -
(2) others 1,891,180.65 - 1,891,180.65
III. Impairment reserve — — —
Property&
Item Land-use-rights Total
building
IV. Book value — — —
(2) Investment property without ownership certificate: none.
Items Closing Book Value Opening Book Value
Fixed asset 1,258,712,033.63 1,211,794,069.63
Fixed asset disposal - -
Total 1,258,712,033.63 1,211,794,069.63
(1) Fixed assets detail
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
I. Initial cost
(1) Purchase 78,603,537.68 10,212,160.51 534,221.78 5,385,359.45 94,735,279.42
(2) Transferred from
construction-in- 21,865,927.39 47,153,665.60 648,921.23 4,133,701.38 73,802,215.60
progress
(3) Transferred from
investment
(1) Disposal 419,331.99 22,952,350.15 2,007,835.01 10,148,847.47 35,528,364.62
(2) transferred to
investment property
II. Accumulated
depreciation
(1) Accrued 29,410,611.73 85,625,554.96 1,348,519.13 14,470,713.22 130,855,399.04
(2) Investment 1,891,180.65 - - - 1,891,180.65
Property& Machinery Transportation Other
Item equipment Total
buildings equipment equipment
(1) Disposal 10,018.16 21,187,981.80 1,788,503.84 9,658,535.62 32,645,039.42
(2) transferred to
investment
III. Impairment
reserve
(1) Disposal 12,078.54 624,920.07 - 139,376.02 776,374.63
IV.Book value
(2)Fixed assets without ownership certificate
Item Book value Reason
The self-constructed houses of Songyang
Compressor, a subsidiary of the Company,
have obtained the relevant certificates for the
Buildings and structures 92,683,534.49 land use rights they occupy in 2025. The
processing procedures for the relevant house
property ownership certificates have been
initiated but not yet completed.
The Company acquired real estate at the end
Buildings and structures 26,255,812.26 of the year, for which the property ownership
certificates have not yet been completed.
Owing to a change in land use purpose,
Songyang Refrigeration, a subsidiary of the
Lithium Bromide Laboratory 5,372,235.00
Company, is unable to process property
ownership certificates.
Due to incomplete formalities, Bingshan Air
Conditioning, a subsidiary of the Company,
JAL Apartment 1,713,976.20
is unable to obtain property ownership
certificates.
Item Closing book value Opening book value
Construction-in-progress 15,669,392.61 86,221,660.80
Construction materials - -
Total 15,669,392.61 86,221,660.80
(1) Construction-in-progress details
Closing balance Opening balance
Item
Book balance Provision Book Value Book balance Provision Book value
Buildings &
- - - 29,766,943.79 - 29,766,943.79
reconstruction
Improvement
of machinery
Software of
intelligent 4,639,204.94 - 4,639,204.94 2,128,888.58 - 2,128,888.58
manufacture
Total 15,669,392.61 15,669,392.61 101,286,310.18 15,064,649.38 86,221,660.80
(2) Change in the significant construction in progress
Decrease
Opening Transfer to FA/ Closing
Name Increase Other
balance Intangible balance
decrease
assets
Renovation of
buildings and 26,825,229.07 14,612,780.26 18,129,877.56 23,308,131.77 -
ancillary facilities
Installation and
renovation of
machine tools and
machinery
Total 77,207,364.64 48,893,939.69 65,888,716.59 49,406,885.25 10,805,702.49
(Continued)
Including:
Percent of
Progress Accumulated accumulated Interest
investment Source of
Name Budget of capitalized capitalized capitalization
against funds
construction interest interest of the Rate (%)
budget (%)
year
Renovation of buildings and Self-
ancillary facilities 18,129,877.56 100.00 100.00 - - -
financing
Installation and renovation of Self-
machine tools and machinery 11,451,116.60 96.32% 96.32% - - -
financing
Total 29,580,994.16 — — — — — —
(3) Impairment provision
Closing
Item Opening balance Increase Decrease Reason
balance
Buildings & Machine tools 15,064,649.38 — 15,064,649.38 — —
Total 15,064,649.38 — 15,064,649.38 — —
Property/ Transportation Electronic
Item Machinery Land use right Software Total
buildings equipment equipment
I. Initial cost
(1) lease in 1,343,940.55 - 138,314.79 - 5,002,740.91 - 6,484,996.25
(1) Disposal 13,341,013.99 - - - - - 13,341,013.99
(2) Transferred to fixed
assets
II. Accumulated
amortization
(1) Accrued 2,595,727.12 385,667.82 88,513.36 160,533.84 738,369.16 75,078.96 4,043,890.26
(1) Disposal 5,204,974.23 - - - - - 5,204,974.23
(2) Transferred to fixed
- 1,356,471.64 172,876.72 - - - 1,529,348.36
assets
Property/ Transportation Electronic
Item Machinery Land use right Software Total
buildings equipment equipment
III. Impairment
reserve
IV. Book value
Non-
Item Land use right Patent Others Total
Patent
I. Initial cost
(1) Purchase 63,038,016.83 - - 716,029.24 63,754,046.07
(2) Transferred from
- - - 1,333,293.90 1,333,293.90
construction-in-progress
(3) increase via merge - - - - -
(1) Disposal - - - 11,421,757.56 11,421,757.56
II. Accumulated
amortization
(1) Accrued 6,274,078.29 1,429,516.20 499,968.00 7,788,993.04 15,992,555.53
(1) Disposal - - - 10,335,632.22 10,335,632.22
III. Impairment
provision
(1) Accrued - - - - -
(1) Disposal - - - - -
IV. Book value
(1) Original cost of goodwill
Opening Closing
Name Increased Decreased
Balance Balance
Sonyo Compressor (Dalian)Co.,Ltd 240,922,872.80 - - 240,922,872.80
Sonyo Refrigeration (Dalian) Co., Ltd. 38,056,663.52 - - 38,056,663.52
Sonyo Refrigeration System (Dalian)
Co., Ltd. 5,671,836.12 - - 5,671,836.12
Dalian Universe Thermal Technology
Co.,Ltd. 1,440,347.92 - - 1,440,347.92
Dalian Bingshan Group Engineering
Co., Ltd 310,451.57 - - 310,451.57
Total 286,402,171.93 - - 286,402,171.93
(2) Goodwill impairment provision
In the year 2015, the book value of equity investment of Dalian Universe Thermal Technology
Co.,Ltd (Former name: Dalian Sanyo High-efficient Refrigeration System Co., Ltd) exceeds the fair
value of the proportion of the acquired company’s identifiable net asset. The difference between the
book value of equity investment of 48,287,589.78 Yuan and the identifiable net asset’s fair value of
Dalian Sanyo High-efficient Refrigeration System Co., Ltd of 46,847,241.86 Yuan on the acquisition
date of July 31st ,2015 is recognized as goodwill of 1,440,347.92 Yuan on The Company
consolidated financial report at the end of the year.
In the year 2016, Dalian Bingshan Group Engineering Co., Ltd purchases shares of Dalian
Bingshan Baoan Leisure Industry Co., Ltd and gains control. The transferred price is based on the
net asset of Dalian BingshanBaoan Leisure Industry Co., Ltd on June 30th, 2016. Negotiated with
Dalian Bingshan Baoan Leisure Industry Co., Ltd’s shareholder Baoan Water Project (China)
Limited Company, the transfer price is the combination cost on the purchasing date which is
Company’s identifiable net asset is 5,049,096.85 Yuan on the purchasing day, therefore, goodwill is
Dalian Bingshan Baoan Leisure Industry Co., Ltd in 2019.
In 2022, the Company purchased 60% of the shareholdings of Sonyo Compressor
(Dalian)Co.,Ltd from Sanyo Electric (China)Co.,Ltd, and negotiated with Sanyo Electric
(China)Co.,Ltd to determine the share transfer consideration of 929,148,000.00 Yuan. After the
transaction, Sonyo Compressor (Dalian)Co.,Ltd became a subsidiary. This transaction is a business
combination not under same control, cost of combination is the FV of previous shareholdings on
acquisition date plus 60% shareholdings acquisition consideration, which is 1,548,580,000Yuan in
total. Goodwill of 240,922,872.80 Yuan is recognized for the difference between the share of FV of
net identifiable asset of acquiree, 1,307,657,127.20Yuan and cost of combination on acquisition date.
In 2022, the Company purchased 30% of the shareholdings of Sonyo Refrigeration System
(Dalian) Co., Ltd. from Panasonic Corporation of china Co., LTD and 25% shareholdings of Sonyo
Refrigeration System (Dalian) Co., Ltd from Panasonic Appliances cold Chain (Dalian)Co.Ltd. The
negotiated share transfer consideration of 81,735,060.00 Yuan. After the transaction, Sonyo
Compressor (Dalian)Co.,Ltd became a subsidiary. This transaction is a business combination not
under same control, cost of combination is the FV of previous shareholdings on acquisition date plus
of acquire, 105,785,063.87Yuan and cost of combination on acquisition date.
In 2023, the Company purchased 40% of the shareholdings of Sonyo Refrigeration (Dalian) Co.,
Ltd. from Panasonic Corporation of China Co., LTD and 60% shareholdings of Sonyo Refrigeration
(Dalian) Co., Ltd from Sanyo Electric (China)Co.,Ltd. This transaction is a business combination not
under same control, cost of combination is the consideration of 145,285,500.00 Yuan for share
transfer. Goodwill of 38,056,663.52Yuan is recognized for the difference between the share of FV of
net identifiable asset of acquire. 107,228,836.48Yuan and cost of combination on acquisition date.
The book value of goodwill from business combination shall be allocated into the relevant asset
group using the reasonable method since acquisition date, and be tested for impairment on related
asset groups containing goodwill by professional appraisal companies or use evaluation models to
predict the recoverable amount of related asset groups containing goodwill in accordance with the
present value of future cash flows including gross profit rate, sales growth rate (2.81%-7.05%),
discount rate(10.51%-12.64%) and other parameters in the next 5 years. No goodwill impairment has
been found when the recoverable amount of asset group for testing is higher than its book value.
Opening Other Closing
Item Increase Amortization
Balance Decrease balance
Greenland of new factory 2,155,945.54 - 892,115.52 - 1,263,830.02
Employee’s dormitory use
right
Membership fee for golf 357,500.00 - 16,500.00 - 341,000.00
Renovation and rebuilding 1,734,482.95 - 428,019.93 - 1,306,463.02
Amortization of instruments 111,479.45 - 65,284.78 - 46,194.67
Software maintenance 40,416.57 287,064.01 72,528.91 - 254,951.67
Major repair expenditure of
fixed assets - 1,912,884.43 270,352.73 - 1,642,531.70
Total 5,719,603.26 2,199,948.44 1,883,280.22 - 6,036,271.48
(1) Deferred tax assets without offsetting
Closing balance
Item Deductible temporary
Deferred tax assets
difference
Provision for credit impairment 482,046,079.42 85,510,657.91
Provision for impairment of
assets 125,545,107.70 18,940,837.38
FA depreciation 67,744,518.27 10,161,677.74
Unrealized revenue 15,884,175.46 3,971,043.86
Accrued sales rebates 24,531,204.35 3,679,680.65
Government grant 22,104,227.00 3,315,634.05
Unrealized profit from
intra-group transactions 13,034,503.47 1,955,175.52
Lease liability 8,577,510.50 1,409,588.02
Accrued expenses 6,622,174.17 993,326.13
Provisions 2,300,208.22 378,141.28
Safety cost 1,988,616.80 298,292.52
Others 8,809,354.66 1,321,403.20
Total 779,187,680.02 131,935,458.26
(continue)
Beginning balance
Item Deductible temporary
Deferred tax assets
difference
Provision for credit impairment 435,919,173.38 75,919,841.22
Provision for impairment of assets 134,581,459.34 20,319,705.43
FA depreciation 54,071,935.80 8,110,790.37
Accrued sales rebates 16,775,734.14 2,516,360.12
Unrealized profit from intra-group
transactions 13,034,503.47 1,955,175.52
Unrealized revenue 12,912,057.50 3,228,014.38
Government grant 12,244,929.32 1,836,739.40
Lease liability 9,109,228.24 1,470,613.49
Accrued expenses 7,223,987.87 1,083,598.18
Provisions 2,301,229.56 378,294.47
Others 1,460,577.94 219,086.69
Total 699,634,816.56 117,038,219.27
(2) Deferred tax liabilities without offsetting
Item Closing balance
Taxable temporary Deferred tax
difference liabilities
Revaluation increase in business
combination asst not under same control 191,185,027.14 28,677,754.07
FA depreciation 36,122,663.18 5,418,399.49
Use right of asset 7,014,886.01 1,172,551.35
Total 234,322,576.33 35,268,704.91
(Continue)
Item Opening balance
Taxable temporary Deferred tax
difference liabilities
Revaluation increase in business
combination asst not under same control 216,909,045.47 32,536,356.82
FA depreciation 40,073,339.62 6,011,000.94
Use right of asset 8,262,320.31 1,339,915.36
Total 265,244,705.40 39,887,273.12
(3) Net deferred tax asset or liability
Offset amount
Offset amount at Closing balance of at the Opening balance of
Item
the year-end net of DTA/DTL beginning of net of DTA/DTL
the year
Deferred tax
assets
Deferred tax
liabilities
(4) Unrecognized deferred tax assets details
Item Closing balance Opening balance
Deductible temporary difference 172,621,148.01 77,793,766.46
Deductible loss 558,446,860.19 518,523,346.16
Total 731,068,008.20 596,317,112.62
(5) Unrecognized deductible loss of deferred tax assets expired years
Year Closing balance Opening balance Notes
Total 558,446,860.19 518,523,346.16 -
Closing Balance Opening balance
Category Carrying Carrying
Book value Provision Book value Provision
amount amount
Debt offset
housing
Prepayments
for
Closing Balance Opening balance
Category Carrying Carrying
Book value Provision Book value Provision
amount amount
equipment
Total 20,496,180.86 1,455,755.51 19,040,425.35 21,770,721.00 1,609,486.12 20,161,234.88
At the year end
Item
Book value Carrying amount Type Restriction
Guarantee
Monetary fund 59,004,453.72 59,004,453.72 Frozen deposit/ frozen
bank account
Notes receivable Pledged Pledged
Financing of receivable 2,720,000.00 2,720,000.00 Pledged Pledged
FA 89,706,820.32 56,697,340.72 Mortgage Mortgage
Intangible asset 8,266,573.44 5,091,198.31 Mortgage Mortgage
Investment property 38,955,728.90 30,395,181.55 Mortgage Mortgage
Total 198,653,576.38 153,908,174.30
(continued)
At the beginning of the year
Item
Book value Carrying amount Type Restriction
Guarantee
Monetary fund 40,157,949.96 40,157,949.96 Frozen deposit/ frozen
bank account
Notes receivable 8,555,115.03 8,555,115.03 Pledged Pledged
Financing of receivable 129,115,879.46 129,115,879.46 Pledged Pledged
FA 89,706,820.32 58,150,963.78 Mortgage Mortgage
Intangible asset 8,266,573.44 5,120,297.71 Mortgage Mortgage
Investment property 38,955,728.90 31,214,402.83 Mortgage Mortgage
Total 314,758,067.11 272,314,608.77
(1) Category of short-term borrowing
Loan category Closing balance Opening balance
Credit loan 176,711,185.21 149,334,095.56
Factoring loan 19,276,014.68 15,271,202.33
Loan category Closing balance Opening balance
Mortgage loan 3,000,000.00 2,000,000.00
Bill discounting loan 2,849,265.00 678,109.37
Total 201,836,464.89 167,283,407.26
Notes Category Closing balance Opening balance
Bank acceptance notes 665,364,289.18 569,117,426.19
Total 665,364,289.18 569,117,426.19
Item Closing balance Opening balance
Material payments 955,939,453.01 860,628,492.89
Project payments 659,245,594.97 696,387,654.58
Equipment payments 36,132,610.35 38,362,719.82
Others 5,495,223.24 6,002,923.51
Total 1,656,812,881.57 1,601,381,790.80
Item Closing balance Opening balance
Dividend payable 533,156.00 533,156.00
Other accounts payable 240,934,956.55 226,828,051.96
Total 241,468,112.55 227,361,207.96
Item Closing balance Opening balance
Ordinary share dividend 533,156.00 533,156.00
Total 533,156.00 533,156.00
(1) Other payables categorized by payments nature
Payments nature Closing balance Opening balance
Supply chain platform 176,455,533.29 138,427,047.31
Reimbursed but unpaid amounts 17,773,445.30 17,093,300.41
Deposits and margins 15,516,100.96 17,352,388.67
Agency and operating fees 2,959,421.97 6,811,472.88
Maintenance fees 1,684,332.73 3,173,010.34
Current accounts 737,505.99 13,486,275.11
Trademark and technology usage
fees 162,319.48 2,403,064.87
Others 25,646,296.83 28,081,492.37
Total 240,934,956.55 226,828,051.96
(1) Contract liability
Item Closing balance Opening balance
Received in advance due from unrealized revenue 525,086,822.72 645,711,808.53
Total 525,086,822.72 645,711,808.53
(1) Category of employee’s payable
Opening
Item Increase Decrease Closing balance
balance
Short-term employee’s
payable
Post-employment benefit
–defined contribution plan
Termination benefits - 4,513,028.93 4,398,003.93 115,025.00
Total 146,734,696.02 719,348,938.05 741,479,416.95 124,604,217.12
(2) Short-term employee’s payables
Opening
Item Increase Decrease Closing balance
balance
Salaries, bonus,
allowance, and subsidy
Welfare - 30,081,689.29 29,942,821.39 138,867.90
Social insurance 121,879.20 46,600,450.63 46,711,894.72 10,435.11
Include: Medical
insurance
Supplemental
- 74,606.26 74,606.26 -
insurance
On-duty injury
insurance
Maternity insurance 10,626.83 3,828,045.39 3,838,672.22 -
Housing funds 82,173.00 52,497,912.52 52,579,140.76 944.76
Labor union and training
expenses
Reward bonus and welfare
fund
Others - 3,511,339.30 3,511,339.30 -
Total 146,537,598.85 640,211,596.93 662,276,884.00 124,472,311.78
(3) Defined contribution plan
Opening Closing
Item Increase Decrease
balance balance
Pension 191,119.00 72,313,195.89 72,487,946.09 16,368.80
Unemployment insurance 5,978.17 2,311,116.30 2,316,582.93 511.54
Total 197,097.17 74,624,312.19 74,804,529.02 16,880.34
Item Closing balance Opening balance
Enterprise income tax 9,764,102.09 15,275,100.75
Value-added tax 3,651,564.87 8,385,659.83
Real estate tax 2,987,873.81 2,658,712.33
Land use tax 1,343,645.06 1,313,359.14
City maintenance and construction tax 360,440.97 833,824.30
Stamp duty 772,391.45 711,220.14
Item Closing balance Opening balance
Education surcharge 257,457.83 595,588.79
Individual income tax 577,158.49 501,446.30
River toll fee 1,836.04 1,669.18
Total 19,716,470.61 30,276,580.76
Item Closing balance Opening balance
Long-term borrowings due within one year 219,320,544.93 139,783,355.56
Long-term payable due within one year 14,883,189.60 15,006,026.71
Lease obligation due within one year 3,177,021.87 6,631,690.45
Total 237,380,756.40 161,421,072.72
Item Closing balance Opening balance
Notes payable endorsed not derecognized 144,625,703.20 145,160,311.19
Output Vat to be carried forward 39,373,636.22 45,849,215.48
Total 183,999,339.42 191,009,526.67
(1) Category of long-term borrowing
Category Closing Balance Opening Balance
Pledged loan 333,902,223.70 501,031,874.58
Credit loans 34,426,021.48 -
Mortgage loan - 6,300,000.00
Guarantee loan - 40,014,666.67
Total 368,328,245.18 547,346,541.25
Note 1: Pledged loan of 0.6 billion Yuan is for business combination in 2022, which
comprises 0.3 billion Yuan from Dalian Zhoushuizi Branch of China Construction Bank
Corporation, 5years with 2.75% borrowing rate. 50% shareholdings of Sonyo Compressor
(Dalian)Co.,Ltd and 37.5% shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd.
were pledged. China Construction Bank Corporation will complete the guarantee in February
shareholdings of Sonyo Refrigeration System (Dalian) Co., Ltd. were pledged. Dalian Branch of
Bank of Communications Co.,Ltd will complete the guarantee in February 2023. In 2026, 100
million Yuan loan is planned to pay back to Construction bank and 54 million Yuan loan to
Communications bank.
Note 2:Pledged loans include an additional M&A loan of RMB 87.00 million from ICBC
in 2023, used to pay the consideration for the acquisition of equity interests in Songyang
Refrigeration held by Sanyo Electric and Panasonic China. The loan has a term of 7 years at an
interest rate of 2.75%. As of December 31, 2025, the outstanding balance was RMB 66.00
million, and RMB 13.00 million is scheduled to be repaid in 2026.
Note 3: In year 2016, the Development Fund from China Development Bank gave support
to the Company’s intelligent and green equipment of cold chain and service industry base
project and provided special fund to the Company’s holding shareholder, Bingshan Group. The
fund is160 million Yuan with 10year’s expiration at 1.2% rate. Once the fund arrived, Bingshan
Group gave it to the Company at the same rate of 1.2% in lump sum. The above fund needed to
be warranted by the Company. The guarantee seems to be given for the holding shareholder, but
it is for the Company itself in fact. Up to December 31, 2025, the closing balance is 40 million
Yuan and will be repaid 40 million Yuan in 2026.
Note 4: Credit loans include a new fixed asset loan of RMB 38.40 million from China
Construction Bank, used for the purchase of part of idle factory buildings, supporting structures,
machinery and electronic equipment of Bingshan Sonyo Cold Chain (Dalian) Co., Ltd. The loan
term is 5 years at an interest rate of 2.51%. As of December 31, 2025, the outstanding balance
was RMB 38.40 million, and RMB 4.00 million is scheduled to be repaid in 2026.
(1) Details of lease obligation
Category Closing balance Opening balance
Lease payment 37,530,642.51 44,764,698.58
Less: unrecognized finance expense 17,790,446.86 19,061,162.35
Non-current liability due within 1 year 3,177,021.87 6,631,690.45
Net lease liability 16,563,173.78 19,071,845.78
Item Closing Balance Opening Balance
Long term accounts payable 18,845,786.63 12,451,396.59
Total 18,845,786.63 12,451,396.59
Nature Closing Balance Opening Balance
Financial lease borrowings 18,845,786.63 12,451,396.59
Total 18,845,786.63 12,451,396.59
Nature Closing Balance Opening Balance Reason
Warranty 2,300,208.22 2,301,229.53 —
Others - 402,140.00 —
Total 2,300,208.22 2,703,369.53 —
(1) Category of deferred income
Item Opening Balance Increase Decrease Closing Balance
Government subsidy 90,733,480.29 12,734,535.29 10,674,882.85 92,793,132.73
Total 90,733,480.29 12,734,535.29 10,674,882.85 92,793,132.73
(2) Government subsidy
The value offset
To non- Related
Opening To other cost and
Government subsidy item Increase operating Others Closing Balance with asset/
Balance income expense this
income income
year
Application of NH3 and CO2
Asset
instead of R22 screw refrigerating 16,645,034.14 - - 4,269,304.80 - - 12,375,729.34
Related
machine combined condensing unit
Asset
Compressor IC system 2,432,051.11 - - 366,455.43 - - 2,065,595.68
related
Ultrasonic intelligent defrost Asset
technology related
R290 replacement of R22 large Asset
industrial screw unit related
R290 replacement of R22 industrial Asset
double stage screw unit related
Asset
Ultrasonic defrost sample project 112,500.00 - - 30,000.00 - - 82,500.00
related
Contribution to subsidiary company Asset
relocation related
Projects Supported by Central
Government Awards and Subsidies Asset
- 2,311,500.00 - 140,296.34 - - 2,171,203.66
for City Pilot Programs of related
New-Type Technological
The value offset
To non- Related
Opening To other cost and
Government subsidy item Increase operating Others Closing Balance with asset/
Balance income expense this
income income
year
Transformation in Manufacturing
Industry
Asset
Eco Compressor project 12,313,920.86 - - 1,928,006.95 - - 10,385,913.91 / Income
related
Meat storage technology and Asset
equipment related
Income
Additional Deduction of Input VAT - 781,680.29 - - - - 781,680.29
related
Total 90,733,480.29 12,734,535.29 - 10,674,882.85 — — 92,793,132.73 —
Increase/decrease（+/-）
Transfer
Opening New Closing
Item Share from
balance share Others Subtotal balance
dividend capital
issued
reserve
Total share capital 843,212,507.00 - - - - - 843,212,507.00
Opening
Items Increase Decrease Closing Balance
Balance
Share premium 669,193,413.27 - - 669,193,413.27
Other capital reserves 47,903,685.11 - - 47,903,685.11
Total 717,097,098.38 - - 717,097,098.38
Current year
Opening
Items Amount for the Less：Previously recognized Less： After-tax After-tax attribute Closing Balance
Balance
period before in profit or loss into other income attribute to the to minority
income tax comprehensive income tax parent company shareholder
I.Later can’t reclassified into
profit and loss of other - - - - - - -
comprehensive income
II. Later reclassified into profit
and loss of other 2,208,669.73 - - - - - 2,208,669.73
comprehensive income
Other comprehensive income
that can be transferred to profit 2,208,669.73 - - - - - 2,208,669.73
or loss under the equity method
Other comprehensive income
total 2,208,669.73 - - - - - 2,208,669.73
Item Opening Closing
Increase Decrease
Balance Balance
Manufacturing safety - 15,636,443.56 13,647,826.76 1,988,616.80
Total - 15,636,443.56 13,647,826.76 1,988,616.80
Item Opening Closing
Increase Decrease
Balance Balance
Statutory surplus reserve 381,004,768.39 12,371,796.37 - 393,376,564.76
Discretionary surplus reserve 514,613,745.30 15,212,024.95 - 529,825,770.25
Total 895,618,513.69 27,583,821.32 - 923,202,335.01
Note: The Company made profit distribution during the reporting period. According to the
resolution of the 2024 annual General meeting of shareholders, the discretionary surplus reserve
of RMB15,212,024.95 will be appropriated based on 20% of the net profit of the statutory
financial report for FY2024; Statutory surplus reserve of 12,371,796.37 Yuan shall be
appropriated based on 10% of the net profit of the parent company this year.
Item Current year Last year
Closing balance of last year 673,966,177.84 617,386,488.34
Add: Adjustments to the opening balance of
- -
undistributed profits
Including: additional retrospective adjustments
- -
according to the new accounting standards
Opening balance of current year 673,966,177.84 617,386,488.34
Add: net profit attributable to shareholders of
parent company in the year
Less: Provision for statutory surplus reserves 12,371,796.37 7,606,012.47
Provision for discretionary surplus reserves 15,212,024.95 20,853,061.88
Dividends payable for common shares 42,160,625.35 25,296,375.21
Closing balance of current year 666,260,524.87 673,966,177.84
(1) Details
Items Current year Last year
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from principle operation 4,326,967,344.65 3,625,212,101.98 4,435,315,179.34 3,715,591,847.99
Revenue from other operation 71,127,044.41 31,533,234.15 95,832,029.64 48,216,368.20
Total 4,398,094,389.06 3,656,745,336.13 4,531,147,208.98 3,763,808,216.19
(2) Main revenue and COS details
Northeast China Central China Total
Contract classification
Sales revenue Cost of sales Sales revenue Cost of sales Sales revenue Cost of sales
Classified by products
Manufacture products 3,154,267,533.55 2,568,059,923.76 145,334,463.79 99,168,542.62 3,299,601,997.34 2,667,228,466.38
Project installation 964,048,955.50 897,537,810.46 63,316,391.81 60,445,825.14 1,027,365,347.31 957,983,635.60
Other products and service 60,790,385.62 27,001,729.48 10,336,658.79 4,531,504.67 71,127,044.41 31,533,234.15
Classified by geography location
domestic 3,586,554,106.86 3,027,773,215.50 218,987,514.39 164,145,872.43 3,805,541,621.25 3,191,919,087.93
overseas 592,552,767.81 464,826,248.20 - - 592,552,767.81 464,826,248.20
Timing of goods transferred
At a point 4,179,106,874.67 3,492,599,463.70 218,987,514.39 164,145,872.43 4,398,094,389.06 3,656,745,336.13
Over the time
Total 4,179,106,874.67 3,492,599,463.70 218,987,514.39 164,145,872.43 4,398,094,389.06 3,656,745,336.13
Items Current year Last year
Property tax 10,899,150.69 10,687,349.62
City construction tax 7,144,679.03 9,022,845.50
Education surcharge 5,135,852.15 6,471,029.87
Land use tax 5,455,774.76 5,427,544.54
Stamp duty 3,060,783.95 2,988,502.65
Vehicle and vessel tax 43,874.28 48,080.08
Others 19,158.50 18,497.60
Total 31,759,273.36 34,663,849.86
Items Current year Last year
Employee compensation 138,891,531.94 152,109,707.56
Office expenses 19,781,682.82 24,204,767.58
Travel expenses 21,837,485.28 24,263,543.79
Business entertainment expenses 14,081,402.65 16,792,673.00
Advertising and bidding expenses 7,728,884.98 4,689,987.05
Maintenance and material consumption 5,097,860.32 13,375,783.32
Depreciation 2,210,845.80 2,411,651.93
Other expenses 2,273,775.28 2,862,415.72
Total 211,903,469.07 240,710,529.95
Items Current year Last year
Employee benefit 145,649,191.97 160,039,888.99
Official expense 24,076,780.83 29,418,682.12
Depreciation expense 23,165,927.70 21,417,108.80
Long-term assets amortization 12,281,390.04 14,348,155.12
Design consultant and test service expense 8,203,763.03 13,245,807.87
Patent trade mark use 7,050,333.34 10,685,467.52
Business travel expense 6,960,166.63 7,654,226.60
Maintenance and repair expense 5,532,679.27 11,254,680.61
Other taxes and fee 4,457,014.59 3,924,000.03
Safety production cost 4,432,383.64 3,880,395.28
Business entertaining expense 3,623,971.64 3,557,038.72
Insurance expense 2,240,108.01 2,645,035.92
Advertisement expense 120,620.04 583,431.31
Items Current year Last year
Other expense 1,522,433.69 2,710,495.81
Total 249,316,764.42 285,364,414.70
Items Current year Last year
Employee benefit 96,290,544.83 91,123,015.98
Raw material 26,645,104.41 33,426,263.16
Depreciation and amortization expense 14,849,414.63 17,272,044.93
Other expense 12,180,763.29 13,704,991.50
Total 149,965,827.16 155,526,315.57
Items Current year Last year
Interest expenses 22,623,993.77 33,022,192.73
Less: interest income 6,007,580.39 9,280,290.94
Add: exchange loss -1,339,955.75 -3,407,833.33
Add: others expenditure 2,689,687.65 2,667,787.47
Total 17,966,145.28 23,001,855.93
Items Current year Last year
Government subsidy 16,749,857.95 19,490,628.71
Input VAT accelerated deduction 12,217,141.65 15,785,855.84
Personal income tax handling fee refund 355,517.32 403,935.18
Premium refund 10,200.00 2,137,900.00
Gain on debt restructuring 153,730.62 -
Total 29,486,447.54 37,818,319.73
Source of gain on FV change Current year Last year
Other non-current financial assets - 27,205,532.40
Total - 27,205,532.40
Items Current year Last year
Long-term equity investment gain under
equity method 31,082,949.20 30,246,020.75
Gain from holding of other non-current
financial assets 8,362.50 5,411,654.40
Gain from disposal of other non-current
financial assets - 33,277,105.94
Gain on debt restructuring 316,365.70 2,154,769.80
Discounting fees for bank acceptance note -782,896.55 -737,835.68
Total 30,624,780.85 70,351,715.21
Items Current year Last year
Bad debt loss on receivable -49,507,646.74 -15,790,318.34
Bad debt loss on other receivable -58,288.55 -882,917.23
Bad debt loss on notes receivable 110,779.18 -536,795.36
Bad debt loss on long term receivable -81,223.04 -10,571.36
Bad debt loss on long term receivable within 1 year -27,152.32 -
Total -49,563,531.47 -17,220,602.29
Items Current year Last year
Loss on impairment of inventory and cost to
-23,606,498.07 -29,153,785.19
fulfill the contract obligation
Loss of contract asset impairment 1,517,664.51 16,725,088.49
Impairment on other non-current asset - -82,114.56
Impairment on construction in progress - -15,064,649.38
Total -22,088,833.56 -27,575,460.64
Item Current year Last year
Gain on non-current assets disposal 94,932.40 5,010,221.27
Including: gain on non-current assets
disposal not classified as held for sale
Including: gain on fixed assets disposal -94,238.91 5,185,071.48
gain on intangible assets disposal - -
gain on early derecognition of use
right asset
Total 94,932.40 5,010,221.27
（1） Non-operating income list
Amounts recognized into
Item Current year Last year
non-recurring profit or
loss for the year
Payable written-off 6,058,162.98 6,083,744.04 6,058,162.98
Penalty received 915,876.78 3,117,992.73 915,876.78
Loss claimed reverse 2,489,120.97 1,186,292.67 2,489,120.97
Gain on donation - 128,800.00 -
Gain on disposal of
non-current asset
Other items 18,842.28 923,931.55 18,842.28
Total 9,738,717.76 11,482,254.04 9,738,717.76
Amounts recognized into
Item Current year Last year non-recurring profit or
loss for the year
Non-current assets scrap loss 2,138,960.86 5,809,971.12 2,138,960.86
Compensation 3,364,102.64 2,322,513.96 3,364,102.64
Expected loss on pending litigation - 241,996.39 -
Outward donation 60,000.00 60,000.00 60,000.00
Others 1,915,454.96 1,066,222.01 1,915,454.96
Total 7,478,518.46 9,500,703.48 7,478,518.46
(1) Income tax expenses
Items Current year Last year
Current income tax expenses 25,506,099.11 36,274,871.93
Deferred income tax expenses -19,515,807.21 -24,313,548.68
Total 5,990,291.90 11,961,323.25
(2) Adjustment process of accounting profit and income tax expense
Items Current year
Consolidated total profit this year 71,251,568.70
Income tax expenses at applicable tax rate 10,687,735.31
Effect on subsidiary applied to different tax rate -3,857,841.95
Effect on prior period income tax adjustment -243,573.77
Effect on non-taxable income -4,678,769.89
Effect on non-deductible cost, expense and loss 1,971,152.07
Effect on use of deductible loss from unrecognized deferred tax assets in
-6,713,002.85
the prior period
Deferred tax assets recognized for prior period temporary difference -
Items Current year
Effect on temporary difference or deductible loss from unrecognized
deferred tax assets this year
R&D expenditure accelerated deduction -18,097,775.57
Income tax expense 5,990,291.90
(1) Cash relevant to operating activities
Items Current year Last year
Deposit returned 40,983,401.46 41,482,792.46
Lease premium received 27,952,247.38 25,014,316.79
Government grants 18,394,961.58 12,106,148.33
Receivable from the 3 party
rd
Interest income 5,471,352.10 11,356,266.86
Frozen money refund 4,393,766.19 20,924,320.43
Received travel expense refund 2,894,614.33 2,155,963.19
Compensation 1,634,914.76 2,246,739.02
Others 2,826,877.83 3,048,070.46
Total 113,584,732.57 124,986,561.38
Items Current year Last year
Expenditure 176,380,513.27 181,703,691.99
Deposit paid 41,910,455.78 37,902,779.65
Unsettled AR/AP among non-related party 6,432,358.17 3,439,560.21
Bank handling charges 2,518,910.29 2,901,472.22
Frozen accounts - 6,236,821.19
Others 1,452,369.37 2,841,796.69
Total 228,694,606.88 235,026,121.95
(2) Cash relevant to investing activities
Items Current year Last year
Cash dividend 31,846,958.75 40,030,942.29
Investment recoup - 45,841,618.00
Gain on disposal of equity investment - 212,428,461.60
Total 31,846,958.75 298,301,021.89
Items Current year Last year
Fixed-term deposit -principle 50,000,000.00 268,000,000.00
Total 50,000,000.00 268,000,000.00
Items Current year Last year
Purchase of long-term asset 192,996,925.42 78,719,169.31
Total 192,996,925.42 78,719,169.31
Items Current year Last year
Fixed-term deposit 100,000,000.00 150,000,000.00
Total 100,000,000.00 150,000,000.00
(3) Cash relevant to financing activities
Items Current year Last year
Notes payable to supplier 10,000,000.00 2,000,000.00
Sale leaseback and financial lease 2,243,624.05 1,598,937.32
Notes discounted 1,943,611.11 9,964,739.15
Others 13,069,828.95 11,480,935.05
Total 27,257,064.11 25,044,611.52
Items Current year Last year
Payment of guarantee money 21,915,722.35 18,074,898.60
Notes payable to supplier 6,204,605.00 47,750,000.00
Sale& leaseback and financial lease 5,122,010.07 20,338,159.55
Lease premium payable 2,911,875.20 3,879,173.06
Others 391,510.81 660,706.34
Total 36,545,723.43 90,702,937.55
(1) Information
Items Current year Last year
Items Current year Last year
activities:
Net profit 65,261,276.80 113,681,979.77
Add: Provision for impairment of assets 22,088,833.56 27,575,460.64
Provision for impairment of credit 49,563,531.47 17,220,602.29
Depreciation of fixed assets, Amortization of
mineral resources, and biological assets
Depreciation of right-of-use assets 4,043,890.26 5,688,436.33
Amortization of intangible assets 15,992,555.53 14,960,016.82
Amortization of long-term deferred expenses 1,883,280.22 1,844,340.48
Losses on disposal of fixed assets, intangible assets,
-94,932.40 -5,010,221.27
and long-term assets (income listed with”-”)
Losses on scrap of fixed assets (income listed
with”-”)
Change of fair value profit or loss - -27,205,532.40
Financial expense (income listed with”-”) 22,623,993.77 33,022,192.73
Investment loss (income listed with”-”) -30,624,780.85 -70,351,715.21
Decrease of deferred tax assets (increase listed
-21,591,679.71 9,896,031.82
with”-”)
Increase of deferred tax liabilities (decrease listed
with”-”)
Decrease of inventories (increase listed with”-”) -40,970,801.11 243,070,107.18
Decrease of operating receivables (increase listed
-81,255,828.05 45,124,178.28
with”-”)
Increase of operating payables (decrease listed
-26,133,996.60 -286,439,840.48
with”-”)
Others - -
Net cash flows arising from operating activities 122,211,684.48 237,154,274.44
— —
unrelated to cash income and expenses
Liabilities transferred to capital - -
Convertible bonds within 1 year - -
Financing leased fixed assets - -
— —
equivalent
Closing balance of cash 720,442,720.84 951,579,683.60
Less: Opening balance of cash 951,579,683.60 670,440,335.98
Add: Closing balance of cash equivalent - -
Items Current year Last year
Less: Opening balance of cash equivalent - -
Net increase of cash and cash equivalent -231,136,962.76 281,139,347.62
(2) Cash and cash equivalents
Items Current year Last year
Cash 720,442,720.84 951,579,683.60
Including: Cash on hand 11,965.04 28,585.88
Bank deposit used for paying at any moment 720,430,755.80 951,551,097.72
Other monetary fund for paying at any moment - -
Deposit fund in central bank available for payment - -
Cash equivalent - -
Including: bonds investment with maturity in 3 months - -
Closing balance of cash and cash equivalents 720,442,720.84 951,579,683.60
(3) Monetary fund not belonging to cash and cash equivalent
Items Current year Last year Reasons
Fixed term deposit 100,000,000.00 50,000,000.00 Held to maturity
Guarantee money for bank
acceptance note
Guarantee money for guarantee
letter
Frozen 1,844,807.27 6,512,838.08 Frozen
Interest receivable 934,791.55 406,111.11 Held to maturity
Rural workers’ salary account
- 3,190,047.46 Special account
restriction
Rural workers guarantee fund 219,297.00 251,006.12 Guarantee money
Total 159,939,245.27 90,564,061.07 —
None
(1) Monetary category of foreign currency
Closing Balance Exchange
Item Closing Balance (RMB)
(foreign currency) Rate
Cash
Including：USD 1,499,490.87 7.0288 10,539,621.43
JPY 299,345,659.00 0.044797 13,409,787.49
Euro 48,617.12 8.2355 400,386.29
Closing Balance Exchange
Item Closing Balance (RMB)
(foreign currency) Rate
HKD 372,568.89 0.90322 336,511.67
Accounts receivable — — —
Including: USD 8,627,601.32 7.0288 60,641,684.16
JPY 110,399,533.00 0.044797 4,945,567.88
Euro 672,685.70 8.2355 5,539,903.08
GBP 140,443.58 9.4346 1,325,029.00
Accounts payable — — —
Including: USD 1,398,672.47 7.0288 9,830,989.06
JPY 55,335,866.10 0.044797 2,478,880.79
(1) As a lessee
Items Current year Last year
Interest expense on lease liabilities 1,051,939.27 1,545,658.27
Short-term lease expense recognized in income statement 6,683,815.92 2,052,986.01
Low-value asset lease expense recognized in income
statement (excl short-term lease) - -
Income from the sublease of the right-of-use the assets - -
Sum of cash outflows related to leases 6,397,756.82 5,240,197.61
Cash inflow from sale and leaseback transactions - 2,000,000.00
Cash outflow from sale and leaseback transactions - 3,330,252.62
(2) As a lessor
Operating lease
Include: income related to variable lease
Items Lease income payments not included in lease payment
receivable
Office and plant 23,618,546.89
Total 23,618,546.89 -
VI. Research and development expense
Items Current year Last year
Labor cost 96,290,544.83 91,123,015.98
Material cost 26,645,104.41 33,426,263.16
Depreciation and amortization 14,849,414.63 17,272,044.93
Others 12,180,763.29 13,704,991.50
Items Current year Last year
Total 149,965,827.16 155,526,315.57
Expensed R&D 149,965,827.16 155,526,315.57
Capitalized R&D
VII. Change of Consolidation Scope
During the year, Dalian Bingshan Group Sales Co., Ltd. was merged into the
Company. In addition, Dalian Bingshan International Trade Co., Ltd. established
a subsidiary, Bingshan International Trade (Hong Kong) Co., Limited.
VIII. Interest in other entity
（1）Organization structure of group company
Registere Shareholding (%)
Main
d capital Registered Obtaining
Name of subsidiaries business Business nature
(million address Direct Indirect method
address
Yuan）
Dalian Bingshan Group
Engineering Co., Ltd.
Chengdu Bingshan
Refrigeration Engineering 1,000.00 Chengdu Chengdu Service - 51.00 Establish
Co., Ltd.
Dalian Bingshan
Air-conditioning 8,254.00 Dalian Dalian Manufacturing 100.00 - Establish
Equipment Co., Ltd.
Dalian Bingshan Guardian
Automation Co., Ltd.
Dalian
Bingshan-RYOSETSU
Quick Freezing
Equipment Co., Ltd.
Wuhan New World
Refrigeration Industrial 20,000.00 Wuhan Wuhan Manufacturing 100.00 - Acquisition
Co., Ltd.
Wuhan New World
Air-conditioning 3,500.00 Wuhan Wuhan Installation - 100.00 Establish
Refrigeration Engineering
Registere Shareholding (%)
d capital Main
Registered Obtaining
Name of subsidiaries business Business nature
(million address Direct Indirect method
address
Yuan）
Co., Ltd
Wuhan Lanning Energy Trading
Technology Co., Ltd.
Dalian Universe Thermal
Technology Co.,Ltd.
Dalian Bingshan
Engineering & Trading 3,000.00 Dalian Dalian Service 100.00 - Acquisition
Co., Ltd
Bingshan Engineering &
Hong Hong
Trading (Hong Kong)Co., 320.00 Service 100.00 Establish
Kong Kong
Ltd
Sonyo Compressor
(Dalian)Co.,Ltd.
Sonyo Refrigeration
System (Dalian) Co., Ltd.
Sonyo Refrigeration
(Dalian) Co., Ltd.
subsidiaries with over 50% voting right.
（2）There are no significant non-subsidiaries.
There is no change of equity share in subsidiary
（1）The important affiliated companies
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Shareholding (%)
Main
Name of joint ventures or Registered Business Accounting
business
affiliated companies address nature methods
address
Direct Indirect
Dalian Bingshan Metal Equity
Dalian Dalian Manufacturing 49.00 -
Technology Co., Ltd. method
affiliated company.
influence although being held 20% or more voting rights.
（2）The key financial information of affiliated companies
Closing balance/Current year
Items Closing balance/Current year Dalian
Bingshan Metal Technology Co., Ltd.
Current assets 259,850,594.91
Including: Cash and cash equivalents 92,115,701.90
Non-current assets 43,062,329.77
Total assets 302,912,924.68
Current liabilities 59,095,874.40
Non-current liabilities -
Total liabilities 59,095,874.40
Total net asset 243,817,050.28
Minority interests -
Equity to the parent company 243,817,050.28
Share of net assets according to the
shareholding proportions
Adjusting events -
—Goodwill 19,269,770.94
—Unrealized profits of insider trading -
--Others -
Book value of equity investment of affiliated
companies
Fair value of equity investment with public
offer
Operating income 435,999,785.46
Financial expense 961,657.28
Closing balance/Current year
Items Closing balance/Current year Dalian
Bingshan Metal Technology Co., Ltd.
Income tax expense 8,644,158.36
Net profit 63,368,276.71
Net profit of discontinuing operation -
Other comprehensive income -
Total comprehensive income 63,368,276.71
The current dividends received from joint
ventures
(Continued)
Opening balance/Last year
Items
Dalian Bingshan Metal Technology Co., Ltd.
Current assets 256,248,904.13
Including: Cash and cash equivalents 80,025,332.42
Non-current assets 42,099,190.29
Total assets 298,348,094.42
Current liabilities 60,317,579.55
Non-current liabilities -
Total liabilities 60,317,579.55
Total net asset 238,030,514.87
Minority interests -
Equity to the parent company 238,030,514.87
Share of net assets according to the
shareholding proportions
Adjusting events -
—Goodwill 19,269,770.94
—Unrealized profits of insider trading -
--Others -
Book value of equity investment of affiliated
companies
Fair value of equity investment with public
offer
Operating income 432,254,731.20
Financial expense -2,035,716.59
Income tax expense 9,817,260.94
Net profit 58,136,954.23
Opening balance/Last year
Items
Dalian Bingshan Metal Technology Co., Ltd.
Net profit of discontinuing operation -
Other comprehensive income -
Total comprehensive income 58,136,954.23
The current dividends received from joint
ventures
（3） Summary financial information of insignificant affiliated companies
Items Current year Last year
Affiliated company — —
Total book value of investment of affiliated
companies 344,133,540.46 346,068,692.14
The total of following items according to the
shareholding proportions — —
Net profit 32,493.61 -7,939,529.15
Other comprehensive income - -
Total comprehensive income 32,493.61 -7,939,529.15
（4） Significant restrictions of the ability of affiliated companies transferring funds to
the Company.
No.
（5） Contingency related to joint venture or affiliated company need to be disclosed.
No.
IX. Government Grant
The value
Into non-
Opening Into other offset cost Closing Related to
Items Increase operating
Balance income and Balance asset/income
income
expense
Deferred
income
Deferred
income 13,483,820.86 130,100.00 - 1,928,006.95 - 11,685,913.91 asset/income
Deferred
income - 781,680.29 - - - 781,680.29 income
Total 90,733,480.29 12,734,535.29 - 10,674,882.85 - 92,793,132.73 —
Items Current year Last year
Other income 16,749,857.95 19,798,839.71
X. Risk Related to Financial Instruments
The main financial instruments held by the group are borrowings, accounts receivable, accounts
payable, other non-current financial asset etc. The detailed explanation is referred to the note
No.V. The related risks of these financial instruments and the risk management policy conducted
to reduce these risks by the group are introduced as below. The group management conducts to
manage and monitor these risks exposure and control these risks under certain risk level.
The objectives of risk management conducted by the Company are to reach the balance between
risk and profit return by reducing the negative influence to operating performance to the
minimum level as well as maximizing the shareholders’ and other investors’ profits. Based on
these objectives, the basic risk management policy is to recognize and analyze all sorts of risk
that the Company faced with, to set up the proper risk tolerance bottom line conducting risk
management, as well as to monitor these risks in a timely and effective manner, and to ensure
these risks under the limit level.
(1) Market risk
Most of the Company’s business is located in China, and settled with RMB. But the Company
defined exchange rate risk of assets, liabilities dominated in foreign currency and future
transaction dominated in foreign currency (mainly including USD, JPY, EURO,HKD and GBP).
The financial department of the Company monitors the Company’s foreign currency transaction
and the scale of foreign assets and liabilities, and decreases exchange rate risk. During the
current year the Company did not agree any forward foreign exchange contract or currency
swap contract .As at 31st December 2025, the Company’s assets and liabilities dominated in
foreign currency are listed in RMB as following：
Items December 31, 2025 January 1, 2025
Monetary fund-USD 10,539,621.43 11,895,447.99
Monetary fund-JPY 13,409,787.49 18,978,914.14
Monetary fund- EURO 400,386.29 128,522.55
Monetary fund- HKD 336,511.67 -
Receivable -USD 60,641,684.16 52,044,382.54
Items December 31, 2025 January 1, 2025
Receivable -GBP 1,325,029.00 1,282,811.66
Receivable -JPY 4,945,567.88 7,974,729.62
Receivable - EURO 5,539,903.08 4,894,436.83
Payables -USD 9,830,989.06 2,476,583.44
Payables -JPY 2,478,880.79 3,285,251.61
Other payables - JPY - 1,582,192.94
The group paid close attention to the effect on FX risk.
he Group’s interest rate risk arises from bank borrowings. Financial liabilities bearing floating interest
rates expose the Group to cash flow interest rate risk, while financial liabilities bearing fixed interest
rates expose the Group to fair value interest rate risk. The Group determines the relative proportion of
fixed-rate and floating-rate contracts based on prevailing market conditions.
As of December 31, 2025, the total amount of RMB-denominated interest-bearing borrowings was RMB
of RMB 550,000,000.00 (December 31, 2024: RMB 686,000,000.00 in total).
The financial department of the group continuously monitors the interest rates level, and the
management would make some adjustment to lower the interest rate risk according to the latest market
situation. Climbing interest rate will increase the cost of newly increased interest-bearing liability and
interest expense for unsettled interest-bearing liability at floating rate and have adverse effect on the
business performance.
The price risk of the Company is mainly commodity price risk. The Company sells products at market
prices. As the national economy enters the "new normal", the manufacturing industry is under great
economic downward pressure, and the drastic fluctuations of bulk material prices have a certain impact
on the group 's operations.
(2) Credit risk
The credit risk of the group comes from monetary fund, notes receivable, accounts receivable, and other
accounts receivable etc. The management made credit policies and monitored changes of this credit
exposure.
The group 's monetary fund was in bank with higher credit rating, so there was no significant credit risk,
nor significant losses due to the default of other entity. Upper limit policy is adopted to avoid any credit
risk from financial institution.
The group made relevant policy to control credit risk exposure from receivable, other receivable and
notes receivable. The group assesses the client’s credit background according to the client’s financial
performance, possibility of obtaining guarantee from the 3rd party, credit record and other factors such
as current market. The group will periodically monitor the credit situation of the client and will take
measures such as prompt letter, shorten credit period or cancel the credit to ensure the overall credit risk
within the controllable scope.
As at 31st December 2025, the top five customers of receivable accounts balance are
(3) Liquidity risk
Liquidity risk was referred to the risk of shortage of funds incurred when the enterprise fulfills the
obligation of settlement by cash or other financial assets. The way to manage the liquidity risk is to
ensure enough fund available to fulfill the liability by due date in prevention from unacceptable loss of
or reputation damage to the group. The group periodically analyze the liability structure and expiry date
and the financial department of the group continued to monitors the short term or long-term capital
needs to ensure maintain plenty of cash flow. And the same time they also monitor the condition of bank
loan agreements and obtain commitments from banks to reduce liquidity risks.
The fund mainly comes from bank loan. By December 31st, 2025, the credit limit still available is 765.66
million Yuan(711.87 million Yuan 2024) and short-term credit limit available is 711.87 million
Yuan(711.87 million Yuan 2024).
non-discounted cash flow of the contracts as following：
Currency unity:10kYuan
Within 1
Items 1-2 years 2-5 years Over 5 years Total
year
Financial Assets — — — — —
Cash and cash in bank 88,038.20 - - - 88,038.20
Notes receivable 32,633.35 - - - 32,633.35
Accounts receivable 163,473.23 - - - 163,473.23
Financing receivable 33,546.08 - - - 33,546.08
Other Receivable 4,303.29 - - - 4,303.29
Contract asset 16,181.69 - - - 16,181.69
Other current asset 3,489.94 - - - 3,489.94
Other non-current
- - - 168.39 168.39
financial asset
Long-term receivable - 38.61 58.30 24.67 121.58
Within 1
Items 1-2 years 2-5 years Over 5 years Total
year
Financial Liabilities — — — — —
Short-term loan 20,183.65 - - - 20,183.65
Notes Payable 66,536.43 - - - 66,536.43
Accounts payable 165,681.29 - - - 165,681.29
Other payable 24,093.50 - - - 24,093.50
Employee’s payable 12,460.42 - - - 12,460.42
Tax payable 1,971.65 - - - 1,971.65
Non-current liability
due within 1 year
Long-term loan - 10,006.33 26,826.50 - 36,832.83
Lease obligation - 170.65 362.76 1,122.91 1,656.32
Long-term payable - 575.50 1,309.07 - 1,884.57
(1) Classified by transfer method
Transfer method Nature Amount Derecognition Basis for
derecognition
Bank All risk and
Endorsement of a bill acceptance 231,636,347.25 Y reward have
bill with high been transferred
credit
Bank rating All risk and
Discounting a bill acceptance 6,435,987.47 Y reward have
bill with high been transferred
credit rating
Bank/trade Retain mostly
Endorsement/discounting acceptance risk and reward
of a bill bill with including default
non-high risk
credit rating All risk and
Factoring Receivable 3,056,228.75 Y reward have
been transferred
Supply chain bill All risk and
endorsement/Discounting Receivable 3,649,025.92 Y reward have
of bills been transferred
Total — 392,252,557.59 — —
(2) Derecognized financial asset due to transfer
Derecognized Gain/loss from
Item Transfer method
Amount derecognition
Bank acceptance bill with
Endorsement of a bill 231,636,347.25 -
high credit rating
Bank acceptance bill with
Discounting a bill 6,435,987.47 -27,838.26
high credit rating
Factoring without
Receivable 3,056,228.75 -
recourse
Bill endorsement or
Supply chain bill 3,649,025.92 -
discounting
Total — 244,777,589.39 -27,838.26
XI. Disclosure of Fair Value
end
Fair value at the year end
Items 1st level 2nd level 3rd level
measurement of measurement of measurement of Total
FV FV FV
Financial assets
Continuously — — — —
measured at FV
Receivable financing - 335,460,836.49 - 335,460,836.49
Other non-current
- - 1,683,852.59 1,683,852.59
financial asset
Total - 335,460,836.49 1,683,852.59 337,144,689.08
None.
key parameter quantitive and qualitive information.
Bank acceptance notes (receivable financing) as measured at fair value through other
comprehensive income is within this scope. Bank acceptance notes held by the group mainly
are high credit grading from the large commercial bank. As the remaining maturity is short and
credit risk is very low, on the balance sheet date, the book value of bank acceptance notes
receivable is similar to fair value.
key parameter quantitive and qualitive information.
As of December 31, 2025, the book value of the share investment in Guotai Junan Investment
Management Co.,Ltd and Wuhan Steel and Power Co.,Ltd is 1,683,852.59 Yuan. It is
presented as other non-current financial asset in accordance with No.22- financial instrument
recognition and measurement of Accounting Standards for Business Enterprises. Having
considered there is neither active market for invested company’s share nor market price is
available for reference, and it is not feasible to obtain the relevant observable input value. FV
of the investment is measured at cost by taking influence factor of FV into consideration.
and sensitivity analysis of unobservable parameter.
None.
the year.
None.
None.
None.
XII. Related Parties Relationship and Transactions
i. Related parties’ relationship
(1) Controlling shareholder and ultimate controller
Parent Registered Business Registered Shareholding Voting
company address nature capital percentage power
(%) percentage
(%)
Dalian
Bingshan Dalian Manufacture 111,080,000.00 20.27 20.27
Group Co., Ltd.
Note: Dalian Bingshan Group Co., Ltd. is a Sino –foreign joint venture located No.106 Liaohe
East Road, DDZ, Dalian, China. The legal representative of Dalian Bingshan Group Co., Ltd. is
Mr. Ji Zhijian, and the registered capital is RMB111.08 million. The registered business
operation period is from 3rd July 1985 to 2nd July 2035. The business scope includes research,
development, manufacture, sales, service and installment of refrigeration equipment, cooling
and freezing equipment, different size of air-conditioners, petrochemical equipment, electronic
and electronic- control products, home electronic appliance, environment protect equipment and
etc. (unless the licenses needed)
Referrer to the content in the Note “VIII. 1. (1) Organization structure of group company”.
The information of the affiliated company and joint venture please refers to the note “VIII. 3.(1)
The significant affiliated company and joint venture’. The Company had transactions with
related parties during the current period or last period, including:
Names of the joint ventures or affiliated company Relationships with the Company
Dalian Fuji Bingshan Vending Machine Co., Ltd. Affiliated company of the Company
Dalian Fuji Bingshan Vending Machine Sales Co.,
Affiliated company of the Company
Ltd.
Jiangsu Jingxue Insulation Technology Co.,Ltd. Affiliated company of the Company
MHI Bingshan Refrigeration (Dalian) Co.,Ltd. Affiliated company of the Company
Dalian Honjo Chemical Co., Ltd. Affiliated company of the Company
Dalian Bingshan Metal Technology Co.,Ltd. Affiliated company of the Company
Dalian Bingshan Group Huahuida Financial Leasing
Affiliated company of the Company
Co., Ltd.
Dalian Bingshan Group Huayida Financial Leasing
Subsidiary of its affiliated company
Co., Ltd.
Dalian Jingxue Freezing Equipment Co., Ltd. Subsidiary of its affiliated company
Shanghai Jingxue Freezing Equipment Co., Ltd. Subsidiary of its affiliated company
Jiangsu Jingxue Insulation Environmental
Subsidiary of its affiliated company
Engineering Co.,Ltd.
Names of the joint ventures or affiliated company Relationships with the Company
Wuhan Sikafu Power Control Equipment Co., Ltd. Affiliate of its subsidiary
PT BINGSHAN MAKMUR INDONESTA Affiliate of its subsidiary
Name of related party Related party relationship
Company under direct/indirect Control of Panasonic under control of or significant influence by the
Co.,Ltd same party
under control of or significant influence by the
Sanyo Corporation
same party
under control of or significant influence by the
Dalian Spindle Environmental Facilities Co., Ltd.
same party
LINDE HYDROGEN FUELTECH (DALIAN) CO., under control of or significant influence by the
LTD. same party
under control of or significant influence by the
Linde Engineering (Dalian) Co., Ltd.
same party
under control of or significant influence by the
Dalian Shentong Electric Co., Ltd.
same party
under control of or significant influence by the
Dalian Fuji Bingshan Control System Co., Ltd.
same party
under control of or significant influence by the
BAC Dalian Co., Ltd.
same party
under control of or significant influence by the
Dalian Bingshan Wisdom Park Co., Ltd
same party
under control of or significant influence by the
Dalian Binggu Hotel Management Co., Ltd.
same party
under control of or significant influence by the
Dalian Xiangu Intelligent Technology Co., Ltd.
same party
under control of or significant influence by the
Dalian Bingshan Part Technology Co.,LTD.
same party
under control of or significant influence by the
Alphavita Bio-scientific (Dalian) Co., Ltd.
same party
under control of or significant influence by the
Bingshan Technology Service （Dalian） Co., Ltd.
same party
under control of or significant influence by the
Sonyo Cold Chain(Dalian) Co., Ltd.
same party
Under control of the same ultimate controlling
Sonyo Cold Chain Equipment (Wuhan) Co., Ltd.
party’s subsidiary
A director of the Company serves as a director of
Dalian Health and Wellness Industry Group Co., Ltd
such company.
Dalian State-owned Assets Investment and An associated natural person serves as a director of
Management Group Co.,Ltd. the company
Note: Companies under direct/indirect Control of Panasonic Co.,Ltd are:
Panasonic Appliances Air-Conditioning Malaysia Sdn.Bhd.、Panasonic Cold Chain Poland sp.
zo.o. 、 Panasonic Corporation Appliances Company 、 Panasonic Corporation Cold Chain
Solutions Company Cold Chain Business Division Product Engineering Department、Panasonic
Corporation Heating & Ventilation A/C Company Heating And Cooling Devices Business
Division、Panasonic Corporation Heating & Ventilation Ac Company Commercial Equipment
Solutions Business Division 、 Panasonic Corporation 、 Panasonic Do Brasil Limitada Miami
Branch、Panasonic Europe B.V.Gernany Branch、Panasonic Hong Kong Co,.Ltd.、Panasonic
Industrial Devices Sales Taiwan Co.,Ltd.、Panasonic Industrial Devices Sales（M）Sdn Bhd、
Panasonic Industry Europe Gmbh 、 Panasonic Industry Sales Asia Pacific 、 Panasonic Life
Solutions India Private Limited、Panasonic Operational Excellence Co.,Ltd.、Panasonic Taiwan
Co.,Ltd.
Panasonic Appliances Air-Conditioning (Guangzhou) Co., Ltd. 、 Panasonic Appliances
Air-Conditioning and Refrigeration Systems Co., Ltd. 、 Panasonic Procurement (CHINA)
Co.,Ltd.、Panasonic Electric Equipment (China) Co., Ltd.、Panasonic Corporation of China、
Shanghai Branch of Panasonic Corporation of China 、 Panasonic Corporation 、 Panasonic
Industry (China) Co., Ltd.、Panasonic Global Procurement (China) Co., Ltd.、Panasonic R&D
Center Suzhou Co.,Ltd Dalian Branch、Wanbao (Guangzhou) Compressor Co.,Ltd.、Panasonic
Electric Taiwan Co.,Ltd. 、 Panasonic Welding Systems (Tangshan) Co., Ltd. 、 Singapore
Panasonic Cold Chain Asia、Panasonic Sales Taiwan Co Ltd.、Panasonic Taiwan Co., Ltd.
ii. Related Party transactions
(1) Purchase of goods/receive labour services
Related party Content Current year Last year
Sonyo Cold Chain (Dalian)Co.Ltd Purchases of goods 85,664,683.20 58,961,755.22
Dalian Bingshan Metal Technology
Purchases of goods 53,402,292.67 62,734,659.74
Co.,Ltd.
Company under direct/indirect
Purchases of goods 41,566,499.92 26,696,668.01
Control of Panasonic Co.,Ltd
Jiangsu Jingxue Insulation
Purchases of goods 23,833,667.50 35,868,159.33
Technology Co.,Ltd.
BAC Dalian Co., Ltd. Purchases of goods 22,160,505.83 9,499,080.31
Dalian Bingshan Part Technology
Purchases of goods 15,092,470.23 14,257,101.84
Co.,LTD.
Dalian Fuji Bingshan Control System
Purchases of goods 9,827,091.39 970,858.76
Co., Ltd.
Dalian Shentong Electric Co., Ltd. Purchases of goods 7,908,130.34 10,593,486.97
Bingshan Technology Service
Purchases of goods 7,007,923.63 21,254,763.30
（Dalian） Co., Ltd.
Dalian Honjo Chemical Co., Ltd Purchases of goods 5,519,140.84 14,418,121.76
Dalian Spindle Environmental
Purchases of goods 4,837,240.83 1,168,153.45
Facilities Co., Ltd
Dalian Bingshan Wisdom Park Co.,
Purchases of goods 826,109.63 161,184.48
Ltd
Alphavita Bio-scientific (Dalian) Co.,
Purchases of goods 93,428.30 93,428.30
Ltd.
Related party Content Current year Last year
Dalian Bingshan Group Huahuida
Purchases of goods 62,124.88 15,337.41
Financial Leasing Co., Ltd.
Dalian Fuji Bingshan Vending
Purchases of goods 52,297.59 9,597.63
Machine Co., Ltd
Dalian Fuji Bingshan Vending
Purchases of goods 49,931.42 68,141.59
Machine Sales Co., Ltd
Dalian Xiangu Intelligent Technology
Purchases of goods 21,518.40 -
Co., Ltd.
Sanyo Corporation Purchases of goods 21,149.28 -
Shanghai Jingxue Freezing
Purchases of goods - 53,008.85
Equipment Co., Ltd
Dalian Jingxue Freezing Equipment
Purchases of goods - 28,300.88
Co., Ltd.
Dalian Bingshan Group Co., Ltd. Purchases of goods - 943.40
Dalian Bingshan Wisdom Park Co., Receive labor
Ltd services 2,037,269.65 -
Receive labor
Dalian Bingshan Group Co., Ltd. 317,058.00 -
services
Alphavita Bio-scientific (Dalian) Co., Receive labor
Ltd. services 186,856.60 -
Dalian Bingshan Part Technology Receive labor
Co.,LTD. services 56,048.44 -
Dalian Binggu Hotel Management Receive labor
Co., Ltd. services 23,539.95 -
Company under direct/indirect Receive labor
Control of Panasonic Co.,Ltd services 1,415.09 -
Receive labor
Sanyo Corporation - 79,389.43
services
Receive labor
Sonyo Cold Chain (Dalian)Co.Ltd - 59,669.09
services
Total 280,568,393.61 256,991,809.75
(2) Sales of goods/ labour services provision
Related party Content Current year Last year
Company under direct/indirect Control
Sales of goods 284,707,564.24 294,094,000.19
of Panasonic Co.,Ltd
Sonyo Cold Chain(Dalian)Co.Ltd Sales of goods 170,383,403.47 124,892,254.77
BAC Dalian Co., Ltd Sales of goods 127,493,776.00 102,516,304.77
Bingshan Technology Service （Dalian）
Sales of goods 17,898,611.01 53,199,272.20
Co., Ltd.
Sonyo Cold Chain Equipment (Wuhan)
Sales of goods 12,425,543.40 12,938,062.52
Co., Ltd.
MHI Bingshan Refrigeration (Dalian)
Sales of goods 7,211,308.24 5,359,262.29
Co.,Ltd.
Dalian Fuji Bingshan Vending Machine
Sales of goods 7,056,303.85 9,294,419.14
Co., Ltd
Alphavita Bio-scientific (Dalian) Co.,
Sales of goods 3,143,742.44 3,226,307.14
Ltd.
Related party Content Current year Last year
Dalian Bingshan Group Huahuida
Sales of goods 2,991,150.45 13,053,097.35
Financial Leasing Co., Ltd.
Dalian Honjo Chemical Co., Ltd Sales of goods 2,335,754.41 2,416,987.78
Dalian Bingshan Part Technology
Sales of goods 1,365,147.67 2,306,804.62
Co.,LTD
Dalian Bingshan Wisdom Park Co., Ltd Sales of goods 947,148.28 531,283.99
PT BINGSHAN MAKMUR
Sales of goods 602,180.00 -
INDONESTA
Dalian Spindle Environmental Facilities
Sales of goods 543,281.22 1,256,946.19
Co., Ltd
Dalian Shentong Electric Co., Ltd Sales of goods 264,245.15 412,111.48
Dalian Fuji Bingshan Control System
Sales of goods 213,388.02 209,722.13
Co., Ltd.
Wuhan Scarf Power Control Equipment
Sales of goods 68,773.09 -
Co., Ltd.
Linde Engineering (Dalian) Co., Ltd. Sales of goods 8,321.10 -
Dalian Bingshan Group Co., Ltd. Sales of goods 6,847.27 -
Dalian Health and Wellness Industry
Sales of goods - 6,653,136.22
Group Co., Ltd
Bingshan Technology Service （Dalian）
Sales of goods - 163,716.81
Co., Ltd.
Dalian Jingxue Freezing Equipment Co.,
Sales of goods - 85,702.88
Ltd
Linde Hydrogen Fueltech (Dalian) Co.,
Sales of goods - 67,265.46
Ltd
Company under direct/indirect Control
Sales of service 394,794.15 -
of Panasonic Co.,Ltd
Dalian Jingxue Freezing Equipment Co.,
Sales of service 91,597.71 -
Ltd
Sonyo Cold Chain(Dalian)Co.Ltd Sales of service 7,547.17 -
Alphavita Bio-scientific (Dalian) Co.,
Sales of service 4,398.11 -
Ltd.
Bingshan Technology Service （Dalian）
Sales of service 622.64 -
Co., Ltd.
Dalian Shentong Electric Co., Ltd Sales of service 207.55 -
Dalian Fuji Bingshan Control Systems
Sales of service - 417,570.36
Co., Ltd.
Total 640,165,656.64 633,094,228.29
(3) Assets Lease
Category of Current year Last year Lease
Lessee
assets rent out Lease Income Income
Dalian Bingshan Wisdom Park
Land/property 9,013,347.56 9,013,347.56
Co., Ltd
Category of Current year Last year Lease
Lessee
assets rent out Lease Income Income
MHI Bingshan Refrigeration
Plant 3,809,523.80 3,809,523.80
(Dalian) Co.,Ltd.
Linde Hydrogen Fueltech
Plant 1,301,141.28 2,792,899.62
(Dalian) Co., Ltd
Bingshan Songyang Cold Chain Plant /Employee
Equipment (Wuhan) Co., Ltd. dormitory 2,020,370.66 1,708,106.44
Dalian Jingxue Freezing
Plant and office 696,854.52 784,927.88
Equipment Co., Ltd.
Wuhan Sikafu Power Control
Plant 721,045.88 721,045.88
Equipment Co., Ltd
Company under direct/indirect Plant/ office /
Control of Panasonic Co.,Ltd dormitory 763,337.16 763,337.16
Bingshan Technology Service
Plant and office 331,276.27 310,725.81
（Dalian） Co., Ltd.
Dalian Bingshan Part
Plant and office 770,642.27 846,330.36
Technology Co.,Ltd.
Dalian Bingshan Group Co.,
Office 66,055.05 66,055.05
Ltd.
Sonyo Cold Chain
Office 49,321.10 52,256.88
(Dalian)Co.Ltd
Dalian Spindle Environmental
Office 5,284.40 5,284.40
Facilities Co., Ltd.
Category of Lease premium paid
Lessor assets rent in
Current year Last year
Sonyo Cold Chain(Dalian)Co.Ltd Plant 1,700,966.97 2,456,952.29
Dalian Bingshan Group Huahuida
Fixed asset 500,702.64 573,090.24
Financial Leasing Co., Ltd
(Continued)
Interests on lease liabilities Increased right-of-use assets
Lessor Current
Last year Current year Last year
year
Sonyo Cold
Chain(Dalian)Co.Ltd
Dalian Bingshan Group
Huahuida Financial Leasing 23,689.90 69,055.29 - -
Co., Ltd
(4) Lease under short term
Category of Current year Last year Lease
Lessee
assets rent out Lease Income Income
Dalian State-owned Assets
Investment and Management Land 3,568,452.38 873,740.74
Group Co.,Ltd.
(5) Warranty provided by Related Parties
The national development fund planned to support the Company’s intelligent and green
equipment of cold chain and service industry base project, and provide the special fund to the
controlling shareholder of the Company, Bingshan Group. Please refer to the “ Note V. 33 long
term borrowings”.
(6) Funds borrow from /lent to related party
Name of the related party Amount Starting date Ending date Explanation
Funds borrowed
Project
Dalian Bingshan Group
Co., Ltd.
investment
Dalian Bingshan Group
Sale and
Huahuida Financial 14,750,000.00 2025-01-21 2030-1-20 leaseback
Leasing Co.,Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 13,805,309.73 2021-11-10 2026-11-09 leaseback
Leasing Co.,Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 8,600,000.00 2024-07-26 2026-07-25 leaseback
Leasing Co.,Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 4,000,000.00 2025-09-29 2027-9-28 leaseback
Leasing Co.,Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 2,000,000.00 2025-10-09 2027-10-8 leaseback
Leasing Co.,Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 1,000,000.00 2025-03-14 2028-3-13 leaseback
Leasing Co.,Ltd
Dalian Bingshan Group
Sale and
Huahuida Financial 1,000,000.00 2025-04-29 2028-4-28 leaseback
Leasing Co.,Ltd
Dalian Bingshan Group
Huayida Commercial 5,000,000.00 2025-4-28 2026-4-27 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 1,000,000.00 2024-6-19 2026-6-18 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 5,000,000.00 2025-7-23 2026-7-22 Factoring
Factoring Co., Ltd
Name of the related party Amount Starting date Ending date Explanation
Funds borrowed
Dalian Bingshan Group
Huayida Commercial 1,000,000.00 2024-7-26 2026-7-25 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 1,801,481.40 2025-8-13 2026-8-12 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 830,733.36 2025-8-22 2026-8-21 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 1,200,000.00 2024-8-26 2026-8-25 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 1,500,000.00 2025-9-25 2026-9-24 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 2,500,000.00 2025-10-9 2026-10-8 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 1,800,000.00 2024-10-31 2026-10-30 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 1,075,120.00 2025-11-14 2026-11-13 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 1,117,485.28 2025-11-19 2026-11-18 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 6,000,000.00 2025-1-15 2027-1-14 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 2,000,000.00 2025-5-21 2027-5-20 Factoring
Factoring Co., Ltd
Dalian Bingshan Group
Huayida Commercial 975,000.00 2025-6-23 2028-6-22 Factoring
Factoring Co., Ltd
Funds lent - — — —
(7) Asset transfer and debt restructuring among the related parties
Item Transaction Current year Last year
Dalian Municipal State-owned Assets Transfer of Land
Investment and Operation Group Co., Ltd. Use Rights
Transfer of Factory
Bingshan Songyang Cold Chain (Dalian)
Buildings and 45,426,006.03 -
Co., Ltd.
Ancillary Facilities
Item Transaction Current year Last year
Dalian Municipal State-owned Assets Transfer of Land
Investment and Operation Group Co., Ltd. Use Rights
Total 108,100,784.43 -
(8) Management Remuneration
Item Current year Last year
Total remuneration 4,620,500.00 5,140,400.00
(9) Other transactions with related party
None
iii. Balances with Related party
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Sonyo Cold Chain
Accounts receivable 82,215,721.94 5,771,543.68
(Dalian)Co.Ltd
Accounts receivable BAC Dalian Co., Ltd 32,884,151.56 2,308,467.44
Company under direct/indirect
Accounts receivable 24,865,710.98 714,583.39
Control of Panasonic Co.,Ltd
Bingshan Technology Service
Accounts receivable 15,948,513.98 1,284,841.10
（Dalian） Co., Ltd.
Sonyo Cold Chain Equipment
Accounts receivable 6,843,953.97 482,102.58
(Wuhan) Co., Ltd.
Dalian Bingshan Wisdom Park
Accounts receivable 6,779,040.11 2,315,259.55
Co., Ltd
Dalian Fuji Bingshan Vending
Accounts receivable 4,694,192.49 329,532.31
Machine Co., Ltd
Alphavita Bio-scientific (Dalian)
Accounts receivable 2,894,365.08 232,267.21
Co., Ltd.
Linde Hydrogen Fueltech
Accounts receivable 1,539,244.44 136,865.17
(Dalian) Co., Ltd
MHI Bingshan Refrigeration
Accounts receivable 1,381,095.17 101,569.87
(Dalian) Co.,Ltd.
Dalian Health and Wellness
Accounts receivable 1,295,691.15 216,898.70
Industry Group Co., Ltd
PT BINGSHAN MAKMUR
Accounts receivable 451,337.50 31,683.89
INDONESIA
Dalian Bingshan Group
Accounts receivable Huahuida Financial Leasing 432,562.50 30,365.89
Co.,Ltd
Closing Balance
Item Related party Bad debt
Book Balance
Provision
Linde Engineering (Dalian) Co.,
Accounts receivable 22,144.33 3,706.96
Ltd.
Dalian Shentong Electric Co.,
Accounts receivable 2,202.00 154.58
Ltd
Bingshan Technology Service
Contract asset 598,400.65 19,262.80
（Dalian） Co., Ltd.
Sonyo Cold Chain
Contract asset 6,200.00 435.24
(Dalian)Co.Ltd
Bingshan Technology Service
Other receivable 400,000.00 14,640.00
（Dalian） Co., Ltd.
Wuhan Scarf Power Control
Other receivable 12,748.03 466.58
Equipment Co., Ltd.
Dalian Shentong Electric Co.,
Prepayment 6,639,791.89 -
Ltd
Prepayment BAC Dalian Co., Ltd 385,423.52 -
Shanghai Jingxue Energy-Saving -
Prepayment 383,059.40
Technology Co., Ltd.
Company under direct/indirect -
Prepayment 336,456.94
Control of Panasonic Co.,Ltd
Jiangsu Jingxue Insulation -
Prepayment 125,062.72
Technology Co.,Ltd.
Dalian Fuji Bingshan Control -
Prepayment 113,072.02
System Co., Ltd.
Sonyo Cold Chain -
Prepayment 58,800.00
(Dalian)Co.Ltd
Dalian Bingshan Group -
Prepayment Huahuida Financial Leasing 221.70
Co.,Ltd
(Continued)
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Sonyo Cold Chain
(Dalian)Co.Ltd 70,233,768.67 5,769,841.07
Accounts receivable BAC Dalian Co., Ltd 29,726,955.86 2,086,832.30
Accounts receivable Company under direct/indirect
Control of Panasonic Co.,Ltd 23,124,134.38 692,390.83
Accounts receivable Sonyo Cold Chain Equipment
(Wuhan) Co., Ltd. 9,290,724.88 653,141.38
Accounts receivable Bingshan Technology Service
（Dalian） Co., Ltd. 8,120,883.28 570,086.01
Accounts receivable Dalian Bingshan Wisdom Park
Co., Ltd 7,476,477.33 1,390,028.46
Accounts receivable Dalian Fuji Bingshan Vending
Machine Co., Ltd 5,051,832.96 354,638.67
Opening Balance
Item Related party Bad debt
Book Balance
Provision
Accounts receivable Dalian Bingshan Group Huahuida
Financial Leasing Co.,Ltd 4,224,312.50 296,546.74
Accounts receivable MHI Bingshan Refrigeration
(Dalian) Co.,Ltd. 3,105,512.32 218,006.97
Accounts receivable Alphavita Bio-scientific (Dalian)
Co., Ltd. 2,265,320.79 246,626.01
Accounts receivable Dalian Health and Wellness
Industry Group Co., Ltd 1,693,997.95 118,918.66
Accounts receivable Linde Hydrogen Fueltech
(Dalian) Co., Ltd 786,500.99 223,828.69
Accounts receivable Dalian Spindle Environmental
Facilities Co., Ltd 765,477.31 53,736.51
Accounts receivable Dalian Fuji Bingshan Control
System Co., Ltd. 54,200.00 7,850.40
Accounts receivable Dalian Shentong Electric Co., Ltd 50,652.00 3,555.77
Accounts receivable Jiangsu Jingxue Insulation
Technology Co.,Ltd. 3,570.00 1,051.32
Bingshan Technology Service
Other receivable 400,000.00 14,640.00
（Dalian） Co., Ltd.
Sonyo Cold Chain
Other receivable 260,719.09 18,302.48
(Dalian)Co.Ltd
Dalian Bingshan Group Huahuida
Contract asset 432,562.50 30,365.89
Financial Leasing Co., Ltd
Dalian Bingshan Metal
Contract asset 9,250.00 649.35
Technology Co.,Ltd
Dalian Health and Wellness
Contract asset 1,000.00 70.20
Industry Group Co., Ltd
Prepayment Dalian Shentong Electric Co., Ltd 11,949,284.99 -
Prepayment Dalian Fuji Bingshan Control
System Co., Ltd. 2,127,955.54 -
Prepayment Company under direct/indirect
Control of Panasonic Co.,Ltd 1,632,646.65 -
Prepayment Bingshan Technology Service
（Dalian） Co., Ltd. 1,327,651.07 -
Prepayment BAC Dalian Co., Ltd 216,202.86 -
Prepayment Dalian Bingshan Wisdom Park
Co., Ltd 23,888.59 -
Closing Opening
Item Related party
Balance Balance
Accounts Jiangsu Jingxue Insulation
Payable Technology Co.,Ltd 34,252,465.26 51,228,592.31
Accounts
Sonyo Cold Chain (Dalian)Co.,Ltd 33,900,564.23 18,271,180.03
Payable
Accounts Bingshan Technology Service
Payable （Dalian） Co., Ltd. 14,357,617.55 742,017.35
Closing Opening
Item Related party
Balance Balance
Accounts Dalian Bingshan Metal Technology
Payable Co.,Ltd 10,536,738.90 11,802,602.36
Accounts
BAC Dalian Co., Ltd 10,433,242.08 14,755,585.47
Payable
Accounts
Dalian Honjo Chemical Co., Ltd. 3,006,167.36 7,135,583.64
Payable
Accounts
Dalian Shentong Electric Co., Ltd 1,410,292.94 1,758,722.25
Payable
Accounts Company under direct/indirect
Payable Control of Panasonic Co.,Ltd 1,322,559.18 1,167,608.32
Accounts Jiangsu Jingxue Insulation
Payable Environmental Engineering Co.,Ltd 1,017,525.00 2,026,200.00
Accounts Dalian Bingshan Part Technology
Payable Co.,LTD 1,309,278.51 4,717,413.12
Accounts Dalian Fuji Bingshan Control
Payable System Co., Ltd. 528,991.64 322,272.97
Accounts Dalian Fuji Bingshan Vending
Payable Machine Co., Ltd 23,514.79 5,907.73
Accounts Dalian Spindle Environmental
Payable Facilities Co., Ltd - 498,527.44
Accounts Jiangsu Jingxue Insulation
Payable Environmental Engineering Co.,Ltd - 207,616.60
Dalian State-owned Assets
Other payable Investment and Management Group 3,639,632.23 434,356.75
Co.,Ltd.
Dalian Fuji Bingshan Control
Other payable 1,340,000.00 -
System Co., Ltd.
Company under direct/indirect
Other payable 1,015,476.74 3,416,919.14
Control of Panasonic Co.,Ltd
Dalian Jingxue Freezing Equipment
Other payable 70,000.00 70,000.00
Co., Ltd.
Wuhan Scarf Power Control
Other payable 65,495.00 -
Equipment Co., Ltd.
Other payable Sanyo Corporation 19,249.06 63,232.42
Dalian Bingshan Group Huayida
Other payable - 7,986,275.11
Commercial Factoring Co., Ltd.
Dalian Bingshan Group Huahuida
Other payable - 5,500,000.00
Financial Leasing Co., Ltd.
Bingshan Technology Service
Other payable - 14,946.50
（Dalian） Co., Ltd.
Long-term Dalian Bingshan Group Huahuida
payable Financial Leasing Co., Ltd. 18,175,681.99 2,649,273.56
Long-term Dalian Bingshan Group Huayida
payable Commercial Factoring Co., Ltd. 670,104.64 1,557,654.53
Non-current
Dalian Bingshan Group Huahuida
liability due 6,388,277.92 5,898,294.48
Financial Leasing Co., Ltd.
within 1 year
Non-current
Dalian Bingshan Group Huayida
liability due 6,103,062.21 9,107,732.23
Commercial Factoring Co., Ltd.
within 1 year
Closing Opening
Item Related party
Balance Balance
Short-term Dalian Bingshan Group Huayida
borrowing Commercial Factoring Co., Ltd. 11,383,996.49 3,790,267.28
Contract liability Dalian Honjo Chemical Co., Ltd. 266,308.00 10,626.23
Contract liability Sonyo Cold Chain (Dalian)Co.,Ltd 190,455.04 15,258.81
Company under direct/indirect
Contract liability 14,845.32 132,587.77
Control of Panasonic Co.,Ltd
Dalian Fuji Bingshan Control
Contract liability - 38,509.12
System Co., Ltd.
Other current
Sonyo Cold Chain (Dalian)Co.,Ltd 24,759.15 1,983.64
liability
Other current Company under direct/indirect
liability Control of Panasonic Co.,Ltd - 12,003.20
Other current Dalian Fuji Bingshan Control
liability System Co., Ltd. - 5,006.18
Other current
Dalian Honjo Chemical Co., Ltd. - 1,381.41
liability
iv. Related Party Commitment
None
v. Others
None
XIII. Share-Based Payment
None
XIV. Contingency & commitment
None
The Company sold water chillers and heat pump equipment to Shandong Jiechuang Energy
Technology Co., Ltd. ( “ Shandong Jiechuang ” ) by way of financial lease. A purchase
contract and a financial lease contract were signed by three parties, under which the
Company acts as the seller, Huahuida acts as the purchaser and lessor, and Shandong
Jiechuang acts as the lessee. The total contract value is RMB 6.9980 million. Shandong
Jiechuang has paid a 10% down payment, with the remaining RMB 6.2982 million as the
subject amount under the contract. In the event that the lessee delays rental payments, the
Company shall be obligated to advance the rental payments and perform the repurchase
obligation. The shareholders of Shandong Jiechuang and relevant natural persons have
issued an unconditional and irrevocable joint liability counter-guarantee in favor of the
Company, covering all debts guaranteed by the Company in connection with such financial
lease sales. As at December 31, 2025, the balance of guarantee obligations undertaken by
the Company in respect of this financial lease amounts to RMB 1.2072 million.
The Company sold refrigeration equipment, air conditioners and production line equipment
to Shanxi Yiming Food Co., Ltd. (“Shanxi Yiming”) by way of financial lease. A purchase
contract and a financial lease contract were signed by three parties, under which the
Company acts as the seller, Huahuida acts as the purchaser and lessor, and Shanxi Yiming
acts as the lessee. The total contract value is RMB 10.4361 million. In the event that the
lessee delays rental payments, the Company shall be obligated to advance the rental
payments and perform the repurchase obligation. The shareholders of Shanxi Yiming and
relevant natural persons have issued an unconditional and irrevocable joint liability
counter-guarantee in favor of the Company, covering all debts guaranteed by the Company
in connection with such financial lease sales. As at December 31, 2025, the balance of
guarantee obligations undertaken by the Company in respect of this financial lease amounts
to RMB 1.5198 million.
Dalian Bingshan Ryshe Quick Freezing Equipment Co., Ltd. ( “ Bingshan Ryshe ” ), a
subsidiary of the Company, sold refrigeration equipment to Jilin Fuyu Agricultural
Technology Co., Ltd. (“Jilin Fuyu”) by way of financial lease. A purchase contract and a
financial lease contract were signed by three parties, under which Bingshan Ryshe acts as
the seller, Huahuida acts as the purchaser and lessor, and Jilin Fuyu acts as the lessee. The
total contract value is RMB 20.5000 million. In the event that the lessee delays rental
payments, Bingshan Ryshe shall be obligated to advance the rental payments and perform
the repurchase obligation. The shareholders of Jilin Fuyu and relevant natural persons have
issued an unconditional and irrevocable joint liability counter-guarantee in favor of
Bingshan Ryshe, covering all debts guaranteed by Bingshan Ryshe in connection with such
financial lease sales. As at December 31, 2025, the balance of guarantee obligations
undertaken by Bingshan Ryshe in respect of this financial lease amounts to RMB 9.1385
million.
As at December 31, 2025, the aggregate balance of guarantee obligations arising from
financial leases of the Group amounts to RMB 11.8655 million. No circumstances have
occurred where the Group is required to assume guarantee liability due to defaults by
lessees.
As at December 31, 2025, other than the above matters, there are no material contingencies
of the Group that require disclosure.
XV. Events after the Balance Sheet Date
Approved by the Board of Directors and relevant authorities, Sonyo Compressor
completed the equity transfer with Dalian Bingshan Group Co., Ltd. (the ultimate
controlling party) on January 21, 2026, by acquiring 100% equity interest of Dalian
Bingshan PAT Technology Co., Ltd. at a consideration of RMB 1,420,000.00.
Since both Sonyo Compressor and Dalian Bingshan PAT Technology Co., Ltd. were under
the ultimate control of Dalian Bingshan Group Co., Ltd. before and after the consolidation,
this combination constitutes a business combination under common control. Pursuant to
the requirements of Accounting Standards for Business Enterprises No. 29 - Events After
the Balance Sheet Date, this event is a non-adjusting event after the balance sheet date.
Accordingly, the Company's financial statements as of December 31, 2025, do not include
the relevant information of Dalian Bingshan PAT Technology Co., Ltd.
Item Content
Planned profit/ dividend distribution 42,160,625.35
The 9th Meeting of the 10th Board of
Directors of the Company held on April
profit distribution proposal for the year
Profit/dividend approved for
of 843,212,507 shares, a cash dividend
distribution declaration
of RMB 0.50 per 10 shares (tax
inclusive) shall be distributed to all
shareholders, and cash dividends on
B-shares shall be converted and paid in
Hong Kong dollars.
There is no significant sales return after the balance sheet date.
Except the subsequent event disclosed above, the Company has no other significant
subsequent event.
XVI. Other Significant Events
None.
None.
(1) The exchange of non-monetary assets
None.
(2) The exchange of other assets
None.
None.
None.
The management of the group divided the business into 2 segments based on the geographic
area: Northeast China and Central China. The Northeast is the Company’s general headquarters
and the subsidiaries registered in Dalian. The Central includes Chengdu Bingshan Refrigeration
Engineering Co., Ltd, Wuhan New World Refrigeration Industrial Co., Ltd and its subsidiary,
Wuhan Lanning Energy Technology Co., Ltd. and Wuhan New World Air-conditioning Refrigeration
Engineering Co., Ltd.
(1) The basis and accounting policies of reporting segments
The internal organization structure, management requirements and internal report scheme are
the determination basis for the Company to set the operating segments. The segments are those
satisfied the following requirements.
allocate resource, assess its performance.
segments can be acquired.
The group confirms the report segments based on the operating segments. The transfer price
among segments is set base on the market price. The assets and related expenses in common use
are allocated to different segments based on their proportion of revenue.
(2) The financial information of reporting segments：
Items Northeast China Central China Offset Total
Including: Depreciation
and amortization 132,049,243.65 7,528,026.15 - 139,577,269.80
expenses
on assets -17,374,479.50 -4,886,398.66 172,044.60 -22,088,833.56
on credit assets -52,501,372.60 3,838,377.02 -900,535.89 -49,563,531.47
from associates 36,222,568.84 322,459.13 -5,462,078.77 31,082,949.20
and joint venture
profits(loss) 240,873,674.04 307,319.82 -169,929,425.16 71,251,568.70
(3) Others
None
The group hasn’t had other important transactions and matters affect the investor's decision in
this period.
XVII. Notes to the Main Items of the Financial Statements of Parent Company
(1) Bad debt provisions under accounting aging analysis method:
Aging Closing Balance Opening Balance
Within 1 year 329,107,924.75 252,493,482.65
Over 3 years 193,088,054.03 148,746,595.23
Including:3-4 years 47,569,524.37 38,330,982.87
Over 5 years 120,583,526.17 55,310,588.34
Total 663,460,037.15 625,882,104.87
(2) Accounts receivable category
Closing Balance
Item Booking balance Provision Booking value
Amount % Amount %
Bad debt provision
on group 663,460,037.15 100.00 200,127,593.93 30.16 463,332,443.22
(1) Accounting age
as characters 450,095,572.09 67.84 200,127,593.93 44.46 249,967,978.16
(2) Related party
within
consolidation 213,364,465.06 32.16 - 213,364,465.06
scope
Total 663,460,037.15 100.00 200,127,593.93 30.16 463,332,443.22
(Continued)
Opening Balance
Item Booking balance Provision Booking
Amount % Amount % balance
Bad debt provision on
group
(1) Accounting age as
characters 474,142,917.60 75.76 158,917,243.15 33.52 315,225,674.45
(2) Related party within
consolidation scope 151,739,187.27 24.24 - - 151,739,187.27
Total 625,882,104.87 100.00 158,917,243.15 25.39 466,964,861.72
Closing Balance
Aging Provision for bad Drawing Proportion
Accounts receivable
debts (%)
Within 1 year 115,743,459.69 8,125,190.87 7.02
Over 5 years 120,583,526.17 120,583,526.17 100.00
Total 450,095,572.09 200,127,593.93 —
(3) Bad debt provision
Change during the year
Category Opening balance Closing Balance
Accrued Collected/ Written-
Other
reversed off
Bad debt
provision
Total 158,917,243.15 16,118,885.45 - - 25,091,465.33 200,127,593.93
(4) Top 5 receivable and contract assets
Based on closing balance ranking, sum of the top five significant receivable and contract asset
are 348,181,036.53Yuan, representing 52.48% of total receivables and contract asset at the year
end 76,267,063.05Yuan bad debt provision is provided respectively.
Item Closing Balance Opening Balance
Dividend receivable 160,000,000.00 100,000,000.00
Other receivable 31,936,403.02 28,957,016.22
Total 191,936,403.02 128,957,016.22
Item Closing Balance Opening Balance
Sonyo Compressor (Dalian)Co.,Ltd. 160,000,000.00 100,000,000.00
Total 160,000,000.00 100,000,000.00
(1) The category of other receivables
Items Closing Balance Opening Balance
Receivables and payables 21,672,864.74 20,032,160.00
Deposits 10,098,294.00 7,181,055.11
Petty cash 802,756.27 904,835.68
Others 283,625.00 1,306,589.74
Total 32,857,540.01 29,424,640.53
(2) Other receivable listed by account aging
Aging Closing Balance Opening Balance
Within 1 year 6,364,219.32 4,758,618.79
Aging Closing Balance Opening Balance
Over 3 years 23,417,521.00 21,683,400.11
Over 5 years 21,611,904.00 1,358,400.11
Total 32,857,540.01 29,424,640.53
(3) Other receivable classified by provision method
Closing Balance
Item Booking balance Provision Booking value
Amount % Amount %
Bad debt provision
- - - - -
on individual
Bad debt provision
on group
(1) Accounting age
as characters
(2) Related party
within
consolidation
scope
Total 32,857,540.01 100.00 921,136.99 2.80 31,936,403.02
(continued)
Opening Balance
Item Booking balance Provision Booking value
Amount % Amount %
Bad debt provision on
- - - - -
individual
Bad debt provision on
group
(1) Accounting age as
characters
(2) Related party within
consolidation scope
Total 29,424,640.53 100.00 467,624.31 1.59 28,957,016.22
Closing Balance
Aging Provision for bad Drawing Proportion
Accounts receivable
debts (%)
Within 1 year 6,364,219.32 232,930.43 3.66
Over 5 years 1,611,904.00 390,312.80 24.21
Total 12,857,540.01 921,136.99 ——
Expected Expected credit Expected credit loss
bad debt
credit loss loss within the within the whole Total
provision
within 12 whole period(no period(impairment
months impairment) incurred)
Opening balance 339,059.31 - 128,565.00 467,624.31
Opening balance
— — — —
during the year
--transfer to the
--transfer to the
--reverse to the
----reverse to the
Accrued 83,359.21 83,359.21
Reverse 125,182.99 125,182.99
Cancelation
Written off
Other movement 495,336.46 495,336.46
Closing balance 422,418.52 498,718.47 921,136.99
(4) Bad debt provision details
Category Opening Change during the year Closing
balance Balance
Accrued Collected/
Written-off Others
reversed
Bad debt
provision
Total 467,624.31 83,359.21 125,182.99 - 495,336.46 921,136.99
(5) Other receivables from the top 5 debtors
Closing
Closing % of
Name Category Aging Balance of
Balance the total
Provision
Wuhan New
World
Refrigeration Receivable 20,000,000.00 Over5 years 60.87 —
Industrial Co.,
Ltd
Deta Town Gas Other deposit 1,100,000.00 Over5 years 3.35 40,260.00
Inner Mongolia
Daquan New Bid deposit 800,000.00 3-4 years 2.43 29,280.00
Energy Co., Ltd
Xinjiang Jinghui
New Materials Bid deposit 800,000.00 2-3 years 2.43 29,280.00
Co., Ltd
Xinjiang
Zhongxin Huantai Others 800,000.00 Within 1 year 2.43 29,280.00
Energy Co., Ltd.
Total — 23,500,000.00 — 71.51 128,100.00
Closing Balance Opening Balance
Item
Closing Balance Provision Book Value Opening Balance Provision Book Value
Investment of subsidiaries 2,422,108,433.14 - 2,422,108,433.14 2,432,830,861.29 - 2,432,830,861.29
Investment of affiliates
and JV
Total 2,894,643,627.80 - 2,894,643,627.80 2,906,530,622.51 - 2,906,530,622.51
(1) Investments of subsidiaries
Provision for Increase/Decrease Provision for
Beginning impairment
Investee Provision for Ending balance impairment
balance at beginning of Increased Decreased Others
impairment at year end
year
Dalian Bingshan Group Engineering
Co., Ltd 293,749,675.77 - - - - - 293,749,675.77 -
Dalian Bingshan Group Sales Co., Ltd 20,722,428.15 - - 20,722,428.15 - - - -
Dalian Bingshan Air-Conditioning
Equipment Co., Ltd 69,272,185.00 - 6,000,000.00 - - - 75,272,185.00 -
Dalian Bingshan Guardian Automation
Co., Ltd 50,638,361.52 - 4,000,000.00 - - - 54,638,361.52 -
Dalian Bingshan-RYOSETSU Quick
Freezing Equipment Co., Ltd 59,356,051.19 - - - - - 59,356,051.19 -
Dalian Universe Thermal Technology
Co.,Ltd 48,287,589.78 - - - - - 48,287,589.78 -
Wuhan New World Refrigeration
Industrial Co., Ltd 184,674,910.81 - - - - - 184,674,910.81 -
Dalian Bingshan Engineering & 71,537,064.86 - - - - - 71,537,064.86 -
Provision for Increase/Decrease Provision for
Beginning impairment
Investee Provision for Ending balance impairment
balance at beginning of Increased Decreased Others
impairment at year end
year
Trading Co., Ltd
Sonyo Compressor (Dalian)Co.,Ltd 1,380,455,603.23 - - - - - 1,380,455,603.23 -
Sonyo Refrigeration System (Dalian)
Co., Ltd 108,851,490.98 - - - - - 108,851,490.98 -
Sonyo Refrigeration (Dalian) Co., Ltd 145,285,500.00 - - - - - 145,285,500.00 -
Total 2,432,830,861.29 - 10,000,000.00 20,722,428.15 - - 2,422,108,433.14 -
Note: During the year, Dalian Bingshan Group Sales Co., Ltd. was merged into the Company.
(2) Joint ventures& affiliated companies
Provision for
Increase/Decrease Ending balance impairment
at year end
Investee Beginning balance Provision for Adjustment of
Gains and losses Changes Cash bonus or
impairment other Provision for
Increased Decreased recognized under of other profits Others
at beginning comprehensive impairment
the equity method equity announced
of year income
Dalian Honjo
Chemical Co., Ltd
Keinin-Grand Ocean
Thermal Technology 53,322,286.73 - - - -3,708,228.87 - - - - - 49,614,057.86 -
(Dalian) Co., Ltd
Dalian Fuji Bingshan
Vending Machine 67,096,098.78 - - - 23,465.56 - - - - - 67,119,564.34 -
Co., Ltd
Provision for
Increase/Decrease Ending balance impairment
at year end
Investee Beginning balance Provision for Adjustment of
Gains and losses Changes Cash bonus or
impairment other Provision for
Increased Decreased recognized under of other profits Others
at beginning comprehensive impairment
the equity method equity announced
of year income
MHI Bingshan
Refrigeration 16,746,474.97 - - - 306,576.57 - - - - - 17,053,051.54 -
(Dalian) Co., Ltd.
Dalian Fuji Bingshan
Vending Machine - - - - - - - - - - - -
Sales Co., Ltd
Jiangsu Jingxue
Insulation 145,535,400.55 - - - *.** - - 3,220,344.00 - - *.** -
Technology Co.,Ltd
Bingshan Metal
Technical Service 135,904,723.22 - - 31,050,455.59 - - 28,059,800.96 - - 138,895,377.85 -
（Dalian） Co., Ltd.
Dalian Bingshan
Group Huahuida
Financial Leasing
Co., Ltd
Total 473,699,761.22 - - 30,662,879.69 - - 31,827,446.25 - - 472,535,194.66 -
Current year Last year
Item
Revenue Cost Revenue Cost
Revenue from main
operation
Revenue from other
operation
Total 811,838,907.91 707,798,921.27 696,459,652.07 604,399,184.03
Items Current year Last year
Long-term equity investment gain under cost method 168,906,225.13 106,062,894.23
Long-term equity investment gain under equity method 30,662,879.69 29,697,030.53
Gain from holding of other non-current financial assets - 5,400,504.40
Gain from disposal of other non-current financial assets - 33,277,105.94
Discounting fees for bank acceptance note -41,186.79 -159,492.41
Gain on debt restructuring 702,703.81 -130,005.76
Total 200,230,621.84 174,148,036.93
None
XVIII. Supplementary Information to the Financial Statements
Items Current year Notes
Gain or loss from disposal of non-current assets (including written
-1,787,313.71
off part of the impairment provision)
Government grants recorded into profit or loss 16,749,857.95
The gain or loss of fair value changes arising from the holding of
financial assets and financial liabilities by non-financial enterprises
and the loss or profit arising from the disposal of them, apart from
the effective hedging for the normal business operation.
Expenses for using funds from non-financial institution recognized
in current profit/loss
Profits/loss from investments or management of assets entrusted by
others
Investment income on entrusted loan -
Assets impairment provision accrued due to force majeure, e.g.: -
Items Current year Notes
suffering natural disasters
Reversal of impairment provision of accounts receivable separately
tested for impairment
Gains from acquisition of subsidiary or associates when initial cost
is less than the fair value of identifiable net asset of invested -
company
Net gain/loss of subsidiary from combination under same control
between the beginning of year and consolidation date.
Profits/loss from non-monetary assets exchange -
Profit or loss from debts restructuring 470,096.32
One-off expenses incurred for discontinued operation activities such
-4,513,028.93
as the expense of relocating employees
Effects of gain/loss from one-off adjustments of gain/loss based on
laws and regulations of taxation and accounting.
Share payment arising from the cancellation or modification of share
incentive plans
For cash settled share payment, gains and losses arising from
changes in the fair value of employee payable after the exercise date
The profits/gains from changes of fair value for investment property
subsequently measured at fair value model
Gain/loss on excessive part from the transaction where the trading
price is obviously unfair.
Gains/ loss from contingencies beyond the normal business -
Custodian fees obtained from entrusted operations -
Non-operating revenue and expense besides the above items 4,142,445.41
Other profit or loss -
Subtotal 19,262,748.41
Effect on income tax 1,347,472.62
Attributable to minority shareholders’ equity (after tax) -110,745.07
Total 18,026,020.86
Weighted Earnings per share
average (EPS)
Profit of report period return on Basic Diluted
net assets EPS EPS
(%)
Net profit attributable to shareholders of parent company 1.94 0.07 0.07
Net profit after deducting non-recurring gains and losses
attributable to shareholders of parent company
Bingshan Refrigeration & Heat Transfer Technologies Co., Ltd
April 24, 2026
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