Wafangdian Bearing Co., Ltd. 2025annual report
Wafangdian Bearing Company Limited
Wafangdian Bearing Co., Ltd. 2025 annual report
Chapter I. Important Prompts, Table of Contents, and Definitions
The board of directors, directors and senior managers of the company shall guarantee that the contents of the
annual report are true, accurate and complete without false records, misleading statements or major omissions, and
shall bear individual and joint legal liabilities.
Company responsible person Wang Jiyuan, responsible person in charge of accounting work Sun Najuan and
responsible person in charge of accounting organization Xuan Songtao statement: ensure that the financial report
in this annual report is true, accurate and complete.
All directors have attended the Board meeting at which this report was considered.
In the third section of this report, "Management Discussion and Analysis", under the sub-section "XI. Outlook for
the Company's Future Development", the company has described the potential risks in its operations and the
corresponding measures.
In recent years, due to the impact of the global economic recession, economic restructuring, and other factors,
Wazhou B has suffered consecutive annual losses and its operating conditions have been deteriorating. Since 2025,
the superposition of multiple adverse factors has further restricted the company's operations, and its financial risks
continue to increase. If this situation persists, it will inevitably intensify the company's operating risks. Taking all
factors into consideration, Wazhou Group, as the controlling shareholder of Wazhou B, intends to initiate a
general offer to all holders of unrestricted tradable shares for the purpose of terminating the listing status of
Wazhou B, so as to fully protect the interests of Wazhou B's shareholders and demonstrate the responsibility of a
state-owned enterprise.
On January 19, 2026, Wazhou Group disclosed the "Wafangdian Bearing Co., Ltd. Takeover Offer Report", with
the offer period from January 20, 2026, to February 27, 2026. The condition for the offer to become effective is
that, as of 15:00 on the last trading day of the effective period of this takeover offer, the number of Wazhou B
public shares temporarily deposited with the Shenzhen Branch of China Securities Depository and Clearing
Corporation Limited pursuant to accepted offers exceeds 39,050,000 shares, meaning that after the acquisition, the
number of Wazhou B public shares held by the public as a percentage of total share capital falls below 10%.
According to the listing rules of the Shenzhen Stock Exchange, Wazhou B would no longer meet the listing
requirements, and thus the offer would become effective.
As of February 27, 2026, there were 1,459 shareholders who accepted the offer for Wazhou B, with a total of
"Wafangdian Bearing Co., Ltd. Takeover Offer Report", the offer has become effective.
Wafangdian Bearing Co., Ltd. 2025 annual report
The number of shares held by the public as a percentage of the company's total share capital is below 10%. In
accordance with the Securities Law, the Shenzhen Stock Exchange Listing Rules, and other relevant regulations,
the company's share distribution no longer meets the listing requirements. The company will follow the relevant
procedures to delist its shares and issue corresponding announcements.
The company plans not to distribute cash dividends, not to issue bonus shares, and not to convert retained earnings
into share capital.
As of the end of the reporting period, the parent company has accumulated losses that have not been made up.
The parent company's taxable income is insufficient to cover the losses, so there are unmade-up losses. The details
of the unmade-up loss situation can be found in Section 8, Financial Report, Item 7 of the Consolidated Financial
Statements Notes, 29th item Deferred Income Tax Assets/Deferred Income Tax Liabilities (5). The company will
not distribute dividends in 2025 due to losses.
Wafangdian Bearing Co., Ltd. 2025 annual report
Catalogue
Wafangdian Bearing Co., Ltd. 2025 annual report
File directory for reference
person responsible for accounting work, and the head of the accounting institution;
certified public accountant;
Securities Regulatory Commission (CSRC) during the reporting period, along with the original draft of the
announcement.
Wafangdian Bearing Co., Ltd. 2025 annual report
Glossary
Terms Defined as Description
Company,the Company Defined as Wafangdian Bearing Company Limited
Wazhou Group Defined as Wafangdian Bearing Group Company
the report period, the current period, the
Defined as January 1, 2025 - December 31, 2025
current year
Wazhou Liaoyang Bearing Manufacture
Liaozhou Co.,Ltd Defined as
Co.,Ltd
Dalian Wazhou Precision Motor Automotive
Dalian motor Defined as
Bearing Co., LTD
Wazhou Precision spherical Roller Bearing
Spherical company Defined as
(Wafangdian) Co., LTD
Wafangdian Bearing Company Limited The
The Board of Directors Defined as
Board of Directors
Wafangdian Bearing Co., LTD. General
General meeting of shareholders Defined as
meeting
Shen Jiao Suo Defined as Shen Zhen Stock Exchange
SRC Defined as China Securities Regulatory Commission
Wafangdian Bearing Co., Ltd. 2025 annual report
Chapter II. Company Profile and Financial Highlights
I. Company Information
Abbreviated name of the stock Wazhou B Stock code: 200706
Listing location of the
Shenzhen Stock Exchange
Company”s stock:
Chinese name of the
瓦房店轴承股份有限公司
Company
Abbreviation of Chinese
瓦轴股份公司
name
Legal representative of the
Wang Jiyuan
Company
Registered address No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China.
P.C 116300
Historical change of
registered address of the Did not change
company
office address No. 1 Beigongji Street, Wafangdian City, Liaoning Province, China.
office P.C 116300
Website http//www.zwz-200706.com
E-mail zwz2308@126.com
II.Contacts
Secretary of the Board Representative of Stock Affairs
Name Sun Najuan Ke Xin
No. 1 Beigongji Street, No. 1 Beigongji Street,
Correspondence address Wafangdian City, Liaoning Wafangdian City, Liaoning
Province, China. Province, China.
Consulting telephone 0411-62198008 0411-62198236
Fax 0411-62198333 0411-62198333
E-mail zwz2308＠126.com zwz2308＠126.com
III.Place for information disclosure
Web address for the annual report as
http://www.cninfo.com.cn
assigned by CSRC.
Information disclosure newspapers Securities Times Newspaper
Place for inquiry of the annual report Investment and Securities Department of the Company
IV.Change of Business Registration
No. of Taxation Registration 912102002423997128
Change of main business since listed None
Change of controlling shareholder all previous(if any) None
V. Other relevant information
The accounting firm employed by the company
Zhongshen Zhonghuan Certified Public Accountants (Special General
Name of accounting firm
Partnership)
No. 166 Zhongbei Road, Fuyu Lake Street, Wuchang District, Wuhan
Address of the CPA
City, Hubei Province
The name of accountants Qi Chengcheng, Liu Yan
Wafangdian Bearing Co., Ltd. 2025 annual report
Sponsoring institution hired by the Company, which is responsible to overseeing the Company’s operation on a
continuous basis:
□ Applicable ? Inapplicable
Financial consultancy institution hired by the Company, which is responsible to overseeing the Company’s
operation on a continuous basis:
□ Applicable ? Inapplicable
VI.Main accounting data and financial indicators
Whether the company needs to retroactively adjust or restate the accounting data of previous years
? Yes ? No
This year has seen an
increase or decrease
compared to the previous
year.
Operating Revenue (yuan) 2,351,123,992.31 2,053,626,920.80 14.49% 2,193,273,682.20
Net profit attributable to
shareholders of the listed -58,093,066.41 -110,212,481.53 47.29% -99,478,593.08
company (yuan)
Net Profit attributable to
Listed Companies'
Shareholders after -99,663,519.77 -141,102,071.15 29.37% -129,316,113.23
Deduction of Non-regular
Items (yuan)
Net Cash Flow Generated
from Operating Activities 385,181,444.86 105,718,993.26 264.34% 84,322,692.15
(yuan)
Basic Earnings Per Share
-0.1443 -0.2738 47.30% -0.2471
(yuan/share)
Diluted Earnings Per Share
-0.1443 -0.2738 47.30% -0.2471
(yuan/share)
Weighted Average Return
-25.26% -34.86% 9.60% -0.24%
on Net Assets
This year-end shows an
increase or decrease By the end of
By the end of 2025 By the end of 2024
compared to the previous 2023
year-end.
Total assets 2,787,274,723.39 3,316,568,117.52 -15.96% 3,180,391,222.98
Net assets attributable to
shareholders of the listed 199,023,958.34 260,983,803.23 -23.74% 371,306,068.15
company
The company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years is negative, and the
audit report of the last year shows that the company's ability to continue operating is uncertain
□ Yes ? No
After the net profit before deducting the non-recurrent gains and losses and the net profit after deducting the non-recurrent gains and
losses are compared, who is low who is negative
? Yes ? No
Project 2025 2024 Note
Operating Revenue
(Yuan) Other 2,351,123,992.31 2,053,626,920.80 Including other business income
businesses
Revenue deduction Income from non-core business activities unrelated to
amount (yuan) the main business
Revenue after
deduction (yuan)
Project 2,283,081,877.43 1,936,910,671.86 After deducting rental income of 20,482,013.45 yuan,
Wafangdian Bearing Co., Ltd. 2025 annual report
material income of 20,913,879.35 yuan, scrap material
income of 14,286,558.83 yuan, and other income such
as labor services of 12,359,663.25 yuan.
Companies that have implemented equity incentives or employee stock ownership plans can disclose the net
profit after deducting the impact of share-based payments.
This period shows a
(positive or negative)
Key accounting data 2025 2024 increase or decrease 2023
compared to the same
period last year (%)
Net profit after
excluding the impact of
-58,093,066.41 -110,212,481.53 47.29% -99,478,593.08
share-based payments
(yuan)
VII. Differences in accounting information under IAS and domestic accounting standard
□ Applicable ? Inapplicable
□ Applicable ? Inapplicable
VIII. Financial Data Summary based on Quarters
In RMB Yuan
In the first quarter In the second quarter In the third quarter In the fourth quarter
Operating revenue 670,576,656.24 660,038,561.24 545,785,818.80 474,722,956.03
Net profit attributable to the
-7,775,309.04 -13,155,602.50 -8,582,720.10 -28,579,434.77
Company’s shareholders
Net profit attributable to the
Company’s shareholders less -14,549,594.19 -17,128,032.12 -14,003,412.38 -53,982,481.08
the non-recurring profit and loss
Net cash flows arising from
operating activities
Does there exist significant difference in the foregoing financial data or their total sum from the relevant financial
data as disclosed in the quarterly reports and/or semi-annual report.
□ Yes ? No
IX. Non-recurring gain/loss items and amounts
? Applicable ? Inapplicable
In RMB Yuan
item Amount of 2025 Amount of 2024 Amount of 2023 instructions
Gain or loss on disposal of illiquid assets (including
the write-off of the asset impairment provision)
Government subsidies included in the profit and loss of
the current period (closely related to the normal
operation of the company, in line with national policies
and provisions, in accordance with the defined 8,186,389.05 11,521,588.35 10,623,570.13
standards, except government subsidies that have a
continuous impact on the profit and loss of the
company)
In addition to the effective hedging business related to
the normal operation of the company, the profit or loss
of fair value changes arising from the holding of
financial assets and financial liabilities by non-
Wafangdian Bearing Co., Ltd. 2025 annual report
financial enterprises and the loss or gain arising from
the disposal of financial assets and financial liabilities
Allowance for impairment reversal of receivables
tested separately for impairment
Gains and losses on debt restructuring 19,517,691.89 17,100,303.03 10,935,641.78
Other non-operating income and expenditure other
than those mentioned above
Other items of profit or loss that meet the definition of
non-recurring profit or loss
Less: Income tax impact 5,815,369.68 5,500,426.31
total 41,570,453.36 30,889,589.62 29,837,520.15 --
Details of other items of profit or loss that meet the definition of non-recurring profit or loss:
? Applicable ? Inapplicable
The company has no other specific situations regarding income and expenses that meet the definition of non-
recurring gains or losses.
The non-recurring profit and loss items listed in Explanatory Announcement No. 1 on Information Disclosure of
Publicly Issued Securities Companies - Non-recurring Profit and Loss are defined as the fact sheet of the regular
profit and loss items
□ Applicable ? Inapplicable
The company does not define the non-recurring profit and loss items listed in the Explanatory Announcement No.
Wafangdian Bearing Co., Ltd. 2025 annual report
Chapter III. Management discussion and analysis
I. Main business of the Company during the reporting period
The business scope of the company is licensed items: inspection and testing services, import and export of goods,
import and export of technology (items subject to approval according to law, business activities can be carried out
only after approval by relevant departments, specific business items subject to approval results) general items:
Bearing manufacturing, bearings, gears and transmission components manufacturing, high speed precision heavy-
duty bearing sales, sales bearings, gears and transmission parts, bearing sales, general equipment manufacturing
(excluding special equipment manufacturing), high-speed rail equipment, parts manufacturing, machinery and
equipment sales, rail transportation equipment, key system and parts sales, sales of lubricating oil, high-speed rail
equipment and accessories sales, Wind generators and spare parts sales, machinery parts, spare parts sales, railway
locomotive vehicle accessories manufacturing, railway locomotive vehicle accessories sales, auto parts and
accessories manufacturing, auto parts wholesale and retail auto parts, metal products repair, sales metal materials,
metal products sales, metal surface treatment and heat treatment processing, quenching process, Mechanical parts
and spare parts processing, land use right leasing, housing leasing, non-residential real estate leasing, mechanical
equipment leasing, computer and communication equipment leasing, transportation equipment leasing service,
office equipment leasing service, storage equipment leasing service, special equipment leasing, labor service
(excluding labor dispatch), Technical services, technology development, technology consultation, technology
exchange, technology transfer and technology popularization (except for projects subject to approval according to
law, independently carry out business activities according to law with business license)
The company has strong manufacturing capacity and quality assurance ability, widely serve railway, metallurgy,
mining and other industries and fields.
II. Industry situation of the Company during the reporting period
In 2025, the bearing industry is in a period of high-quality development transformation. With continuous policy
support, multiple policies encourage the research and development of high-end bearings, facilitating domestic
substitution. The trend of high-end, green and intelligent development in the industry is prominent. The domestic
production rate of high-end bearings has increased to 41%, green processes have become a key factor for
international market entry, and the application of intelligent bearings has expanded. The market size has steadily
grown, with demand concentrated in areas such as new energy vehicles and wind power. However, the industry
still faces challenges such as foreign giants monopolizing the high-end market and still having shortcomings in
core technologies and materials. Domestic enterprises are accelerating their efforts to overcome these obstacles.
III.Analysis of core competitiveness
The company has a complete product service system and possesses the ability to provide round-the-clock dynamic
services for product operation sites. It has been highly praised by customers for its "ten additional value-added
services" image. The company has strong production manufacturing capabilities and quality assurance capabilities,
and serves various industries and fields such as railways, metallurgy, and mining.
The company has currently established strategic cooperation relationships with key domestic customers in the
equipment application field. Through involvement in customer value engineering, it conducts in-depth marketing
and has firmly established the company's brand and influence in the domestic bearing market.
Wafangdian Bearing Co., Ltd. 2025 annual report
IV. Analysis of main business
During the reporting period, the company achieved a revenue of 235,112 million yuan, an increase of 14.49%
compared to the same period last year. The net profit attributable to the shareholders of the listed company was -
reporting period, the company's total assets were 279,973 million yuan, a decrease of 15.58% compared to the
beginning of the period; the net assets attributable to the shareholders of the listed company were 21,148 million
yuan, a decrease of 18.97% compared to the beginning of the period.
(1) Composition of operating revenue
Unit：yuan
Year-on-year
Proportion in the Proportion in the
Amount Amount increase/decrease
operating revenue operating revenue
Total operating
revenue
Classified based on sectors
exit 57,171,157.03 2.43% 127,671,159.01 6.22% -55.22%
Traffic bearing 416,239,084.61 17.70% 428,677,399.77 20.87% -2.90%
Special bearing 834,385,530.16 35.49% 637,224,088.58 31.03% 30.94%
Universal bearing 896,885,586.99 38.15% 662,516,982.77 32.26% 35.38%
Industrial
operation
Other business 68,042,114.88 2.89% 116,716,248.94 5.68% -41.70%
Classified based on product
bearing 2,204,681,358.79 93.77% 1,856,089,630.13 90.38% 18.78%
Industrial
operation
Other business 68,042,114.88 2.89% 116,716,248.94 5.68% -41.70%
Classified based on regions
domestic 2,293,952,835.28 97.57% 1,925,955,761.79 93.78% 19.11%
abroad 57,171,157.03 2.43% 127,671,159.01 6.22% -55.22%
Classified by sales model
(2) The industry, product, region and sales mode accounting for more than 10% of the company's
operating revenue or operating profit
? Applicable ? Inapplicable
Unit:yuan
Operating
Operating costs
income was Gross margin
Operating Gross profit increased or
Operating cost up or down was up or down
income margin decreased from
from a year from a year ago
a year earlier
earlier
Classification by industry
Wafangdian Bearing Co., Ltd. 2025 annual report
exit 57,171,157.03 44,226,168.02 22.64% -55.22% -60.71% 10.81%
Traffic bearing 2,147,510,201.76 1,813,429,979.76 15.56% 24.25% 20.16% 2.88%
Special bearing 416,239,084.61 372,966,069.17 10.40% -2.90% -2.29% -0.56%
Universal
bearing
Industrial
operation
Other business 78,400,518.64 49,861,556.12 36.40% -2.99% -0.59% -1.54%
Classification by product
bearing 2,204,681,358.79 1,857,656,147.78 15.74% 18.78% 14.54% 3.12%
Industrial
operation
Other business 68,042,114.88 41,224,237.16 39.41% -41.70% -23.71% -14.29%
Classification by regions
domestic 2,293,952,835.28 1,904,515,773.04 16.98% 19.11% 18.04% 0.75%
abroad 57,171,157.03 44,226,168.02 22.64% -55.22% -60.71% 10.81%
Classified by sales model
If the statistical caliber of the company's main business data is adjusted during the reporting period, the company's
main business data in the recent year shall be adjusted according to the caliber at the end of the report
? Applicable ? Inapplicable
(3) Whether the company's income from physical sales is greater than the income from labor service
? yes ? no
Industry Compared with
item unit 2025 2024
classification last year(+/-)
sales set 14,475,803 14,640,019 -1.12%
bearing production set 12,018,520 15,100,826 -20.41%
inventory set 9,269,119 11,726,402 -20.96%
Causes of the change in the year-on-year data by over 30%
? Applicable ? Inapplicable
(4) Implementation of Important Sale Contracts Concluded at the End of the Reporting Period
□ Applicable ? Inapplicable
(5) Composition of Operating Costs
Classified based on sectors and products
Unit :yuan
Proporti
Proportion
Product item on in Year-on-year
in
classification Amount operatin Amount (+/-)
operating
g
costs
costs
bearing 1,857,656,147.78 95.33% 1,621,777,317.32 93.96% 14.54%
Among them:
bearing 1,381,733,627.34 70.90% 1,137,686,069.21 65.91% 21.45%
raw materials
bearing Labor cost 189,143,886.28 9.71% 206,224,826.34 11.95% -8.28%
bearing depreciation 45,494,279.13 2.33% 47,273,092.13 2.74% -3.76%
Energy
bearing 53,302,550.15 2.74% 65,179,460.08 3.78% -18.22%
consumption
bearing other 187,981,804.88 9.65% 165,413,869.56 9.58% 13.64%
Industrial 49,861,556.12 2.56% 50,159,866.67 2.91% -0.59%
Wafangdian Bearing Co., Ltd. 2025 annual report
operation
Other business 41,224,237.16 2.12% 54,039,487.45 3.13% -23.71%
total 1,948,741,941.06 100.00% 1,725,976,671.44 100.00% 12.91%
Instructions
This year's bearing cost - "Other" includes the following items:
Consumables amounted to 75,159,036.79 yuan, leasing expenses 19,201,739.67 yuan, subcontracting/outsourcing
costs 42,415,592.43 yuan, logistics expenses 22,155,280.31 yuan, packaging costs 18,369,917.72 yuan, and other
expenses including repair and safety production fees totaled 10,680,237.96 yuan.
(6) Is there any change in the consolidation scope in the reporting period
□ Yes ? No
(7) Is there any significant change or adjustment related situation take place in the Company’s business,
products or services in the reporting period
□ Applicable ? Inapplicable
(8) Major trade debtors and major suppliers
The company mainly sells customer information
Total sales amount of top five customers (Yuan) 886,103,807.56
The total sales amount of the top five customers accounts for the total annual sales 37.69%
Proportion of related party sales of top five customers in total annual sales 15.87%
Company's top 5 major customer information
Percentage of total
No. Customer name Sales (Yuan)
annual sales
Total -- 886,103,807.56 37.69%
Other information of major customers
□ Applicable ? Inapplicable
Company's major suppliers
Total Purchase Amount of Top 5 Suppliers (RMB) 1,367,099,721.23
The total purchase amount of the top five suppliers accounts for the
proportion of the total annual purchase
The proportion of the purchase amount of related parties in the total annual
purchase amount of the top five suppliers
Profiles of top 5 suppliers
Amount of Percentage in total
Serial number Supplier name
purchase(RMB) purchase of year(%)
total -- 1,367,099,721.23 59.72%
Other information of major suppliers
□ Applicable ? Inapplicable
During the reporting period, the revenue from the company's trading business accounted for more than 10% of the
total revenue.
□ Applicable ? Inapplicable
Wafangdian Bearing Co., Ltd. 2025 annual report
In RMB Yuan
Year-on-year
increase/decrease
Sales expenses 132,802,981.57 160,646,188.33 -17.33%
Administrative expenses 131,424,173.68 125,074,518.31 5.08%
Financial expenses 12,178,503.79 28,932,462.53 -57.91% Interest expenses have decreased
Investment in research and development
R&D expenses 143,367,714.53 113,321,379.95 26.51%
materials has increased
? Applicable ? Inapplicable
Name of main R&D Expected impact on the company's
Project purpose Project progress The goal to be achieved
project future development
By adopting reasonable processes
It will lay a solid foundation for the
and setting the optimal processing
Research on Bearing Master the manufacturing technology of processing and inspection of self-
The technical breakthrough project parameters, rapid detection can be
Technology in the self-aligning roller bearings and achieve the aligning roller bearings, improve the
has been completed and meets the achieved, reducing process defects,
Paper Industry - The domestic substitution of imported bearings stability of product processing, and
design requirements. thereby increasing production
Large Spherical Project in key fields of this series. expand the brand influence and market
efficiency and reducing defective
share of the ZWZ brand.
products.
Fully leverage the advantages of the
By leading the sales units with
Championing the production line of self-aligning roller
products for market development,
Grinding Processing bearings, increase the output of Wazhou The technical breakthrough project It will steadily enhance production
more than 10 new customers will be
Technology for self-aligning roller bearings, meet the has been completed and meets the efficiency and delivery rate, reduce
developed throughout the year,
Medium and Large delivery requirements of the market for design requirements. labor costs, and seize market share.
enhancing sales revenue and market
Spherical Bearings customers, and enhance the manufacturing
share.
capacity of the enterprise.
The product quality has been
Reduce the tolerance range of the
comprehensively improved. The deviations
carburized layer of the product (the Significantly improve the production
of key indicators such as the depth of
deviation of the carburized layer is efficiency of the enterprise, reduce
Breaking Through the carburizing layer, hardness and carbon The technical breakthrough project
controlled within ±0.15); achieve maintenance costs, reduce failure
Precise Carburizing concentration gradient of the product are has been completed and meets the
the same carburized layer process to losses, promote technological
Technology controlled within a very small range, design requirements.
control the deviation of the innovation, and ultimately bring about
ensuring that the quality of each product is
carburized layer within ±0.2 range an increase in economic benefits.
uniform and stable, meeting the
in different carburizing furnaces.
requirements of high-precision products.
Wafangdian Bearing Co., Ltd. 2025 annual report
It will lay a solid foundation for the
Research on the Improve the quality of bearing quenching Improve the grinding processing
The defects caused by the rolling path processing and inspection of spherical
Process of Removing parts, reduce the number of unit quality efficiency of the finished products,
connection processing have been roller bearings, improve the stability
the Abrasion Marks on complaints, and increase the unit grinding reduce the wear of the grinding
completely resolved, achieving the of product processing, and expand the
the Inner Raceway of processing efficiency of the finished wheel, and lower the loss of
design goal. brand influence and market share of
the Cone products. defective products.
the ZWZ brand.
base surface of the rolling elements,
By studying and optimizing the convexity of change the radius of the rolling
the bearing raceway and the convexity of element ball base surface and the
the outer diameter of the rolling elements, contour of the rolling surface,
the rolling elements, the R value of the increase the bearing capacity of the The promotion and application of this
spherical base plane, etc., design enhanced large retaining edge, and improve the project will significantly increase the
Research on the Roller
wind turbine drive shaft bearings and carry problem of retaining edge cracking. market share of the enterprise's series
Profile and Convexity The optimization design of the wind
out batch production, improve the quality Perform shape processing on the of products, reduce quality loss costs,
of the Drive Shaft power bearing has been completed.
and brand value of the products, facilitate inner and outer ring raceways to promote technological innovation, and
Bearing
market development, achieve an increase in increase the bearing capacity of the ultimately bring about an increase in
sales revenue, reduce the quality risk of raceways. 2. Study the contact area economic benefits.
large flange cracking, and thereby achieve between the retaining edge and the
the goal of reducing customer complaints rolling element ball base surface,
and minimizing quality losses. optimize the processing and
detection process of the retaining
edge angle.
This will make the process more
stable, improve quality reliability;
facilitate customer selection, enhance
The processing and design plan for cylindrical bearings, the number of
Simplified Design and cylindrical bearings has been existing drawings can be reduced,
cylindrical bearings, the risk of nail heads customers; at the same time, reduce
Manufacturing of determined, and the optimization effectively lowering production and
falling off can be reduced, and user the weight and cost of the cage,
Cylindrical Bearings design of 34 specifications has been management costs, and improving
complaints can be decreased. enhancing the quality competitiveness
completed. production efficiency and market
and price competitiveness of large and
competitiveness.
medium-sized cylindrical bearings of
Wazhou.
Wafangdian Bearing Co., Ltd. 2025 annual report
drawings, after standardization, the backlog The locking sleeve for the large of the cage to an EM self-riveted Improve the quality of bearings,
Research on Improving
of work-in-progress can be reduced, and the contact angle angular contact bearings assembly structure cage, the increase customer satisfaction with the
Assembly Quality of
turnover efficiency of work-in-progress can has been changed from the outer ring bearing's load-bearing capacity can company's products, and increase the
Precision Angular
be improved. Eliminating the nail riveting to the inner ring. The processing plan be effectively enhanced, and the market share of Wazhou's precision
Contact Bearings
process can reduce labor costs and increase has been solidified. bearing's service life can be angular contact bearings.
the production time for product assembly. prolonged.
documents without outer rings, new
product assembly fixtures, process
reviews, process validations for the
Development and new products' processing, the
Manufacturing of Full- 3. By optimizing the design parameters of solidification operation of operation 3. Reducing the weight of the cage
Improve product quality, production
Loaded Cylindrical the cage and reducing the weight of the instructions for the three newly arrived can decrease its weight and lower
efficiency and market share.
Roller Bearings cage, the cost of the cage can be reduced. automatic assembly machines, and the costs.
without Outer Rings solidification of the guidance for
recycling and reusing plastic bushings
have been completed. Partial
specifications have been produced in
small batches.
quantity of the inner ring. Determine a
Completed the production of new
scientific and reasonable calculation method
product assembly process documents,
for the locking quantity of the inner ring
new product assembly fixtures,
assembly to ensure a comfortable assembly Realize the application of ceramic
conducted process reviews and Improve product quality, reduce
Development and process and avoid damage to the steel balls balls in high-speed angular contact
verification of the new product customer complaints. Enhance
Manufacturing of and raceways. 2. Determination of the bearings and improve the
processing procedures. Purchased an production efficiency, improve
Precision Angular assembly process and parameters: Through measurement method for the
electric spindle and additionally product quality stability, and increase
Contact Bearings process verification, determine a reasonable protrusion amount of assembled
equipped 8 sets of sample bearings for market share.
assembly process and heating temperature, bearings.
testing at the bearing and shaft
time, freezing temperature, time, etc. of the
technology center to evaluate their
inner ring, to improve production efficiency.
performance.
measuring the protrusion quantity.
Wafangdian Bearing Co., Ltd. 2025 annual report
Completed the ultra-precision tests in Improve product quality, reduce
Research and Improve product quality and production Achieve an increase in the
accordance with the relevant plans, customer complaints. Enhance
manufacturing of four- efficiency, eliminate customers' complaints production quality, product output
compiled process cards, fixed the production efficiency, improve
point angular contact about bearing vibration and abnormal and production efficiency of four-
process parameters, and ensured product quality stability, and increase
bearings sounds, and increase user satisfaction. point angular contact bearings.
product quality. market share.
At present, the design of multiple Through optimized design, the roller
Complete the design of product drawings, models of products, drawings, bearing is endowed with features
Research and
processes, and fixtures for three grinding processes, assembly such as low torque and long service Improve product quality, production
manufacturing of idler
specifications of products, and the products processes, and production tools for life. The annual sales revenue growth efficiency and market share
roller bearings
have been supplied in batches. Project 3 has been completed, and it target of 30% to 50% for the roller
has entered the pilot production stage. bearing is achieved.
Formulate a mature processing plan for the
bearing of new energy motors, including:
At present, the design of multiple
Research and product drawings, product quenching part
bearing model products, drawings, Provide customers with high-quality
manufacturing of new drawings, product grinding processing
grinding processes, assembly bearing products and expand the Improve product quality, production
energy motor bearings technology, product assembly process, etc.
processes, and production tools for the market for new energy vehicle efficiency and market share
and electric drive to conduct performance tests on the bearing.
project has been completed, and it has bearings.
bearings Provide customers with high-quality bearing
entered the pilot production stage.
products and expand the market for bearing
products of new energy vehicles.
Under the premise of ensuring the
service life of the bearing, Optimize the angular contact structure
Solve the problem of poor heat dissipation
reasonably design the copper cage to enhance the versatility of the ring,
performance and low material utilization This project was initiated in January
New structure design of structure to reduce the weight of the reduce production site management
rate of the inner ring structure of angular 2025. Up to now, all research tasks
angular contact ball copper cage; reasonably design the costs and increase production
contact products, as well as the impact of have been completed and it has
bearings BM inner ring structure to improve efficiency; optimize the copper cage
the existing design of copper retaining rings entered the acceptance stage.
material utilization and enhance the structure to lower the cost of the
on product performance and cost.
heat dissipation performance of the copper cage.
bearing.
Wafangdian Bearing Co., Ltd. 2025 annual report
Company r & D personnel
Number of R&D personnel (people) 491 537 -8.57%
The proportion of R&D personnel 19.19% 22.77% -3.58%
Educational structure of R&D personnel
undergraduate 140 135 3.70%
Master's degree 35 16 118.75%
Age composition of R&D personnel
Under 30 years old 41 74 -44.59%
R&d investment of the company
R&d investment amount (Yuan) 143,367,714.53 113,321,379.95 26.51%
R&d investment as a percentage of
revenue
Capitalized amount of R&D
investment (Yuan)
Capitalized R&D investment as a
percentage of R&D investment
Causes and impacts of major changes in the composition of r&d personnel
? Applicable ? Inapplicable
The reason for the significant change in the proportion of total R&D investment to revenue over the previous year
□ Applicable ? Inapplicable
The reason of the large change of capitalization rate of R&D investment and its rationality explanation
□ Applicable ? Inapplicable
Unit:yuan
Year-on-year
item 2025 2024
(+/_)
Subtotal of cash inflows from operating activities 1,093,438,868.96 1,275,357,527.67 -14.26%
Subtotal of cash outflow from operating activities 708,257,424.10 1,169,638,534.41 -39.45%
Net cash flow from operating activities 385,181,444.86 105,718,993.26 264.34%
Subtotal of cash inflows from investment
activities
Subtotal cash outflow from investment activities 1,892,244.21 5,996,953.69 -68.45%
Net cash flow from investment activities 581,812.52 -4,292,339.64 -113.55%
Subtotal of cash inflows from financing activities 744,988,414.20 1,311,690,323.73 -43.20%
Subtotal cash outflows from financing activities 1,228,396,196.34 1,365,299,063.67 -10.03%
Net cash flows from financing activities -483,407,782.14 -53,608,739.94 801.73%
Net increase in cash and cash equivalents -97,261,978.70 50,242,737.61 -293.58%
Explanation of the main influencing factors for the significant year-on-year changes in relevant data
? Applicable ? Inapplicable
Unit: Ten thousand yuan
Wafangdian Bearing Co., Ltd. 2025 annual report
From January Last year at Increase or Percentage
Serial
Project to December the same decrease increase or Reason for Changes
Number
in 2025 time amount decrease
Operating activities: Net inflow decreased by 18,192
million yuan (mainly due to a decrease of 16,895 million
Net cash flow
yuan in cash received from sales of goods and provision of
generated from
operating
activities
million yuan in cash paid for purchasing goods and
receiving services)
Investment activities: Cash inflow increased by 77 million
yuan (mainly due to an increase of 77 million yuan in net
Net cash flow
cash recovered from the disposal of fixed assets, intangible
generated from
investing
Cash outflow decreased by 410 million yuan (mainly due
activities
to a decrease of 410 million yuan in cash paid for the
construction of fixed assets)
Financing activities: Cash inflow decreased by 56,670
Net cash flow million yuan (mainly due to a decrease of 54,600 million
generated from yuan in cash received from obtaining loans); Financing
financing activities: Cash outflow decreased by 13,690 million yuan
activities (mainly due to a decrease of 13,384 million yuan in cash
paid for other matters related to financing)
Explanation of the reasons for the significant difference between the net cash flow generated from the company's
operating activities during the reporting period and the net profit of the current year
□ Applicable ? Inapplicable
V.Analysis of Non-Core Business Operations
□ Applicable ? Inapplicable
VI. Situation of assets and liabilities
Unit：yuan
At the beginning of the year Notes
At the end of the year 2025
Percentage Percentage proportio Major
Amount of total Amount of total n (+/_) Chang
assets assets es
monetary resources 65,287,519.84 2.34% 239,398,923.10 7.22% -4.88%
accounts receivable 872,114,645.31 31.29% 30.94% 0.35%
Contract Asset 5,258,761.24 0.19% 11,498,470.21 0.35% -0.16%
stock 636,325,993.85 22.83% 688,440,738.43 20.76% 2.07%
Investment property 73,919,295.42 2.65% 71,679,927.05 2.16% 0.49%
fixed assets 406,111,493.56 14.57% 437,398,315.29 13.19% 1.38%
construction in
process
money borrowed for 82,053,118.00 2.94% 570,000,000.00 17.19% -14.25%
Wafangdian Bearing Co., Ltd. 2025 annual report
short time
Contract Liability 31,776,246.33 1.14% 34,098,145.99 1.03% 0.11%
Foreign assets account for a relatively high proportion
? Applicable ? Inapplicable
? Applicable ? Inapplicable
Unit：yuan
Current fair
Accumulated Impairme
value Current Current
Ending changes in nt of the Other The final
item change Purchase Sale
balance fair value of current changes number
profit and Amount Amount
equity period
loss
Financial assets
financial
assets
(excluding 221,882.59 24,653.63 -320,497.08 246,536.22
derivative
financial
assets)
Equity
Instrument
Investment
s
Subtotal of
Financial 24,653.63 0.00 0.00 0.00 0.00
Assets
receivables 48,925,906. 1,044,689 17,047,616.4 64,928,833.
financing 07 .43 4 08
(1) Notes 48,925,906. - 45,079,733.
Receivable 07 3,846,172.21 86
(2) Supply
Chain
.43 5 22
Certificate
Total above 24,653.63 0.00 0.00
financial
liabilities
Other changes：Other changes in notes receivable represent the net amount of revenues and expenditures. Supply
chain vouchers were reclassified to accounts receivable financing during the period.
Whether the measurement attribute of the company's main assets has changed significantly during the reporting
period
□ Yes ? No
The end of the year the beginning of the year
item Book Restricted Restricte Book Restricted Restricte
Book value Book value
balance type d case balance type d case
Other
Monetary 45,920,930.0 45,920,930.0 Bill
Monetary
funds deposit
Funds
Other Letter of Other Letter of
Monetary 370,597. 28,240,000.0 28,240,000.0
Monetary Credit Monetary credit
funds 370,597.99
Funds Deposit Funds deposit
Wafangdian Bearing Co., Ltd. 2025 annual report
Other Other
Monetary 1,001,46 1,001,467.1 Guarante Guarante
Monetary Monetary
funds e Deposit 4,330,694.83 4,330,694.83 e deposit
Funds Funds
SDN
Monetary 269,718. Bank
Sanction
funds 269,718.32 Deposits
s Freeze
Litigation
Monetary Bank
Involvem
funds 416.84 416.84 Deposits
ent
Accounts Financial Bill
Receivabl 16,503,410.7 16,503,410.7 company Pledge
e Bills acceptanc
Accounts 7 7 e bill
Receivabl
e
Accounts Commerci Bill
Receivabl 20,888,325.7 20,888,325.7 al Pledge
e Bills acceptanc
Total 0 0 e bill
Monetary Bank Bill
funds 1,177,401.62 1,177,401.62 acceptanc Pledge
e draft
Monetary
Expired
funds 59,547,2 59,547,219. Supply
endorse
chain bill
ment
Monetary
See Expired
funds 405,338, 405,338,56
Section 6, endorse
(3) ment
Monetary
funds 466,527, 466,527,98 117,060,762. 117,060,762.
—— —— —— ——
V. Investment
□ Applicable ? Inapplicable
investments during the reporting period
□ Applicable ? Inapplicable
□ Applicable ? Inapplicable
(1) securities investment
? Applicable ? Inapplicable
Unit :yuan
Curre Accu Profit
The Accou Curre
Initial nt fair mulat Curre and
Variet abbre nting nt Endin Accou Sourc
Variet cost Initial value ed nt loss
ies of viatio measu Purch g nting es of
ies of of book chang chang Sale during
securi n of remen ase book subjec fundin
code invest value e es in Amou the
ties securi t Amou value t g
ment profit fair nt report
ties model nt
and value ing
Wafangdian Bearing Co., Ltd. 2025 annual report
loss of period
equity
Dome
Chon Fair Tradi
stic
gqing value - ng debt-
and 60100 567,0 221,8 24,65 246,5
iron measu 320,4 0.00 0.00 0.00 financ for-
foreig 5 33.30 82.59 3.63 36.22
and remen 97.08 ial equity
n
steel t assets
stocks
total -- 320,4 0.00 0.00 0.00 -- --
(2)derivatives investment
□ Applicable ? Inapplicable
There is no derivative investment during the reporting period.
VIII. Sales of Significant Assets and Equity
□ Applicable ? Inapplicable
□ Applicable ? Inapplicable
IX. Analysis on Principal Subsidiaries and Mutual Shareholding Companies
? Applicable ? Inapplicable
The situation of the main subsidiaries and the equity participation companies that have an impact of more than
In RMB Yuan
Company Compa Principal registered Operating operating
total assets net asset net profit
name ny type business capital income profit
Product and Sale
Liaoyang -
Subsidi Bearing and 19,350,00 208,710,65 171,403,47
Bearing 70,870,2 780,584.51 806,541.89
ary machine-electrical 0 7.33 3.90
company 47.89
equipment
Dalian
Wazhou
Product and Sale
Precision -
Subsidi Bearing and 10,000,00 156,056,74 168,853,74 3,162,195.5 3,256,163.7
Motor 86,530,2
ary machine-electrical 0 3.47 5.41 1 6
Automotive 82.62
equipment
Bearing
Co., LTD
Wzhou
precision
Product and Sale
spherical
Subsidi Bearing and 194,000,0 244,363,00 114,293, 278,580,25 - -
roller
ary machine-electrical 00 6.50 205.62 1.78 898,921.62 898,065.62
bearing(Wa
equipment
fangdian)
Co.,Ltd.
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable ? Inapplicable
Description of the main holding and shareholding companies
X.A structured entity controlled by a company
□ Applicable ? Inapplicable
Wafangdian Bearing Co., Ltd. 2025 annual report
XI.The prospect of the company's future development
Currently, the international and domestic macroeconomic environment is under pressure, and the severe situation
is gradually becoming more prominent. Compared with the international giants in the bearing industry, we still
have gaps in core technologies, product stability, global services and operational efficiency; at the same time,
domestic competitors are competing in emerging fields such as new energy, and the market competition is
becoming increasingly fierce. Global manufacturing is undergoing profound changes, artificial intelligence, green
low-carbon and intelligent manufacturing are accelerating development, bringing new opportunities and new
challenges to the development of the bearing industry.
Due to the intensification of geopolitical conflicts, unilateralism, the expansion of the United States' reach, and
trade protectionism, the international environment has become more complex and severe. The company's internal
and external production and operation in the future face a complex and harsh environment. The company's direct
export business is blocked, and it faces difficulties in capital allocation and resource integration. The survival
pressure in multiple aspects such as funds, procurement, and sales continues to increase.
In response to this, the company has determined its future development ideas: Under the leadership of the
municipal committee, municipal government, and municipal state-owned assets supervision and administration
commission, relying on the effective coordination and strong support of the major shareholder, with stability and
continuous operation as the main line, and "structural adjustment", "preparation for layout", "benefit priority", and
"key breakthroughs" as the four major principles, carry out all work in 2026.
In 2026, the company will continue to focus on doing addition for major customers, deeply cultivate high-value
major customers, and concentrate resources to expand the existing market; gather core products to do subtraction,
adhere to "profitable income" and "profit with cash flow", focus on product refinement and specialization,
increase mid-to-high-end product revenue, and abandon non-core products with poor market prospects and no
competitive advantages; gather sales prices to do value addition, adhere to "calculate and act, make profits by
acting", minimize the adverse impact of export trade as much as possible, reconstruct the sales price management
system, and improve product gross profit margin; deepen lean production, supply chain transformation,
technological innovation, etc., focus on cost reduction and efficiency improvement, and consolidate development
advantages; actively raise funds to repay loans.
XII. Statement of Such Activities as Reception of Survey, Communications, Interview, etc.
? Applicable ? Inapplicable
The main contents of Index of the
Reception Reception Reception
Reception time Reception place the discussion and the basic facts of the
mode object type object
information provided survey
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investor
the company
XIII. The formulation and implementation of the market value management system and the valuation
enhancement plan
Has the company formulated a market value management system?
□ Yes ? No
Has the company disclosed the valuation enhancement plan?
□ Yes ? No
IXV.the implementation of the "Quality return double improvement" action plan
Whether the company disclosed the "quality return double improvement" action plan.
□ Yes ? No
Wafangdian Bearing Co., Ltd. 2025 annual report
Chapter IV Corporate governance, environment and society
I. Basic situation of corporate governance
The company has established a corporate governance structure consisting of the shareholders' meeting, the board
of directors, specialized committees of the board, and senior management personnel in accordance with relevant
regulatory provisions such as the "Company Law" and the "Securities Law". This has formed a mechanism of
mutual coordination and mutual checks and balances among the power institutions, decision-making institutions,
supervisory institutions and senior management, with clear rights and responsibilities and standardized operation.
The company has also established internal systems in areas such as independent directors, information disclosure,
investor protection, related party transactions, and internal control. Through the formulation of the "Company
Charter" and the implementation of various internal systems, the company has clarified the responsibilities,
authorities, procedures and obligations of each level of institution in decision-making, execution and supervision.
Whether the actual situation of corporate governance is materially different from laws, administrative regulations
and regulations on listed company governance issued by CSRC
? yes ? no
The actual situation of corporate governance is not significantly different from laws, administrative regulations
and regulations on listed company governance issued by the CSRC.
II. The company's independence from the controlling shareholders and actual controllers in ensuring the
company's assets, personnel, finance, institutions and business
In terms of business, personnel, assets, institutions and finance, the Company and the controlling shareholder are
independently accounting, undertaking responsibilities and risks independently. There is no situation in which the
company and the controlling shareholder cannot guarantee their independence and independent operation ability
in terms of business, personnel, assets, institutions and finance.
III. The situation of industry competition
? Applicable ? Inapplicable
IV.The situation of directors, supervisors and senior managers
Wafangdian Bearing Co., Ltd. 2024 annual report
Number of
Initial Number of
Expiry shares Other Ending Reason
positio number shares to be
Name Age Status of Starting Date Date of increased in changes shares of
n Gender of shares sold at current
employment of Tenure Tenure current period (share) (shares) change
(shares) period (shares)
(shares)
Chairman Incumbent 28 August 2024
Zhang Xinghai male 57
Director Incumbent 17 September 2015
Chen Jiajun male 58 Director Incumbent 26 June 2013
Director, General
Wang Jiuyuan male 59 Incumbent 19 May 2021
Manager
Director, Deputy Leave one's 15 January
Tan Jianguang male 61 6 September 2019
General Manager post 2025
Director,
Secretary of the
Sun Naijuan female 57 Incumbent 26 June 2013
Board, Chief
Accountant
Leave one's 19 January
Zhao Qingtao male 48 Director 19 May 2022
post 2025
Leave one's 19 January
Square wave female 53 Director 26 June 2013 1,500 0 0 0 1,500
post 2025
Director Incumbent 28 August 2024
male
Li Huawei 51 Vice General
male Incumbent 18 December 2019
Manager
Independent
Liu Yuping male 69 Incumbent 31 May 2023
Director
Independent
Wen Bo male 62 Incumbent 19 May 2022
Director
Independent
Li Rizhu female 61 Incumbent 24 May 2024
Director
Independent
Wang Yan female 62 Incumbent 19 May 2021
Director
Director Incumbent 23 May 2025
male
Li Dong 48 Vice General
male Incumbent 20 January 2025
Manager
Employee
Lu Ning male 40 representative Incumbent 23 May 2025
director
total -- -- -- -- -- -- 1,500 0 0 1,500 --
Wafangdian Bearing Co., Ltd. 2024 annual report
During the reporting period, whether any directors or supervisors leave office or senior managers are
dismissed
? yes ? no
changes.
changes.
from his positions as a director and deputy general manager.
Changes of directors, supervisors and senior managers of the company
? Applicable ? Inapplicable
Name post type Date Cause
Zhao Qingtao Director Leave one's post 19 January 2025 personal reasons
Fang Bo Director Leave one's post 19 January 2025 personal reasons
Director, Deputy
Tan Jianguang Leave one's post 15 January 2025 retire
General Manager
The professional background, main work experience and main responsibilities of the current directors and
senior managers of the company
Mr. Zhang Xinghai was born in October 1968. He holds a university degree and is a senior accountant at
the researcher level. He started working in July 1991. He used to be the Deputy chief Accountant and
secretary of the board of directors of Wafangdian Bearing Co., LTD., a director, chief accountant and
secretary of the board of directors of Wafangdian Bearing Co., LTD. Currently, he serves as the deputy
secretary of the Party Committee, general manager and director of Wafangdian Bearing Group Co., LTD.,
and the chairman of this company.
Mr. Chen Jiajun was born in December 1967. He holds a university degree and is an economist and
statistician. He started working in August 1990. He used to be the section chief, assistant minister, deputy
minister and minister of the Economic Operation Department of Wafangdian Bearing Group Co., LTD., as
well as the assistant general manager and minister of the Economic Operation Department of Wafangdian
Bearing Group Co., LTD. He is currently the Deputy Secretary of the Party Committee, Deputy General
Manager and Employee Director of Wafangdian Bearing Group Co., LTD., and a director of this company.
Mr. Wang Jiyuan was born in December 1966. Graduated from Liaoning University with a bachelor's
degree in Industrial Economics. He has successively held positions such as Deputy Minister of the Business
Management Department, Minister of the Planning and Finance Department, Deputy General Manager of
this company, and Assistant General Manager of Wazhou Group Company. He is currently a director of
Wafangdian Bearing Group Co., Ltd. and the director and general manager of this company.
Ms. Sun Najuan, born in October 1968, holds a university degree and a master's degree. She is a senior
accountant at the researcher level and started working in August 1990. He used to be an accountant and the
head of the inspection section in the Finance Department of Wafangdian Bearing Group Co., LTD.,
assistant general manager of the Materials Supply Company and assistant general manager of the Sales
Wafangdian Bearing Co., Ltd. 2024 annual report
General Company of Wafangdian Bearing Co., LTD., director and deputy chief accountant of Wafangdian
Bearing Group Co., LTD. Currently, he serves as the chief accountant, director and secretary of the board
of Wafangdian Bearing Co., LTD.
Mr. Li Huawei was born in June 1974. University degree, master's degree, senior engineer. He started
working in August 1996 and has successively held the positions of deputy director, executive deputy
director and director of the Engineering Research Center of Wazhou Group, as well as deputy chief
engineer of the group Company. Currently serves as a director and deputy general manager of the company.
Mr. Li Dong, born in March 1978, is of Han ethnicity and holds a Master's degree in Engineering. He
joined the Communist Party of China in May 1999. He graduated from Liaoning Institute of Technology
with a bachelor's degree in Foreign Trade in July 2000 and started working in July 2000. He has held
positions such as General Manager of the Import and Export Department of Wazhou Joint Stock Company,
Assistant General Manager of Wazhou Joint Stock Company, General Manager (and concurrently Director)
of the Export Automotive Bearing Division, General Manager (and concurrently Director) of Wazhou
Group's High-End Automotive Bearing Co., Ltd., Assistant General Manager of Wazhou Group, Director
of the Development Department of Overseas Business Division (and concurrently), Director of the
Information Engineering Department of Wazhou Group (and concurrently), and Information Director of
Wazhou Group. Currently, he is a director of Wazhou Europe Company, a subsidiary of Wazhou Group, a
director of our company, the Vice President of our company's International Business Division, and the
General Manager of our company's International Business Division.
Ms. Sun Ye, born in February 1973, holds a bachelor's degree. She is a probationary member of the
Communist Party of China (became a probationary member on September 5, 2024). Currently, she serves
as the deputy secretary and financial officer of the Dalian Youth Development Foundation. Employee
representative director
Mr. Lu Ning, male, born in June 1985, of Han ethnicity, started working in July 2009. He holds a
bachelor's degree and is an assistant engineer. He graduated from the Engineering Mechanics Department
of Liaoning Technical University. Currently, he holds the position of the Director of the Warehouse and
Logistics Department of the Management and Operation Center.
Mr. Liu Yuping, born in August 1956, is a professor. Since graduation, he has been teaching at the Law
School of Dongbei University of Finance and Economics. Currently, he serves as the director of the
Teaching Department of the Law School of Dongbei University of Finance and Economics. He also
concurrently holds positions as an arbitrator at the Dalian Arbitration Commission, a lawyer at Liaoning
Zhonglin Law Firm, a legal advisor to the Economic and Technological Development Corporation of
Dongbei University of Finance and Economics, LTD. Vice President of the Constitution and
Administrative Law Society of Liaoning Province, with rich legal knowledge.
Ms. Wang Yan, born in 1963, used to be a professor and master's supervisor at the Law School of Dongbei
University of Finance and Economics. In 1981, graduated from China University of Political Science and
Law, obtaining a bachelor's degree in law. In 1988, graduated from China University of Political Science
and Law, obtaining a Master's degree in Economic Law. Since 1988, She has been teaching at the Law
Wafangdian Bearing Co., Ltd. 2024 annual report
School of Dongbei University of Finance and Economics. Ms. Wang Yan has served as an independent
director of China Dalian International Cooperation (Group) Co., LTD. (former), China General Nuclear
Power Technology Development Co., LTD. (former), Dalian Liancheng Numerical Control Machinery Co.,
LTD. (current), and Bingshan Cold and Heat Technology Co., LTD. (former). Part-time positions: Director
of the China Society of Economic Law, President of the Economic Law Society of the Liaoning Law
Society, Academic Committee Member of the Liaoning Law Society; Standing Director of the First
Council of Dalian People's Mediation Association, Member of the Expert Consultative Committee of
Dalian Intermediate People's Court, Legal Advisor of Dalian Consumers' Association, Pulandian Municipal
Government, and the Office for Law-based Governance of Dalian Municipal Government; Arbitrator of
Dalian, Anshan and Benxi Arbitration Commission, part-time lawyer; She has successively held the
positions of Director of the Economic Law Teaching Department and Vice Dean of the Law School at
Dongbei University of Finance and Economics.
Mr. Wen Bo was born in 1963. He graduated from the Law Department of China University of Political
Science and Law.He is now the founding partner of Liaoning Huacheng Law Firm and legal counsel to the
Dalian Municipal Party Committee and Government. He used to work in Dalian Municipal Bureau of
Justice and Dalian Municipal People's Congress Standing Committee as an expert consultant on local
legislation.
Ms. Li Riyu, born in 1964, is of Zhuang ethnicity, a professor, a Certified Public accountant of China, a
doctoral student, and a member of the Communist Party of China. After graduating with a master's degree,
I have been teaching at the School of Accounting of Dongbei University of Finance and Economics until
now. In addition to being dedicated to teaching at the School of Accounting of Dongbei University of
Finance and Economics, I have also held part-time positions as an accounting supervisor in enterprises, a
certified public accountant in accounting firms, a researcher at Sanyou Accounting Research Institute, a
part-time researcher at the China Center for Internal Control and Risk Management, the deputy director of
the Accounting Department, the director of the Accounting Department, and a specially-appointed financial
expert of the Equipment and Finance Bureau of the Ministry of Public Security. The Ministry of Education
has specially appointed an expert for online review of Chinese scientific and technological papers, and the
Ministry of Finance has specially appointed an expert for question setting and review of accounting
qualification examinations, as well as an independent director of listed companies (independent director of
Haosen Co., LTD.).
The situation where the controlling shareholder and the actual controller concurrently hold the positions of
the chairman and the general manager of the listed company
? Applicable ? Inapplicable
Holding positions in shareholder units
? Applicable ? Inapplicable
Whether to receive
Name of Term start Term end remuneration
Name of officer A position held by a shareholder
shareholder unit Date Date allowance in the
shareholder unit
Wafangdian Deputy Secretary of the Party
Zhang Xinghai Yes
bearing Group Co., Committee, General Manager,
Wafangdian Bearing Co., Ltd. 2024 annual report
LTD Director
Wafangdian Deputy Secretary of the Party
Chen Jiajun bearing Group Co., Committee, Deputy General Yes
LTD Manager, Director
Wafangdian
Wang Jiyuan bearing Group Co., Director No
LTD
Dalian Youth
Sun Ye Development Deputy Secretary-General
Foundation
Position in other units
? Applicable ? Inapplicable
Whether you
Term Term receive
Name of A position held in
Name of other units start end remuneration
officer another organization
Date Date allowance in other
units
Jietai gete wazhou Automobile Bearing
Chen Jiajun Chairman No
co., LTD
Wang Jiyuan China Bearing Industry Association President of a council No
Executive Director
Wazhou Precision Spherical Roller
Wang Jiyuan and Legal No
Bearing (Wafangdian) Limited Company
Representative
Shanghai Aaimuyi Electromechanical
Sun Najuan Director No
Equipment chain Co., LTD
Jietai gete wazhou Automobile Bearing
Li Dong Director No
co., LTD
Dalian Smart Manufacturing Industry
Li Dong vice-chairman No
Association
Dongbei University of Finance and
Wang Yan Professor Yes
Economics
Dalian Liancheng CNC Machine Co.,
Wang Yan Independent director Yes
LTD
Dongbei University of Finance and
Liu Yuping Professor Yes
Economics
Liu Yuping Liaoning Zhonglin Law Firm Lawyer Yes
Liu Yuping Dalian Arbitration Commission arbitrator Yes
Dongbei University of Finance and
Liu Yuping Economics Economic and Technological Legal advisor Yes
Development Corporation
Wen Bo Liaoning Huaicheng Law Firm Founding partner Yes
Dongbei University of Finance and
Li Riyu Professor Yes
Economics
Punishment of current and outgoing directors, supervisors and senior managers by securities regulatory
authorities in the past three years during the reporting period
? Applicable ? Inapplicable
Decision-making procedures, basis for determination and actual payment of remuneration for directors and
senior managers
The remuneration of independent directors of the company shall be calculated and paid according to the
standards determined by the board of directors and the general meeting of shareholders. Other directors an
shall not pay remuneration for their positions as directors and . The salary of senior executives shall be
determined according to the salary level of the heads of dalian state-owned enterprises and the completion
Wafangdian Bearing Co., Ltd. 2024 annual report
of the business objectives determined by the board of directors at the beginning of the year, strictly
following the company's salary assessment system.
Remuneration of directors, and senior managers during the reporting period
Unit:10000yuan
Total pre-tax Whether to obtain
compensation remuneration from
The name Gender Age Position As state
received from related parties of
the company the company
Zhang Xinghai Male 57 Chairman Current 0 Yes
Director, General
Wang Jiuyuan Male 59 Current 51.58 No
Manager
Director, Chief
Sun Najuan Female 57 Accountant, Board Current 57.57 No
Secretary
Chen Jiajun Male 58 Director Current 0 Yes
Director, Deputy
Li Huawei Male 51 Current 43.87 No
General Manager
Director, Deputy
Li Dong Male 48 Current 42.31 No
General Manager
Director representing
Lu Ning Male 40 employee Current 25.19 No
representatives
Sun Ye Female 53 Director Current 0 Yes
Wang Yan Female 62 independent director Current 4 No
Wen Bo Male 62 independent director Current 4 No
Liu Yuping Male 69 independent director Current 4 No
Li Rijiu Female 61 independent director Current 4 No
Director, Deputy
Tan Jianguang Male 61 leave one's post 18.12 No
General Manager
Zhao Qingtao Male 48 Director leave one's post 0 Yes
Fang Bo Female 53 Director leave one's post 0 Yes
Total -- -- -- -- 254.64 --
The salary is determined based on the comprehensive assessment
results including the company's annual operating performance,
The assessment basis for the actual compensation received position, job division, the annual operating performance
by all directors and senior management personnel at the completion of the units under one's management, and personal
end of the reporting period performance. According to relevant laws, regulations and company
rules and regulations, the individual enjoys various social
insurances and other welfare benefits of the company.
The completion status of the assessment for the actual
compensation received by all directors and senior The salary assessment work has been completed.
management personnel at the end of the reporting period
The deferred payment arrangement for the actual
compensation received by all directors and senior not applicable
management personnel at the end of the reporting period
The stop-payment and recourse situation for the actual
compensation received by all directors and senior not applicable
management personnel at the end of the reporting period
Other information note
? Applicable ? Not applicable
V. Performance of directors' duties during the reporting period
Wafangdian Bearing Co., Ltd. 2024 annual report
Attendance of directors at the board of directors and general meetings of shareholders
Whether two
The number of Number Number of
Number of consecutive
board meetings of board times Board of Attendance of
Director's board meetings board meetings
to be attended meetings entrusted to Directors shareholders'
name attended by were not
during the attended attend board absence meetings
communication attended in
reporting period on site meetings
person
Zhang
Xinghai
Wang
Jiuyuan
Sun Najuan 5 5 0 0 0 No 1
Chen Jiajun 5 5 0 0 0 No 1
Li Huawei 5 5 0 0 0 No 1
Wang Yan 5 5 0 0 0 No 1
Liu Yuping 5 5 0 0 0 No 1
Wen Bo 5 5 0 0 0 No 1
Li Rijiu 5 5 0 0 0 No 1
Lu Ning 3 3 0 0 0 No 1
Li Dong 3 3 0 0 0 No 1
Sun Ye 3 3 0 0 0 No 1
Tan
Jianguang
Two consecutive statements of failure to attend board meetings in person
None
Whether directors raise objections to matters related to the company
? yes ? no
During the reporting period, the directors raised no objection to the company's related matters.
Whether the directors' suggestions about the company have been adopted
? yes ? no
A director's statement to the Company that a proposal has been or has not been adopted
During the reporting period, the directors of the Company carried out their work in strict accordance with
the Company Law, the Securities Law, the Governance Code for Listed Companies, the Self-Regulatory
Guidelines for Shenzhen Stock Exchange Listed Companies No. 1 -- Standardized Operation of Listed
Companies on the Main Board, the Articles of Association of the Company and the Rules of Procedure of
the Board of Directors, with diligence and diligence. I put forward relevant opinions on the major
governance and operation decisions of the company, reached a consensus through full communication and
discussion, and resolutely supervised and promoted the implementation of the resolutions of the board of
directors to ensure that the decisions were scientific, timely and efficient, and to safeguard the legitimate
rights and interests of the company and all shareholders.
VI. The situation of the special committees under the Board of Directors during the reporting period
Wafangdian Bearing Co., Ltd. 2024 annual report
Number Important
Name of Members of of comments Other Details of
committee the situation Meeting At the date The meeting content and performance objection (if
s suggestions of duties any)
board of directors
Wang 21April 2025 2. The proposal regarding the nomination of candidates for independent directors of the 10th
Nominatin Yan， board of directors
g Zhang 3
committee Xinghai， 1. The proposal regarding the appointment of Mr. Wang Jiyuan as the general manager of the
Wen Bo company
board of directors
February 24, 3. Regarding overseas income.
duties.
April 21, 2025 5. Report of the Audit Committee on the performance in 2024.
Liu Yuping, 6. 2024 internal control evaluation report.
Audit Li Riyu, 4 7. Summary of the internal control and internal audit work in 2024 and arrangements for 2025.
committee Chen Jiajun 8. First quarter report of 2025.
August 19, 2. 2025 Semi-annual Financial Closeout Report (Unaudited)
first half of 2025 and the arrangements for the second half of the year was listened to.
October 23, 2. The financial final report for the third quarter of 2025 (unaudited).
company for the third quarter of 2025 and the arrangements for the fourth quarter.
Special Wen Bo, April 21, 2025 2. Proposals regarding the restructuring of some daily operating debts involving related-party
meeting of Wang Yan, transactions
independe Liu Yuping, 2
nt directors Li Riyu October 23, 1. Regarding the proposal for the restructuring of some daily operating debts involving related-
Wafangdian Bearing Co., Ltd. 2024 annual report
VII. Work of the Audit Committee
The audit committee, during its supervision activities in the reporting period, determined whether the
company was at risk.
? yes ? no
The audit committee has no objections to the supervisory matters during the reporting period.
VIII. Employee status
Number of working employees of parent company at the end of
reporting period (persons)
Number of employees in major subsidiaries at the end of
reporting period (persons)
Total number of in-service employees at the end of reporting
Period (persons)
Total number of salaried employees (persons) 2,158
Number of retired employees (persons) to be borne by the
parent company and its major subsidiaries
Professional composition
Specialty composition category Number of Majors (Persons)
Production personnel 1,533
Salesperson 180
Technicians 169
Financial personnel 47
Administrative staff 54
Managers 175
Total 2,158
The degree of education
Education Category Quantity (person)
University degree and above 629
college 486
Secondary school/high school and below 1,043
A combined 2,158
Based on the relevant national laws and regulations as well as a series of policies issued by the
government's labor department, and in light of the company's actual situation, the company adheres to the
principle of "determining salary based on position, rewarding based on performance, giving priority to
efficiency, and taking fairness into account". The performance distribution is tilted towards the
hardworking and value-creating employees, fully leveraging the incentive effect of the salary system and
stimulating the enthusiasm of the employees.
In 2025, Wazhou Co., Ltd. carried out various training programs as planned. A total of 115 training
sessions were organized throughout the year, involving a cumulative of 24,497 participants, with 2,112
training hours completed, and an investment of over 700,000 yuan in training costs. Company-level,
system-level, and self-initiated unit-level training projects were all fully accomplished. The key talent
cultivation projects achieved remarkable results. The "five types of talents" engineer team training was
completed and the number of qualified participants exceeded the target. 340+ key position personnel
integrating industry and intelligence and 50+ lean leaders achieved 100% certification upon taking up their
positions. All 20+ trainees in the first "Work, Study, Finance" integrated talent training program passed the
theoretical examination. At the same time, key thematic training was carried out to support business
transformation, multiple types of standardized course development were completed, and the KM
Wafangdian Bearing Co., Ltd. 2024 annual report
knowledge platform was upgraded to build a digital and intelligent learning ecosystem, providing strong
support for the company's talent team building and business development.
? Applicable ? Inapplicable
IX.The company's profit distribution and the conversion of capital reserve fund into capital stock
Formulation, implementation or adjustment of profit distribution policies, especially cash dividend policies
during the reporting period
? Applicable ? Not applicable
Corporate profit distribution policy
return of investors, while taking into account the long-term interests of the company, the overall interests
of all shareholders and the sustainable development of the company.
company's profits and cash can meet the company's sustainable operation and long-term development, the
company's cumulative profit distributed in cash in the recent three years shall not be less than 30 percent of
the average annual distributable profit realized in the recent three years.
Special explanation of cash dividend policy
Whether it conforms to the provisions of the articles of association or the requirements of the resolution of the general
YES
meeting of shareholders:
Are dividend standards and ratios clear and clear: YES
The adequacy of relevant decision-making procedures and mechanisms: YES
Whether the independent directors have performed their duties and played their due roles: YES
If the company does not pay a cash dividend, it shall disclose the specific reasons and the next steps to enhance the
YES
return level of investors:
Whether minority shareholders have sufficient opportunities to express their opinions and appeals, and whether their
YES
legitimate rights and interests are fully protected:
If the cash dividend policy is adjusted or changed, the conditions and procedures are compliant and transparent: YES
The company's profit during the reporting period and the parent company's profit available for distribution
to shareholders are positive, but no cash dividend distribution plan has been put forward
? Applicable ? Inapplicable
Profit distribution and conversion of capital reserve fund into capital stock during the reporting period
? Applicable ? Inapplicable
The company plans not to distribute cash dividend, bonus shares or increase capital stock by provident
fund.
X. The implementation of the company's equity incentive plan, employee stock ownership plan or
other employee incentive measures
? Applicable ? Inapplicable
The company has no equity incentive plan, employee stock ownership plan or other employee incentive
measures and their implementation during the reporting period.
XI. Internal control system construction and implementation during the reporting period
In 2025, the company, in accordance with the requirements of the "Company Charter" and other
regulations, as well as the needs of actual business adjustments, revised and formulated the systems and
procedures, issued and disseminated them, and further clarified the responsibilities and authorities of each
Wafangdian Bearing Co., Ltd. 2024 annual report
institution and the business processes. This avoided functional overlaps, omissions, or overly centralized
power and responsibilities, and established a working mechanism where each department performs its own
duties, is accountable for its own work, checks and balances each other, and coordinates with each other. It
provided guidance and basis for the establishment, operation, supervision, evaluation, and maintenance of
the internal control system, ensuring the consistency of the internal control system of the joint-stock
company in terms of awareness and behavior.
□Yes ? No
XII. Management and control of subsidiaries during the reporting period
None
XIV.Internal control evaluation report or internal control audit report
Disclosure date of full internal control evaluation report 28 April 2026
Index of full-text disclosure of internal control evaluation reports http//www.cninfo.com.cn
The proportion of total assets of units included in the evaluation scope to total
assets of the company in consolidated financial statements
The proportion of the operating income of units included in the evaluation
scope to the operating income of the company's consolidated financial 100.00%
statements
Defect identification standard
category Financial report Non-financial report
The following situations shall be identified as major defects of
internal control of financial reporting, and other situations shall
be identified as major defects or general defects according to the The following situations are identified
degree of impact. as non-major defects of internal control
(1) Senior management fraud, including financial reporting of financial reporting, and other
fraud; Improper use of assets; False revenues, expenses and situations are identified as major
liabilities; Improper acquisition of assets; Tax evasion and high- defects or general defects according to
level fraud; the degree of impact.
(2) Restatement of the issued financial report for material (1) The enterprise lacks democratic
misstatement to reflect the correction of the wrong statement, decision-making procedure;
and was punished by the regulatory authorities for this matter; (2) unscientific decision-making
(3) Certified public accountants find that there is a material procedures;
The qualitative misstatement in the financial report of the current period, while (3) Violation of national laws and
standard internal control fails to find the misstatement in the operation regulations, such as environmental
process; pollution;
(4) The audit committee of the Company's internal control (4) Frequent occurrence of negative
supervision of the company's financial reports is invalid, media news;
including the audit committee is unable to effectively supervise (5) The results of internal control
the internal control of the company's financial reports or is not evaluation, especially major or
qualified and capable of monitoring the accuracy of financial important defects, have not been
reports; corrected;
(5) The defect that the total amount of related transactions (6) Lack of institutional control or
exceeds the amount of related transactions approved by the systematic failure of important
general meeting of shareholders due to the failure of internal business.
decision-making procedures in accordance with relevant
provisions.
Major defects: direct property losses of
more than 500,000 yuan;
Major defect: direct property loss of more than 10 million yuan;
Major defect: direct property loss less
Quantitative Major defects: direct property loss of 5 million yuan (inclusive)-
than or equal to 500,000 yuan;
standard 10 million yuan;
Defects other than major defects and
General defects: less than 5 million yuan.
major defects shall be identified as
general defects.
Number of material
defects in financial 0
reports (pieces)
Wafangdian Bearing Co., Ltd. 2024 annual report
Number of non-
financial report
material defects
(PCS)
Number of
significant defects
in financial reports
(pieces)
Number of non-
financial report
significant defects
(PCS)
? Applicable ? Inapplicable
Review section of internal control audit report
In our opinion, Waxshaft Corporation maintained effective internal control over financial reporting in all
material respects as of December 31, 2025 in accordance with the Basic Practice for Internal Control of
Enterprises and relevant provisions.
Disclosure of internal control audit report Disclosure of the
Disclosure date of full internal control audit report 28 April 2026
Zhong Huan Shen Zi
Index of full-text disclosure of internal control audit reports
(2026) No.3200048
Standard without
Opinion type of internal control audit report
reservation
Whether there are material deficiencies in the non-financial reports no
Whether the accounting firm issues the internal control audit report of non-standard opinion
? yes ? no
Whether the internal control audit report issued by accounting firm is consistent with the self-evaluation
report of the board of directors
? yes ? no
Whether a non-standard audit opinion on internal control was issued during the reporting period or the
previous year
? yes ? no
XIV. Self-inspection and rectification of problems in the special action of governance of listed
companies
During the reporting period, no governance issues related to the special self-examination list of listed
company governance were found in the company.
XV.Environmental information disclosure situation
Whether the listed company and its major subsidiaries are included in the list of enterprises that disclose
environmental information in accordance with the law.
? yes ? no
XVI. Social Responsibility Situation
The company has fulfilled its due social responsibilities. While pursuing economic benefits for the
enterprise, it actively assumes the responsibilities towards the overall development of the country and
society, the natural environment and resources, as well as the stakeholders such as shareholders, employees,
customers, consumers, suppliers, and communities. This has achieved the social value of the enterprise and
better realized the win-win cooperation among the state, society, and stakeholders. The company has
strengthened environmental protection, improved resource efficiency, influenced and driven the
Wafangdian Bearing Co., Ltd. 2024 annual report
development of local economy through project construction, and effectively promoted the coordinated
development of the company with society, nature, and other stakeholders.
The company strictly complies with the relevant laws, regulations, and documents of the state and
localities, and has provided employees with pension insurance, unemployment insurance, medical
insurance, work injury insurance, maternity insurance, housing provident fund, and large medical mutual
aid insurance. It promptly provides assistance and relief to employees in difficulty. It has established and
improved the employment system including the salary system and incentive mechanism, ensuring that
employees legally enjoy labor rights and fulfill labor obligations. It has established and improved the labor
safety and health system, strictly adhering to the national labor safety and health regulations and standards,
providing labor safety and health education, occupational protection, and health check-ups to employees,
and providing a healthy and safe working and living environment for them. It has minimized the
occurrence of accidents during the labor process and reduced occupational disease hazards to the greatest
extent.
In its business activities, the company adheres to the principles of voluntariness, fairness, equivalent
exchange, and honesty and trustworthiness, strictly controls quality targets, and ensures the provision of
qualified products. The technical department of the company actively develops new products and new
materials, and the company guarantees that all products or services provided comply with relevant national
quality standards or have been certified by relevant national quality inspection departments, and actively
applies for various domestic and foreign third-party certifications. The company pays attention to customer
after-sales services, properly handles complaints and suggestions raised by customers and consumers. It
strictly examines the qualifications and conducts on-site inspections of suppliers, selects qualified suppliers,
carefully understands the needs of suppliers, and actively built a good cooperative atmosphere.
XVII. Situation of consolidating and expanding the achievements of poverty alleviation and
promoting rural revitalization.
Deployed village officials to the surrounding areas of Dalian City to support rural construction, fulfill
social responsibilities, continuously strengthen village party organizations, and enhance party building.
Promoted the work of strengthening village prosperity and improving people's livelihood, implemented
policies benefiting farmers, increased village collective income. Conducted clean-up of village appearance
and environment, improved governance level, carried out publicity and supervision, promptly organized
the cleaning of garbage sites, improved the living environment, and built beautiful villages.
Wafangdian Bearing Co., Ltd. 2024 annual report
Chapter V Important items
I. Performance of commitments
during the reporting period or have not been fulfilled by the end of the reporting period
? Applicable ? Inapplicable
Reasons for Committing Commitment Commitment Commitment Performance
Commitment content
commitment party type time period status
(I) Commitment on maintaining the independence of listed companies
I. Ensure the independence of personnel in listed companies:
The
commitment
manager, deputy general manager, financial officer, and secretary of the board of directors, do
regarding
not hold positions other than directors and supervisors in the company and other enterprises
maintaining
controlled by the company (excluding the listed company and the enterprises controlled by it,
the
the same below), and do not receive salaries in other enterprises controlled by the company;
independenc
Ensure that the financial personnel of the listed company do not hold concurrent positions or
e of the
receive salaries in other enterprises controlled by the company. 2. Ensure that the labor,
listed
The personnel relations and salary management system of the listed company are independent
company;
commitments Dalian from the company and other enterprises controlled by the company; 3. The nomination of
made in the Heavy candidates for directors, supervisors, general managers and other senior management
Commitment
acquisition Industry personnel by the Company and other enterprises controlled by the Company to the listed Long-term Strictly
on reducing 2024/08/26
report or the Equipment company shall be carried out through legal procedures, and personnel appointment and effectiveness implement
and
report on Group Co., removal decisions shall not be made beyond the board of directors and shareholders' meeting
regulating
changes in LTD of the listed company.
related-party
equity II. Ensuring the independence of assets of listed companies:
transactions;
and related independent and complete assets; 2. Ensure that the funds, assets and other
Commitment
resources of listed companies are not illegally occupied; 3. Ensure that the assets of the listed
on avoiding
company are not used to provide illegal guarantees for the debts of the company and other
competition
enterprises controlled by the company.
within the
III. Ensuring the financial independence of listed companies:
same
industry.
independent financial accounting system, and has a standardized and independent financial
accounting system; 2. Ensure that the listed company independently opens bank accounts and
Wafangdian Bearing Co., Ltd. 2024 annual report
does not share bank accounts with the company and other enterprises controlled by the
company; 3. Ensure that listed companies pay taxes independently in accordance with the law;
does not illegally interfere in the use of funds by listed companies.
IV. Ensuring the institutional independence of listed companies:
has an independent and complete organizational structure, and there is no situation of
institutional confusion between this company and other enterprises controlled by this
company; 2. Ensure that the shareholders' meeting, board of directors, board of supervisors,
independent directors, senior management personnel, etc. of the listed company independently
exercise their powers in accordance with laws, regulations and the company's articles of
association.
V. Ensuring the business Independence of Listed Companies:
capabilities to carry out business activities independently, and has the ability to operate
independently and continuously for the market; 2. Ensure that the Company and other
enterprises controlled by the Company avoid engaging in businesses that have substantive
competition with the main business of the listed company. If there is already competition in
the same industry, commit to resolving it within a limited time. 3. Ensure that the related-party
transactions between the Company and other enterprises controlled by the company and the
listed company are minimized as much as possible; When conducting truly necessary and
unavoidable related-party transactions, agreements will be signed in accordance with the law,
and the necessary legal procedures will be fulfilled in accordance with relevant laws,
regulations, and the articles of association of the listed company.
(II) Commitment on avoiding competition within the same industry
company, the Company will take necessary and possible measures in accordance with the law
to prevent the Company and other enterprises controlled by the Company from engaging in
business or activities that constitute the same industry competition with the main business of
the listed company.
opportunities that constitute substantial competition in the same industry with the main
products of the listed company, the Company will notify the listed company in writing and
make every effort to ensure that such new business opportunities are first provided to the
listed company or its holding enterprises on reasonable and fair terms and conditions. If the
listed company decides not to accept such new business opportunities, the Company or other
enterprises controlled by the Company may accept such new business opportunities on their
Wafangdian Bearing Co., Ltd. 2024 annual report
own and engage in and operate such new businesses independently. If the regulatory authority
believes that the above-mentioned business conducted by the company or other enterprises
controlled by the company constitutes competition in the same industry with the main
business of the listed company, or that the listed company and the enterprises controlled by it
intend to engage in the above-mentioned business, Our company will adopt the methods
permitted by laws and regulations (including but not limited to asset injection, trusteeship,
asset transfer, one party's cessation of related business, adjustment of product structure,
establishment of joint ventures, etc.) to solve the problem.
industry are also applicable to other enterprises directly or indirectly controlled by our
Company. Our Company is obligated to supervise and ensure that such other enterprises
implement all the arrangements stated in the commitment letter and strictly abide by the
relevant commitments.
(III) Commitment on reducing and regulating related-party transactions
subsidiaries will strive to minimize and standardize related-party transactions with the listed
company and its holding enterprises.
acquirer and its other holding and participating subsidiaries will follow the principles of
market openness, fairness and impartiality, conduct them at fair and reasonable market prices,
fulfill the decision-making procedures for related-party transactions in accordance with
relevant laws, regulations and normative documents, fulfill the obligation of information
disclosure in accordance with the law and handle the relevant approval procedures. It will not
take advantage of its position as an indirect controlling shareholder to infringe upon the
legitimate rights and interests of listed companies and other small and medium-sized
shareholders.
the completion of this transaction and during the period when the acquirer is the indirect
controlling shareholder of the listed company. In the event of any violation of the above
commitments, the acquirer shall bear the losses caused to the listed company as a result.
Whether the
commitment
YES
is fulfilled on
time
Wafangdian Bearing Co., Ltd. 2024 annual report
profit forecast period, the company shall explain why the assets or projects meet the original profit forecast
? Applicable ? Inapplicable
? Applicable ? Inapplicable
II. Non-operational appropriation of funds by controlling shareholders and other related parties to
the listed company
? Applicable ? Inapplicable
During the reporting period, there is no non-operational appropriation of funds by controlling shareholders
and other related parties to the listed company.
III. Violation of external guarantee
? Applicable ? Inapplicable
The company has no violation of external guarantee during the reporting period.
IV. Explanation of the Board of Directors on the latest "Non-standard audit Report"
? Applicable ? Inapplicable
V.Explanation of the Board of Directors and independent directors (if any) to the "non-standard
audit report" of the accounting firm during the reporting period
? Applicable ? Inapplicable
Ⅵ.Description of changes in accounting policies, accounting estimates or correction of significant
accounting errors compared with the previous year's financial report
? Applicable ? Inapplicable
There is no change in accounting policies, accounting estimates or correction of major accounting errors
during the reporting period.
VII. Explanation of changes in the scope of consolidated statements as compared with the financial
statements of the previous year
? Applicable ? Inapplicable
There is no change in the scope of consolidated statements during the reporting period.
VIII.Employment and dismissal of accounting firms
Now employed accounting firm
Zhongshen Zhonghuan Certified Public
Name of domestic accounting firm
Accountants (Special General Partnership)
Remuneration of domestic accounting firm (ten thousand yuan) 69.5
The number of consecutive years of audit services provided by domestic
accounting firms
Name of certified public accountant of domestic accounting firm Qi Chengcheng, Liu Yan
The number of consecutive years of audit services provided by certified public
accountants of domestic accounting firms
Whether to hire an accounting firm for the current period
? yes ? no
Whether to change the accounting firm during the audit period
? yes ? no
Whether the change of accounting firm has gone through the approval process
? yes ? no
Wafangdian Bearing Co., Ltd. 2024 annual report
Detailed explanation of the re-appointment and change of accounting firms:
(Special General Partnership)
Partnership) (hereinafter referred to as "Lixin").
Institutions for Financial Settlement of Enterprises Under the Management of the Dalian Municipal State-
owned Assets Supervision and Administration Commission Regarding Relevant Requirements" (Dalian
State Assets Finance [2020] No. 155) issued by the Dalian Municipal State-owned Assets Supervision and
Administration Commission, listed companies should appoint the same accounting firm as their controlling
shareholder.
Accounting Firms of State-owned Enterprises and Listed Companies" issued by the Ministry of Finance,
the State-owned Assets Supervision and Administration Commission of the State Council, and the China
Securities Regulatory Commission (Finance [2023] No. 4).
The situation of engaging an internal control audit accounting firm, financial advisor or sponsor
? Applicable ? Inapplicable
IX. Delisting after the disclosure of the annual report
? Applicable ? Inapplicable
In recent years, due to the impact of the global economic recession, economic restructuring, and other
factors, Wazhou B has suffered consecutive annual losses and its operating conditions have been
deteriorating. Since 2025, the superposition of multiple adverse factors has further restricted the company's
operations, and its financial risks continue to increase. If this situation persists, it will inevitably intensify
the company's operating risks. Taking all factors into consideration, Wazhou Group, as the controlling
shareholder of Wazhou B, intends to initiate a general offer to all holders of unrestricted tradable shares for
the purpose of terminating the listing status of Wazhou B, so as to fully protect the interests of Wazhou B's
shareholders and demonstrate the responsibility of a state-owned enterprise.
On January 19, 2026, Wazhou Group disclosed the "Wafangdian Bearing Co., Ltd. Takeover Offer Report",
with the offer period from January 20, 2026, to February 27, 2026. The condition for the offer to become
effective is that, as of 15:00 on the last trading day of the effective period of this takeover offer, the
number of Wazhou B public shares temporarily deposited with the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited pursuant to accepted offers exceeds 39,050,000 shares,
meaning that after the acquisition, the number of Wazhou B public shares held by the public as a
percentage of total share capital falls below 10%. According to the listing rules of the Shenzhen Stock
Exchange, Wazhou B would no longer meet the listing requirements, and thus the offer would become
effective.
As of February 27, 2026, there were 1,459 shareholders who accepted the offer for Wazhou B, with a total
of 54,524,555 unrestricted tradable public shares accepted. According to the effective conditions set out in
the "Wafangdian Bearing Co., Ltd. Takeover Offer Report", the offer has become effective.
The number of shares held by the public as a percentage of the company's total share capital is below 10%.
In accordance with the Securities Law, the Shenzhen Stock Exchange Listing Rules, and other relevant
regulations, the company's share distribution no longer meets the listing requirements. The company will
follow the relevant procedures to delist its shares and issue corresponding announcements.
Wafangdian Bearing Co., Ltd. 2024 annual report
X. Matters related to bankruptcy reorganization
? Applicable ? Inapplicable
No bankruptcy reorganization related matters occurred during the reporting period.
Ⅺ.Major litigation and arbitration matters
? Applicable ? Inapplicable
Amount Progress Litigation
Whether an Execution
involved of (arbitration)
Litigation (arbitration) estimated of litigation Date of Disclosure
(Ten litigation adjudication
basic information liability is (arbitration) disclosure index
thousand (arbitratio result and
formed judgments
yuan) n) influence
A summary of other
lawsuits that occurred
The case was
during the reporting
closed as of
period, were concluded as Closed It has been
of the end of this reporting case fulfilled.
reporting
period, and did not meet
period
the disclosure standards for
major lawsuits
A summary of other
lawsuits that occurred
As of the end As of the
during the reporting
of the end of the
period, remained
Unresolve reporting reporting
unresolved as of the end of 407.37 no 2026/03/30
d period, there period, there
this reporting period, and
were no were no
did not meet the disclosure
closed cases closed cases
standards for major
lawsuits
Ⅻ.Punishment and rectification
? Applicable ? Inapplicable
There is no punishment or rectification during the reporting period.
XIII. Integrity status of the Company and its controlling shareholders and actual controllers
□ Applicable ? Not applicable
XIV. Major connected transactions
□ Applicable ? Not applicable
During the reporting period, there were no related transactions related to the company's daily operations.
□ Applicable ? Not applicable
During the reporting period, there were no related transactions involving the acquisition or sale of assets or
equity.
□ Applicable ? Not applicable
No related transactions of joint foreign investment occurred during the reporting period.
?Applicable ? Not applicable
Applicable ? Not applicable
There is no deposit, loan, credit granting or other financial business between the Company and the finance
company and the related parties.
Wafangdian Bearing Co., Ltd. 2024 annual report
□ Applicable ? Not applicable
There is no deposit, loan, credit or other financial business between the finance company controlled by the
Company and the related parties.
? Applicable ? Not applicable
For details on routine related-party transactions, please refer to the "Announcement on the Company's
Forecast of Routine Related-Party Transactions in 2026" disclosed by the company on the Juchao
Information Network on April 28, 2026, as well as Section 8, Part 14, "Related Parties and Related-Party
Transactions" under Section 5 of this report. "Situation of related party transactions"
Inquiries related to the website for the disclosure of interim reports on major related-party transactions
The date of disclosure in the temporary A temporary announcement discloses the
Name of Temporary Announcement
announcement name of the website
Announcement on the Estimated Daily
Related Party Transactions of the April 28, 2026 Juchao Information Network
Company in 2026
XV.Major contracts and their performance
(1) Custody
? Applicable ? Inapplicable
There is no custody during the reporting period.
(2) Contracting situation
? Applicable ? Inapplicable
There is no contracting during the reporting period.
(3) Lease situation
? Applicable ? Inapplicable
Lease Information
The Company does not have any major lease contracts.
Projects that bring profit and loss for the company to reach more than 10% of the total profit of the
company during the reporting period
? Applicable ? Inapplicable
During the reporting period, there is no leasing project whose profit and loss of the company reaches more
than 10% of the total profit of the company during the reporting period.
? Applicable ? Inapplicable
There is no material guarantee during the reporting period.
(1) Entrusted financial management
? Applicable ? Inapplicable
There is no entrusted financial management during the reporting period.
(2) Entrusted loans
? Applicable ? Inapplicable
There is no entrusted loan during the reporting period.
Wafangdian Bearing Co., Ltd. 2024 annual report
? Applicable ? Inapplicable
There are no other major contracts during the reporting period.
XVI.Use of the funds raised
? Applicable ? Inapplicable
The company had no use of raised funds during the reporting period.
XVII.Explanation of other important matters
? Applicable ? Inapplicable
There is no other major event that needs to be explained during the reporting period.
XVIII. Major events of the company's subsidiaries
? Applicable ? Inapplicable
Wafangdian Bearing Co., Ltd. 2024 annual report
Chapter VI Share changes and shareholders
I. Changes in shares
Unit：stocks
Prior to this change This change is more or less (+, -) After this change
Convers
Issuing
Send ion of
number ratio new other total number ratio
shares provide
shares
nt fund
I.Unlisted and tradable 244,000,0 244,000
shares 00 ,000
Among them: the state 244,000,0 244,000
holds shares 00 ,000
Domestic legal persons
hold shares
Overseas legal persons
hold shares
other
shares
otherwise
II.Shares already listed 158,600,0 158,600
and circulating 00 ,000
stock
foreign capital stocks 00 ,000
listed abroad
III.Total number of 402,600,0 100.00 402,600 100.00
shares 00 % ,000 %
Reasons for changes in shares
? Applicable ? Inapplicable
Approval of changes in shares
? Applicable ? Inapplicable
Transfer of shares
? Applicable ? Inapplicable
The impact of share changes on basic and diluted earnings per share, net asset per share attributable to
common shareholders of the company and other financial indicators in the latest year and the latest period
? Applicable ? Inapplicable
Other contents that the company deems necessary or required by the securities regulatory authority
? Applicable ? Inapplicable
? Applicable ? Inapplicable
II. Securities issuance and listing
Wafangdian Bearing Co., Ltd. 2024 annual report
□ Applicable ? Inapplicable
structure of assets and liabilities of the company
? Applicable □ Inapplicable
The controlling shareholder of the company, Wafangdian Bearing Group Co., Ltd., originally held 244
million non-tradable internal shares of Wazhou B, accounting for 60.61% of the total shares. On January
Ltd.", aiming to terminate the listing status of Wazhou B, it initiated a comprehensive offer acquisition to
all unrestrictedly tradable shareholders of Wazhou B. The offer acquisition period was from January 20,
As of February 27, 2026, the total number of unrestrictedly tradable public shares that accepted the offer
was 5,452,455 shares.
After the transfer of the accepted shares was completed, Wafangdian Bearing Group held 298,524,555
shares of the company, accounting for 74.15% of the total shares of the company.
□ Applicable ? Inapplicable
III. Shareholders and Actual Controlling Shareholder
Unit: Share
Total Total common Total preference Total preference
common shareholders at the shareholders with shareholders with
shareholder end of the month the voting power the voting power not
s in 4,889 before the date of 2744 recovered at the end 0 recovered at the end of the 0
the disclosing the annual of the reporting month before the day of
reporting report period (if any)(See disclosing the annual
period Note 8) report(if any)(See Note 8)
Shares held by the shareholders holding over 5% shares or the top ten shareholders(excluding shares lent through refinancing)
The number Pledge or freeze
Number of
The Changes The number of
holdings at the
Shareholder Nature of the number of in the of unlisted outstanding The
end of Shares
names shareholders shares in reportin outstanding shares held number
reporting in state
proportion g period shares held on the of
period
market
Wafangdian
Bearing State-owned inapplic
Group shareholder ability
Corporation
Dalian Youth
inapplic
Development Other 19.70% 79,300,000 0 0 79,300,000 0
ability
Foundation
China
merchants Foreign inapplic
securities shareholder ability
Hong Kong
Wafangdian Bearing Co., Ltd. 2024 annual report
limited
Huang Domestic inapplic
Junyue shareholder ability
Domestic inapplic
Hu Xiaofeng 0.45% 1,814,277 0 0 1,814,277 0
shareholder ability
BOCI
Foreign inapplic
SECURITIES 0.33% 1,313,154 0 0 1,313,154 0
shareholder ability
LIMITED
GUOTAI
JUNAN
Foreign inapplic
SECURITIES 0.22% 882,100 0 0 882,100 0
shareholder ability
(HONGKON
G) LIMITED
Domestic inapplic
Wang Xiao 0.19% 774,420 0 0 774,420 0
shareholder ability
Jiang Domestic inapplic
Guangsen shareholder ability
Domestic inapplic
Chenpeng 0.18% 738,100 0 0 738,100 0
shareholder ability
Where a strategic investor or general legal
person becomes a top 10 shareholder as a
none
result of the placement of new shares (if any)
(see Note 3)
Among the top ten shareholders of the company, there is no correlation
relationship or concerted action between the largest shareholder and other
A description of such shareholder shareholders, or between the top ten shareholders of tradable shares, while the
association or concerted action correlation relationship and concerted action between other shareholders, between
the top ten shareholders of tradable shares, or between the top ten shareholders of
tradable shares and other shareholders are unknown.
Explanation of the aforesaid shareholders'
involvement in entrustment /fiduciary voting none
rights and abandonment of voting rights
Special notes for the repo account among the
none
top 10 shareholders (see Note 10)
Shareholding of top 10 shareholders of unrestricted shares(Excluding shares lent through securities lending and short selling and
shares locked by senior executives)
Quantity of unrestricted shares Share type
held
Shareholder’s Name
at the end of there porting Share type Quantity
period
Dalian Youth Development Foundation 79,300,000 B-shares 79,300,000
China merchants securities Hong Kong limited 10,842,157 B-shares 10,842,157
Huang Junyue 7,302,709 B-shares 7,302,709
Hu Xiaofeng 1,814,277 B-shares 1,814,277
BOCI SECURITIES LIMITED 1,313,154 B-shares 1,313,154
Wafangdian Bearing Co., Ltd. 2024 annual report
GUOTAI JUNAN SECURITIES(HONG KONG) LIMITED 882,100 B-shares 882,100
Wang Xiao 774,420 B-shares 774,420
Jiang Guangsen 759,300 B-shares 759,300
Chen Peng 738,100 B-shares 738,100
MAN,KWAI WING 文贵荣 713,101 B-shares 713,101
There was no relationship and consistent activities between the
Explanation to the associated relationship or consistent action
first big shareholder and other shareholders or the top ten
among the top 10 shareholders of non-restricted negotiable
common stock holders; The relationship among other
shares and that between the top 10 shareholders of non-
shareholders, top ten circulation shareholders, top ten
restricted negotiable shares and top 10 shareholders.
circulation shareholders and other shareholders was not clear.
Description of Top 10 Common Shareholders' Participation in
none
Margin and Short Selling Business (if any) (see Note 4)
The situation of shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10
shareholders of unrestricted tradable shares lending shares in the securities lending and short selling
business
? Applicable ? Not applicable
The top 10 shareholders and the top 10 shareholders of unrestricted tradable shares have changed
compared with the previous period due to the lending/repayment of securities lending and short selling
? Applicable ? Not applicable
Whether the top 10 ordinary shareholders and the top 10 ordinary shareholders with unrestricted sale
conditions of the company conducted agreed repurchase transactions during the reporting period
□Yes ? No
The top 10 ordinary shareholders and the top 10 ordinary shareholders with unrestricted sale conditions of
the company did not conduct any agreed repurchase transactions during the reporting period.
Nature of the controlling shareholder: State-owned holding directly under the Dalian government
Name of the Legal Date of
Controlling Representat incorporati Organization Main Business
Shareholder ive/Leader on code
Bearing, bearing spare parts, bearing special tools, tooling,
equipment, mechanical equipment, abrasives, abrasives,
Wafangdian casting, auto parts, locomotive parts and related industrial
Bearing Group Meng Wei products manufacturing and sales; Bearing design, repair,
Corporation
of bearing raw materials and auxiliary materials; House
leasing and equipment leasing.
The shareholding of the
controlling shareholder of
other listed companies at home none
and abroad during the
reporting period
Type of the controlling shareholder: corporate Legal Person
Change of Controlling Shareholder in the Report Period
□ Applicable ? Inapplicable
The controlling shareholder of the company has not changed during the reporting period.
Nature of the actual controller: State-owned assets regulatory agency directly under the Dalian government
Wafangdian Bearing Co., Ltd. 2024 annual report
Type of the actual controller: corporate
Legal Establishing Organization Register
Name of the actual controller
Representative Date Code Capital
Authorized by the Dalian Municipal People's
Dalian Municipal Government State- Government, fulfill the investor responsibilities in
owned Assets Supervising and Yang Dequan 2004.09.30 accordance with the law, supervise the state-owned
Managing committee assets of the invested enterprises, and strengthen the
management of state-owned assets
Equity in other domestic and foreign
listed companies held by the actual During the reporting period, other domestic and overseas listed companies controlled by the actual
controller by means of control and controller included Dalian Thermal Power (600719), Dalian Heavy Industry（002204）, Zhangzidao
mutual shareholding in the reporting (002069), and Dalian Shengya (600593).
period
Actual controller changes during the reporting period
? Applicable ? Inapplicable
The actual controller of the company has not changed during the reporting period.
A block diagram of the property rights and control relationship between the company and the actual
controller
Actual Controller controlled the Company by trust or other asset management method.
□ Applicable ? Inapplicable
the person acting in concert accounts for 80% of the company's shares held by them
? Applicable ? Inapplicable
Wafangdian Bearing Co., Ltd. 2024 annual report
? Applicable ? Inapplicable
Legal Date of
Name Capital Main Business
Representative establishment
(1) Implement and organize projects of funding and services that
are in line with the foundation's mission; (2) Carry out various
social public welfare and charity projects that are beneficial to
Dalian Youth the physical and mental health and growth of teenagers; (3)
Development Song Jijun 2025.10.25 Reward outstanding young talents in Dalian and individuals and
RMB
Foundation groups who have made significant contributions to the cause of
teenagers in Dalian; (4) Support the public welfare projects and
development of organizations and groups of young people, as
well as volunteer groups.
Reorganizing Party and other Commiting Party
□ Applicable ? Inapplicable
Iv. Specific implementation of share repurchase during the reporting period
The implementation progress of share repurchase
? Applicable ? Inapplicable
The implementation progress of reducing repurchased shares by means of centralized bidding
? Applicable ? Inapplicable
v. About the Preferred Shares
□ Applicable ? Inapplicable
During the reporting period, the company did not have any preferred stocks.
Chapter VII. Bond-related information
□ Applicable ? Inapplicable
Chapter VIII Financial report
I.Financial report
Types of Audit opinions Standard unqualified opinion
Date of audit report signing 24 April 2026
Zhongshen Zhonghuan Accounting Firm (Special
Name of audit institution
General Partnership)
Audit report number Zhong Huan Shen Zi (2026) No.3200047
Name of auditor Liu Yan, Qi Chengcheng
Auditor's Report
Wafangdian Bearing Co., Ltd. 2024 annual report
No. 3200047, Zhonghuan Audit Character (2026)
To the Shareholders of Wafangdian Bearing Company Limited:
Opinion
We have audited the accompanying financial statements of Wafangdian Bearing Company Limited
(“Wafangdian Bearing Company”), which comprise the consolidated and company's balance sheets as
at 31 December 2025, the consolidated and company's income statements, the consolidated and
company's statements of cash flows, and the consolidated and company's statements of changes in
owners' equity for the year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
consolidated and company's financial position as at 31 December 2025 and the consolidated and
company's financial performance and cash flows for the year then ended in accordance with the
requirements of Accounting Standards for Business Enterprises.
Basis for Opinion
We conducted our audit in accordance with Chinese Standards on Auditing (“CSAs”). Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of Wafangdian Bearing
Company in accordance with the Code of Ethics for Professional Accountants of the Chinese Institute
of Certified Public Accountants (“CICPA Code”), and we have fulfilled our other ethical
responsibilities in accordance with the CICPA Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements 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 opinion thereon, and we do not
provide a separate opinion on these matters.
We identified the following key audit matters in our audit:
How these matters were addressed in the audit
Key Audit Matters
process
For details of the accounting policy for revenue The audit procedures we performed on revenue
recognition and analysis of revenue, please refer recognition consisted primarily of:
to the accounting policy described in Note (22) of 1. Understanding, evaluating and testing the
the Notes to Consolidated Financial Statements effectiveness of the design and implementation
"III. Significant Accounting Policies and of management's key internal controls related to
Accounting Estimates" and Note (39) of the Notes revenue recognition;
to Consolidated Financial Statements. 2. Performing analytical review procedures to
analyze the reasonableness of changes in revenue
Revenue from sales of various types of bearings in and gross profit margin;
the consolidated statements of operations of 3. Select a sample to examine sales contracts,
Wafangdian Bearing Company for fiscal 2025 identify contractual provisions related to the
Wafangdian Bearing Co., Ltd. 2024 annual report
How these matters were addressed in the audit
Key Audit Matters
process
amounted to CNY 2,204,681,358.79. transfer of control of goods, and evaluate
whether the revenue recognition point of
Since revenues and profits from bearing sales Wafangdian Bearing Company Corporation
have a significant impact on The Group's results, meets the requirements of the Enterprise
the recognition of revenues depends on the ability Accounting Standards;
to properly assess whether the product sales 4. Selecting samples of revenue transactions
satisfy the agreement on the conditions for the recorded during the year, verifying whether the
transfer of control in the sales contract. The book revenue, sales invoices and customer
complexity of the commercial agreements, confirmation sheets are consistent, and
however, requires separate judgment. For this evaluating whether the relevant revenue
reason, we identified revenue as a key audit recognition is in accordance with the revenue
matter. recognition accounting policy of Wafangdian
Bearing Company;
The correspondence procedure includes
correspondence on the balance of accounts
receivable at the end of the customer's period as
well as sales during the reporting period;
date, select samples and check the supporting
documents such as shipment records and
customer acknowledgement slips to evaluate
whether revenues are included in the appropriate
period.
For details of the accounting policies and analysis The audit procedures we performed on the
of accounts receivable, please refer to the collectability of accounts receivable consisted
accounting policies described in Note (ix) to the primarily of:
consolidated financial statements under "III. 1. understanding, evaluating and testing the
Significant Accounting Policies and Estimates" effectiveness of management's design and
and Note (iv) to the consolidated financial implementation of internal controls related to the
statements under "V. Notes to Consolidated aging analysis of accounts receivable and the
Financial Statements". determination of the allowance for bad debts on
accounts receivable;
The balance of accounts receivable in the 2. reviewing management's consideration and
consolidated financial statements as of December objective evidence related to the impairment
allowance for bad debts was CNY whether management has adequately identified
balance of contractual assets was 3. for accounts receivable for which management
CNY7,119,828.52, provision for impairment of has provided for bad debts according to a
contract assets was CNY1,861,067.28, net of combination of credit risk characteristics,
contractual assets was CNY 5,258,761.24. evaluating whether the percentage of provision
for bad debts determined by management is
We identified the collectability of accounts reasonable;
receivable as a key audit matter because 4. Implemented the correspondence procedure
estimating the collectability of accounts receivable and reconciled the results of the correspondence
and testing for impairment involves significant with the amounts recorded by management;
accounting estimates and judgments by 5. Evaluating the reasonableness of the provision
management, and the impact on the financial for bad debts reserves by management in
statements if the accounts receivable are not conjunction with the post-period payback
collected on time or are uncollectible is more examination.
Wafangdian Bearing Co., Ltd. 2024 annual report
How these matters were addressed in the audit
Key Audit Matters
process
significant.
Other Information
Management of Wafangdian Bearing Company (“Management”) is responsible for the other
information. The other information comprises all of the information included in the 2025 annual report
of Wafangdian Bearing Company, other than 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.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the requirements of Accounting Standards for Business Enterprises, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing Wafangdian Bearing
Company's ability to continue as a going concern, disclosing, if applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
Wafangdian Bearing Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing Wafangdian Bearing Company’s
financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an 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 CSAs will always detect a material misstatement when it exists.
Wafangdian Bearing Co., Ltd. 2024 annual report
Misstatements arising from fraud or error are material Chartered reserveif, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
(2) Obtain an understand of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of 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 Wafangdian Bearing 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 or, if
such disclosures are inadequate, to 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 Wafangdian Bearing Company to cease to continue as a going concern.
(5) Evaluate the overall presentation (including the disclosures), structure and contents of the
financial statements, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within Wafangdian Bearing Company to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other
Wafangdian Bearing Co., Ltd. 2024 annual report
matters that may reasonably be thought to bear on our independence and, where applicable, related
safeguards.
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 precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Zhongshenzhonghuan Certified Public Accountant of China:
Certified Public Accountants LLP (Engagement Partner)
Certified Public Accountant of China:
Wuhan, China April 24, 2026
II. Financial statements
The unit of the statements in the financial notes is: yuan
Compiled by: Wafangdian Bearing Co., LTD
Unit：yuan
project Ending balance Opening balance
Current assets:
Monetary funds 65,287,519.84 239,398,923.10
Settlement of provisions
Loan funds
Trading financial assets 246,536.22 221,882.59
Derivative financial assets
Notes receivable 500,110,673.70 597,196,581.19
Accounts receivable 872,114,645.31 1,026,226,986.45
Financing of receivables 64,928,833.08 48,925,906.07
prepayment 9,287,712.68 10,948,524.83
Premium receivable
Reinsurance accounts receivable
Reserves receivable for reinsurance contracts
Other receivables 10,631,908.31 7,962,213.75
Among them: interest receivable
Wafangdian Bearing Co., Ltd. 2024 annual report
Dividends receivable
Buy and resell financial assets
inventory 636,325,993.85 688,440,738.43
Among them: Data resources
Contractual assets 5,258,761.24 11,498,470.21
Holding assets for sale
Non-current assets due within one year
Other current assets 50,298,808.19 53,298,611.95
Total current assets 2,214,491,392.42 2,684,118,838.57
Non-current assets:
Make loans and advances
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment
Investment in other equity instruments 8,705,393.14 11,906,928.35
Other non-current financial assets
Investment real estate 73,919,295.42 71,679,927.05
Fixed assets 406,111,493.56 437,398,315.29
Construction in progress 10,513,430.99 34,740,635.71
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 66,301,236.59 70,121,059.58
Among them: Data resources
Development expenditure
Among them: Data resources
goodwill
Long-term deferred expenses 6,949,581.27 6,602,412.97
Deferred tax assets
Other non-current assets 282,900.00
Total non-current assets 572,783,330.97 632,449,278.95
Total assets 2,787,274,723.39 3,316,568,117.52
Current liabilities:
Short-term loan 82,053,118.00 570,000,000.00
Borrow from the central bank
Borrowed funds
Trading financial liabilities
Derivative financial liability
Notes payable 370,597.50 401,129,901.60
Accounts payable 1,261,731,806.69 1,663,816,039.46
Advances received
Wafangdian Bearing Co., Ltd. 2024 annual report
Contractual liability 31,776,246.33 34,098,145.99
Selling repurchase funds of financial assets
Deposit-taking and interbank deposits
Agent to buy and sell securities
Agent underwrites securities
Employee compensation payable 49,061,641.96 42,089,354.01
Taxes payable 8,932,707.47 12,064,219.60
Other payables 587,079,378.98 135,258,184.75
Among them: interest payable
Dividends payable
Commissions and commissions payable
Reinsurance accounts payable
Holding liabilities held for sale
Non-current liabilities due within one year 98,350,000.00
Other current liabilities 469,016,692.21 4,417,479.62
Total current liabilities 2,490,022,189.14 2,961,223,325.03
Non-current liabilities:
Insurance contract reserve
Long-term loan
Bonds payable
Among them: preferred stock
Perpetual debt
Lease liability
Long-term payables 344,974.84 344,974.84
Long-term employee compensation payable
Projected liability 62,247,622.41 55,771,671.86
Deferred income 34,847,189.82 37,719,857.35
Deferred income tax liabilities 788,788.84 524,485.21
Other non-current liabilities
Total non-current liabilities 98,228,575.91 94,360,989.26
Total liabilities 2,588,250,765.05 3,055,584,314.29
Owner's equity:
Capital stock 402,600,000.00 402,600,000.00
Other equity instruments
Among them: preferred stock
Perpetual debt
Capital reserve 485,691,050.47 485,691,050.47
Minus: Treasury stocks
Other comprehensive income -3,201,535.21
Special reserve 1,639,850.97 2,305,094.24
Surplus reserve 136,770,391.01 136,770,391.01
General risk reserve
Wafangdian Bearing Co., Ltd. 2024 annual report
Undistributed profit -824,475,798.90 -766,382,732.49
Total owner's equity attributable to parent company 199,023,958.34 260,983,803.23
Minority shareholders' interests
Total owners' equity 199,023,958.34 260,983,803.23
Total liabilities and equity 2,787,274,723.39 3,316,568,117.52
Chairman: Wang Jiyuan General Accountant : Sun Najuan Accounting charger:Xuan Songtao
Unit:yuan
project Ending balance Opening balance
Current assets:
Monetary funds 62,726,188.11 237,603,355.24
Trading financial assets 246,536.22 221,882.59
Derivative financial assets
Notes receivable 497,182,824.72 598,162,807.95
Accounts receivable 867,794,392.68 990,716,081.66
Financing of receivables 64,457,568.41 44,303,611.96
prepayment 8,815,214.66 10,125,500.59
Other receivables 245,164,992.88 265,704,686.03
Among them: interest receivable
Dividends receivable
inventory 525,147,258.82 437,173,417.69
Among them: Data resources
Contractual assets 5,258,761.24 11,498,470.21
Holding assets for sale
Non-current assets due within one year
Other current assets 49,955,969.26 53,254,761.44
Total current assets 2,326,749,707.00 2,648,764,575.36
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 226,488,897.67 226,488,897.67
Investment in other equity instruments 8,705,393.14 11,906,928.35
Other non-current financial assets
Investment real estate 68,679,455.19 66,151,054.38
Fixed assets 271,405,080.88 289,356,808.71
Construction in progress 10,050,847.29 31,415,493.14
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 53,357,540.82 56,459,406.17
Among them: Data resources
Wafangdian Bearing Co., Ltd. 2024 annual report
Development expenditure
Among them: Data resources
goodwill
Long-term deferred expenses 6,949,581.27 6,602,412.97
Deferred tax assets
Other non-current assets 282,900.00
Total non-current assets 645,919,696.26 688,381,001.39
Total assets 2,972,669,403.26 3,337,145,576.75
Current liabilities:
Short-term loan 82,053,118.00 570,000,000.00
Trading financial liabilities
Derivative financial liability
Notes payable 370,597.50 401,129,901.60
Accounts payable 1,231,268,246.54 1,465,053,380.82
Advances received
Contractual liability 31,755,996.33 34,060,441.72
Employee compensation payable 39,804,727.20 34,267,209.57
Taxes payable 5,817,395.80 10,016,846.15
Other payables 574,587,108.18 122,802,562.47
Among them: interest payable
Dividends payable
Holding liabilities held for sale
Non-current liabilities due within one year 98,350,000.00
Other current liabilities 466,718,720.38 4,417,323.65
Total current liabilities 2,432,375,909.93 2,740,097,665.98
Non-current liabilities:
Long-term loan
Bonds payable
Among them: preferred stock
Perpetual debt
Lease liability
Long-term payables 244,974.84 244,974.84
Long-term employee compensation payable
Projected liability 61,798,365.54 55,730,460.81
Deferred income 8,229,767.64 11,203,199.32
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 70,273,108.02 67,178,634.97
Total liabilities 2,502,649,017.95 2,807,276,300.95
Owner's equity:
Capital stock 402,600,000.00 402,600,000.00
Other equity instruments
Wafangdian Bearing Co., Ltd. 2024 annual report
Among them: preferred stock
Perpetual debt
Capital reserve 485,678,443.26 485,678,443.26
Minus: Treasury stocks
Other comprehensive income -3,201,535.21
Special reserve 2,607.15
Surplus reserve 136,770,391.01 136,770,391.01
Undistributed profit -551,829,520.90 -495,179,558.47
Total owners' equity 470,020,385.31 529,869,275.80
Total liabilities and equity 2,972,669,403.26 3,337,145,576.75
Unit:yuan
project 2025 2024
I. Gross operating income 2,351,123,992.31 2,053,626,920.80
Among them: operating income 2,351,123,992.31 2,053,626,920.80
Interest income
Earned premium
Fee and commission income
Ii. Total operating costs 2,385,929,003.78 2,166,982,902.74
Among them: operating cost 1,948,741,941.06 1,725,976,671.44
Interest expense
Commission and commission expenses
Surrender premium
Net claims disbursement
Net reserve for insurance liability contracts
Policy dividend payout
Reinsurance expense
Taxes and surcharges 17,413,689.15 13,031,682.18
Selling expense 132,802,981.57 160,646,188.33
Administrative expenses 131,424,173.68 125,074,518.31
Research and development expenses 143,367,714.53 113,321,379.95
Financial expense 12,178,503.79 28,932,462.53
Among them: interest expense 13,220,559.41 33,560,937.47
Interest income 857,113.68 2,209,880.01
Plus: Other earnings 13,756,342.64 28,480,421.16
Investment income (loss marked with "-") 20,520,044.53 18,100,303.03
Among them: income from investment in joint venture and joint
venture
Financial assets measured at amortized cost cease to recognize
income
Exchange gain (loss marked with "-")
Net exposure hedge gain (loss marked with "-")
Gain on changes in fair value (loss marked with "-") 24,653.63 7,704.26
Wafangdian Bearing Co., Ltd. 2024 annual report
Credit impairment loss (loss marked with "-") -17,419,600.21 -23,901,979.00
Asset impairment loss (marked with "-") -41,776,370.87 -25,973,978.91
Gain on disposal of assets (loss marked with "-") 760,241.48 892,931.71
Iii. Operating profit (loss marked with "-") -58,939,700.27 -115,750,579.69
Plus: non-operating income 1,670,266.87 6,391,353.58
Less: non-operating expenses 559,329.38 901,627.76
Iv. Total Profit (total loss marked with "-") -57,828,762.78 -110,260,853.87
Less: Income tax expense 264,303.63 -48,372.34
V. Net profit (marked with "-" for net loss) -58,093,066.41 -110,212,481.53
(1) Classification by business continuity
-58,093,066.41 -110,212,481.53
loss)
loss)
(2) Classification according to ownership
Vi. Net of other comprehensive income after tax -3,201,535.21
Net of other comprehensive income attributable to the owner of
-3,201,535.21
the parent company after tax
(1) Other comprehensive income that cannot be reclassified into
-3,201,535.21
profit or loss
profit or loss under the equity method
-3,201,535.21
instruments
(2) Other comprehensive income reclassified into profit or loss
or loss under the equity method
comprehensive income
investments
statements
Net of other comprehensive income attributable to minority
shareholders after tax
Vii. Total comprehensive income -61,294,601.62 -110,212,481.53
Total comprehensive income attributable to the owner of the
-61,294,601.62 -110,212,481.53
parent company
Wafangdian Bearing Co., Ltd. 2024 annual report
Total comprehensive income attributable to minority shareholders
Viii. Earnings per share
(1) Basic earnings per share -0.1443 -0.2738
(2) Diluted earnings per share -0.1443 -0.2738
Chairman: Wang Jiyuan General Accountant : Sun Najuan Accounting charger:Xuan Songtao
Unit: RMB Yuan
item 2025 2024
I. Operating income 2,318,556,077.65 2,086,835,411.85
Less: operating costs 1,976,004,065.36 1,781,586,806.99
Taxes and surcharges 12,256,333.35 10,134,670.34
Selling expense 132,175,203.41 150,288,974.22
Administrative expenses 105,840,750.24 96,859,925.78
Research and development expenses 103,805,185.57 94,235,738.46
Financial expense 12,068,895.78 28,979,772.05
Among them: interest expense 11,086,150.49 20,931,843.91
Interest income 3,244.09 28,320.12
Plus: Other earnings 11,258,488.77 26,337,091.91
Investment income (loss marked with "-") 12,357,574.87 13,308,581.11
Among them: income from investment in joint venture and
joint venture
Financial assets measured at amortized cost cease to
recognize income (loss marked with "-")
Net exposure hedge gain (loss marked with "-")
Gain on changes in fair value (loss marked with "-") 24,653.63 7,704.26
Credit impairment loss (loss marked with "-") -17,232,989.76 -24,126,616.19
Asset impairment loss (marked with "-") -41,210,346.26 -18,939,937.86
Gain on disposal of assets (loss marked with "-") 756,856.52 609,426.05
II. Operating profit (loss marked with "-") -57,640,118.29 -78,054,226.71
Plus: non-operating income 1,445,803.44 5,692,303.60
Less: non-operating expenses 455,647.58 840,700.60
III. Total Profit (total loss marked with "-") -56,649,962.43 -73,202,623.71
Less: Income tax expense
Iv. Net Profit (marked with "-" for net loss) -56,649,962.43 -73,202,623.71
(1) Net profit from continuing operations (marked with "-" for
-56,649,962.43 -73,202,623.71
net loss)
(2) Net profit from discontinued operations (marked with "-"
for net loss)
V.Net of other comprehensive income after tax -3,201,535.21
(1) Other comprehensive income that cannot be reclassified
-3,201,535.21
into profit or loss
profit or loss under the equity method
Wafangdian Bearing Co., Ltd. 2024 annual report
-3,201,535.21
instruments
(2) Other comprehensive income reclassified into profit or
loss
profit or loss under the equity method
investments
comprehensive income
investments
statements
VI. Total comprehensive income -59,851,497.64 -73,202,623.71
VII. Earnings per share
(1) Basic earnings per share -0.1407 -0.1818
(2) Diluted earnings per share -0.1407 -0.1818
Unit:yuan
Item 2025 2024
I. Cash flows generated from operating activities:
Cash received from sales of goods and services provided 1,050,075,409.91 1,219,026,500.82
Net increase in customer deposits and interbank deposits
Net increase in borrowing from the Central bank
Net increase of funds borrowed from other financial
institutions
Cash from receipt of premiums from the original insurance
contract
Net cash received from reinsurance operations
Net increase of depository and investment funds
Cash for interest, charges and commissions
Net increase in borrowed funds
Net increase in repurchase funds
Net cash received from agents buying and selling securities
Tax refunds received 10,600,282.59 19,803,922.16
Other cash received in connection with operating activities 32,763,176.46 36,527,104.69
Subtotal of cash inflow from operating activities 1,093,438,868.96 1,275,357,527.67
Cash paid for goods purchased or services received 160,704,366.19 591,448,981.33
Net increase in customer loans and advances
Net increase in central bank and interbank deposits
Wafangdian Bearing Co., Ltd. 2024 annual report
Cash payable on the original insurance contract
Net increase of funds sold out
Cash to pay interest, fees and commissions
Cash to pay dividends on policies
Cash paid to and for employees 370,233,440.01 388,636,266.43
All taxes paid 82,545,566.67 49,043,695.10
Disburse other cash in connection with operating activities 94,774,051.23 140,509,591.55
Subtotal of cash outflow from operating activities 708,257,424.10 1,169,638,534.41
Net cash flow from operating activities 385,181,444.86 105,718,993.26
Ii. Cash Flows generated from investment activities:
Recovery of cash received from investment
Cash received from investment income 1,002,352.64 1,000,000.00
Net cash recovered from disposal of fixed assets, intangible
assets and other long-term assets
Net cash received on disposal of subsidiaries and other
operating units
Other cash received in connection with investment activities
Subtotal of cash inflows from investing activities 2,474,056.73 1,704,614.05
Cash paid for the purchase and construction of fixed assets,
intangible assets and other long-term assets
Cash paid by investment
Net increase in pledged loans
Obtain net cash paid by subsidiaries and other business units
Disburse cash in connection with other investment activities
Subtotal cash outflow from investment activities 1,892,244.21 5,996,953.69
Net cash flow from investing activities 581,812.52 -4,292,339.64
Iii. Cash Flows generated by financing Activities:
Absorb cash received from investments
Among them: subsidiaries absorb minority shareholders
investment received cash
Obtain cash received on loan 162,000,000.00 708,000,000.00
Other cash received in connection with fund-raising activities 582,988,414.20 603,690,323.73
Subtotal cash inflow from financing activities 744,988,414.20 1,311,690,323.73
Cash to pay off debts 748,350,000.00 737,100,000.00
Cash disbursed to distribute dividends, profits, or interest
payments
Among them: dividends and profits paid by subsidiaries to
minority shareholders
Disburse cash in connection with other fundraising activities 463,579,253.82 597,417,026.60
Subtotal cash outflow from financing activities 1,228,396,196.34 1,365,299,063.67
Net cash flows from financing activities -483,407,782.14 -53,608,739.94
IV. The impact of exchange rate changes on cash and cash
equivalents
V. Net increase in cash and cash equivalents -97,261,978.70 50,242,737.61
Wafangdian Bearing Co., Ltd. 2024 annual report
Plus: Starting cash and cash equivalents balance 160,907,298.24 110,664,560.63
Vi. Balance of cash and cash equivalents at the end of the
period
Unit: RMB yuan
ITEM 2025 2024
I. Cash flows generated from operating activities:
Cash received from sales of goods and services provided 1,031,973,351.26 1,183,896,172.53
Tax refunds received 10,597,748.36 19,803,922.16
Other cash received in connection with operating activities 29,373,398.35 34,114,009.77
Subtotal of cash inflow from operating activities 1,071,944,497.97 1,237,814,104.46
Cash paid for goods purchased or services received 263,140,602.60 680,302,711.04
Cash paid to and for employees 295,109,312.76 316,404,978.59
All taxes paid 51,478,056.59 34,004,251.18
Disburse other cash in connection with operating activities 77,797,628.19 97,245,640.59
Subtotal of cash outflow from operating activities 687,525,600.14 1,127,957,581.40
Net cash flow from operating activities 384,418,897.83 109,856,523.06
Ii. Cash Flows generated from investment activities:
Recovery of cash received from investment
Cash received from investment income 1,002,352.64 1,000,000.00
Net cash recovered from disposal of fixed assets, intangible
assets and other long-term assets
Net cash received on disposal of subsidiaries and other
operating units
Other cash received in connection with investment activities
Subtotal of cash inflows from investing activities 2,471,256.73 1,342,614.05
Cash paid for the purchase and construction of fixed assets,
intangible assets and other long-term assets
Cash paid by investment
Obtain net cash paid by subsidiaries and other business units
Disburse cash in connection with other investment activities
Subtotal cash outflow from investment activities 1,892,244.21 3,707,420.59
Net cash flow from investing activities 579,012.52 -2,364,806.54
Iii. Cash Flows generated by financing Activities:
Absorb cash received from investments
Obtain cash received on loan 162,000,000.00 708,000,000.00
Other cash received in connection with fund-raising activities 582,988,414.20 603,690,323.73
Subtotal cash inflow from financing activities 744,988,414.20 1,311,690,323.73
Cash to pay off debts 748,350,000.00 737,100,000.00
Cash disbursed to distribute dividends, profits, or interest
payments
Disburse cash in connection with other fundraising activities 463,579,253.82 597,417,026.60
Subtotal cash outflow from financing activities 1,228,396,196.34 1,365,299,063.67
Net cash flows from financing activities -483,407,782.14 -53,608,739.94
Wafangdian Bearing Co., Ltd. 2024 annual report
IV. The impact of exchange rate changes on cash and cash
equivalents
V. Net increase in cash and cash equivalents -98,027,325.73 56,307,800.51
Plus: Starting cash and cash equivalents balance 159,111,730.38 102,803,929.87
Vi. Balance of cash and cash equivalents at the end of the
period
Wafangdian Bearing Co., Ltd. 2024 annual report
This amount
Unit: RMB yuan
The year in2025
Owner’s equity attributable to parent company
Other equity instruments Less: Other Genera
Item The Minority Total owners'
Prefer Sustai Capital invento comprehe Surplus l risk Undistribute oth
Capital stock special subtotal equity equity
red nable other reserves ry nsive reserves provisi d profit er
reserve
stock debt stocks income on
I.Ending -
balance of last 485,691,050.47 766,382,732 260,983,803.23
year .49
Plus: changes
in accounting
policies
Future Error
Correction
other
II.Balance at
the beginning 402,600,000. 2,305,09 136,770,3 260,983,803.
of the current 00 4.24 91.01 23
.49
year
III. Amount of
increase or
- - - -
decrease in
current period
(marked with "-
" for decrease)
(1) Total - - -
comprehensive 3,201,53 58,093,066. 61,294,601.6 -61,294,601.62
income 5.21 41 2
(2) capital input
or reduction by
the owner
stock invested
by the owner
invested by
holders of other
equity
instruments
share payments
credited to
Wafangdian Bearing Co., Ltd. 2024 annual report
owners' equity
(3) Profit
distribution
surplus reserve
general risk
provisions
to owners (or
shareholders)
(4)Internal
carryover of
owners' equity
of capital
reserves to
increased
capital (or
capital stock)
of surplus
reserves to
increased
capital (or
equity)
reserves make
up the losses
in benefit plan
to carry
forward
retained
earnings
of other
comprehensive
income to
retained
earnings
(5) Special -
-665,243.27 -665,243.27
reserve 665,243.
Wafangdian Bearing Co., Ltd. 2024 annual report
extraction 3.57
(6) Others
balance of 485,691,050.47 3,201,53 824,475,798 199,023,958.34
current period 5.21 .90
The amount of the previous
Unit: RMB yuan
The year in2024
Owner’s equity attributable to parent company
Other equity instruments Less: Other Genera
Item The Minority Total owners'
Prefer Sustai Capital invento comprehe Surplus l risk Undistribute oth
Capital stock special subtotal equity equity
red nable other reserves ry nsive reserves provisi d profit er
reserve
stock debt stocks income on
I.Ending -
balance of last 485,691,050.47 656,170,250 371,306,068.15
year .96
Plus: changes
in accounting
policies
Advance error
correction
Merger of
enterprises
under the same
control
other
II.Balance at
the beginning 402,600,000. 2,414,87 136,770,3 371,306,068.
of the current 00 7.63 91.01 15
.96
year
III. Amount of
increase or
- - -
decrease in
current period
(marked with "-
" for decrease)
Wafangdian Bearing Co., Ltd. 2024 annual report
(1) Total - -
comprehensive 110,212,481 110,212,481. -110,212,481.53
income .53 53
(2) capital input
or reduction by
the owner
stock invested
by the owner
invested by
holders of other
equity
instruments
share payments
credited to
owners' equity
(3) Profit
distribution
surplus reserve
general risk
provisions
to owners (or
shareholders)
(4)Internal
carryover of
owners' equity
of capital
reserves to
increased
capital (or
capital stock)
Wafangdian Bearing Co., Ltd. 2024 annual report
of surplus
reserves to
increased
capital (or
equity)
reserves make
up the losses
in benefit plan
to carry
forward
retained
earnings
of other
comprehensive
income to
retained
earnings
(5) Special
reserve
extraction 00.52 2
(6) Others
balance of 485,691,050.47 766,382,732 260,983,803.23
current period .49
This amount
Unit: RMB yuan
Item Other equity instruments Capital Less: Other The Surplus Undistributed Total owners'
Capital stock other
Preferred Sustainabl othe reserves inventor comprehensiv special reserves profit equity
Wafangdian Bearing Co., Ltd. 2024 annual report
stock e debt r y stocks e income reserv
e
I.Ending balance of last year 529,869,275.80
Plus: changes in accounting
policies
Advance error correction
other
II.Balance at the beginning of 402,600,000. 485,678,443.2 136,770,391.0 -
the current year 00 6 1 495,179,558.47
III. Amount of increase or
decrease in current period -3,201,535.21 -56,649,962.43 -59,848,890.49
(marked with "-" for decrease)
(1) Total comprehensive
-3,201,535.21 -56,649,962.43 -59,851,497.64
income
(2) capital input or reduction by
the owner
the owner
of other equity instruments
credited to owners' equity
(3) Profit distribution
shareholders)
(4)Internal carryover of owners'
equity
reserves to increased capital (or
capital stock)
reserves to increased capital (or
equity)
Wafangdian Bearing Co., Ltd. 2024 annual report
losses
carry forward retained earnings
comprehensive income to
retained earnings
(5) Special reserve 2,607.15
(6) Others
IV. Ending balance of current 402,600,000. 485,678,443.2 2,607. 136,770,391.0 -
-3,201,535.21 470,020,385.31
period 00 6 15 1 551,829,520.90
The amount of the previous
Unit:yuan
Other equity instruments The
Less: Other
Item Capital special Surplus Undistributed Total owners'
Capital stock Preferred Sustainabl othe inventor comprehensiv other
reserves reserv reserves profit equity
stock e debt r y stocks e income
e
I.Ending balance of last year 603,071,899.51
Plus: changes in accounting
policies
Advance error correction
other
II.Balance at the beginning of 402,600,000. 485,678,443.2 136,770,391.0 -
the current year 00 6 1 421,976,934.76
III. Amount of increase or
decrease in current period -73,202,623.71 -73,202,623.71
(marked with "-" for decrease)
(1) Total comprehensive
-73,202,623.71 -73,202,623.71
income
(2) capital input or reduction by
Wafangdian Bearing Co., Ltd. 2024 annual report
the owner
the owner
of other equity instruments
credited to owners' equity
(3) Profit distribution
shareholders)
(4)Internal carryover of owners'
equity
reserves to increased capital (or
capital stock)
reserves to increased capital (or
equity)
losses
carry forward retained earnings
comprehensive income to
retained earnings
(5) Special reserve
(6) Others
IV. Ending balance of current 402,600,000. 485,678,443.2 136,770,391.0 -
period 00 6 1 495,179,558.47
Wafangdian Bearing Co., Ltd. 2025 annual report
III.The basic information of company
Wafangdian Bearing Company Limited (the “Company”, the “Group” is referred to
“Company” together with its subsidiaries) is a joint stock limited company established in the
People’s Republic of China (the “PRC”) on 16 July, 1996. In the opinion of the directors, its
parent and ultimate holding company is Wafangdian Bearing Group Company Limited
(“Wazhou Group”).
The Company’s B shares have been listed on the Shenzhen Stock Exchange since 19 February,
The Company’s founding meeting and the first meeting of the first board of directors decided that
the effective date of the shareholding system reorganization in the accounting of The
Company (that is, the date of the establishment of The Company's accounts) was determined as
April 1, 1997 on March 19, 1997.
The Company obtained its business license as an enterprise legal person on March 20, 1997, with
registration number DaGongShangQiFaZi24239971-2. The business scope includes the
manufacture and sale of bearings, mechanical equipment, auto parts and related products.
The Company's B shares were officially listed on the Shenzhen Stock Exchange on March 25,
capital was CNY 330 million.
In accordance with the Supplementary Notice on Issues Concerning the Equity Distribution of
Listed Companies under the Rules Governing the Listing of Stocks of the Shenzhen Stock
Exchange ( hereinafter referred to as the “ Supplementary Notice” ) issued by the Shenzhen
Stock Exchange on August 30, 2006, based on the audited financial report on September 30, 2006,
The Company implemented the conversion of capital reserve into share capital, giving 2.2 shares
for every 10 shares, and the total share capital increased from 330 million shares to 402.6 million
shares, of which Wazhou Group owned the legal person shares increased from 200 million shares
to 244 million shares, accounting for 60.6% of the total share capital; the Swedish SKF Company
increased from 65 million shares to 79.3 million shares, accounting for 19.7% of the total share
capital; public shares increased from 65 million shares to 79.3 million shares, accounting for
shareholding structure meets the requirements of the "Supplementary Notice" of the Shenzhen
Stock Exchange.
The parent company is Wazhou Group. General shareholders meeting is The Company’s
authority and have the resolution power over company’s business policy, financing,
investment and profit appropriation etc. significant events in accordance with relevant law.
Board of directors is responsible for general meeting and has the power over The Company’s
decision making. Management is in charge of implementation of resolution made by general
meeting and board meeting and is responsible for operation management.
Wafangdian Bearing Co., Ltd. 2025 annual report
The Company belongs to the bearing manufacturing industry, mainly engaged in the production
and sales of various types of bearings. The addresses of the registered office and principal place
of business of The Company are No. 1, Phrase 1, North Gongji Street, Wafangdian, Liaoning
Province, and the PRC Legal representative is Liu Jun. Registered according to law, the
business scope of The Company is as follows: Licensed items: inspection and testing services,
import and export of goods, import and export of technologies (for items subject to approval
according to law, business activities can only be carried out after approval by relevant departments,
and the specific business items shall be subject to the approval result)Bearing manufacturing,
bearings, gears and transmission components manufacturing, high speed precision heavy-duty
bearing sales, sales bearings, gears and transmission parts, bearing sales, general equipment
manufacturing (excluding special equipment manufacturing), high-speed rail equipment, parts
manufacturing, machinery and equipment sales, rail transportation equipment, key system and
parts sales, sales of lubricating oil, high-speed rail equipment and accessories sales, Wind
generators and spare parts sales, machinery parts, spare parts sales, railway locomotive vehicle
accessories manufacturing, railway locomotive vehicle accessories sales, auto parts and
accessories manufacturing, auto parts wholesale and retail auto parts, metal products repair, sales
metal materials, metal products sales, metal surface treatment and heat treatment processing,
quenching process, machinery parts and spare parts processing, land use right leasing, housing
leasing, non- residential real estate leasing, mechanical equipment leasing, computer and
communication equipment leasing, transportation equipment leasing service, office equipment
leasing service, storage equipment leasing service, special equipment leasing, labor services
(excluding labor dispatch), Technology service, technology development, technology consultation,
technology exchange, technology transfer, technology popularization (with the exception of the
projects subject to approval according to law, independently carry out business activities according
to law with the business license).
These financial statements were approved by The Company's Board of Directors on April 24,
IV.The basis for the preparation of financial statements
(1) Basis of preparation
The financial statements have been prepared in accordance with the "Accounting Standards for
Business Enterprises - Basic Standards" and various specific accounting standards, guidelines for
the application of accounting standards for business enterprises, interpretations of accounting
standards for business enterprises and other related regulations (hereinafter collectively referred to
as "Accounting Standards for Business Enterprises") issued by the Ministry of Finance, as well as
the relevant provisions of the "General Provisions on Financial Reporting, No. 15 of the Rules
Governing the Preparation of Information Disclosures by Companies Issuing Public Securities" of
the China Securities Regulatory Commission.
Wafangdian Bearing Co., Ltd. 2025 annual report
(2) Going concern
This financial statements are prepared on the assumption of going concern.
V. Significant Accounting Policies and Accounting Estimates
The group established the accounting policy and estimate, such as operation cycle, bad debt
recognition and measurement, dispatched inventories measurement and classification of fixed
assets and FA’ s depreciation, intangible asset’s amortization, capitalization condition of research
and development expenses, revenue recognition and measurement based on the actual characters
of business operation.
（1）Declaration for compliance with Accounting Standards for Business Enterprises
The financial statements are prepared by the Group according to the requirements of Accounting
Standards for Business Enterprises, and reflect the relative information for the financial position,
operating performance, cash flow of the Group truly and fully.
（2）Accounting period
The Group adopts the Gregorian calendar year as accounting period, i.e. from Jan 1 to Dec 31.
（3）Operating cycle
Normal operating cycle refers to the duration starting from purchasing the assets for manufacturing
up to cash or realization of cash equivalents. The Group sets twelve months as one operating cycle
and as the liquidity criterion for assets and liabilities.
（4）Functional currency
The Group adopts CNY as functional currency.
（5）Accounting for business combination under same control and not under same control
Business combinations under common control: Assets and liabilities acquired by the consolidating
party in a business combination (including goodwill resulting from the acquisition of the
consolidated party by the ultimate controlling party) are measured at the carrying value of the
consolidated party's assets and liabilities in the consolidated financial statements of the ultimate
controlling party at the date of the combination. The difference between the book value of the net
assets acquired in the merger and the book value of the merger consideration paid (or the total
nominal value of shares issued) is adjusted against the equity premium in capital surplus, and if the
equity premium in capital surplus is not sufficient for elimination, retained earnings are adjusted.
Business combinations not under common control: The cost of the combination is the fair value of
the assets paid, liabilities incurred or assumed and equity securities issued by the purchaser to obtain
control of the acquiree at the date of acquisition. The difference between the cost of the combination
Wafangdian Bearing Co., Ltd. 2025 annual report
and the share of the fair value of the acquiree's identifiable net assets acquired in the combination is
recognized as goodwill; the difference between the cost of the combination and the share of the fair
value of the acquiree's identifiable net assets acquired in the combination is recognized in profit or
loss for the period. Each identifiable asset, liability and contingent liability of the acquiree acquired
in a merger that meets the recognition criteria is measured at fair value at the date of acquisition.
Directly related costs incurred for a business combination are recognized in profit or loss as
incurred; transaction costs for issuing equity securities or debt securities for a business combination
are included in the initial recognition amount of the equity securities or debt securities.
（ 6 ） Criteria for determining control and Method of preparation of consolidated financial
statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control, and the scope of consolidation includes The company and all of its subsidiaries. Control
means that The company has power over the investee, has rights to variable returns through its
participation in the investee's related activities, and has the ability to use its power over the investee
to influence the amount of its returns.
The company considers the entire enterprise group as one accounting entity and prepares
consolidated financial statements in accordance with uniform accounting policies to reflect the
financial position, results of operations and cash flows of the enterprise group as a whole. The
effects of internal transactions that occur between The company and its subsidiaries and between
subsidiaries are eliminated. If an internal transaction indicates an impairment loss on the related
asset, the full amount of such loss is recognized. If the accounting policies and accounting periods
adopted by a subsidiary are not consistent with those of The company, the necessary adjustments
are made in accordance with The company's accounting policies and accounting periods when
preparing the consolidated financial statements.
The share of ownership equity, net profit or loss for the period and comprehensive income for the
period attributable to minority shareholders of the subsidiaries are presented separately in the
consolidated balance sheet under the item of ownership equity, in the consolidated income
statement under the item of net profit and in the consolidated statement of total comprehensive
income, respectively. The balance resulting from the subsidiary's minority share of current loss
exceeding the minority's share of the subsidiary's opening ownership interest is eliminated to reduce
shareholders' equity.
(1) Increase number of subsidiaries or operations
Wafangdian Bearing Co., Ltd. 2025 annual report
During the reporting period, if a subsidiary or business is added as a result of a business
combination under the same control, the operating results and cash flows of the subsidiary or
business from the beginning of the period in which the subsidiary or business is combined to the
end of the reporting period are included in the consolidated financial statements, while the opening
balance of the consolidated financial statements and the relevant items in the comparative
statements are adjusted as if the consolidated reporting entity had existed since the point when the
ultimate controlling party began to control it.
If control over an investee under the same control can be exercised due to additional investment,
equity investments held prior to the acquisition of control over the investee are eliminated from the
opening retained earnings or current profit or loss for the comparative statement period, respectively,
for the relevant gains or losses, other comprehensive income and other changes in net assets
recognized between the later of the date of acquisition of the original equity interest and the date
when the consolidated party and the investee are under the same control and the date of
consolidation.
During the reporting period, the addition of subsidiaries or operations as a result of a business
combination not under common control is included in the consolidated financial statements from the
date of acquisition based on the fair value of each identifiable asset, liability and contingent liability
determined at the date of acquisition.
If, for example, additional investments enable the exercise of control over an investee not under
common control, the equity interest in the investee held prior to the date of acquisition is
remeasured at the fair value of that equity interest at the date of acquisition, and the difference
between the fair value and its carrying amount is recognized as investment income for the current
period. The difference between the fair value and its carrying amount is recognized as investment
income for the period. The equity interest in the investee held prior to the date of acquisition is
transferred to investment income for the period to which the equity interest is transferred under the
equity method.
(2) Disposal of subsidiaries
①General treatment
When control over an investee is lost due to disposal of part of the equity investment or other
reasons, the remaining equity investment after disposal is remeasured at its fair value at the date of
loss of control. The difference between the sum of the consideration received for the disposal of the
equity interest and the fair value of the remaining equity interest, less the sum of the share of the net
assets of the original subsidiary calculated on a continuing basis from the date of acquisition or the
date of consolidation in proportion to the original shareholding and goodwill, is recognized as
Wafangdian Bearing Co., Ltd. 2025 annual report
investment income in the period in which control is lost. Other comprehensive income and other
changes in owners' equity under the equity method of accounting related to the equity investment in
the original subsidiary that can be reclassified to profit or loss in the future are transferred to
investment income in the current period when control is lost.
②Step-by-step disposal of subsidiaries
Disposal of equity investments in subsidiaries through multiple transactions in steps until the loss of
control, the terms and conditions of the disposal of equity investments in subsidiaries and the
economic impact of each transaction is consistent with one or more of the following, usually
indicating that the multiple transactions are a package deal:
i. The transactions are entered into simultaneously or after taking into account their mutual effects;
ⅱ. These transactions as a whole to achieve a complete business result;
ⅲ. The occurrence of one transaction depends on the occurrence of at least one other transaction;
ⅳ. A transaction is not economical when viewed alone, but is economical when considered together
with other transactions.
If each transaction is a package transaction, each transaction is accounted for as a disposal of a
subsidiary and loss of control; the difference between the disposal price and the share of the net
assets of the subsidiary corresponding to the disposal of the investment before the loss of control is
recognized in the consolidated financial statements as other comprehensive income and is
transferred to profit or loss in the period is lost when control is lost.
If each transaction is not a package transaction, the accounting treatment is based on partial disposal
of the equity investment in the subsidiary without loss of control before the loss of control; upon the
loss of control, the accounting treatment is based on the general treatment of disposal of subsidiaries.
(3) Purchase of minority interests in subsidiaries
The difference between the newly acquired long-term equity investment due to the purchase of
minority interest and the share of net assets of the subsidiary calculated in proportion to the newly
acquired shareholding on an ongoing basis from the date of acquisition or the date of consolidation
is adjusted to the equity premium in capital surplus in the consolidated balance sheet; if the equity
premium in capital surplus is not sufficient for elimination, it is adjusted to retained earnings.
(4) Partial disposal of equity investments in subsidiaries without loss of control
Wafangdian Bearing Co., Ltd. 2025 annual report
The difference between the disposal price and the share of net assets of the subsidiary calculated on
a continuing basis from the date of acquisition or the date of consolidation corresponding to the
disposal of the long-term equity investment is adjusted to the equity premium in capital surplus in
the consolidated balance sheet, and if the equity premium in capital surplus is not sufficient to offset
it, retained earnings are adjusted.
（7）Cash and cash equivalent
The cash listed on the cash flow statements of the Group 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.
（8）Translation of foreign currency
Foreign currency transactions are translated at the spot exchange rate issued by People’s Bank of
China (“PBOC”) when the transaction incurs. Monetary assets and liabilities in foreign currencies
are translated into RMB at the exchange rate prevailing at the balance sheet day. Exchange
differences arising from the settlement of monetary items are charged as in profit or loss for the
period. Exchange differences of specific borrowings related to the acquisition or construction of a
fixed asset should be capitalized as occurred, before the relevant fixed asset being acquired or
constructed is ready for its intended uses.
Assets and liabilities in the balance sheet are translated using the spot rate of exchange at the
balance sheet date; items in owners' equity, except for "undistributed earnings", are translated using
the spot rate of exchange at the time of occurrence. Income and expense items in the income
statement are translated using the spot exchange rate at the date of the transaction.
Upon disposal of a foreign operation, the difference in translation of the foreign currency financial
statements relating to the foreign operation is transferred from owners' equity to profit or loss in the
period of disposal.
（9）Financial instrument
The Group recognizes a financial assets, a financial liability or an equity instrument when it
becomes a party to a financial instrument contract.
Based on The Group's business model for managing financial assets and the contractual cash flow
Wafangdian Bearing Co., Ltd. 2025 annual report
characteristics of financial assets, financial assets are classified at initial recognition as financial
assets carried at amortized cost, financial assets at fair value through other comprehensive income,
and financial assets at fair value through profit or loss.
The Group classifies financial assets at amortized cost that are not designated as financial assets at
fair value through profit or loss if they both meet the following criteria:
- (a) The business model is to collect the contractual cash flows;
- The contractual cash flows are only payments of principal and interest based on the outstanding
principal amount.
The Group classifies financial assets as financial assets at fair value through other comprehensive
income (debt instruments) that are not designated as at fair value through profit or loss if they also
meet the following criteria:
- Operating model with the objective of both collecting the contractual cash flows and selling the
financial assets;
- The contractual cash flows are only payments on the principal and interest based on the
outstanding principal amount.
For investments in non-trading equity instruments, The Group may irrevocably designate them at
initial recognition as financial assets at fair value through other comprehensive income (equity
instruments). This designation is made on an individual investment basis and the related investment
meets the definition of an equity instrument from the perspective of the issuer.
Except for the above-mentioned financial assets measured at amortized cost and financial assets at
fair value through other comprehensive income, The Group classifies all remaining financial assets
as financial assets at fair value through profit or loss. On initial recognition, The Group may
irrevocably designate financial assets that would otherwise be classified as financial assets at
amortized cost or at fair value through other comprehensive income as financial assets at fair value
through profit or loss if it can eliminate or significantly reduce the accounting mismatch.
Financial liabilities are classified at initial recognition as financial liabilities at fair value through
profit or loss and financial liabilities at amortized cost.
A financial liability may be designated as a financial liability at fair value through profit or loss at
initial measurement if one of the following conditions is met:
(1) The designation eliminates or significantly reduces an accounting mismatch.
Wafangdian Bearing Co., Ltd. 2025 annual report
of financial assets and financial liabilities is performed on a fair value basis in accordance with the
enterprise's risk management or investment strategy as set out in formal written documentation and
reported to key management personnel on this basis within the enterprise.
(3) The financial liability contains embedded derivatives that are subject to separate splitting.
(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost, including notes receivable, accounts receivable, other
receivables, long-term receivables and debt investments, are initially measured at fair value, with
related transaction costs included in the initial recognition amount; accounts receivable that do not
contain significant financing components and those that The Group has decided not to consider
financing components that do not exceed one year are initially measured at contractual transaction
prices.
Interest calculated using the effective interest rate method during the holding period is recognized in
profit or loss.
On recovery or disposal, the difference between the acquisition price and the carrying amount of the
financial assets is recognized in profit or loss for the current period.
(2) Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets (debt instruments) at fair value through other comprehensive income include
receivables financing and other debt investments, which are initially measured at fair value, with
related transaction costs recognized in the initial recognition amount. The financial assets are
subsequently measured at fair value, and changes in fair value are recognized in other
comprehensive income, except for interest, impairment loss or gain and exchange gain or loss
calculated using the effective interest rate method.
Upon derecognition, the cumulative gain or loss previously recognized in other comprehensive
income is transferred from other comprehensive income and recognized in profit or loss for the
current period.
(3) Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets (equity instruments) at fair value through other comprehensive income, including
investments in other equity instruments, are initially measured at fair value, with related transaction
Wafangdian Bearing Co., Ltd. 2025 annual report
costs recognized in the initial recognition amount. The financial assets are subsequently measured at
fair value, with changes in fair value recognized in other comprehensive income. Dividends
received are recognized in current profit or loss.
Upon derecognition, the cumulative gain or loss previously recognized in other comprehensive
income is transferred from other comprehensive income and recognized in retained earnings.
(4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading,
derivative financial assets and other non-current financial assets, which are initially measured at fair
value, with related transaction costs recognized in profit or loss. The financial assets are
subsequently measured at fair value, with changes in fair value recognized in profit or loss for the
period.
(5) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and derivative financial liabilities, which are initially measured at fair value, with related transaction
costs recognized in profit or loss. The financial liabilities are subsequently measured at fair value,
with changes in fair value recognized in profit or loss for the period.
Upon derecognition, the difference between the carrying amount and the consideration paid is
recognized in profit or loss for the current period.
(6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost include short-term borrowings, notes payable,
accounts payable, other payables, long-term borrowings, bonds payable and long-term payables,
which are initially measured at fair value, with related transaction costs included in the initial
recognition amount.
Interest calculated using the effective interest rate method during the holding period is recognized in
profit or loss.
Upon derecognition, the difference between the consideration paid and the carrying amount of the
financial liability is recognized in profit or loss for the current period.
transfers
Wafangdian Bearing Co., Ltd. 2025 annual report
The Group derecognizes a financial assets when one of the following conditions is met:
- The contractual rights to receive cash flows from the financial assets are terminated;
- The financial assets has been transferred and substantially all the risks and rewards of ownership
of the financial assets have been transferred to the transferring party;
- A financial assets has been transferred and control over the financial assets is not retained,
although The Group neither transfers nor retains substantially all the risks and rewards of ownership
of the financial assets.
When The Group modifies or renegotiates a contract with a counterparty and the modification
constitutes a material change, the original financial assets is derecognized and a new financial assets
is recognized in accordance with the modified terms.
A financial assets is not derecognized if substantially all the risks and rewards of ownership of the
financial assets are retained when a transfer of the financial assets occurs.
In determining whether a transfer of financial assets meets the above conditions for derecognition of
financial assets, the principle of substance over form is applied.
The Group distinguishes between transfers of financial assets as a whole and partial transfers of
financial assets. If the transfer of a financial assets as a whole meets the derecognition condition, the
difference between the following two amounts is recognized in profit or loss for the current period:
(1) The carrying amount of the financial assets transferred;
(2) The sum of the consideration received for the transfer and the cumulative amount of changes in
fair value previously recognized directly in owners' equity (in the case where the transferred
financial assets is a financial assets (debt instrument) measured at fair value through other
comprehensive income).
If a partial transfer of a financial assets satisfies the derecognition condition, the carrying amount of
the financial assets transferred as a whole is apportioned between the derecognized portion and the
unrecognized portion according to their respective relative fair values, and the difference between
the following two amounts is recognized in profit or loss:
(1) The carrying amount of the derecognized portion;
(2) The sum of the consideration for the derecognized portion and the amount corresponding to the
derecognized portion of the cumulative amount of changes in fair value previously recognized
Wafangdian Bearing Co., Ltd. 2025 annual report
directly in owners' equity (in the case where the financial assets involved in the transfer is a
financial assets (debt instrument) measured at fair value through other comprehensive income).
If the transfer of a financial assets does not meet the derecognition condition, the financial assets
continues to be recognized and the consideration received is recognized as a financial liability.
A financial liability or a portion thereof is derecognized when the present obligation of the financial
liability is discharged in whole or in part. If The Group enters into an agreement with a creditor to
replace an existing financial liability by assuming a new financial liability, and the contractual terms
of the new financial liability are materially different from those of the existing financial liability, the
existing financial liability is derecognized and a new financial liability is recognized at the same
time.
If all or part of the contractual terms of an existing financial liability are substantially modified, the
existing financial liability or part of it is derecognized, and the modified financial liability is
recognized as a new financial liability at the same time.
When a financial liability is derecognized in whole or in part, the difference between the carrying
amount of the derecognized financial liability and the consideration paid (including non-cash assets
transferred or new financial liabilities assumed) is recognized in profit or loss for the period.
If The Group repurchases a portion of a financial liability, the carrying amount of the financial
liability as a whole is allocated on the repurchase date based on the relative fair values of the portion
that continues to be recognized and the portion that is derecognized. The difference between the
carrying amount allocated to the derecognized portion and the consideration paid (including non-
cash assets transferred or new financial liabilities assumed) is recognized in profit or loss for the
period.
The fair value of financial instruments for which there is an active market is determined by quoted
prices in an active market. The fair value of financial instruments for which no active market exists
is determined using valuation techniques. In valuation, The Group uses valuation techniques that are
applicable in the current circumstances and supported by sufficient available data and other
information, selects inputs that are consistent with the characteristics of the asset or liability
considered by market participants in transactions for the relevant asset or liability, and gives
preference to the use of relevant observable inputs. Unobservable inputs are used only if the
relevant observable inputs are not available or not practicable to obtain.
Wafangdian Bearing Co., Ltd. 2025 annual report
The Group estimates the expected credit losses on financial assets measured at amortized cost,
financial assets at fair value through other comprehensive income (debt instruments) and financial
guarantee contracts, etc.
The Group recognizes expected credit losses by calculating the probability-weighted amount of the
present value of the difference between the cash flows receivable under the contract and the cash
flows expected to be received, taking into account reasonable and substantiated information about
past events, current conditions and forecasts of future economic conditions, weighted by the risk of
default.
For receivables and contract assets resulting from transactions governed by ASBE No. 14, Revenue,
The Group always measures its allowance for losses at an amount equal to the expected credit losses
over the entire duration, regardless of whether or not there is a significant financing component.
For lease receivables resulting from transactions regulated by ASBE No. 21, "Leases," The Group
has elected to always measure its allowance for losses at an amount equal to the expected credit
losses over the entire duration.
For other financial instruments, The Group assesses at each balance sheet date the change in credit
risk of the related financial instruments since initial recognition.
The Group assesses whether the credit risk of a financial instrument has increased significantly
since initial recognition by comparing the risk of default of the financial instrument at the balance
sheet date with the risk of default at the date of initial recognition to determine the relative change
in the risk of default over the expected life of the financial instrument. The Group generally
considers that the credit risk of a financial instrument has increased significantly if it is more than
has not increased significantly since initial recognition.
If the credit risk of a financial instrument is low at the balance sheet date, The Group considers that
the credit risk of the financial instrument has not increased significantly since initial recognition.
If the credit risk of a financial instrument has increased significantly since initial recognition, The
Group measures the allowance for losses at an amount equal to the expected credit losses over the
entire life of the financial instrument; if the credit risk of a financial instrument has not increased
significantly since initial recognition, The Group measures the allowance for losses at an amount
equal to the expected credit losses of the financial instrument in the next 12 months. The resulting
increase or reversal amount of the loss allowance is recognized as an impairment loss or gain in
profit or loss. For financial assets (debt instruments) that are measured at fair value through other
Wafangdian Bearing Co., Ltd. 2025 annual report
comprehensive income, the allowance for losses is recognized in other comprehensive income and
the impairment loss or gain is recognized in profit or loss for the current period and does not reduce
the carrying amount of the financial assets as stated in the balance sheet.
If there is objective evidence that a accounts receivable is credit impaired, The Group provides for
impairment of that accounts receivable on a stand-alone basis.
For receivables and contract assets resulting from transactions governed by ASBE No. 14 - Revenue
(2017), The Group consistently measures its allowance for losses at an amount equal to the expected
credit loss over the entire life of the asset, regardless of whether it contains a significant financing
component.
For lease receivables, The Group has elected to always measure the allowance for losses at an
amount equal to the expected credit loss over the entire life of the receivables.
In addition to certain financial assets that are assessed for past due credit losses on an individual
basis, the Group also assesses expected credit losses on financial assets measured at amortized cost
on the basis of an aging portfolio.
In addition to the above receivables that are individually provided for bad debts, The Group
classifies the remaining financial instruments into portfolios based on credit risk characteristics and
determines expected credit losses on a portfolio basis. The categories of portfolio and the basis for
determining expected credit losses for notes receivable, accounts receivable, accounts receivable
financing, and other receivables are described below:
（1）Notes Receivable
Portfolio Name Basis for Determining the Portfolio
Portfolio 1 Bank acceptance notes
Portfolio 2 Finance company acceptance notes
Portfolio 3 Trade acceptance notes
（2）Accounts Receivable and Contract Assets
Portfolio Name Basis for Determining the Portfolio
Amounts receivable from related parties within the
Related party portfolio consolidation scope of Dalian Heavy Industry
Equipment Group Co., Ltd.
Account receivable aging portfolio Receivables other than the above related party Portfolio
（3）Financing receivable
Wafangdian Bearing Co., Ltd. 2025 annual report
Portfolio Name Basis for Determining the Portfolio
Notes receivable that are held both for collecting
Notes receivable
contractual cash flows and for sale
Supply chain certificates that are held both for collecting
Supply Chain E-Credential
contractual cash flows and for sale
（4）Other Receivables
Portfolio Name Basis for Determining the Portfolio
Amounts receivable from related parties within the
Related party portfolio consolidation scope of Dalian Heavy Industry
Equipment Group Co., Ltd.
Reserve fund portfolio Reserve fund
Other receivables other than the Related party portfolio
Account receivable aging portfolio
and the reserve fund portfolio.
If The Group no longer has a reasonable expectation that the contractual cash flows from a financial
assets will be fully or partially recovered, the carrying amount of the financial assets is written down
directly.
(10) Inventories
Inventories are classified as: raw materials, packaging, low-value consumables, work in process,
and finished goods.
Inventories is initially measured at cost, and the cost of inventories includes the cost of purchase,
processing costs and other expenses incurred in bringing the inventories to its current location and
condition.
Inventories are valued on a real-time moving weighted-average basis when they are issued.
Adoption of perpetual inventories system
(1) Low-value consumables are amortized using the one-time reversal method;
Wafangdian Bearing Co., Ltd. 2025 annual report
(2) The one-time reversal method is used for packaging.
At the balance sheet date, inventories should be measured at the lower of cost or net realizable value.
When the cost of inventories is higher than their net realizable value, a provision for the impairment
of inventories should be made. Net realizable value is the estimated selling price of inventories in
the ordinary course of activities, less the estimated costs to be incurred to completion, estimated
selling expenses and related taxes.
The net realizable value of finished goods, inventories and materials for sale, which are directly
used for sale, is determined in the normal course of production and operation as the estimated
selling price of the inventories, less estimated selling expenses and related taxes; the net realizable
value of materials subject to processing is determined in the normal course of production and
operation as the estimated selling price of the finished goods produced, less estimated costs to be
incurred to completion, estimated selling expenses and related taxes, The net realizable value of
inventories held for the execution of sales contracts or labor contracts is calculated on the basis of
the contract price, and if the quantity of inventories held exceeds the quantity ordered in the sales
contract, the net realizable value of the excess inventories is calculated on the basis of the general
sales price.
After the provision for the impairment of inventories, if the factors affecting the previous write-
down of inventories value have disappeared, resulting in the net realizable value of inventories
higher than its book value, the amount of the provision for the impairment of inventories is
reversed within the original provision, and the reversed amount is included in the current profit and
loss.
(11) Contract assets
The Group presents contract assets or contract liabilities in the balance sheet based on the
relationship between the performance obligations and payments from customers. The right to
receive consideration for goods transferred or services provided by The Group to the customer (and
which is dependent on factors other than the passage of time) is presented as a contract assets.
Contract assets and contract liabilities under the same contract are shown on a net basis. The
Group's unconditional (depending only on the passage of time) right to receive consideration from
customers is shown separately as receivables.
Wafangdian Bearing Co., Ltd. 2025 annual report
The methods of determining expected credit losses on contract assets and the accounting treatment
are described in detail in Note "(ix) 6. Methods of testing and accounting treatment for impairment
of Financial instrument" in this Note.
(12) Long-term equity investments
Joint control refers to the control shared by an arrangement in accordance with the relevant
agreement, and the relevant activities of the arrangement can only be decided with the unanimous
consent of the participants sharing the control. If The Group exercises joint control over an investee
together with other joint venture parties and has rights to the investee's net assets, the investee is a
joint venture of The Group.
Significant influence means having the power to participate in the financial and operating decisions
of the investee, but not being able to control or exercise joint control with other parties over the
formulation of those policies. Where The Group is able to exercise significant influence over an
investee, the investee is an associate of The Group.
(1) Long-term equity investments resulting from business combinations
For long-term equity investments in subsidiaries formed by business combinations under common
control, the initial investment of long-term equity investments is determined at the date of
consolidation based on the acquisition of the share of the ownership interest of the consolidated
party in the book value of the consolidated financial statements of the ultimate controlling party.
The difference between the initial investment cost of the long-term equity investment and the
carrying value of the consideration paid is adjusted against the equity premium in capital surplus; if
the equity premium in capital surplus is not sufficient for elimination, retained earnings are adjusted.
If The Group is able to exercise control over an investee under the same control due to additional
investment, the difference between the initial investment cost of the long-term equity investment
recognized in accordance with the above principle and the sum of the book value of the long-term
equity investment before reaching the consolidation plus the book value of the consideration paid
for further acquisition of shares at the date of consolidation is adjusted against equity premium, and
if the equity premium is not sufficient for elimination, it is reduced against retained earnings.
For long-term equity investments in subsidiaries formed through business combinations not under
common control, the initial investment cost of the long-term equity investment is based on the cost
of the combination determined at the date of acquisition. If it is possible to exercise control over the
investee under non-same control due to additional investment, the sum of the book value of the
Wafangdian Bearing Co., Ltd. 2025 annual report
equity investment originally held plus the cost of the additional investment is used as the initial
investment cost.
(2) Long-term equity investments acquired through other means instead of business combination
Long-term equity investments acquired by cash payment are recorded at initial investment cost
based on the actual purchase price paid.
Long-term equity investments acquired by issuing equity securities are recorded at the initial
investment cost based on the fair value of the equity securities issued.
(1) Long-term equity investments accounted for under the cost method
The Group accounts for its long-term equity investments in subsidiaries using the cost method
unless the investments meet the conditions of being held for sale. Except for the declared but unpaid
cash dividends or profits included in the actual price or consideration paid for the investment, The
Group recognizes investment income for the current period based on The Group's entitlement to the
declared cash dividends or profits of the investee.
(2) Long-term equity investments accounted for under the equity method
Long-term equity investments in associates and joint ventures are accounted for using the equity
method. The difference between the initial investment cost and the share of the fair value of the
identifiable net assets of the investee at the time of investment is not adjusted to the initial
investment cost of the long-term equity investment; the difference between the initial investment
cost and the share of the fair value of the identifiable net assets of the investee at the time of
investment is recognized in profit or loss for the current period and the cost of the long-term equity
investment is also adjusted.
The Group recognizes investment income and other comprehensive income according to the share
of net profit or loss and other comprehensive income realized by the investee, respectively, and
adjusts the carrying value of the long-term equity investment at the same time; the portion to which
The Group is entitled according to the profit or cash dividends declared by the investee is calculated,
and the carrying value of the long-term equity investment is reduced accordingly; for the investee's
ownership interest other than net profit or loss, other comprehensive income and profit distribution
For changes in the equity of the investee other than net profit or loss, other comprehensive income
and profit distribution ("changes in other owners' equity"), the carrying amount of the long-term
equity investment is adjusted and recognized in owners' equity.
Wafangdian Bearing Co., Ltd. 2025 annual report
In recognizing the share of the investee's net profit or loss, other comprehensive income and other
changes in owners' equity, the fair value of the investee's identifiable net assets at the time of
acquisition is used as the basis for recognition, and the net profit and other comprehensive income
of the investee are adjusted in accordance with The Group's accounting policies and accounting
periods.
Unrealized gains or losses on internal transactions between The Group and associate and joint
ventures that are attributable to The Group on the basis of their proportionate share are offset and
investment income is recognized on this basis, except when the assets invested or sold constitute a
business. Unrealized losses on internal transactions with investees are recognized in full if there are
impairment losses on assets.
The net loss incurred by The Group in a joint venture or an associate, except for the obligation to
assume additional losses, is limited to a write-down to zero of the carrying amount of the long-term
equity investment and other long-term interests that substantially constitute the net investment in the
joint venture or associate. If the joint venture or associate subsequently realizes net profit, The
Group resumes recognition of revenue sharing after the revenue sharing amount makes up for the
unrecognized loss sharing amount.
(3) Disposal of long-term equity investments
The difference between the carrying amount and the actual acquisition price of a long-term equity
investment is recognized in profit or loss for the current period.
If a long-term equity investment accounted for under the equity method is partially disposed of and
the remaining equity interest is still accounted for under the equity method, the other comprehensive
income recognized under the former equity method is carried forward in proportion to the
corresponding percentage using the same basis as the direct disposal of the related assets or
liabilities by the investee, and other changes in owners' equity are carried forward in proportion to
the current profit or loss.
If the common control or significant influence over the investee is lost due to the disposal of equity
investments, etc., other comprehensive income recognized as a result of the adoption of the equity
method of accounting for the original equity investment is accounted for on the same basis as the
direct disposal of the related assets or liabilities of the investee upon the termination of the adoption
of the equity method of accounting, and all changes in other owners' equity are transferred to
current profit or loss upon the termination of the adoption of the equity method of accounting.
If control over the investee is lost due to disposal of part of the equity investment, the remaining
equity interest that can exercise joint control or significant influence over the investee is accounted
Wafangdian Bearing Co., Ltd. 2025 annual report
for under the equity method in the preparation of individual financial statements, and the remaining
equity interest is adjusted as if it had been accounted for under the equity method from the time of
acquisition, and other comprehensive income recognized prior to the acquisition of control over the
investee is accounted for on the same basis as if the investee had directly disposed of the related
assets or liabilities. If the remaining equity interest cannot exercise joint control or significant
influence over the investee, it is recognized as a financial assets, and the difference between its fair
value and its carrying amount at the date of loss of control is recognized in profit or loss for the
current period, and for other comprehensive income and other owner's equity recognized prior to the
acquisition of control of the investee, the remaining equity interest is recognized in profit or loss for
the current period. All other comprehensive income and other changes in owners' equity recognized
prior to the acquisition of control of the investee are carried forward.
If the disposal of an equity investment in a subsidiary through multiple transactions until the loss of
control is a package transaction, each transaction is accounted for as a disposal of an equity
investment in a subsidiary and the loss of control; the difference between the disposal price and the
carrying value of the long-term equity investment corresponding to the equity interest disposed of
before the loss of control is recognized as other comprehensive income in the individual financial
statements, and then recognized as other comprehensive income when control is lost. The difference
between the disposal price and the carrying amount of the long-term equity investment before the
loss of control is recognized as other comprehensive income in the individual financial statements,
and then transferred to profit or loss in the period in which control is lost. If it is not a package
transaction, each transaction is accounted for separately.
(13) Investment properties
Investment properties are real estate held to earn rentals or for capital appreciation, or both, and
include land use rights that have been leased out, land use rights that are held and intended to be
transferred after appreciation, and buildings that have been leased out (including buildings that are
used for leasing after completion of self-construction or development activities and buildings that
are under construction or development that will be used for leasing in the future).
Subsequent expenditures related to investment properties are included in the cost of investment
properties when the inflow of related economic benefits is probable and their costs can be measured
reliably; otherwise, they are recognized in current profit or loss when incurred.
The Group uses the cost model to measure existing investment properties. The same depreciation
policy as that for The Group's fixed assets is applied to investment properties - buildings for lease
that are measured under the cost model, and land use rights for lease are subject to the same
amortization policy as that for intangible assets.
(14) Fixed assets
Wafangdian Bearing Co., Ltd. 2025 annual report
Fixed assets are tangible assets held for the production of goods, provision of services, rental or
management, and with a useful life of more than one fiscal year and a unit value of more than
CNY2,000. A fixed asset is recognized when both of the following conditions are met:
(1) It is probable that the economic benefits associated with the fixed asset will flow to the
enterprise;
(2) The cost of the fixed asset can be measured reliably.
Fixed assets are initially measured at cost (taking into account the effect of expected disposal costs).
Subsequent expenditures related to fixed assets are included in the cost of fixed assets when it is
probable that the economic benefits associated with them will flow to the enterprise and their cost
can be measured reliably; for the replaced part, the carrying amount is derecognized; all other
subsequent expenditures are charged to current profit or loss when incurred.
Depreciation of fixed assets is provided using the average annual method, and the depreciation rate
is determined based on the category of fixed assets, estimated useful life and estimated net residual
value rate. For fixed assets with provision for impairment, the depreciation amount is determined in
future periods based on the carrying amount after deducting the provision for impairment and based
on the remaining useful life. If each component of fixed assets has different useful lives or provides
economic benefits to the enterprise in different ways, different depreciation rates or depreciation
methods are selected and depreciated separately.
The depreciation methods, useful life, residual value rate and annual depreciation rates of various
types of fixed assets are as follows:
Annual
Estimated net residual
Category Useful life (years) depreciation
value rate (%)
rate (%)
Housing and Buildings
Including: Houses, factories, cubicles,
pipelines, roads
Waste storage 20 3 4.85
Machinery equipment 10 3 9.7
Transportation equipment 5 3 19.4
Electronic equipment
Including: Computer 5 3 19.4
Instrumentation 10 3 9.7
Wafangdian Bearing Co., Ltd. 2025 annual report
Others equipment
Including：Transmission equipment 10 3 9.7
Specialized equipment 10 3 9.7
Office equipment 5 3 19.4
Other Fixed assets 5 3 19.4
Fixed assets are derecognized when they are disposed of, or when no economic benefits are
expected to arise from their use or disposal. The disposal proceeds from the sale, transfer, scrapping
or destruction of fixed assets, net of their book value and related taxes and fees, are recognized in
profit or loss for the current period.
(15) Construction in progress
Construction in progress is measured at the actual cost incurred. Actual costs include construction
costs, installation costs, borrowings costs eligible for capitalization and other necessary
expenditures incurred to bring the construction in progress to its intended useable condition.
Construction in progress is transferred to fixed assets and depreciated from the following month
when it reaches its intended useable state.
(16) Intangible assets
(1) The Group initially measures intangible assets at cost when they are acquired;
The cost of an externally acquired intangible asset includes the purchase price, related taxes and
other expenses directly attributable to bringing the asset to its intended use.
(2)Subsequent measurement
The useful life of an intangible asset is analyzed and determined at the time of acquisition.
For intangible assets with finite useful lives, they are amortized over the period in which they bring
economic benefits to the enterprise; if the period in which the intangible assets bring economic
benefits to the enterprise cannot be foreseen, they are considered to be intangible assets with
indefinite useful lives and are not amortized.
For intangible assets with finite useful lives, they are amortized over the period that they will bring
economic benefits to the enterprise; if it is not possible to foresee the period that the intangible
assets will bring economic benefits to the enterprise, they are regarded as intangible assets with
Wafangdian Bearing Co., Ltd. 2025 annual report
indefinite useful lives and are not amortized.
Land use rights are amortized equally over their useful lives from the date of grant; ERP software
and other intangible assets are amortized equally over the shortest of their estimated useful lives,
contractual beneficial lives and effective lives as prescribed by law. The amortization amount is
charged to the cost of the related assets and to current profit or loss according to the target
beneficiary. The estimated useful lives and amortization methods for intangible assets with finite
useful lives are reviewed at the end of each year, and any changes are treated as changes in
accounting estimates.
The Group's expenses incurred in the process of conducting research and development include
related staff salaries, materials consumed, related depreciation and amortization expenses and other
related expenses of the personnel engaged in research and development activities, and are
summarized as follows:
The relevant employee compensation of the personnel engaged in R&D activities mainly refers to
the relevant employee compensation of the personnel directly engaged in R&D activities, the
management personnel closely related to R&D activities and the direct service personnel.
Depreciation expense refers to the expense of depreciation of instruments, equipment and buildings
in use for research and development activities. Long-term deferred expenses refer to long-term
deferred expenses incurred in the course of alteration, modification, renovation and repair of
research and development facilities.
Direct input expense refers to the related expenditure actually incurred by enterprises for the
implementation of research and development activities. Including direct consumption of materials,
fuel and power costs; Expenses for the operation, maintenance, adjustment, inspection, inspection
and repair of instruments and equipment used in research and development activities, as well as
lease fees for fixed assets rented through business leasing for research and development activities.
Expenditures on in-house research and development projects are categorized into research stage
expenditures and development stage expenditures.
Research stage: the stage of original and planned investigation and research activities for the
purpose of acquiring and understanding new scientific or technological knowledge.
Development phase: the stage of applying research results or other knowledge to a plan or design to
produce new or substantially improved materials, devices, products and other activities before
Wafangdian Bearing Co., Ltd. 2025 annual report
commercial production or use.
Expenditures in the research stage are recognized in profit or loss when they are incurred.
Expenditures in the development phase are recognized as intangible assets if the following
conditions are met. Expenditures in the development phase that do not meet the following
conditions are recognized in the current period's profit or loss:
(1) It is technically feasible to complete the intangible asset so that it can be used or sold;
(2) There is an intention to complete the intangible asset for use or sale;
(3) The manner in which the intangible asset will generate economic benefits, including the ability
to demonstrate the existence of a market for the products produced by applying the intangible asset
or the existence of a market for the intangible asset itself, and the usefulness of the intangible asset
if it will be used internally;
(4) The availability of sufficient technical, financial and other resources to support the completion
of the development of the intangible asset and the ability to use or sell the intangible asset;
(5) Expenditures attributable to the development phase of the intangible asset can be measured
reliably.
If it is not possible to distinguish between research-phase expenditures and development-phase
expenditures, all research and development expenditures incurred are recognized in the current
period's profit or loss.
(17) Impairment of long term assets
Long-term equity investments, investment properties measured using the cost model, fixed assets,
construction in progress, right-of-use assets, intangible assets with finite useful life, oil and gas
assets and other long-term assets are tested for impairment if there is an indication of impairment at
the balance sheet date. If the result of the impairment test indicates that the recoverable amount of
an asset is less than its carrying amount, a provision for impairment is made for the difference and
an impairment loss is recorded. The recoverable amount is the higher of the asset's fair value less
costs of disposal and the present value of estimated future cash flows of the asset. The provision for
asset impairment is calculated and recognized on an individual asset basis. If it is difficult to
estimate the recoverable amount of an individual asset, the recoverable amount of the asset group is
determined using the asset group to which the asset belongs. An asset group is the smallest
combination of assets that can generate cash inflows independently.
Wafangdian Bearing Co., Ltd. 2025 annual report
For goodwill resulting from business combinations, intangible assets with indefinite useful lives,
and intangible assets that have not yet reached a serviceable status, impairment tests are performed
once a year at the end of each year, regardless of whether there is an indication of impairment.
The Group conducts goodwill impairment tests and apportions the carrying value of goodwill
formed as a result of a business combination to the relevant asset group from the date of purchase in
accordance with a reasonable method; if it is difficult to apportion to the relevant asset group, it is
apportioned to the relevant asset group combination. A relevant asset group or a combination of
asset groups is an asset group or a combination of asset groups that can benefit from the synergistic
effect of a business combination.
When impairment test of the relevant asset group or combination of asset groups that contain
goodwill, if there is an indication of impairment of the asset group or combination of asset groups
related to goodwill, the asset group or combination of asset groups that do not contain goodwill is
first tested for impairment, the recoverable amount is calculated and compared with the relevant
carrying amount, and a corresponding impairment loss is recognized. If the recoverable amount is
less than the carrying amount, the impairment loss is first reduced by the carrying amount of
goodwill apportioned to the asset group or group of assets, and then reduced by the carrying amount
of each asset group or group of assets other than goodwill in proportion to its proportionate share of
the carrying amount of the other assets. The carrying value of each asset is then reduced by the
carrying value of each asset other than goodwill.
Once the above impairment loss is recognized, it will not be reversed in subsequent accounting
periods.
(18) Long-term amortization
Long-term amortization is an expense that has been incurred but should be borne by the current and
future periods and is apportioned over a period of more than one year. These costs are amortized
evenly over the period of benefit. If an item of long-term amortization does not benefit subsequent
accounting periods, the unamortized amortized value of the item is transferred to current profit or
loss.
(19) 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. Contract assets and contract liability
originate from same contact shall be listed at net amount.
(20) Employee compensation
Wafangdian Bearing Co., Ltd. 2025 annual report
The Group recognizes actual short-term compensation incurred by employees as a liability in the
accounting period in which the employees provide services to The Group, and recognizes it in the
current profit or loss or the cost of related assets.
The social insurance premiums and housing fund paid by The Group for its employees, as well as
the labor union funds and employee education funds withdrawn in accordance with regulations, are
used to determine the corresponding amount of employee compensation in accordance with the
prescribed accrual basis and accrual ratio during the accounting period in which the employees
provide services to The Group.
Employee benefit expenses incurred by The Group are charged to current profit or loss or the cost
of related assets based on the actual amount incurred when incurred, of which non-monetary
benefits are measured at fair value.
(1) Defined contribution plan
The Group contributes to basic pension and unemployment insurance for employees in accordance
with the relevant local government regulations. During the accounting period in which the
employees provide services to The Group, the amount payable is calculated based on the
contribution base and ratio set by the local regulations, recognized as a liability, and charged to
current profit or loss or cost of related assets. In addition, The Group participates in an enterprise
annuity plan/supplemental pension fund approved by the relevant state authorities. The Group
contributes a certain percentage of the employees' total salaries to the annuity plans/local social
insurance agencies, and the corresponding expenses are recognized in the current profit or loss or
cost of related assets.
(2) Defined benefit plans
The Group attributes the benefit obligations arising from the defined benefit plans to the period in
which the employees render services in accordance with the formula determined by the expected
accumulated benefit unit method, and recognizes them in current profit or loss or cost of related
assets.
The deficit or surplus resulting from the present value of the defined benefit plan obligation less the
fair value of the defined benefit plan assets is recognized as a net defined benefit plan liability or net
asset. If a defined benefit plan has a surplus, The Group measures the net defined benefit plan asset
at the lower of the surplus or asset limit of the defined benefit plan.
All defined benefit plan obligations, including those expected to be paid within twelve months after
Wafangdian Bearing Co., Ltd. 2025 annual report
the end of the annual reporting period in which employees render services, are discounted based on
market yields on treasury bonds or high-quality corporate bonds in active markets that match the
maturity and currency of the defined benefit plan obligations as of the balance sheet date.
The service cost incurred by the defined benefit plan and the net interest on the net liabilities or net
assets of the defined benefit plan are recognized in profit or loss or the cost of the related assets;
changes resulting from the remeasurement of the net liabilities or net assets of the defined benefit
plan are recognized in other comprehensive income and are not reversed to profit or loss in
subsequent accounting periods, and the entire portion previously recognized in other comprehensive
income is carried forward to unrecognized earnings to the extent of equity upon termination of the
original defined benefit plan. The portion of other comprehensive income within equity is
transferred to unappropriated earnings upon termination of the defined benefit plan.
Upon settlement of a defined benefit plan, a gain or loss on settlement is recognized as the
difference between the present value of the defined benefit plan obligation and the settlement price
determined at the settlement date.
If The Group provides termination benefits to employees, it recognizes employee compensation
liabilities arising from termination benefits and recognizes them in profit or loss at the earlier of:
when The Group cannot unilaterally withdraw termination benefits provided as a result of a
termination plan or a proposed reduction in force; and when The Group recognizes costs or
expenses related to a restructuring involving the payment of termination benefits.
(21) Accrued liabilities
The Group recognizes an obligation related to a contingent event as an accrued liabilities when the
following conditions are simultaneously met:
(1) The obligation is a present obligation assumed by The Group;
(2) It is probable that the performance of the obligation will result in an outflow of economic
benefits to The Group;
(3) The amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related
present obligation.
In determining the best estimate, the risks associated with the contingency, uncertainty and the time
value of money are considered. Where the effect of the time value of money is material, the best
Wafangdian Bearing Co., Ltd. 2025 annual report
estimate is determined by discounting the related future cash outflows.
Where a continuous range of expenditures required exists and it is equally probable that various
outcomes will occur within that range, the best estimate is determined at the mid-point of the range;
in other cases, the best estimate is treated separately as follows:
- Where the contingency relates to a single item, the best estimate is determined in accordance with
the most probable occurrence amount.
- If the contingency involves multiple items, it is determined on the basis of various possible
outcomes and related probabilities.
If all or part of the expenditure required to settle the estimated liability is expected to be reimbursed
by a third party, the amount of reimbursement is recognized separately as an asset when it is
substantially certain that it will be received, and the amount of reimbursement recognized does not
exceed the carrying amount of the estimated liability.
The Group reviews the carrying amount of the estimated liability at the balance sheet date, and if
there is conclusive evidence that the carrying amount does not reflect the current best estimate, the
carrying amount is adjusted in accordance with the current best estimate.
(22) Revenue
The Group recognizes revenue when it has fulfilled its performance obligations under a contract, i.e.,
when the customer obtains control of the relevant goods or services. The acquisition of control of
the relevant goods or services is defined as the ability to dominate the use of the goods or services
and derive substantially all of the economic benefits therefrom.
If a contract contains two or more performance obligations, The Group apportions the transaction
price to each individual performance obligation on the contract commencement date in proportion to
the relative share of the individual selling price of the goods or services promised by each individual
performance obligation. The Group measures revenue based on the transaction price apportioned to
each individual performance obligation.
The transaction price is the amount of consideration to which The Group expects to be entitled as a
result of the transfer of goods or services to the customer, excluding amounts collected on behalf of
third parties and amounts expected to be refunded to the customer. The Group determines the
transaction price in accordance with the terms of the contract, taking into account its past customary
practices, and considers the impact of variable consideration, the existence of significant financing
components in the contract, non-cash consideration, and consideration payable to the customer in
Wafangdian Bearing Co., Ltd. 2025 annual report
determining the transaction price. The Group determines the transaction price that includes variable
consideration by an amount that does not exceed the amount for which it is highly probable that
there will be no material reversal of the cumulative recognized revenue at the time the relevant
uncertainty is removed. If there is a significant financing component in the contract, The Group
determines the transaction price based on the amount payable in cash assuming that the customer
will pay for the goods or services as soon as control is obtained, and amortizes the difference
between this transaction price and the contract consideration using the effective interest rate method
over the term of the contract. Performance obligations are fulfilled within a certain period of time if
one of the following conditions is met, otherwise, performance obligations are fulfilled at a certain
point in time:
- The customer obtains and consumes the economic benefits resulting from The Group's
performance at the same time as The Group's performance.
- The customer is able to control the goods under construction in the course of The Group's
performance.
- The goods produced in the course of The Group's performance have irreplaceable use and The
Group is entitled to receive payment for the portion of the performance that has been completed to
date in the aggregate throughout the term of the contract.
For performance obligations performed within a certain period of time, The Group recognizes
revenue in accordance with the progress of performance during that period, except when the
progress of performance cannot be reasonably determined. The Group uses the output method or
input method to determine the progress of performance, taking into account the nature of the goods
or services. When the progress of performance cannot be reasonably determined, The Group
recognizes revenue in the amount of costs already incurred until the progress of performance can be
reasonably determined, if the costs already incurred are expected to be reimbursed.
For performance obligations performed at a point in time, The Group recognizes revenue at the
point in time when the customer obtains control of the related goods or services. In determining
whether the customer has acquired control of the goods or services, The Group considers the
following indications:
- The Group has a present right to receive payment for the goods or services, i.e., the customer has a
present obligation to pay for the goods or services.
- The Group has transferred legal title to the goods to the customer, i.e., the customer has legal title
to the goods.
- The Group has transferred physical possession of the goods to the customer, i.e. the customer has
Wafangdian Bearing Co., Ltd. 2025 annual report
taken physical possession of the goods.
- The Group has transferred the principal risks and rewards of ownership of the goods to the
customer, i.e., the customer has acquired the principal risks and rewards of ownership of the goods.
- The customer has accepted the goods or services, etc.
The Group determines whether its status is that of a principally liable person or an agent at the time
of engaging in a transaction based on whether it has control over the goods or services prior to
transferring them to the customer. If The Group is able to control the goods or services prior to
transferring them to the customer, The Group is the principal and recognizes revenue based on the
total consideration received or receivable; otherwise, The Group is the agent and recognizes revenue
based on the amount of commissions or fees it expects to be entitled to receive.
The Group primarily sells bearing products. The performance obligations are satisfied at a point in
time. Based on the characteristics of the business, the specific methods for revenue recognition are
as follows:
Domestic sales:
For products subject to customer drawdown (consumption), revenue is recognised when the
customer draws down and accepts the products in accordance with the terms of the sales contract.
For products subject to customer signature upon delivery, revenue is recognised upon customer
acceptance and receipt of the signed delivery note.
Export sales:
Revenue is recognised at the time of obtaining the bill of lading (after customs clearance and
departure of goods) or at the time of customer signature upon delivery, as specified in the sales
contract.
(23) Contract Costs
Contract costs include contract performance costs and contract acquisition costs.
Costs incurred by The Group to perform a contract that are not regulated by the relevant standards,
such as inventories, fixed assets or intangible assets, are recognized as contract performance costs as
an asset when the following conditions are met:
Wafangdian Bearing Co., Ltd. 2025 annual report
- The cost is directly related to a contract that is currently or expected to be acquired.
- The cost increases The Group's resources available to meet future performance obligations.
- The cost is expected to be recovered.
Incremental costs incurred by The Group to acquire a contract that are expected to be recovered are
recognized as a contract acquisition cost as an asset.
Assets related to contract costs are amortized using the same basis as revenue recognition for the
goods or services to which the asset relates; however, for contract acquisition costs that are
amortized over a period of less than one year, The Group recognizes them in profit or loss as
incurred. If the carrying value of an asset related to the contract cost is higher than the difference
between the following two items, The Group provides for impairment of the excess and recognizes
an impairment loss on the asset:
related to the asset
If there is a subsequent change in the factors impaired in prior periods that causes the
aforementioned difference to be higher than the carrying amount of the asset, The Group reverses
the original provision for impairment and recognizes it in profit or loss, provided that the carrying
amount of the asset after the reversal does not exceed the carrying amount of the asset at the date of
reversal assuming no provision for impairment was made.
(24) Government grants
Government grants, which are monetary or non-monetary assets acquired by The Group from the
government without compensation, are classified as asset-related government grants and revenue-
related government grants.
Government grants related to assets are obtained by The Group for the acquisition and construction
or otherwise forming long-term assets. Revenue-related government grants refer to government
grants other than asset-related government grants.
The specific criteria for The Group to classify government grants as asset-related are: government
grants obtained by the Group and used for the acquisition and construction or otherwise forming
long-term assets
Wafangdian Bearing Co., Ltd. 2025 annual report
The Group's specific criteria for classifying government grants as revenue-related are: government
grants other than those related to assets
For those government grants for which the government documents do not specify the objects of the
grants, The Group classifies the government grants as asset-related or revenue-related based on the
following judgment: the Group makes judgment in accordance with the above-mentioned principles
of differentiation, and if it is difficult to differentiate, the whole is classified as revenue-related
government grants.
Government grants are recognized when The Group is able to meet the conditions attached to them
and when they can be received.
Government grants related to assets are reduced to the carrying amount of the relevant assets or
recognized as deferred income. If recognized as deferred income, it is recognized in profit or loss in
accordance with a reasonable and systematic method in installments over the useful life of the
relevant assets (if it is related to The Group's daily activities, it is recognized in other income; if it is
not related to The Group's daily activities, it is recognized in non-operating income);
Government grants related to revenue, which are used to compensate The Group for relevant costs
and expenses or losses in subsequent periods, are recognized as deferred revenue and charged to
current profit or loss (to other income if they are related to The Group's ordinary activities; to non-
operating income if they are not related to The Group's ordinary activities) or offset against relevant
costs and expenses or losses in the period in which the relevant costs and expenses or losses are
recognized; to compensate The Group for If it is used to compensate The Group for the related costs
or losses incurred, it is directly recognized in profit or loss (other income if it is related to The
Group's daily activities; non-operating income if it is not related to The Group's daily activities) or
reduced by the related costs or losses.
(25) Deferred income tax assets and deferred income tax liabilities
Income taxes consist of current income taxes and deferred income taxes. The Group recognizes
current income tax and deferred income tax in profit or loss, except for income tax arising from
business combinations and transactions or events directly recognized in owners' equity (including
other comprehensive income).
Deferred income tax assets and deferred income tax liabilities are recognized based on the
difference between the tax basis of assets and liabilities and their carrying amounts (temporary
Wafangdian Bearing Co., Ltd. 2025 annual report
differences).
Deferred tax assets are recognized for deductible temporary differences to the extent that it is
probable that taxable income will be available in future periods against which the deductible
temporary differences can be utilized. For deductible losses and tax credits that can be carried
forward to future years, deferred tax assets are recognized to the extent that it is probable that future
taxable income will be available against which the deductible losses and tax credits can be utilized.
Deferred income tax liabilities are recognized for taxable temporary differences, except under
special circumstances.
The special circumstances under which deferred tax assets or deferred tax liabilities are not
recognized include
- Initial recognition of goodwill;
- Transactions or events that are neither business combinations nor, at the time of their occurrence,
affect accounting profit and taxable income (or deductible losses), and for which the initial
recognition of assets and liabilities does not result in taxable temporary differences and deductible
temporary differences of an equivalent amount.
Deferred income tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries, associates and joint ventures, unless The Group is able to control the
timing of the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred income tax assets are recognized for deductible
temporary differences associated with investments in subsidiaries, associates and joint ventures
when it is probable that the temporary differences will reverse in the foreseeable future and it is
probable that future taxable income will be available against which the deductible temporary
differences can be utilized.
At the balance sheet date, deferred income tax assets and deferred income tax liabilities are
measured at the tax rates applicable to the periods when the related assets are expected to be
recovered or the related liabilities settled, in accordance with the tax laws.
At the balance sheet date, The Group reviews the carrying amount of deferred tax assets. The
carrying amount of deferred tax assets is written down if it is more likely than not that sufficient
taxable income will not be available in future periods to offset the benefit of the deferred tax assets.
To the extent that it is probable that sufficient taxable income will be available, the written down
amount is reversed.
When there is a legal right to settle on a net basis and the intention is to settle on a net basis or to
Wafangdian Bearing Co., Ltd. 2025 annual report
acquire assets and settle liabilities simultaneously, current income tax assets and current income tax
liabilities are stated at the net amount after offsetting.
At the balance sheet date, deferred income tax assets and deferred income tax liabilities are
presented on a net basis after offsetting when both of the following conditions are met:
- The taxable entity has the legal right to settle current income tax assets and current income tax
liabilities on a net basis;
- Deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the
same tax authority on the same taxable entity or to different taxable entities, but in each future
period in which it is significant that the deferred income tax assets and liabilities reverse, the taxable
entities involved intend to settle the current income tax assets and liabilities on a net basis or to
acquire the assets and The reversal of deferred income tax assets and liabilities is a significant
transaction.
(26) Lease
A lease is a contract in which the lessor cedes the right to use an asset to the lessee for a certain
period of time for consideration. At the inception date of the contract, The Group assesses whether
the contract is a lease or contains a lease. A contract is a lease or contains a lease if one party to the
contract cedes the right to control the use of one or more identified assets for a certain period of
time in exchange for consideration.
If a contract contains several separate leases, The Group splits the contract and accounts for each
separate lease separately. If a contract contains both lease and non-lease components, the lessee and
the lessor split the lease and non-lease components.
(1) Right-of-use assets
At the commencement date of the lease term, The Group recognizes right-of-use assets for leases
other than short-term leases and leases of low-value assets. Right-of-use assets are initially
measured at cost. This cost includes:
- the initial measurement amount of the lease liability;
- the amount of lease payments made on or before the commencement date of the lease term, net of
amounts related to lease incentives taken if lease incentives exist;
- the initial direct costs incurred by The Group;
Wafangdian Bearing Co., Ltd. 2025 annual report
- costs that The Group expects to incur to disassemble and remove the leased asset, restore the site
where the leased asset is located, or restore the leased asset to the condition agreed upon under the
terms of the lease, excluding costs that are part of the costs incurred to produce the inventories.
The Group subsequently depreciates right-of-use assets using the straight-line method. If it is
reasonably certain that ownership of the leased asset will be obtained at the end of the lease term,
The Group depreciates the leased asset over its remaining useful life; otherwise, the leased asset is
depreciated over the shorter of the lease term or the remaining useful life of the leased asset.
The Group determines whether a right-of-use asset is impaired and accounts for the identified
impairment loss in accordance with the principles described in Note 3(17), "Impairment of Long-
lived Assets".
(2) Lease liabilities
The Group recognizes a lease liability for leases other than short-term leases and leases of low-
value assets at the commencement date of the lease term. Lease liabilities are initially measured at
the present value of the outstanding lease payments. Lease payments consist of
- fixed payments (including material fixed payments), net of amounts related to lease incentives, if
lease incentives exist;
- variable lease payments that are dependent on an index or rate;
- payments expected to be payable based on the residual value of the guarantee provided by The
Group;
- the exercise price of the purchase option, provided that The Group reasonably determines that it
will exercise the option;
- the amount to be paid upon exercise of the option to terminate the lease, provided that the lease
term reflects that The Group will exercise the option to terminate the lease.
The Group uses the interest rate embedded in the lease as the discount rate, but if the interest rate
embedded in the lease cannot be reasonably determined, The Group's incremental borrowings rate is
used as the discount rate.
The Group calculates the interest expense on the lease liability for each period of the lease term
based on a fixed periodic interest rate, which is included in the current profit or loss or the cost of
the related asset.
Wafangdian Bearing Co., Ltd. 2025 annual report
Variable lease payments that are not included in the measurement of the lease liability are charged
to current profit or loss or the cost of the related assets when they are actually incurred.
After the commencement date of the lease term, The Group remeasures the lease liability and
adjusts the corresponding right-of-use asset if the carrying value of the right-of-use asset has been
reduced to zero, but the lease liability still needs to be further reduced, the difference is recognized
in profit or loss for the current period:
- When there is a change in the valuation of the purchase option, lease renewal option or termination
option, or when the actual exercise of the aforementioned options is not consistent with the original
valuation, The Group remeasures the lease liability at the present value calculated by the changed
lease payments and the revised discount rate;
- When there is a change in the substantive fixed payment amount, a change in the amount expected
to be payable for the guaranteed residual value, or a change in the index or rate used to determine
the lease payment amount, The Group remeasures the lease liability at the present value calculated
from the changed lease payment amount and the original discount rate. However, if the change in
the lease payment amount results from a change in the floating interest rate, the present value is
calculated using the revised discount rate.
(3) Short-term leases and leases of low-value assets
The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases
and leases of low-value assets, and to recognize the related lease payments in current profit or loss
or the cost of the related assets on a straight-line basis over each period of the lease term. Short-term
leases, which are leases with a lease term of not more than 12 months at the commencement date of
the lease term and do not include a purchase option. Low-value asset leases, which are leases with a
lower value when the single leased asset is a brand-new asset. If The Group subleases or expects to
sublease the leased assets, the original lease is not a low-value asset lease.
(4) Change of lease
If a lease is changed and the following conditions are met at the same time, The Group will account
for the lease change as a separate lease:
- the lease modification expands the scope of the lease by adding the right to use one or more leased
assets;
- The increased consideration is equivalent to the separate price of the expanded portion of the lease
adjusted for the circumstances of that contract.
Wafangdian Bearing Co., Ltd. 2025 annual report
If a lease modification is not accounted for as a separate lease, at the effective date of the lease
modification, The Group reapportioned the consideration of the modified contract, redetermined the
lease term, and remeasured the lease liability based on the present value of the modified lease
payments and the revised discount rate.
If a lease change results in a reduction in the scope of the lease or a shortening of the lease term,
The Group reduces the carrying value of the right-of-use asset accordingly and recognizes the gain
or loss related to partial termination or complete termination of the lease in profit or loss for the
current period. If other lease changes result in the remeasurement of the lease liability, The Group
adjusts the carrying value of the right-of-use asset accordingly.
At the commencement date of the lease, The Group classifies leases into finance leases and
operating leases. A finance lease is a lease that transfers substantially all the risks and rewards
associated with ownership of the leased asset, regardless of whether ownership is ultimately
transferred. Operating leases refer to leases other than finance leases. When The Group acts as a
sublease lessor, it classifies the sublease based on the right-to-use assets arising from the original
lease.
(1) Accounting for operating leases
Lease receipts under operating leases are recognized as rental income on a straight-line basis over
each period of the lease term. The Group capitalizes the initial direct costs incurred in connection
with operating leases and apportions them to current profit or loss over the lease term on the same
basis as rental income is recognized. Variable lease payments that are not included in the lease
receipts are recognized in current profit or loss when they are actually incurred. If a change in an
operating lease occurs, The Group accounts for it as a new lease from the effective date of the
change, and the amount of lease payments received in advance or receivable in connection with the
lease before the change is regarded as the amount of payments received under the new lease.
(2) Accounting for finance leases
On the commencement date of the lease, The Group recognizes finance lease receivables for finance
leases and derecognizes finance lease assets. When The Group makes initial measurement of the
finance lease receivable, the net lease investment is used as the recorded value of the finance lease
receivable. The net lease investment is the sum of the unguaranteed residual value and the present
value of the lease receipts not yet received at the commencement date of the lease term discounted
at the interest rate embedded in the lease.
The Group calculates and recognizes interest income for each period of the lease term based on a
Wafangdian Bearing Co., Ltd. 2025 annual report
fixed periodic interest rate. Derecognition and impairment of finance lease receivables are
accounted for in accordance with Note 3 (ix) "Financial Instruments" of this note.
Variable lease payments that are not included in the net lease investment measurement are
recognized in profit or loss when they are actually incurred.
If a change in a finance lease occurs and the following conditions are met, The Group accounts for
the change as a separate lease:
- the change expands the scope of the lease by adding the right to use one or more leased assets;
- the increased consideration is equivalent to the separate price of the expanded portion of the lease
adjusted for the circumstances of that contract.
If a change in a finance lease is not accounted for as a separate lease, The Group treats the changed
lease separately in the following circumstances:
- If the change becomes effective on the lease commencement date and the lease would be classified
as an operating lease, The Group accounts for it as a new lease from the effective date of the lease
change and uses the net investment in the lease prior to the effective date of the lease change as the
carrying amount of the leased asset;
- If the change becomes effective on the lease commencement date and the lease is classified as a
finance lease, The Group accounts for the lease in accordance with the policy on modification or
renegotiation of contracts as described in Note 3 (ix) Financial Instruments.
The Group assesses whether the transfer of assets in sale-and-leaseback transactions is a sale in
accordance with the principles described in Note 3(22) "Revenue".
(1) As a lessee
If the transfer of assets in a sale-and-leaseback transaction is a sale, The Group, as the lessee,
measures the right-of-use asset resulting from the sale-and-leaseback at the portion of the carrying
value of the original asset that relates to the right-of-use acquired by the leaseback and recognizes a
gain or loss only for the right transferred to the lessor; if the transfer of assets in a sale-and-
leaseback transaction is not a sale, The Group, as the lessee, continues to recognize the transferred
asset and at the same time recognizes a financial liability equal to the transfer proceeds. The Group
continues to recognize the transferred asset as a lessee and at the same time recognizes a financial
liability equal to the transferred revenue. For details of the accounting treatment of financial
Wafangdian Bearing Co., Ltd. 2025 annual report
liabilities, please refer to Note 3 (9) "Financial Instruments".
(2) As lessor
If the transfer of assets in a sale-and-leaseback transaction is a sale, The Group accounts for the
purchase of the assets as a lessor and accounts for the lease of the assets in accordance with the
aforementioned policy "2. If the transfer of assets in a leaseback transaction is not a sale, The Group,
as the lessor, does not recognize the transferred asset, but recognizes a financial assets equal to the
transferred revenue. For details of the accounting treatment of financial assets, please refer to Note 3
(9) "Financial Instruments".
(27) Debt restructuring
The Group derecognizes a claim when the contractual right to receive cash flows from the claim is
terminated. If a debt restructuring is carried out by settling the debt with assets or converting the
debt into an equity instrument, The Group recognizes the related assets when they meet the
definition and recognition criteria.
For debt restructuring by means of settlement of debts with assets, The Group initially recognizes
the transferred non-financial assets at cost. The cost of inventories includes the fair value of the
relinquished claims and other costs directly attributable to bringing the asset to its present location
and condition, such as taxes, transportation, handling and insurance. The cost of an investment in an
associate or joint venture includes the fair value of the relinquished claim and other costs such as
taxes directly attributable to the asset. The cost of investment property, including the fair value of
the relinquished claims and other costs such as taxes directly attributable to the asset. The cost of
property, plant and equipment includes the fair value of the relinquished claim and other costs
directly attributable to the asset, such as taxes, transportation, loading and unloading, installation,
and professional services, incurred before the asset is brought to its intended useable condition. The
cost of biological assets, including the fair value of the relinquished claim and other costs directly
attributable to the asset, such as taxes, transportation, and insurance. The cost of intangible assets,
including the fair value of the relinquished claims and other costs directly attributable to taxes
incurred in bringing the asset to its intended use. If a debt restructuring by way of conversion of
debt into an equity instrument results in the creditor converting the claim to an equity investment in
an associate or a joint venture, The Group measures the initial investment cost of the claim at the
fair value of the relinquished claim and other costs, such as taxes, that are directly attributable to the
asset. The difference between the fair value of the relinquished claim and its carrying amount is
recognized in profit or loss.
If debt restructuring is carried out by modifying other terms, The Group recognizes and measures
Wafangdian Bearing Co., Ltd. 2025 annual report
the restructured claims in accordance with "III. (IX) Financial Instruments" in this note.
For debt restructuring using multiple assets or a combination of assets, The Group first recognizes
and measures the transferred financial assets and restructuring claims in accordance with "III. (IX)
Financial instruments" in this note, and then, in proportion to the fair value of each asset other than
the transferred financial assets, recognizes a net gain or loss on the fair value of the claims net of the
amount recognized for the transferred financial assets and restructuring claims. The fair value of
each asset other than the transferred financial assets is then allocated to the net amount after
deducting the recognized amount of the transferred financial assets and the restructuring claim in
proportion to the fair value of each asset, and the cost of each asset is determined separately on this
basis in accordance with the aforementioned method. The difference between the fair value and the
carrying amount of the abandoned claims shall be recognized in profit or loss for the current period.
The Group derecognizes a debt when the present obligation of the debt is discharged.
For debt restructuring by way of settlement of debts with assets, The Group derecognizes the
relevant assets and debts settled when the conditions for derecognition are met, and the difference
between the carrying amount of the debts settled and the carrying amount of the assets transferred is
recognized in profit or loss for the current period.
For debt restructuring by converting debt to equity instruments, The Group derecognizes the debt
when the debt settled meets the conditions for derecognition. The Group initially recognizes an
equity instrument at the fair value of the equity instrument. If the fair value of the equity instrument
cannot be reliably measured, it is measured at the fair value of the debt settled. The difference
between the carrying amount of the debt settled and the amount recognized for the equity instrument
shall be recognized in profit or loss for the current period.
If debt restructuring is carried out by modifying other terms, The Group recognizes and measures
the restructured debt in accordance with "III (IX) Financial Instruments" in this note.
When debt restructuring is carried out by using multiple assets to settle debts or by combining them,
The Group recognizes and measures equity instruments and restructured debts in accordance with
the aforementioned method, and the difference between the carrying amount of the debt settled and
the sum of the carrying amount of the transferred assets and the amounts recognized for equity
instruments and restructured debts is recognized in profit or loss for the current period.
(28) Methodology for determining materiality criteria and basis for selection
Items Materiality criterion
Accounts receivable for which a significant Individual provision amount ≥ 3% of the total bad debt
Wafangdian Bearing Co., Ltd. 2025 annual report
Items Materiality criterion
provision for bad debts is made on an individual provision for accounts receivable and ≥ RMB 1 million
basis
Significant amount of recovery or reversal of bad
Amount recovered or reversed ≥ 3% of the total bad debt
debt provision for accounts receivable during the
provision for accounts receivable and ≥ RMB 1 million
period
Significant write- off of accounts receivable during Write- off amount ≥ 3% of the total bad debt provision for
the period accounts receivable and ≥ RMB 1 million
(29) Changes in significant accounting policies and accounting estimates
There were no changes in The Group's significant accounting policies during the reporting period.
There were no changes in The Group's significant accounting estimates during the reporting period.
VI.Taxation
Tax Tax base Tax rate
The output tax is calculated on the basis of the income
from the sale of goods and taxable services calculated in
accordance with the provisions of the tax law, and after
Value-added tax (VAT) 13%,9%,6%,5%
deducting the input tax allowed to be deducted in the
current period, the difference is the value-added tax
payable
City construction tax Value-added tax payables 7%
Enterprise income tax (EIT) Current period taxable profit 15% or 25%
Notes: EIT rate for different tax payer
Tax principles EIT rate
Wafangdian Bearing Co., Ltd 15%
Wazhou Liaoyang Bearing construction Co., Ltd 15%
Dalian Wazhou Precision Motor Car Bearing Company Limited 25%
Wazhou Precision of Spherical Roller Bearings (Wafangdian) Co., Ltd 25%
On December 12, 2023, The Company obtained the qualification of high-tech enterprise
certification, high-tech enterprise certification certificate number is GR202321200183, valid for 3
years, according to the tax law, can enjoy the preferential tax policy of enterprise income tax levied
at a tax rate of 15% within 3 years.
The subsidiary Waxiang Liaoyang Bearing Manufacturing Co., Ltd. obtained the qualification of
high-tech enterprise identification on December 20, 2023, and the high-tech enterprise identification
certificate number is GR202321002020, valid for 3 years, and can enjoy the preferential tax policy
of levying enterprise income tax at a tax rate of 15% within 3 years according to the tax law.
Wafangdian Bearing Co., Ltd. 2025 annual report
VII. Notes to Consolidated Financial Statements
i. Monetary Funds
Items Closing balance Opening balance
Cash on hand
Cash in bank 160,907,298.24
Other cash and cash equivalents 78,491,624.86
Total 65,287,519.84 239,398,923.10
Note 1: As at 31 December 2025, the Group's bank deposits with restricted ownership amounted to
RMB 270,135.16 (31 December 2024: RMB nil), which consisted of RMB 269,718.32 frozen due
to the "SDN List" issued by the U.S. Department of the Treasury, and RMB 416.84 frozen due to
litigation；
Note 1: As at 31 December 2025, the Group's bank deposits with restricted ownership amounted to
RMB 270,135.16 (31 December 2024: RMB nil), which consisted of RMB 269,718.32 frozen due
to the "SDN List" issued by the U.S. Department of the Treasury, and RMB 416.84 frozen due to
litigation.
ii. Transactional financial assets
Items Closing balance Opening balance
P&L
Among them: Debt instrument investment
Equity instrument investment 246,536.22 221,882.59
Total 246,536.22 221,882.59
iii. Note receivable
Items Closing balance Opening balance
Bank acceptance 293,562,783.24 402,220,507.99
Finance company acceptance 11,266,224.46 7,832,575.73
Trade acceptance 203,435,408.83 196,993,155.22
Total 508,264,416.53 607,046,238.94
Less: Provision for impairment 8,153,742.83 9,849,657.75
Total 500,110,673.70 597,196,581.19
Wafangdian Bearing Co., Ltd. 2025 annual report
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Notes receivable with bad debt
provision based on the characters
of credit risk portfolio 508,264,416.53 100.00 8,153,742.83 1.60 500,110,673.70
including:
Bank acceptance 293,562,783.24 57.76 293,562,783.24
Finance company acceptance 11,266,224.46 40.02 11,266,224.46
Trade acceptance 203,435,408.83 2.22 8,153,742.83 4.01 195,281,666.00
Total 508,264,416.53 —— 8,153,742.83 —— 500,110,673.70
(Continued)
Opening balance
Items Booking balance Provision
Booking value
Amount % Amount %
Notes receivable with bad debt
provision based on the characters 607,046,238.94 100.00 9,849,657.75 1.62 597,196,581.19
of credit risk portfolio
including:
Bank acceptance 402,220,507.99 66.26 402,220,507.99
Finance company acceptance 7,832,575.73 1.29
Trade acceptance 196,993,155.22 32.45 9,849,657.75 5.00 187,143,497.47
Total 607,046,238.94 100.00 9,849,657.75 1.62 597,196,581.19
Notes receivable with bad debt provision based on the characters of credit risk portfolio:
Closing Balance
Items
Booking balance Amount %
Bank acceptance 293,562,783.24
Finance company acceptance 11,266,224.46
Trade acceptance 203,435,408.83 8,153,742.83 4.01
Total 508,264,416.53 8,153,742.83 ——
Change during the year Closing
Category Opening balance
Accrued Collect/carry over Written-off Balance
Provision for bad debt 9,849,657.75 -1,695,914.92 8,153,742.83
Total 9,849,657.75 -1,695,914.92 8,153,742.83
Closing amount no more Closing amount still
Items
recognized recognized
Bank acceptance 227,644,005.26
Finance company acceptance 3,112,995.33
Trade acceptance 174,581,559.89
Wafangdian Bearing Co., Ltd. 2025 annual report
Total 405,338,560.48
iv. Accounts receivable
Aging Closing Balance Opening balance
Within1 year 957,607,035.33
Over 5 years 36,635,851.02
Total 1,171,376,684.29
Less: Provision for bad debt 145,149,697.84
Total 1,026,226,986.45
Closing Balance
Booking balance Provision
Items Amount % Amount % Booking value
Accounts receivable with
individual bad debt provision 104,032,877.62 10.05 103,843,410.02 99.82 189,467.60
Accounts receivable with bad
debt provision based on the
characters of credit risk portfolio 930,724,571.69 89.95 58,799,393.98 6.32 871,925,177.71
Including:
-Aging portfolio 869,316,475.54 84.02 57,635,348.32 6.63 811,681,127.22
-Related party portfolio 61,408,096.15 5.93 1,164,045.66 1.90 60,244,050.49
Total 1,034,757,449.31 — 162,642,804.00 — 872,114,645.31
(Continued)
Opening Balance
Items Booking balance Provision
Amount % Amount % Booking value
Wafangdian Bearing Co., Ltd. 2025 annual report
Accounts receivable with
individual bad debt provision
Accounts receivable with bad
debt provision based on the 1,096,401,308.69 93.60 70,174,322.24 6.40 1,026,226,986.45
characters of credit risk portfolio
Including:
-Aging portfolio 894,281,761.39 76.34 64,984,479.65 7.27 829,297,281.74
-Related party portfolio 202,119,547.30 17.25 5,189,842.59 2.57 196,929,704.71
Total 1,171,376,684.29 — 145,149,697.84 — 1,026,226,986.45
Wafangdian Bearing Co., Ltd. 2025 annual report
Bad debt provision for significant accounts receivable at the end of year based on individual：
Closing Balance Opening balance
Debtors name Accounts Provision for bad Reasons for Accounts Provision for
%
receivable debts provision receivable bad debts
An Gang steel Co.,Ltd 1,595,050.69 1,595,050.69 100.00 uncollectable 1,595,050.69 1,595,050.69
Bazhou Tianli Tube Co., Ltd 1,319,586.71 1,319,586.71 100.00 uncollectable 1,319,586.71 1,319,586.71
HBIS Company Limited Handan Branch 1,608,611.42 1,608,611.42 100.00 uncollectable 1,608,611.42 1,608,611.42
Heilongjiang Longmei Logistics Co., Ltd 8,366,227.79 8,366,227.79 100.00 uncollectable 10,656,227.79 10,656,227.79
Liaoning Wazhou Bearing Sales Co.,Ltd 1,611,795.99 1,611,795.99 100.00 uncollectable 1,611,795.99 1,611,795.99
Liaoning Yinheng Galvanized Colored Coated Steel Sheet Co. Ltd 3,213,308.67 3,213,308.67 100.00 uncollectable 3,213,308.67 3,213,308.67
Shandong Yuanda Board Technology Co., Ltd 1,804,722.77 1,804,722.77 100.00 uncollectable 1,804,722.77 1,804,722.77
Xuzhou Xugong Material Supply Co., Ltd 2,826,234.67 2,826,234.67 100.00 uncollectable 373,237.55 373,237.55
Yingkou Iron & Steel Co. Ltd 1,696,318.44 1,696,318.44 100.00 uncollectable 1,696,318.44 1,696,318.44
Zhejiang Yesheng New Material Co. Ltd 1,301,760.00 1,301,760.00 100.00 uncollectable 1,301,760.00 1,301,760.00
CITIC Heavy Industries Co.,Ltd 1,128,791.54 1,128,791.54 100.00 uncollectable 1,126,828.28 1,126,828.28
ZHUZHOU GEAR CO.,LTD. 1,055,392.12 1,055,392.12 100.00 uncollectable 290,587.00 290,587.00
Pakistan Eastern Commercial Enterprise 1,871,195.21 1,871,195.21 100.00 uncollectable 2,459,996.98 2,459,996.98
Northern Heavy Industries Group Co., Ltd. 1,101,255.06 1,101,255.06 100.00 uncollectable
Hebei Jinxi Section Steel Co., Ltd. 1,895,386.00 1,895,386.00 100.00 uncollectable
Jilin Xinda Steel Co., Ltd. 4,544,255.52 4,544,255.52 100.00 uncollectable
Shandong Taishan Steel Group Co., Ltd. 2,430,247.71 2,430,247.71 100.00 uncollectable
Shanxi Taiyuan Heavy Industry New Energy Technology Co., Ltd. 1,548,954.08 1,548,954.08 100.00 uncollectable
Wafangdian Bearing Co., Ltd. 2025 annual report
Wu’an Yuhua Steel Co., Ltd. 5,425,620.03 5,425,620.03 100.00 uncollectable
AG Company, India 1,568,656.74 1,568,656.74 100.00 uncollectable
GOD Company, India 1,805,222.55 1,805,222.55 100.00 uncollectable
Total 49,718,593.71 49,718,593.71 29,058,032.29 29,058,032.29
Wafangdian Bearing Co., Ltd. 2025 annual report
Notes receivable with bad debt provision based on the characters of credit risk portfolio:
Combined accrual items:
Closing Balance
Aging
Accounts receivable Provision for bad debts Proportion (%)
Within 1 year
Over 5 years
Related Party Portfolio
Total 930,724,571.69 58,799,393.98 —
Change during the year
Category Opening balance Collect/carry Others Closing Balance
Accrued Written-off
over
Provision for
bad debt 145,149,697.84 30,311,417.16 12,255,059.49 565,215.51 -1,964.00 162,642,804.00
Total 145,149,697.84 30,311,417.16 12,255,059.49 565,215.51 -1,964.00 162,642,804.00
Item Written-off Amount
Accounts receivable written off 565,215.51
Significant amount written off:
Procedure to be
Company name Amount Reason Related party
performed
Qinghai Lufeng New Materials Co., Unable to
Ltd. 198,987.78 recover Internal approval N
Datong Risheng Jingrui Bearing Unable to
Co., Ltd. 100,520.79 recover Internal approval N
Nanyang Explosion-proof Group Unable to
Xinpu Motor Co., Ltd. 77,075.26 recover Internal approval N
Zibo Shenying Economic & Trade Unable to
Co., Ltd. 33,074.89 recover Internal approval N
Wafangdian Bearing Factory
Beijing Distribution Office Tianjin Unable to
Operation Department 22,927.20 recover Internal approval N
Jiangyin Huayi Fluid Transmission Unable to
Control Co., Ltd. 14,771.10 recover Internal approval N
Benxi Precision Wazhou Bearing Unable to
Sales Co., Ltd. 12,543.97 recover Internal approval N
Dandong Luozhou Bearing Sales Unable to
Co., Ltd. 12,024.61 recover Internal approval N
Wafangdian Bearing Co., Ltd. 2025 annual report
Jinan Sennuo Mechanical & Unable to
Electrical Co., Ltd. 11,599.40 recover Internal approval N
Unable to
Fuxin Hongsheng Bearing Co., Ltd. 10,983.86 recover Internal approval N
Total 494,508.86
Closing Balance Proportion Receivable bad
of total debts &
Debtors name Contractual closing contractual
Receivable Total balance assets
assets
(%) impairment
China National
Railway Group
Corporation and
subsidiaries 186,841,512.74 118,996.41 186,960,509.15 17.94 9,504,415.75
Wafangdian Bearing
Group Corporation
and subsidiaries 60,400,328.53 60,400,328.53 5.80 1,300,236.23
China Railway Group
Corporation
(CRGC)and
subsidiaries 19,707,278.02 281,230.48 19,988,508.50 1.92 1,914,272.93
Shanghai Ouyeel
Purchasing
Information
Technology Co., Ltd 17,163,102.48 17,163,102.48 1.65 858,155.12
Chongqing Gearbox
Co., Ltd 15,663,340.96 1,017,614.72 16,680,955.68 1.60 1,291,974.41
Total
v. Financing receivable
Items Closing Balance Opening Balance
Bank acceptance 45,079,733.86 48,925,906.07
Supply Chain E-Credential 20,893,788.65
Total 65,973,522.51 48,925,906.07
Less: Provision for bad debt 1,044,689.43
Total 64,928,833.08 48,925,906.07
Closing Balance
Items Booking balance Provision
Amount % Amount % Booking value
Financing receivable with
individual bad debt provision
Wafangdian Bearing Co., Ltd. 2025 annual report
Financing receivable with bad
debt provision based on the
characters of credit risk portfolio 65,973,522.51 100.00 1,044,689.43 1.58 64,928,833.08
Including:
- Bank acceptance 45,079,733.86 68.33 45,079,733.86
- Supply Chain E-Credential 20,893,788.65 31.67 1,044,689.43 5.00 19,849,099.22
Total 65,973,522.51 — 1,044,689.43 — 64,928,833.08
(Continued)
Opening Balance
Items Booking balance Provision
Amount % Amount % Booking value
Financing receivable with
individual bad debt provision
Financing receivable with bad
debt provision based on the
characters of credit risk portfolio 48,925,906.07 100.00 48,925,906.07
Including:
- Bank acceptance 48,925,906.07 100.00 48,925,906.07
- Supply Chain E-Credential
Total 48,925,906.07 — — 48,925,906.07
New in this Derecognition Closing
Items Opening Balance
period during the period Balance
Bank acceptance 48,925,906.07 683,633,467.64 687,479,639.85 45,079,733.86
Supply Chain E- 61,823,908.71 40,930,120.06 20,893,788.65
Credential
Total 48,925,906.07 745,457,376.35 728,409,759.91 65,973,522.51
Amount derecognized at end Amounts not derecognized at
Items
of period the end of the period
Bank acceptance 250,185,902.66
Supply Chain E-Credential 32,373,101.50
Total 282,559,004.16
vi. Prepayment
Closing Balance Opening Balance
Wafangdian Bearing Co., Ltd. 2025 annual report
Items Amount Percentage (%) Amount Percentage (%)
Within 1 year
More than 3 years
Total
Company name Closing Balance Proportion of receivable (%)
Daye Special Steel co.,Ltd 3,871,984.69 41.69
Wafangdian Bearing Power Co., Ltd 1,822,624.54 19.62
Northeast Special Steel Group Co., Ltd 1,152,613.45 12.41
Bengang Steel Plates Co.,Ltd. 597,229.38 6.43
Dalian Wazhou Group Bearing Equipment 478,000.00 5.15
Manufacturing Co., Ltd
Total
vii. Other receivables
Items Closing Balance Opening Balance
Interest receivable
Dividend receivable
Other receivables 10,631,908.31 7,962,213.75
Total 10,631,908.31 7,962,213.75
(1) Disclosure by aging：
Aging Closing Balance Opening Balance
Within 1 year (including 1year) 7,778,270.21 5,424,106.94
Over 5 years
Total
Less:Provision for bad debt
Total
Wafangdian Bearing Co., Ltd. 2025 annual report
(2) Categories of other receivables
Closing Balance
Items Booking balance Provision Booking
balance
Amount % Amount %
Provision for bad debts is 5,206,086.42 27.48 5,206,086.42 100.00
made on an individual basis
Provision for bad debts by
portfolio
Including:
Accounts receivable
aging portfolio
Reserve fund portfolio 1,291,885.37 6.82 1,291,885.37
Related party portfolio
Total
(Continued)
Opening Balance
Booking balance Provision Booking
Items balance
Amount % Amount %
Provision for bad debts is 6,079,333.51 37.04 6,079,333.51 100.00
made on an individual basis
Provision for bad debts by
portfolio
Including:
Accounts receivable 10,173,479.37 61.99 2,370,226.34 25.25 10,173,479.37
aging portfolio
Risk-free portfolio 123,960.72 0.76 123,960.72
Related party portfolio 35,000.00 0.21 35,000.00
Total 16,411,773.60 — 8,449,559.85 — 7,962,213.75
Bad debt provision for significant other receivables at the end of year based on
individual:
Closing Balance Opening Balance
Items Booking Accrual Reason for Booking
Bad debts bad debts
balance rate(%) accrual balance
Bengang
Steel Plates
Co.,Ltd. 1,065,185.03 1,065,185.03 100.00 1,065,185.03 1,065,185.03 100.00
Total 1,065,185.03 1,065,185.03 100.00 1,065,185.03 1,065,185.03 100.00
Provision for bad debts by portfolio:
Combined accrual items:
Closing Balance
Items
Other receivables Bad debts Accrual rate(%）
Wafangdian Bearing Co., Ltd. 2025 annual report
Closing Balance
Items
Other receivables Bad debts Accrual rate(%）
Accounts receivable 25,000.00
aging portfolio
Risk-free portfolio 1,291,885.37
Related party portfolio 12,422,514.57 3,107,491.63 25.01
Total
（3） Categories of other receivables：
Expected Expected Expected
credit loss credit loss credit loss
Provision for bad debt Total
within within life within life
following time time
Balance on January 1, 2025
On January 1, 2025
Other receivables carrying
amount on the book
--transfer to 2nd stage
-- transfer to 3rd stage
--reverse to 2nd stage
--reverse to 1st stage
Accrued
Reversed
Recollected
Written off
Others
Closing Balance
（4） Provision for bad debts charged off, reversed or recovered during the period
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Balance
reversed
Bad debts 8,313,578.05
Total 8,449,559.85 14,468.03 150,449.83 8,313,578.05
（5） Other receivables written off in current period
Items written off
Other receivables written off in current period 150,449.83
Wafangdian Bearing Co., Ltd. 2025 annual report
（6） The categories of other receivables by nature
Nature Closing Balance Opening Balance
Security deposit
Personal petty cash
Others
Total 16,411,773.60
（7) Other receivables from the top 5 debtors
closing Rate of other
Company name Category Ageing Bad debts
balance receivables
Bengang Steel Plates Co.,Ltd. others 1,065,185.03 Over 5 years 5.62 1,065,185.03
Anhui Conch Cement Co Guarantee 1,300,000.00 Within 4 years 6.86 650,000.00
National Railway Materials
Co., Ltd Guarantee 1,424,095.25 Within 4 years 7.52 86,684.76
CRRC Logistics Co., Ltd Guarantee 1,174,508.00 Within 2 years 6.20 117,450.80
China Railway Shenyang
Bureau Group Co., Ltd.
Shenyang Rail Bus Factory Guarantee 1,216,300.00 Within 1 years 6.42 60,815.00
Total 6,180,088.28 32.62 1,980,135.59
viii. Inventories
Closing Balance
Items Provision for decline in
Book value Net book value
value of inventories
Raw materials
Low-value
consumable
Finished goods
Goods on transit
Semi-finished goods
Total 740,814,369.29 104,488,375.44 636,325,993.85
(Continued)
Closing Balance
Items Provision for decline in
Book value Net book value
value of inventories
Raw materials 71,827,818.05 10,373,535.37 61,454,282.68
Low-value
consumable
Wafangdian Bearing Co., Ltd. 2025 annual report
Closing Balance
Items Provision for decline in
Book value Net book value
value of inventories
Finished goods 544,114,655.33 66,049,055.70 478,065,599.63
Goods on transit 10,491,357.08 10,491,357.08
Semi-finished goods 149,656,639.78 11,500,641.54 138,155,998.24
Total 776,549,242.24 88,108,503.81 688,440,738.43
performance costs
Increase Decrease
Opening Closing
Items Reverse/Writt Others
Balance Accrual Other
en-off transferred Balance
Raw materials 10,373,535.37 2,185,057.58 12,558,592.95
Low-value
consumable 185,271.20 417,607.38 602,878.58
Finished goods 66,049,055.70 35,286,104.68 61,122.27 3,467,501.35 17,955,747.31 79,973,033.99
Semi-finished
goods 11,500,641.54 5,884,743.44 767,772.42 5,263,742.64 11,353,869.92
Total 88,108,503.81 43,773,513.08 61,122.27 4,235,273.77 23,219,489.95 104,488,375.44
ix. Contract assets
Closing Balance Opening balance
Provision
Items Provision Net book Net book
Book value Book value for
for decline value value
decline
contract to 7,119,828.52 1,861,067.28 5,258,761.24
be 12,103,652.85 605,182.64 11,498,470.21
performed
Total 7,119,828.52 1,861,067.28 5,258,761.24 12,103,652.85 605,182.64 11,498,470.21
Closing Balance
Items Booking balance bad debts
Amount Rate (%) Amount Rate( Booking value
%)
Provision for bad debts is made
on an individual basis 3,026,953.42 42.51 1,656,423.52 54.72 1,370,529.90
Notes receivable with bad debt
provision based on the characters
of credit risk portfolio 4,092,875.10 57.49 204,643.76 5.00 3,888,231.34
including:
Contract performance payments 4,092,875.10 57.49 204,643.76 5.00 3,888,231.34
Total
(Continued)
Opening Balance
Items Booking balance bad debts
Amount Rate (%) Amount Rate Booking value
(%)
Wafangdian Bearing Co., Ltd. 2025 annual report
Provision for bad debts is made
on an individual basis
Notes receivable with bad debt
provision based on the characters 12,103,652.85 100.00 605,182.64 5.00 11,498,470.21
of credit risk portfolio
including:
Contract performance payments 12,103,652.85 100.00 605,182.64 5.00 11,498,470.21
Total 12,103,652.85 — 605,182.64 — 11,498,470.21
Contract assets with bad debt provision based on the characters of credit risk portfolio:
Closing balance
Items
Contract assets Provision for decline Rate (%)
Contract performance payments 4,092,875.10 204,643.76 5.00
Total 4,092,875.10 204,643.76 5.00
Opening Closing
Items Accrual Reverse Written-off
balance Balance
contract to be performed 605,182.64 1,656,423.52 400,538.88 1,861,067.28
Total 605,182.64 1,656,423.52 400,538.88 1,861,067.28
x. Other current assets
Items Closing Balance Opening Balance
VAT to be verified
VAT to be deducted 50,294,287.94 53,298,611.95
Advance income tax
Others 4,520.25
Total 50,298,808.19 53,298,611.95
xi. Other equity instrument investment
Investments in other equity instruments
Items Closing Balance Opening Balance
Shanghai ME Mechanical & Electrical
Equipment Chain Co., Ltd
Tianjin Bogang No.12 Enterprise Management
Partnership Enterprise (Limited Partnership) 1,301,958.80
（Qian’an Zhayi Iron & Steel Group Co. Ltd）
Trust beneficiary rights of CCB Trust - Caide 1st
Property Rights Trust Plan （ Qian’an Zhayi Iron & 1,181,879.86
Steel Group Co. Ltd）
（ Dalian Huilong Industry& Trade Company’s 7,423,089.69
share）
Total 8,705,393.14 11,906,928.35
xii. Investment property
Investment property measured as cost method
Wafangdian Bearing Co., Ltd. 2025 annual report
Item Property Land use
Total
right
（1）Opening Balance 112,228,925.54 52,861,118.81 165,090,044.35
（2） Increase
—Purchase
—Transferred from FA 13,049,355.22 13,049,355.22
—Increase in business combinations
（3）Decrease
—Disposal
—Transfer to others
（4）Closing Balance 125,278,280.77 52,861,118.81 178,139,399.57
（1）Opening Balance 69,524,288.87 23,885,828.43 93,410,117.30
（2）Opening Balance
—Accrued 1,162,200.28 1,321,512.00 2,483,712.28
—Transferred from FA 8,326,274.57 8,326,274.57
（3）Decrease
—Disposal
—Transfer to others
（4）Closing Balance 79,012,763.72 25,207,340.44 104,220,104.16
（1）Opening Balance
（2） Increase
—Accrued
（3）Decrease
—Decrease
（4）Closing Balance
（1）Closing book value 46,265,517.05 27,653,778.37 73,919,295.42
（2）Opening book value 42,704,636.67 28,975,290.38 71,679,927.05
xiii. Fixed assets
Item Closing Balance Opening Balance
Fixed assets 406,111,493.56 437,398,315.29
Total 406,111,493.56 437,398,315.29
Wafangdian Bearing Co., Ltd. 2025 annual report
Machinery Transportation
Item Property Electronic Device Other Equipment Total
Equipment Equipment
（1）Opening Balance 289,536,784.35 1,071,033,507.85 17,231,477.41 57,054,270.50 234,130,132.63 1,668,986,172.74
（2）Increase
—Purchase 8,813,777.80 128,318.58 94,905.99 100,240.58 9,137,242.95
—Transferred from 4,465,509.78 23,207,136.49 79,646.02 4,285,020.79 163,716.81 32,201,029.89
construction- in-progress
（3）Decrease
—Disposal 1,108,084.41 47,471,053.29 1,136,560.38 1,735,500.16 346,666.17 51,797,864.41
—Transfer out to investment 13,049,355.22 13,049,355.22
property
—Transferred out 2,314,603.14 2,314,603.14
construction- in-progress
—Transfer-out by 68,273.85 68,273.85
gratuitous allocation
（4）Closing Balance 279,844,854.50 1,053,268,765.71 16,302,881.63 59,630,423.27 234,047,423.85 1,643,094,348.96
Depreciation
（1）Opening Balance 196,133,491.93 811,729,768.80 13,267,876.92 41,526,684.15 137,615,929.88 1,200,273,751.68
（2）Increase
—Accrued 12,003,634.09 47,058,169.32 911,086.97 3,826,360.69 2,631,412.41 66,430,663.48
—Transferred from
construction- in-progress
— Changes in fixed asset
classes
（3）Decrease
—Disposal 2,307,896.78 39,791,665.22 1,087,896.54 1,553,774.76 337,047.73 45,078,281.03
—Transfer out to investment 9,199,442.41 9,199,442.41
property
—Transfer-out by 54,670.60 54,670.60
gratuitous allocation
（4）Closing Balance 196,629,786.83 818,996,272.90 13,091,067.35 43,744,599.48 139,910,294.56 1,212,372,021.12
（1） Opening Balance 1,166,765.45 29,341,973.65 25,027.00 643,458.07 136,881.60 31,314,105.77
Wafangdian Bearing Co., Ltd. 2025 annual report
（2） Increase
—Accrued 257,104.31 2,546.70 87,727.74 347,378.75
（3）Decrease
—Disposal 91,769.25 6,941,779.81 17,101.18 7,050,650.24
（4）Closing Balance 1,074,996.20 22,657,298.15 7,925.82 646,004.77 224,609.34 24,610,834.28
（1）Closing book value 82,140,071.47 211,615,194.66 3,203,888.46 15,239,819.02 93,912,519.95 406,111,493.56
（ 2 ） Opening book
value
Wafangdian Bearing Co., Ltd. 2025 annual report
Items Initial Cost Accumulated Provision Book Value
Deprecation
Property 38,094,078.82 34,536,936.98 3,557,141.84
Machinery equipment 73,618,543.12 62,812,202.66 8,161,563.03 2,644,777.43
Transportation equipment 234,048.57 227,027.11 7,021.46
Electronic device others
equipment
Total 114,737,765.05 99,847,876.04 8,384,898.71 6,504,990.30
Items Book value Reason
Dalian Industrial Park Ball Bearing Plant 21,830,743.26
In process
Dalian Ball Bearing Factory Outdoor Warehouse 395,069.56 In process
Cone and Cylinder Flaw Detection and Packing Room 85,407.83 In process
others 1,036,678.11 In process
Total 23,347,898.76
xiv. Construction-in-progress
Closing Balance Opening Balance
Items provision for Booking provision for
Booking balance Net book value Net book value
impairment balance impairment
Construction
in progress 17,944,798.33 7,431,367.34 10,513,430.99 41,831,957.96 7,091,322.25 34,740,635.71
Engineering
materials
Total 17,944,798.33 7,431,367.34 10,513,430.99 41,831,957.96 7,091,322.25 34,740,635.71
Closing Balance
Item
Book Balance Provision Book Value
Super Precision Machine Installation Project 456,878.68 456,878.68
Workshop plant renovation project
Dalian Industrial Park Project 5,590.45 5,590.45
Equipment to be installed 7,337,976.83 987,470.88 6,350,505.95
Dynamic Bearing Project
Share Overhaul
Share Works Remodeling 955,350.36 955,350.36
Share Ball Base Program 1,087,964.58 1,087,964.58
Computer engineering 18,000.00 18,000.00
Precision Roller Modification 13,091.45 13,091.45
Precision Bearing Factory Renovation
Mill Processing Line 38,957.26 38,957.26
Maintenance and modification of mill processing lines 741,000.00 741,000.00
Seven finished product modifications 3,555,799.28 3,453,144.41 102,654.87
Spherical Roller Bearing Assembly Line 1,198,862.55 1,169,162.55 29,700.00
Overhaul of very large equipment 853,657.69 80,870.09 772,787.60
Railroad upgrading 665,647.85 27,254.40 638,393.45
Channel 2 construction project 256,249.27 234,157.39 22,091.88
Medium and Large Branch Component CNC
Production Line Renewal and Reconstruction Project 759,772.08 205,789.78 553,982.30
Total
Wafangdian Bearing Co., Ltd. 2025 annual report
(continued)
Opening Balance
Item
Book Balance Provision Book Value
Precision Bearing Factory Renovation 794,690.25 794,690.25
Seven finished product modifications 3,555,799.28 3,453,144.41 102,654.87
Spherical Roller Bearing Assembly Line 1,703,287.33 1,110,842.55 592,444.78
Maintenance and modification of mill processing lines 741,000.00 741,000.00 0.00
Railroad upgrading 665,647.85 24,854.40 640,793.45
Super Precision Machine Installation Project 456,878.68 456,878.68 0.00
Channel 2 construction project 256,249.27 222,849.70 33,399.57
Precision Roller Modification 13,091.45 13,091.45
Mill Processing Line 38,957.26 38,957.26
Computer engineering 18,000.00 18,000.00
Dalian Industrial Park Project 5,590.45 5,590.45
Equipment to be installed 18,257,773.90 1,081,752.51 17,176,021.39
Workshop plant renovation project 80,188.68 80,188.68
Overhaul of very large equipment 5,498,470.80 5,498,470.80
Railroad Bearing Overhaul Branch Railway Bearing
Automatic Assembly Line and Supporting Projects
Medium and Large Branch Component CNC
Production Line Renewal and Reconstruction Project
Dynamic Bearing Project 530,973.45 530,973.45
Share Overhaul 1,550,000.00 1,550,000.00
Share Works Remodeling 5,707,837.18 5,707,837.18
Share Ball Base Program 329,203.54 329,203.54
Total 41,831,957.96 7,091,322.25 34,740,635.71
Opening Transfer to Other Closing
Items Increase
Balance fixed assets decrease Balance
Equipment to be installed 18,257,773.90 2,165,736.30 13,085,533.37 7,337,976.83
Dynamic Bearing Project 530,973.45 1,905,254.45 2,436,227.90
Share Works Remodeling 5,707,837.18 -367,165.72 4,385,321.10 955,350.36
Share Ball Base Program 329,203.54 1,307,433.61 548,672.57 1,087,964.58
Precision Bearing Factory
Renovation 794,690.25 346,902.65 1,141,592.90
Spherical Roller Bearing
Assembly Line 1,703,287.33 336,283.19 840,707.97 1,198,862.55
Overhaul of very large
equipment 5,498,470.80 687,433.07 5,233,970.63 98,275.55 853,657.69
Overhaul of Equipment for
Full Complement Roller
Bearings without Outer Ring 1,472,566.36 1,472,566.36
Cleaning and Oiling Line for
Medium and Large Spherical
Bearings 557,522.13 557,522.13
Medium and Large Branch
Component CNC Production
Line Renewal and
Reconstruction Project 1,628,318.59 139,690.16 819,557.52 188,679.15 759,772.08
Total 34,450,555.04 8,551,656.20 30,521,672.45 286,954.70 12,193,584.09
Wafangdian Bearing Co., Ltd. 2025 annual report
Opening Change during the year Closing
Items
Balance Accrued transfer out Others Balance
Provision for impairment of
construction in progress
Total 7,091,322.25 634,868.17 294,823.08 7,431,367.34
xv. Intangible assets
Items Land use right ERP software Total
（1）Opening balance 124,575,250.35 12,055,595.99 136,630,846.34
（2）Increase
—Transferred from
construction- in-progress
（3） Decrease
—Disposal
（4） Closing balance 124,575,250.35 12,244,275.14 136,819,525.49
（1）Opening balance 57,154,037.24 9,355,749.52 66,509,786.76
（2）Increase
—Accrual 3,168,267.76 840,234.38 4,008,502.14
（3）Decrease
—Disposal
（4）Closing balance 60,322,305.00 10,195,983.90 70,518,288.90
（1）Opening balance
（2）Increase
—Accrual
（3）Decrease
—Disposal
（4）Closing balance
（1） Closing Book value 64,252,945.35 2,048,291.24 66,301,236.59
（2）Opening Book value 67,421,213.11 2,699,846.47 70,121,059.58
xvi. Long-term unamortized expense
Opening Other Closing
Items Increase Amortization
Balance Decrease Balance
Fixed asset improvement
expenses
Building maintenance
Wafangdian Bearing Co., Ltd. 2025 annual report
expenses
Total
xvii. Deferred tax assets and deferred tax liabilities
Closing Balance Opening Balance
Items Deferred
Taxable temporary Deferred income Taxable temporary
income tax
differences tax liabilities differences
liabilities
Asset evaluation increment in
business combination without
the same control
Total
Items Closing Balance Opening Balance
Deductible temporary difference 318,546,458.65 290,568,029.91
Deductible loss
Total 1,146,826,174.19
Year Closing Balance Opening Balance Memo
Total 790,821,313.82 856,258,144.28
xviii. Other non-current assets
Items Closing Balance Opening Balance
Prepaid construction cost 282,900.00
Total
Wafangdian Bearing Co., Ltd. 2025 annual report
xix. Assets with restricted ownership or use
Closing Balance Opening Balance
Items Book Restricted
Book Balance Book Value Restricted assets Restrictions Book Value Restrictions
Balance assets
Other monetary Bank acceptance
Monetary funds 45,920,930.03 45,920,930.03 funds deposit
Other monetary Letter of Credit Other monetary Letter of Credit
Monetary funds 370,597.99 370,597.99 funds Deposit 28,240,000.00 28,240,000.00 funds Deposit
Letter of
Other monetary Letter of Other monetary Guarantee
Monetary funds 1,001,467.15 1,001,467.15 funds Guarantee Deposit 4,330,694.83 4,330,694.83 funds Deposit
Monetary funds 269,718.32 269,718.32 Cash in bank "SDN List"
Monetary funds 416.84 416.84 Cash in bank litigation
Finance
company
Note receivable 16,503,410.77 16,503,410.77 acceptance Pledge of notes
Trade
Note receivable 20,888,325.70 20,888,325.70 acceptance Pledge of notes
Bank
Note receivable 1,177,401.62 1,177,401.62 acceptance Pledge of notes
endorsed but not
mature at the end
Note receivable 405,338,560.48 405,338,560.48 of year
endorsed but not
Supply Chain E- mature at the end
Accounts receivable 59,547,219.71 59,547,219.71 Credential of year
Total 466,527,980.49 466,527,980.49 117,060,762.95 117,060,762.95
Wafangdian Bearing Co., Ltd. 2025 annual report
xx. Short-term loan
Classification Closing balance Opening balance
Credit loan 82,053,118.00 570,000,000.00
Total 82,053,118.00 570,000,000.00
xxi. Note payable
Classification Closing balance Opening balance
Bank acceptance notes 175,309,107.43
Bank letter of credit 370,597.50 205,348,156.00
Trade acceptance notes 20,472,638.17
Total 370,597.50 401,129,901.60
xxii. Accounts payable
Items Closing balance Opening balance
Within1 year
Over 3 years
Total
Items Closing balance Reasons
Wafangdian Bearing Group Co., Ltd. and its subsidiaries
Anshan City Grinding Wheel Co., Ltd.
Beijing Longxuan Rubber & Plastic Co., Ltd.
Beijing Rongsheng Runde Trading Co., Ltd.
Dalian Binhai Grinding Wheel Co., Ltd.
Liaoning Huan Bohai Industrial Co., Ltd.
Shijiazhuang Iron and Steel Co., Ltd.
Wafangdian Jinguanda Bearing Manufacturing Co., Ltd.
Zibo Yijia Power Machinery Co., Ltd.
Anhui Liyuan Transmission Technology Co., Ltd.
Beijing Waye Metallurgical Technology Co., Ltd.
Total
xxiii. Contract liability
Wafangdian Bearing Co., Ltd. 2025 annual report
Items Closing balance Opening balance
Contract obligation to be fulfilled 31,776,246.33 34,098,145.99
Total 31,776,246.33 34,098,145.99
xxiv. Employee’s payable
Opening
Items Increase Decrease Closing balance
balance
payable 37,348,348.42 341,011,716.84 334,050,887.18 44,309,178.08
–defined contribution plan 4,705,119.59 35,772,709.47 35,824,651.18 4,653,177.88
Total 42,089,354.01 378,054,396.06 371,082,108.11 49,061,641.96
Opening
Items Increase Decrease Closing balance
balance
subsidy 32,245,070.77 225,771,881.82 220,744,149.31 37,272,803.28
Include: Medical insurance 16,542.64 18,814,708.14 18,829,000.78 2,250.00
On-duty injury insurance 494.66 2,398,004.63 2,398,419.29 80.00
Maternity insurance 1,436,549.20 1,436,549.20
expense 127,597.22 3,113,771.92 2,734,474.66 506,894.48
benefits 702,296.10 41,186,917.82 40,883,785.03 1,005,428.89
Total 37,348,348.42 341,011,716.84 334,050,887.18 44,309,178.08
Opening Closing
Items Increase Decrease
balance balance
Total
xxv. Tax payables
Wafangdian Bearing Co., Ltd. 2025 annual report
Item Closing balance Opening balance
Value-added tax 6,281,267.42 9,626,068.98
Vehicle and vessel tax 523.35 523.35
Individual income tax
City maintenance and construction tax
Real estate tax
Resource tax 5,258.80
Education surcharge
Land use tax
local education surcharge
Stamp duty
Total
xxvi. Other payables
Items Closing balance Opening balance
Other payables 587,079,378.98 135,258,184.75
Total 587,079,378.98 135,258,184.75
（1）Other payables categorized by payments nature
Payments nature Closing balance Opening balance
Deposits and pledges
borrowings and interest
Others 43,782,968.17 47,598,186.25
Total 587,079,378.98 135,258,184.75
xxvii. Non-current liabilities due within one year
Items Closing balance Opening balance
Long-term loans due within one year 98,350,000.00
Total 98,350,000.00
xxviii. Other current liabilities
Items Closing balance Opening balance
Supply chain vouchers endorsed but not
yet matured at the balance sheet date 59,547,219.71
Commercial acceptance bills endorsed
but not yet matured at the balance sheet
date 174,581,559.89
Bank acceptance bills endorsed but not 227,644,005.26
Wafangdian Bearing Co., Ltd. 2025 annual report
yet matured at the balance sheet date
Finance company acceptance bills
endorsed but not yet matured at the
balance sheet date 3,112,995.33
Output VAT to be transferred 4,130,912.02 4,417,479.62
Total 469,016,692.21 4,417,479.62
xxix. Long-term Borrowings
Items Closing balance Opening balance
Credit borrowings
Total
xxx. Long-term payables
Type Closing balance Opening balance
Long-term payables 100,000.00 100,000.00
Special payables 244,974.84 244,974.84
Total 344,974.84 344,974.84
Payments nature Closing balance Opening balance
Equipment payments 100,000.00 100,000.00
Total 100,000.00 100,000.00
Opening Closing
Items Increase Decrease Formation Basis
Balance Balance
Granted by Wafangdian Bureau of
Special pollution Finance and Wafangdian Bureau of
treatment Environment Protection with approval
with “WaCaiZhiQi No.[2004]217”
Dalian Financial Bureau and
Municipal Office of Economic and
Informatization Information Technology Committee
construction with approval with “Da CaiZhiQi No.
[2012]917” and “DaJing XinFa No.
[2012]199”
Total 244,974.84 244,974.84
xxxi. Projected liability
Opening
Items Closing balance Reason
balance
Wafangdian Bearing Co., Ltd. 2025 annual report
Accrual for wind power
Accrued warranty 7,651,644.80 16,472,767.59
product quality claim
Customer claimed
Wind power product quality claim 32,761,252.54 30,476,133.03 compensation for quality
problem
Bearing Overhaul
Railroad Bearing Overhaul Business
Compensates Customers for Losses
for Losses
Total 55,771,671.86 62,247,622.41
xxxii. Deferred income
Opening Closing
Items Increase Decrease Formation Basis
balance balance
Government
subsidy
Old factory removal and
new factory and land
Compensation for
land removal
Bearing Construction
Co.,Ltd
Total
xxxiii. Share capital
Change for current period
Transferring
Shareholders’ Opening Issuing Closing
Distributing capital
name/category Balance new Others Subtotal Balance
shares reserves to
shares
share capital
Shares under
restriction for
sale
Domestically
legal person 244,000,000.00 244,000,000.00
shares
Total shares
under
restriction for
sale
Shares without
restriction for
sale
Domestically
listed foreign
Wafangdian Bearing Co., Ltd. 2025 annual report
shares
Total shares
without
restriction for
sale
Total shares 402,600,000.00 402,600,000.00
xxxiv. Capital Reserve
Items Opening balance Increase Decrease Closing balance
Share premium 201,956,446.52 201,956,446.52
Other capital reserves 283,734,603.95 283,734,603.95
Total 485,691,050.47 485,691,050.47
xxxv. Other comprehensive income
Change for current period
Less: Less:
Reclassificatio Reclassificatio
Pre-tax n of previously n of previously After-tax After-tax
Openin Less:
amount recognized recognized amount amount Closing
Items g
arising in other other
Income
attributabl attributabl balance
balance tax
the comprehensive comprehensive e to the e to non-
expens
current income to income to parent controlling
e
year profit or loss in retained company interests
the current earnings in the
period current period
that will
not be
reclassified
to profit or
loss
Including:
Fair value
changes of
other
-3,201,535.21 -3,201,535.21 -3,201,535.21
equity
instrument
investment
s
Total -3,201,535.21 -3,201,535.21 -3,201,535.21
xxxvi. Special reserve
Items Opening balance Increase Decrease Closing balance
Safety production fee 2,305,094.24 8,348,163.57 9,013,406.84 1,639,850.97
Total 2,305,094.24 8,348,163.57 9,013,406.84 1,639,850.97
xxxvii. Surplus reserves
Items Opening balance Increase Decrease Closing balance
Statutory surplus
reserve
Discretionary surplus
reserve
Wafangdian Bearing Co., Ltd. 2025 annual report
Total 136,770,391.01 136,770,391.01
xxxviii. Undistributed profits
Item Current year Prior year
Closing balance of prior year -766,382,732.49 -656,170,250.96
Add: Adjustments to the opening balance of
undistributed profits
Including: additional retrospective adjustments according
to the new accounting standards
Change on accounting policy
Correction of prior period significant errors
Change on combination scope under same control
Other factors
Opening balance of current year -766,382,732.49 -656,170,250.96
Add: net profit attributable to shareholders of parent
-58,093,066.41 -110,212,481.53
company in the year
Less: Provision for statutory surplus reserves
Provision for any surplus reserves
Provision of general risk
Dividends payable for common shares
Share dividends
Closing balance of current year -824,475,798.90 -766,382,732.49
xxxix. Operating revenue and cost
Current year Prior year
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Revenue from principle
operation
Revenue from other
operation
Wafangdian Bearing Co., Ltd. 2025 annual report
Total
Current year Prior year
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Business Type：
Export 127,671,159.01 112,561,290.79
Domestic 2,147,510,201.76 1,813,429,979.76 1,728,418,471.12 1,509,216,026.53
Including: 416,239,084.61 372,966,069.17
Transportation vehicle 428,677,399.77 381,703,666.85
bearings
Special use bearings 834,385,530.16 629,970,512.15
General use bearings 896,885,586.99 810,493,398.44
Industrial Operations 80,821,041.73 50,159,866.67
Total 2,283,081,877.43 1,907,517,703.90
xl. Taxes and surcharges
Items Current year Prior year
City construction tax 4,972,867.92 2,311,829.75
Education surcharge 2,130,865.77 1,031,280.53
Local Education surcharge 1,420,577.23 627,028.31
Stamp duty 2,590,990.74 2,919,761.63
Property tax 3,500,321.41 3,376,259.16
Tax on land use 2,764,863.28 2,764,863.28
Others 33,202.80 659.52
Total 17,413,689.15 13,031,682.18
xli. Selling expenses
Items Current period Previous period
Employee benefit 66,688,836.25 71,386,376.16
Compensation for quality default 1,213,648.16 7,254,597.04
Transportation expense 128,474.97 4,198,782.58
Travel expense 16,383,442.29 14,904,363.52
Trademark use fee 20,883,296.81 20,192,279.28
Business activity 16,216,200.75 22,432,551.85
Leasing 726,015.00 711,842.90
Conference expense 1,120,399.12 349,075.96
Others 9,442,668.22 19,216,319.04
Total 132,802,981.57 160,646,188.33
Wafangdian Bearing Co., Ltd. 2025 annual report
xlii. Administrative expenses
Items Current year Prior year
Employee benefit 101,601,243.63 101,772,079.43
Intangible assets amortization 4,330,612.35 4,616,232.78
Guide and fire fighting expense 3,218,136.17 2,893,099.67
Depreciation expense 4,291,345.49 4,189,181.66
Travel expense 2,457,391.41 3,475,584.30
Business entertaining expense 423,400.88 372,232.50
Consulting expense 4,109,663.36 250,137.33
Other expense 10,992,380.39 7,505,970.64
Total 131,424,173.68 125,074,518.31
xliii. R&D expenses
Items Current year Prior year
Materials input 76,228,379.22 44,262,226.19
Design, new process development fee 18,083,846.31 20,380,830.48
Labor cost 17,634,000.10 23,302,368.71
Depreciation and amortization of long term expense 4,158,228.77 5,108,258.00
Fuel power 9,005,810.33 6,541,139.75
R&D equipment repair and leasing fee 215,783.60 116,391.24
Processing fee 14,190,164.99 2,024,648.09
Others fee 3,851,501.21 11,585,517.49
Total 143,367,714.53 113,321,379.95
xliv. Financial expenses
Items Current year Prior year
Interest expenses 13,220,559.41 33,560,937.47
Less: Interest income 857,113.68 2,209,880.01
Exchange gain -1,361,118.21 -2,897,876.15
Add: Others expenditure 1,176,176.27 479,281.22
Total 12,178,503.79 28,932,462.53
xlv. Other income
Items Current year Prior year
Government grant 8,186,389.05 11,521,588.35
Input tax credits 5,495,125.88 16,820,223.37
Withholding of personal income tax handling fee 74,827.71 75,961.53
Direct VAT relief 62,647.91
Total 13,756,342.64 28,480,421.16
xlvi. Investment income
Items Current year Prior year
Dividend income from other equity instrument
Wafangdian Bearing Co., Ltd. 2025 annual report
investments during the holding period
Debt restructuring
Total
xlvii. Gain on FV movement
Source of Gain on FV change Current year Prior year
Tradable financial assets 24,653.63 7,704.26
Total 24,653.63 7,704.26
xlviii. Loss on credit impairment (loss listed as “-”)
Items Current year Prior year
Bad debt loss of notes receivable 1,695,914.92 -5,691,196.56
Bad debt loss of receivable -18,056,357.67 -17,297,182.03
Bad debt loss of other receivables -14,468.03 -913,600.41
Bad debt loss on receivables financing -1,044,689.43
Total -17,419,600.21 -23,901,979.00
xlix. Loss on asset impairment (loss listed as “-”)
Items Current year Prior year
Inventories impairment loss & Impairment loss on
contract performance costs
-39,538,239.31 -25,587,485.55
Contract assets impairment loss
-1,255,884.64 -312,280.35
Fixed asset impairment loss
-347,378.75 -74,213.01
Construction in progress loss
-634,868.17
Total
-41,776,370.87 -25,973,978.91
l. Gain on assets disposal
Amounts recognized into current
Item Current year Prior year
non-recurring profit or loss
Gain on non-current assets disposal
Total
li. Non-operating income
Amounts recognized into current
Item Current year Prior year
non-recurring profit or loss
Penalty income 191,517.24 2,503,519.88 191,517.24
Written off unsettled payable 301,491.19 3,887,833.70 301,491.19
Gains on destruction and retirement
of non-current assets
Others 894,500.74 894,500.74
Wafangdian Bearing Co., Ltd. 2025 annual report
Total 1,670,266.87 6,391,353.58 1,670,266.87
lii. Non-operating expenses
Amounts recognized into current
Item Current year Prior year non-recurring profit or loss
Public beneficial donation
Loss on disposal of non- current
asset scrapped
Penalty loss 139,052.84 193,084.67 139,052.84
Others 169,019.94 169,334.50 169,019.94
Total 559,329.38 901,627.76 559,329.38
liii. Income tax expense
Items Current year Prior year
Current income tax expenses
Deferred income tax expenses 264,303.63 -48,372.34
Total 264,303.63 -48,372.34
Items Current year
Total profit -57,828,762.78
-8,674,314.42
Income tax expense at the statutory [or applicable] tax rate
Effect of different tax rates applied to subsidiaries
Effect of adjustments to income taxes of prior periods
Impact of non-taxable income
Effect of non-deductible costs, expenses and losses 1,997,549.66
Effect of deductible losses on the use of deferred income tax assets not recognized
in prior periods
Effect of deductible temporary differences or deductible losses on deferred income
tax assets not recognized in the period
Other (additive deductions) -2,740,111.30
Income tax expense 264,303.63
liv. Earnings per share
Wafangdian Bearing Co., Ltd. 2025 annual report
Basic earnings per share is calculated by dividing consolidated net income attributable to
ordinary shareholders of the parent by the weighted average number of ordinary shares of
The Group in issue:
Items Current period Previous period
Consolidated net income attributable to
-58,093,066.41 -110,212,481.53
ordinary shareholders of the parent
Weighted average number of common shares
of The Group issued and outstanding
Basic earnings per share -0.1443 -0.2738
Include: Basic earnings per share from
-0.1443 -0.2738
continuing operations
Basic earnings per share from discontinued
operations
Diluted earnings per share is calculated by dividing the consolidated net income
attributable to ordinary shareholders of the parent (diluted) by the weighted average
number of ordinary shares of The Group in issue (diluted)
Current Previous
Items
period period
Consolidated net income attributable to ordinary shareholders of the
-58,093,066.41 -110,212,481.53
parent (diluted)
Weighted average number of common shares of The Group issued and
outstanding (diluted)
Diluted earnings per share -0.1443 -0.2738
Include: Diluted earnings per share from continuing operations -0.1443 -0.2738
Diluted earnings per share from discontinued operations
lv. Notes on Cash Flow
(1) . Other cash received in connection with operating activities
Items Current period Previous period
Interest income 857,113.68 2,288,003.82
Government Grants 7,090,879.95 2,186,663.30
Refund of deposits and reserve funds 17,780,935.89 20,500.00
Current payments and others 7,034,246.94 32,031,937.57
Total 32,763,176.46 36,527,104.69
(2) Other cash paid in connection with operating activities
Items Current period Previous period
Selling expenses 37,354,376.36 50,545,781.88
Administrative costs 16,320,250.63 39,658,453.58
Financial expenses 1,176,176.27 5,091,454.23
Others 39,923,247.97 45,213,901.86
Total 94,774,051.23 140,509,591.55
(1) Other cash received in connection with financing activities
Wafangdian Bearing Co., Ltd. 2025 annual report
Items Current period Previous period
Note Discounting 108,215,931.00 554,037,639.98
Recovery of deposits due 14,772,483.20 49,652,683.75
Proceeds from borrowings from non-financial
institutions
Total 582,988,414.20 603,690,323.73
(2) Other cash paid in connection with financing activities
Items Current period Previous period
Notes due for payment 432,699,820.36 357,096,368.00
Deposit 30,879,433.46 240,320,658.60
Total 463,579,253.82 597,417,026.60
(3) Changes in liabilities arising from financing activities
Increase Decrease
Items Opening balance Non-cash Non-cash Closing balance
Cash movements Cash movements
movements movements
Short term
loan 570,000,000.00 162,000,000.00 53,118.00 650,000,000.00 82,053,118.00
Long term
loan 98,350,000.00 98,350,000.00
Total 668,350,000.00 162,000,000.00 53,118.00 748,350,000.00 82,053,118.00
lvi. Notes on Cash Flow Statement Items
additional materials Current period Previous period
activities:
-58,093,066.41 -110,212,481.53
Net profit
Add: Provision for asset impairment
Credit asset impairment loss
Depreciation of fixed assets
Amortization of intangible assets
Amortization of long-term deferred expenses
-760,241.48
Losses on disposal of fixed assets, intangible assets and
-892,931.71
other long-term assets
-31,501.10 539,208.59
Loss on scrapping of fixed assets
-24,653.63 -7,704.26
Loss from changes in fair value
Financial expenses
-20,520,044.53 -18,100,303.03
Investment loss
Decrease in deferred income tax assets
Increase in deferred income tax liabilities
Inventories reduction
Decrease in operating receivables
Increase in operating payables
Wafangdian Bearing Co., Ltd. 2025 annual report
additional materials Current period Previous period
Other
Net cash flow from operating activities
not involve cash receipts and expenditures:
Conversion of debt into capital
Convertible corporate bonds due within one year
Financing lease of fixed assets
Year-end balance of cash
Less: cash balance at the beginning of the year
Plus: the year-end balance of cash equivalents
Less: the beginning balance of cash equivalents
-97,261,978.70 50,242,737.61
Net increase in cash and cash equivalents
Items Closing balance Opening balance
Including: cash on hand
Bank deposits that can be used for payment at any time 63,645,319.54 160,907,298.24
Other currency funds that can be used for payment at any time
Of which: bond investments due within three months
Among them: the restricted use of cash and cash equivalents
by the parent company or subsidiary within the group
lvii. Foreign currency monetary items
Converted Closing balance
Items Closing balance
exchange rate converted CNY
Money funds
Include：USD
Euro
Accounts Receivable 9,223,854.84
Include：USD
Euro
lviii. Leases
Wafangdian Bearing Co., Ltd. 2025 annual report
Items Current period Previous period
Simplified treatment of short-term lease charges
recognized in the cost of the related asset or in current 18,941,324.02 18,753,486.47
profit or loss
(1) Operating lease
Items Current period Previous period
Operating lease income 20,482,013.45 19,296,263.38
VIII. Research and development expenditure
Items Current period Previous period
Material inputs 76,228,379.22 44,262,226.19
Technical service fee, design fee, new process protocol
development fee (equipment commissioning fee and
new product tooling) 18,083,846.31 20,380,830.48
Labor costs 17,634,000.10 23,302,368.71
Depreciation and amortization of long-term expenses 4,158,228.77 5,108,258.00
Fuel and power 9,005,810.33 6,541,139.75
R&D equipment repair and rental fees 215,783.60 116,391.24
Processing costs 2,024,648.09
Testing costs
Other expenses 3,851,501.21 11,585,517.49
Total 143,367,714.53 113,321,379.95
Of which: Expensed R&D expenditures 143,367,714.53 113,321,379.95
Capitalized R&D expenses
Wafangdian Bearing Co., Ltd. 2025 annual report
IX. Interest in other entity
(1) Organization structure of group company
Principal place of Shareholding (%)
Name of Subsidiary Registered capital Place of Registration Business Nature Acquisition method
business
Direct Indirect
Wangshuitai Street, Manufacture and sale
Wazhou Liaoyang Bearing 19.35 million Liaoyang City,
Taizihe District, of bearings and 100 Business Merger
Manufacturing Co. dollars Liaoning Province
Liaoyang City, China machinery
No.12, Yongsheng
Manufacture and sale
Dalian Wazhou Precision Dalian, Liaoning Street, Thirteen Mile, Investment and
Motor Bearing Co. Province Dalian Free Trade establishment
machinery
Zone
Wazhou Precision Spherical No.1, Section 1, North Manufacture and sale
Wafangdian, Liaoning
Roller Bearing (Wafangdian) 194 million dollars Gongji Street, of bearings and 100 Business combination
Province
Co. Wafangdian machinery
Wafangdian Bearing Co., Ltd. 2025 annual report
XI. Government Grants
i. Liability items involving government grants
Recognized
in non- Asset-
Liability Opening operating Transferred to Charged Other Closing related/revenue-
items Balance New grants income other gains to costs changes Balance related
Deferred
income 37,719,857.35 1,260,000.00 4,129,661.53 3,006.00 34,847,189.82 Asset-related
ii. Revenue-related government grants
Items Current period Previous period
Compensation for demolition of Dalian
Branch Plant 2,704,235.88 2,704,235.88
Special subsidy fund for the development of
intelligent manufacturing equipment 101,599.89 1,288,889.09
Interest subsidy for large axle load project 220,000.00 240,000.00
Subsidy for the construction of skill master
studio 46,189.80 89,562.18
Industrial development fund of Liaozhou
Bearing Company 97,548.00 3,431.15
Compensation for relocation of old plant
area 960,087.96 1,054,204.75
Social security subsidy for college graduates
in Dalian City 1,487,041.49
Support and development fund 98,800.00
Special fund for digital transformation of
small and medium-sized enterprises 75,600.00
Subsidies for stabilizing jobs 3,000.00 745,640.00
Digital Liaoning Intelligent Manufacturing
Province Special Funds 300,000.00
CITIC 2022 Short-Term Credit Insurance
Grant 237,933.00
Dalian Business Council disburses funds for
full provincial openness in 2022 940,144.73 243,070.78
National and Provincial Specialized R&D
Funds 1,341,141.30 4,218,252.44
Science and technology prize 196,666.00
Dalian Bureau of Industry and Information
Technology typed Digital Liaoning
Manufacturing Province 150,000.00
Subsidy for job expansion 51,000.00 25,500.00
Others 60,000.00 24,203.08
Total 8,186,389.05 11,521,588.35
XII. Risk Related to Financial Instruments
i. Types of risks arising from financial instruments
Wafangdian Bearing Co., Ltd. 2025 annual report
The Group is exposed to a variety of financial risks in the course of its operations: credit
risk, liquidity risk and market risk (including exchange rate risk, interest rate risk and other
price risks).
Credit risk is the risk that the counterparty will fail to fulfill its contractual obligations and
cause The Group to incur a financial loss.
The carrying amount of recognized financial assets in the consolidated balance sheet; for
financial instruments measured at fair value, the carrying amount reflects the risk exposure,
but not the maximum risk exposure, which will change with future changes in fair value.
In order to reduce credit risk, the Group has set up a special department to determine credit
limits, conduct credit approvals and perform other
The Group has established a special department to determine credit limits, conduct credit
approvals and implement other monitoring procedures to ensure that necessary measures
are taken to recover overdue claims. In addition, the Group reviews the collection status of
each individual receivable at each balance sheet date to ensure that adequate provision for
bad debts is made for uncollectible amounts. As a result, the management of the Group
considers that the Group's exposure to credit risk is significantly reduced.
The Group's liquidity is placed with banks with high credit ratings, therefore, the credit risk
of liquidity is low.
The Group has adopted necessary policies to ensure that all sales customers have good
credit history. Except for the accounts receivable amount
The Group has no other significant credit concentration risk except for the top five
amounts of accounts receivable.
The total amount of the top five accounts receivable: RMB314 million.IX. Fair value
disclosures.
Liquidity risk is the risk that an enterprise will experience a shortage of funds to meet its
obligations that are settled by delivery of cash or other financial assets.
The Group manages liquidity risk by ensuring that there is sufficient liquidity to meet
Wafangdian Bearing Co., Ltd. 2025 annual report
obligations as they fall due without incurring unacceptable losses or causing damage to the
enterprise's reputation. The Group regularly analyzes the structure and maturity of its
liabilities to ensure adequate funding. The management of the Group monitors the
utilization of bank borrowings and ensures compliance with the borrowings agreements. It
also negotiates with financial institutions for financing in order to maintain a certain credit
line and minimize liquidity risk.
The undiscounted contractual cash flows of each of The Group's financial liabilities by
maturity date are set out below:
Closing Balance
Total
items Over
Immediate 1-2 2-5 undiscounted
Within1 year 5 Book value
reimbursement years years contract
years
amount
Short-term 82,053,118.00 82,053,118.00 82,053,118.00
loans
Notes payable 370,597.50 370,597.50 370,597.50
Other payables 460,329,726.03 460,329,726.03 460,329,726.03
Total 542,753,441.53 542,753,441.53 542,753,441.53
Market risk of a financial instrument is the risk that the fair value or future cash flows of
the financial instrument will fluctuate because of changes in market prices, including
exchange rate risk, interest rate risk and other price risks.
(1) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates.
The Group's risk of changes in cash flows from financial instruments due to changes in
interest rates relates mainly to variable-rate bank borrowings. The Group's policy is to
maintain floating interest rates on these borrowings.
Current year
items Impact on shareholders'
Impact on profit
equity
RMB benchmark interest rate
increases by 25 basis points -1,355,000.00 -1,355,000.00
RMB benchmark interest rate
decreases by 25 basis points
Wafangdian Bearing Co., Ltd. 2025 annual report
(2) Exchange rate risk
Exchange rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign exchange rates.
The Group's exposure to foreign exchange risk relates primarily to the U.S. dollar, and the
Group's major export operations are settled in U.S. dollars. As at December 31, 2025,
except for the balances of monetary items in foreign currencies in this Note V. (54), the
Group's assets and liabilities were in RMB. The foreign exchange risk arising from these
assets and liabilities with foreign currency balances may have an impact on the Group's
results of operations.
The Group's exposure to exchange rate risk mainly arises from financial assets and
financial liabilities denominated in U.S. dollars, and the amounts of foreign-currency
financial assets and foreign-currency financial liabilities translated into Renminbi are set
out below:
Current year
items Impact on shareholders'
Impact on profit
equity
CNY appreciates by 1% against the
US dollar -81,131.58 -81,131.58
CNY depreciates by 1% against the
US dollar 81,131.58 81,131.58
CNY appreciates by 1% against the
euro -15,816.22 -15,816.22
CNY depreciates by 1% against the
euro 15,816.22 15,816.22
(3) Other price risks
As of December 31, 2025, the Group's purchased bearing components may be subject to
price fluctuations.Other price risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices other than exchange
rate risk and interest rate risk.
ii. Transfer of financial assets
Method of transferring Transferred financial assets Basis of
Status
financial assets Nature Amount judgment
Wafangdian Bearing Co., Ltd. 2025 annual report
Non-
Notes endorsed and outstanding Bank acceptance 227,644,005.26
derecognition
Finance company Non-
Notes endorsed and outstanding 3,112,995.33
acceptance derecognition
Non-
Notes endorsed and outstanding Trade acceptance 174,581,559.89
derecognition
Supply Chain E-
Notes endorsed and outstanding 59,547,219.71
Credential
Total 464,885,780.19
Modalities for the transfer Associated gains or
items Amount
of financial assets losses
Receivables financing 282,559,004.16
Total 282,559,004.16
XIII. Fair value disclosures
The inputs used in fair value measurements are divided into three levels:
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or
liabilities that are available at the measurement date.
Level 2 inputs are inputs other than Level 1 inputs that are directly or indirectly observable
for the related asset or liability.
Level 3 inputs are unobservable inputs for the relevant asset or liability.
The level to which the fair value measurement results belong is determined by the lowest
level to which the inputs that are significant to the fair value measurement as a whole
belong.
i. Closing fair value of assets and liabilities measured at fair value
F V at the year end
items 1st Level FV 2nd Level FV 3rd Level FV
Total
Measurement Measurement Measurement
I. Continuously measured at FV
◆Tradable financial assets 246,536.22 246,536.22
profit or loss
（1）Equity instrument investment 246,536.22 246,536.22
◆Receivables financing 64,928,833.08 64,928,833.08
◆Other equity instrument investment 8,705,393.14 8,705,393.14
Total assets measured at fair value on an
ongoing basis
ii. Basis for determining the market value of continuing and discontinued Level 1
fair value measurement items
Wafangdian Bearing Co., Ltd. 2025 annual report
The Group obtains the unadjusted closing price on the public stock exchange at December
for trading.
XIV .Related Parties Relationship and Transactions
i. Status of the Wafangdian Bearing Company Limited's parent company
Registered Registered
Parent Shareholding Voting power
Business nature
company address
capital percentage percentage
No. 1 North Manufacture and
Wazhou Gongji Street, sales of bearing
Group Wafangdian 00
and other
City, Dalian
equipment
Ultimate controlling party ： State-owned Assets Supervision and Administration Commission of Dalian
Municipal People's Government.
ii. Status of The Group's subsidiaries
For details of The Group's subsidiaries, please refer to "VIII. Interests in other entities" in
this note.
iii. Other related parties
Name of related party Related party relationship
Dalian Wazhou Bearing Manufacturing Equipment Co., Ltd Other entity controlled by the same parent
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Exact Forge Co., Ltd
company and ultimate controlling party
Wazhou Group Precision Turnplate Bearing Co., Ltd Other entity controlled by the same parent
company and ultimate controlling party
Wazhou Group Exact Transmission Bearing Co., Ltd Other entity controlled by the same parent
company and ultimate controlling party
Wazhou Group Special Precision Bearing Co. , Ltd. Other entity controlled by the same parent
company and ultimate controlling party
Liaoning North Metal Materials Supply Chain Co., Ltd Other entity controlled by the same parent
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group (USA) Bearing Co., Ltd.
company and ultimate controlling party
Wafangdian Bearing Co., Ltd. 2025 annual report
Other entity controlled by the same parent
Wazhou Group High-End Auto Bearing Co.,Ltd
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group Precision Roller Co.,Ltd
company and ultimate controlling party
Other entity controlled by the same parent
Wazhou Group Precision Retainer Co.,Ltd
company and ultimate controlling party
Other entity controlled by the same parent
Kugel- und Rollenlagerwerk Leipzig GmbH
company and ultimate controlling party
Wafangdian Bearing Power Co.,Ltd Other entity controlled by the same parent
Wazhou Group National Bearing Engineering Technology Other entity controlled by the same parent
Research Centre Co.,Ltd
Wafangdian Bearing Group Dalian Wind Power Spindle Other entity controlled by the same parent
Bearing Co.
Wafangdian Bearing Group Shanghai R&D Center Co. Other entity controlled by the same parent
Waxaxhaft Group (Europe) Bearing Co. Other entity controlled by the same parent
Wafangdian Tongda Bearing Manufacturing Co., Ltd
Other related party
ZWZ Bearing Europe GmbH Other related party
Dalian koyo Wazhou shaft auto bearing co., Ltd
Other related party
Wafangdian Bearing Education and Training Center
Other related party
Dalian Diye Gikai Wax Shaft Industry Co., Ltd
Other related party
Dalian Heavy Industries Crane Group Co.
Ultimate controlling party
iv. Related party transactions
(1) Purchase of goods, provide, and receive labour services
Contents of related
Related Party current year prior year
transactions
Purchase of goods and
equipment and lease of
tangible assets;
Wafangdian Bearing Group Co. Acceptance of labor 510,357,070.64 392,149,666.35
Wafangdian Bearing Precision Forging Purchase of goods and
Co. equipment 204,441,561.17 281,289,010.82
Wafangdian Bearing Group Precision
Rolling Body Co. Purchase of goods 9,387,786.06
Wafangdian Bearing Group High-end
Automobile Bearing Co. Purchase of goods 72,356,346.63 296,601.78
Wafangdian Bearing Group High-end
Automobile Bearing Co. Acceptance of labor 6,340.00
Wafangdian Bearing Group Precision
Retainer Co. Purchase of goods 107,168,247.67 144,626,560.11
Wafangdian Tongda Bearing
Manufacturing Co. Acceptance of labor 92,748,683.99 2,988,120.82
Wafangdian Bearing Co., Ltd. 2025 annual report
Purchase of goods;
Dalian Wazhou Group Bearing Purchase of equipment;
Equipment Manufacturing Co. Acceptance of labor 13,663,839.38 16,124,998.73
Wazhou Group Precision Transmission
Bearings Co. Purchase of goods 469,590.56 249,459.51
Purchase of power,
acceptance of labor;
Wafangdian Bearing Power Co. Acceptance of labor 57,872,617.19 74,361,234.05
Wafangdian Bearing Group National
Bearing Engineering Technology
Research Center Co. Acceptance of labor 23,617,259.26 22,771,578.60
Wafangdian Bearing Group Wind Power Purchase of
Bearing Co. goods/equipment 50,896,361.47 474,998.01
Wafangdian Bearing Group Special
Precision Bearing Co. Purchase of goods 3,880,596.92 62,406.68
Dalian Heavy Industry Crane Group Co. Acceptance of labor 78,897.95 771,982.40
Wafangdian Bearing Group Dalian Wind Purchase of
Turbine Spindle Bearing Co. commodities/energy 72,140,296.08 700,443.09
Wafangdian Bearing Group National
Bearing Engineering Technology
Research Center Co. Purchase of equipment 1,408.50
Wafangdian Bearing Group Shanghai
R&D Center Co. Purchase of equipment 445,648.68 5,591.11
Dalian Zhixin Machinery Trading Co.,
Ltd 5,038,458.05
Total 1,215,175,475.64 946,268,186.62
(2) Sales of goods/provide labor services
Contents of
Related Party related current year prior year
transactions
Wafangdian Bearing Precision Forging Co. Sales of goods 11,794,128.80 79,930.30
Wazhou Group (USA) Bearing Co. Sales of goods
Wafangdian Bearing Group Precision
Sales of goods 6,420.00
Rolling Body Co.
Wafangdian Bearing Group Wind Power
Sales of goods 91,193,280.76 130,113,742.84
Bearing Co.
Wafangdian Bearing Group Co. Products for sale 47,255,334.03 40,540,297.95
Wafangdian Bearing Group High-end
Products for sale 28,226,023.30 1,883,238.73
Automobile Bearing Co.
Leipzig Roller Ball Bearing Co. Products for sale 430,940.41 4,988,691.99
Wafangdian Bearing Group Precision
Products for sale 815,262.15 1,098,535.63
Transmission Bearing Co.
Dalian Wazhou Jinzhou Machinery Co.,
Products for sale
Ltd
Wafangdian Bearing Group Special
Products for sale 1,023,715.65 706,322.55
Precision Bearing Co.
Wafangdian Tongda Bearing
Products for sale 44,192.84 17,827.60
Manufacturing Co.
Wafangdian Bearing Co., Ltd. 2025 annual report
Dalian Waxial Group Bearing Equipment
Products for sale 11,305,547.01 10,286,024.34
Manufacturing Co.
Wafangdian Bearing Group Precision
Products for sale 254,810.08 169,507.24
Retainer Co.
Wafangdian Bearing Group Dalian Wind
Products for sale 20,959.36 1,342,741.76
Power Spindle Bearing Co.
Wafangdian Bearing Group National
Bearing Engineering Technology Research Products for sale 1,258,097.23 142,198.58
Center Co.
Dalian Heavy Industry Crane Group Co. Sales of goods 32,043,968.86 26,276,398.10
Wafangdian Bearing Group Precision
Provision of labor 1,814,119.28
Rolling Bodies Co.
Wafangdian Bearing Group High-end
Provide labor 4,128,910.22 7,346,126.23
Automobile Bearing Co.
Wafangdian Bearing Group Precision
Provision of labor 25,515,079.97 44,130,641.68
Transmission Bearing Co.
Wafangdian Bearing Group Special
Provision of labor 119,299.71 967,887.36
Precision Bearing Co.
Dalian Waxial Group Bearing Equipment
Selling equipment 89,700.00
Manufacturing Co.
Wafangdian Bearing Precision Forging Co. Provision of labor 848,486.44 2,823,358.25
Dalian Waxial Group Bearing Equipment
Provide labor 191,549.83 1,022,022.26
Manufacturing Co.
Wafangdian Tongda Bearing
Provide labor 4,933,941.30
Manufacturing Co.
Wafangdian Bearing Group Precision
Provide labor 223,027.67 470,035.46
Retainer Co.
Wafangdian Bearing Group Co. Provide labor 30,157,084.86 32,919,993.99
Wafangdian Bearing Group Wind Power
Provide labor 457,792.74 3,932,506.00
Bearing Co.
Wafangdian Bearing Co., Ltd. 2025 annual report
Wafangdian Bearing Group National
Bearing Engineering Technology Research Provide labor 120,410.68 319,337.59
Center Co.
Wafangdian Bearing Group Dalian Wind
Provision of labor 24,622.03 10,859,179.28
Power Spindle Bearing Co.
Wafangdian Bearing Group Co. Sales of equipment 7,973.14
Wafangdian Bearing Group Precision
Selling equipment
Retainer Co.
Wafangdian Bearing Group High-end
Selling equipment
Automobile Bearing Co.
Dalian Zhixin Machinery Trading Co., Ltd 117,634,367.77
Total 405,086,892.40 329,288,699.43
Contents of
Related Party related current year prior year
transactions
Wafangdian Bearing Precision Forging Co. Factory for rent 1,645,507.12 1,310,603.00
Waxaxial Group High-end Automobile Bearing Co. Factory for rent 1,019,845.20 1,019,845.20
Wafangdian Bearing Group Precision Retainer Co. Factory for rent 1,636,375.75 1,234,762.99
Dalian Wazhou Fengyuan Machinery Co. Factory for rent
Wafangdian Bearing Group Precision Transmission
Factory for rent 277,764.00 277,764.00
Bearings Co.
Wafangdian Bearing Group Co. Rental equipment 2,528,608.87 2,912,280.07
Waxaxial Group High-end Automobile Bearing Co. Rental equipment 2,508,640.03 3,326,444.03
Wafangdian Bearing Group Precision Retainer Co. Rental equipment 376,000.64 475,488.04
Wafangdian Bearing Precision Forging Limited
Rental equipment 1,136,884.18 852,805.09
Liability Company
Wafangdian Bearing Group Co. Rental equipment 6,345,184.88 5,377,917.75
Wafangdian Bearing Group Precision Rolling Body
Rental equipment 154,222.80
Co.
Wafangdian Bearing Precision Steel Ball
Land for rent 87,442.50
Manufacturing Co.
Wafangdian Bearing Group Limited Liability
Company Precision Roller Manufacturing Branch Land for rent 661,860.00 483,037.50
Company
Wafangdian Bearing Precision Forging Co. Land for rent 1,328,730.00 1,328,730.00
Wafangdian Bearing Group Co. Land for rent
Wafangdian Bearing Co., Ltd. 2025 annual report
Wafangdian Bearing Group Precision Retainer Co. Land for rent 400,455.00 310,455.00
Wafangdian Bearing Group Precision Transmission
Land for rent 58,677.65 58,677.65
Bearings Co.
Dalian Waxial Group Bearing Equipment
Land for rent 8,750.00
Manufacturing Co.
Wafangdian Bearing Group Wind Power Bearing Co. Land for rent 15,000.00 7,500.00
Dalian Waxial Group Bearing Equipment
Factory for rent 46,167.00 39,537.76
Manufacturing Co.
Wafangdian Bearing Group Wind Power Bearing Co. Factory for rent 60,000.00 30,000.00
Wafangdian Bearing Group Precision Transmission
Factory for rent 5,815.53
Bearings Co.
Total 20,051,515.85 19,296,263.38
Wafangdian Bearing Co., Ltd. 2025 annual report
current year prior year
Rental costs Variable Rental costs Variable
for short-term lease for short-term lease
Category of leases and payments not Interest leases and payments not Interest
Lessor assets rent low-value included in expense on Increased right- low-value included in expense on Increased right-
in Rent paid Rent paid
asset leases the lease liabilities to-use assets asset leases the lease liabilities to-use assets
with measurement assumed with measurement assumed
simplified of lease simplified of lease
processing liabilities processing liabilities
Wafangdian
Bearing Group Houses
Co.,Ltd
Wafangdian
Bearing Group Factory
Co.,Ltd
Wafangdian
Bearing Group Land
Co.,Ltd
Dalian Waxial
Group Bearing
Equipment Land
Manufacturing
Co. 117,744.50 117,744.50
Total
Wafangdian Bearing Co., Ltd. 2025 annual report
Related party Type of transaction current year prior year
Dalian Wazhou Group Bearing
Gain on debt restructuring 37,410.27
Equipment Manufacturing Co.
Wafangdian Bearing Group High-end
Debt restructuring losses 132,572.19
Automobile Bearing Co.
Wafangdian Bearing Group National
Bearing Engineering Technology Gain on debt restructuring 154,484.67
Research Center Co.
Wafangdian Bearing Group Precision
Gain on debt restructuring 996,260.34
Retainer Co. 160,529.24
Wafangdian Bearing Group Precision
Debt restructuring losses 92,783.51
Transmission Bearings Co.
Wafangdian Bearing Group Precision
Gain on debt restructuring 304,683.51
Rolling Body Co.
Wafangdian Bearing Group Co. Gain on debt restructuring 1,499,522.53
Wafangdian Bearing Group Co. Debt restructuring losses 316,437.26
Wafangdian Bearing Group Equipment
Gain on debt restructuring
Technology Engineering Co.
Wafangdian Bearing Group Wind
Debt restructuring losses 1,300,000.00
Power Bearing Co.
Wafangdian Bearing Power Co. Gain on debt restructuring 47,800.00
Wafangdian Bearing Precision Forging
Gain on debt restructuring 1,799,309.23 2,302,558.02
Co.
Total 3,653,992.94 7,014,529.84
Item current year prior year
Management remuneration 2,386,374.00 2,094,544.81
v. Unsettled receivables and payables from related parties
Closing Balance Opening balance
Items Related party
Book
Provision Book balance Provision
balance
Receivable
Wafangdian Bearing Group 3,930,178.86
Wafangdian Bearing Co., Ltd. 2025 annual report
High-end Automobile Bearing
Co.
Wafangdian Bearing Group
Wind Power Bearing Co.
Wafangdian Bearing Group
Precision Rolling Bodies Co.
Wazhou Group (USA) Bearing
Co.
Dalian Waxial Group Bearing
Equipment Manufacturing Co.
Wafangdian Bearing Group
Precision Transmission Bearing 9,557,749.30 7,161,607.14
Co.
Wafangdian Bearing Group
Special Precision Bearing Co.
Leipzig Roller Ball Bearing
Manufacturing Co.
Wafangdian Bearing Group
Dalian Wind Power Spindle
Bearing Co.
Wafangdian Bearing Precision
Forging & Pressing Co.
Dalian Zhixin Machinery
Trading Co., Ltd
Dalian Rubber & Plastic
Machinery Co.
Dalian Huarui Special
Transmission Equipment Co.
Dalian Dazhong Mechanical
and Electrical Installation 50.00 627,086.69 33,559.16
Engineering Co.
Dalian Great Oak Machinery
Manufacturing Co.
Dalian Huarui Heavy Industry
Coke Oven Vehicle Equipment 1,017,562.72 50,878.14
Co.
Dalian Huarui Heavy Industry
Special Spare Parts 143,518.83 11,806.70
Manufacturing Co.
Dalian Huarui Heavy Industry
Crane Co.
Dalian Huarui Heavy Industry
Casting Co.
Wafangdian Bearing Co., Ltd. 2025 annual report
Dalian Ruifeng Heavy Duty
Machinery & Materials Co.
Dalian Heavy Industry
Mechanical & Electrical 35,640.00 7,128.00
Equipment Sets Co.
Dalian Dazhong Inspection
Technology Service Co.
Shanxi Huarui Heavy Industry
Mechanical & Electrical 159,238.64 7,961.93
Equipment Co.
Dalian Jinzhou Heavy
Machinery Group Co.
Dalian Huarui Heavy Industry
Group Co.
Total 61,733,754.32 1,300,236.23 156,239,208.55 5,189,842.60
Note Dalian Rubber & Plastic
receivable Machinery Co. 150,000.00 7,500.00
Wafangdian Bearing Precision
Forging & Pressing Co. 20,000,000.00
Wafangdian Bearing Group
Wind Power Bearing Co. 10,000,000.00
Dalian Zhixin Machinery
Trading Co., Ltd 17,990,983.77 899,549.19
Total 48,140,983.77 907,049.19
Financing Dalian Rubber & Plastic
receivable Machinery Co., Ltd
Dalian Zhixin Machinery
Trading Co., Ltd
Total 69,033.64
Prepayments
Wafangdian Bearing Precision
Forging Limited Liability
Company
Wafangdian Bearing Power Co. 1,822,624.54 1,773,006.38
Dalian Waxial Group Bearing
Equipment Manufacturing Co.
Total 2,300,624.54 1,773,006.38
Other
receivables
Wafangdian Bearing Group Co. 25,000.00 310,000.00 290,000.00
Total 25,000.00 310,000.00 290,000.00
Wafangdian Bearing Co., Ltd. 2025 annual report
Closing Opening
Item Related party
Balance balance
Accounts
payable
Wafangdian Bearing Group Co. 167,490,157.46 102,774,587.92
Dalian Wazhou Group Bearing Equipment
Manufacturing Co.
Dalian Zhixin Machinery Trading Co., Ltd 18,428.32
Wafangdian Tongda Bearing Manufacturing Co. 53,989,932.83 2,198,500.98
Dalian Wazhou Fengyuan Machinery Co. 14,559,366.11 114,394,739.17
Wafangdian Bearing Group National Bearing
Engineering Technology Research Center 14,193,114.46 9,340,519.15
Wafangdian Bearing Group
Wafangdian Bearing Group Precision Retainer
Co.
Wafangdian Bearing Power Co. 11,451,887.88 7,725,587.00
Wafangdian Bearing Group Wind Power Bearing
Co., Ltd
Wafangdian Bearing Group High-end Automobile
Bearing Co.
Wafangdian Bearing Group Special Precision
Bearing Co.
Wafangdian Bearing Group Shanghai R&D
Center Co., Ltd.
Dalian Dazhong Electrical and Mechanical
Installation Engineering Co., Ltd.
Dalian Dahui Testing Technology Service Co.,
Ltd.
Dalian Huarui Heavy Industry Group Co., Ltd. 257,968.68
Wafangdian Bearing Precision Forging Co., Ltd 154,569,781.59
Total 502,506,226.36 316,454,689.87
Contractual
liabilities
Wazhou Bearing Group (USA) Bearing Co.
Leipzig Roller Ball Bearing Production Co.
Wafangdian Bearing Precision Forging Co.
Other accounts
payable
Dalian Dazhong Electrical and Mechanical
Installation Engineering Co., Ltd.
Wafangdian Bearing Group Co. 14,586,506.71 200.00
Wafangdian Bearing Power Co. 2,287,498.33 2,415,150.75
Dalian Zhixin Machinery Trading Co., Ltd 460,329,726.03
Total 477,203,731.07 2,447,852.75
XVI. Commitments and contingencies
Wafangdian Bearing Co., Ltd. 2025 annual report
As of December 31, 2025, the Group has significant commitments or material
contingencies that do not require disclosure.
XVII. Events after the Balance Sheet Date and Other important matters
i. Events after the Balance Sheet Date
Until the financial report date, there is no significant post balance sheet event for
disclosure.
ii. Other important matters
On November 17, 2025, the Party Committee of Wazhou Group resolved to initiate the
voluntary delisting procedures of The Company, and the application, submitted by Dalian
Heavy Industry Equipment Group Co., Ltd. to the Dalian Municipal State-owned Assets
Supervision and Administration Commission (SASAC), received approval on November
As disclosed in the Takeover Offer Report of Wafangdian Bearing Co., Ltd., commencing
from January 20, 2026, for the purpose of terminating the listing status of The Company, a
general offer was made to all shareholders of The Company other than Wazhou Group.
Following the delisting, Wazhou Group may take lawful and effective measures in
accordance with applicable laws to possibly achieve the cancellation of The Company's
status as an independent legal entity. Relevant subsequent arrangements will be announced
separately based on actual circumstances after The Company's delisting.
As of February 27, 2026, the total number of unrestricted tradable public shares tendered in
acceptance of the offer was 54,524,555 shares. Wazhou Group held 74.15% of The
Company's shares, and the public shareholding percentage fell below 10%. As The
Company's equity distribution no longer meets the listing conditions, The Company will
proceed with the delisting procedures for its shares in accordance with relevant regulations
and issue corresponding announcements.
XIV.Notes to the Main Items of the Financial Statements of Parent Company
i. Accounts receivable
(1). Accounts receivable with the bad debt provisions under accounting aging analysis
method
Aging Closing Balance Opening balance
Within1 year 838,847,662.72 923,943,439.94
Wafangdian Bearing Co., Ltd. 2025 annual report
Over 5 years 42,704,202.33 32,676,415.23
Total 1,026,849,605.40 1,131,851,569.41
Less: Provision for bad debt 159,055,212.72 141,135,487.75
Total 867,794,392.68 990,716,081.66
(1) .Category of accounts receivable
Closing Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts receivable
with individual bad
debt provision
Accounts receivable
with bad debt
provision based on the
characters of credit
risk portfolio
-Aging portfolio 867,049,226.23 84.44 57,611,685.85 6.64 809,437,540.38
-Related party
portfolio 59,331,430.36 5.78 1,164,045.66 1.96 58,167,384.70
Total 1,026,849,605.40 — 159,055,212.72 — 867,794,392.68
(continued)
Opening Balance
Items Booking balance Provision
Booking value
Amount % Amount %
Accounts receivable
with individual bad 71,334,371.53 6.30 71,334,371.53 100.00
debt provision
Accounts receivable
with bad debt
provision based on the
characters of credit
risk portfolio
-Aging portfolio 893,147,194.64 78.91 64,611,273.63 7.23 828,535,921.01
Wafangdian Bearing Co., Ltd. 2025 annual report
-Related party
portfolio
Total 1,131,851,569.41 — 141,135,487.75 — 990,716,081.66
Wafangdian Bearing Co., Ltd. 2025 annual report
Bad debt provision for accounts receivable at the end of year based on individual
Closing Balance Opening balance
Debtors name Accounts Provision for bad Reasons for Accounts Provision for
%
receivable debts provision receivable bad debts
An Gang steel Co.,Ltd 1,595,050.69 1,595,050.69 100.00 uncollectable 1,595,050.69 1,595,050.69
Bazhou Tianli Tube Co., Ltd 1,319,586.71 1,319,586.71 100.00 uncollectable 1,319,586.71 1,319,586.71
HBIS Company Limited Handan Branch 1,608,611.42 1,608,611.42 100.00 uncollectable 1,608,611.42 1,608,611.42
Heilongjiang Longmei Logistics Co., Ltd 8,366,227.79 8,366,227.79 100.00 uncollectable 10,656,227.79 10,656,227.79
Liaoning Wazhou Bearing Sales Co.,Ltd 1,611,795.99 1,611,795.99 100.00 uncollectable 1,611,795.99 1,611,795.99
Liaoning Yinheng Galvanized Colored Coated Steel Sheet Co. Ltd 3,213,308.67 3,213,308.67 100.00 uncollectable 3,213,308.67 3,213,308.67
Shandong Yuanda Board Technology Co., Ltd 1,804,722.77 1,804,722.77 100.00 uncollectable 1,804,722.77 1,804,722.77
Xuzhou Xugong Material Supply Co., Ltd 2,826,234.67 2,826,234.67 100.00 uncollectable 373,237.55 373,237.55
Yingkou Iron & Steel Co. Ltd 1,696,318.44 1,696,318.44 100.00 uncollectable 1,696,318.44 1,696,318.44
Zhejiang Yesheng New Material Co. Ltd 1,301,760.00 1,301,760.00 100.00 uncollectable 1,301,760.00 1,301,760.00
CITIC Heavy Industries Co.,Ltd 1,128,791.54 1,128,791.54 100.00 uncollectable 1,126,828.28 1,126,828.28
ZHUZHOU GEAR CO.,LTD. 1,055,392.12 1,055,392.12 100.00 uncollectable 290,587.00 290,587.00
Pakistan Eastern Commercial Enterprise 1,871,195.21 1,871,195.21 100.00 uncollectable 2,459,996.98 2,459,996.98
Northern Heavy Industries Group Co., Ltd. 1,101,255.06 1,101,255.06 100.00 uncollectable
Hebei Jinxi Section Steel Co., Ltd. 1,895,386.00 1,895,386.00 100.00 uncollectable
Jilin Xinda Steel Co., Ltd. 4,544,255.52 4,544,255.52 100.00 uncollectable
Shandong Taishan Steel Group Co., Ltd. 2,430,247.71 2,430,247.71 100.00 uncollectable
Shanxi Taiyuan Heavy Industry New Energy Technology Co., Ltd. 1,548,954.08 1,548,954.08 100.00 uncollectable
Wafangdian Bearing Co., Ltd. 2025 annual report
Wu’an Yuhua Steel Co., Ltd. 5,425,620.03 5,425,620.03 100.00 uncollectable
AG Company, India 1,568,656.74 1,568,656.74 100.00 uncollectable
GOD Company, India 1,805,222.55 1,805,222.55 100.00 uncollectable
Total 49,718,593.71 49,718,593.71 29,058,032.29 29,058,032.29
Wafangdian Bearing Co., Ltd. 2025 annual report
Provision for bad debts by portfolio
Portfolio accruals items
Closing Balance
Name
Accounts Receivable Provision for bad debts Proportion (%)
Within 1 year 738,900,733.44 36,979,590.40 5.00
Over 5 years
Related Party
Portfolio 59,331,430.36 1,164,045.66 1.96
Total 926,380,656.59 58,775,731.51
(2) Provision for bad debts charged off, reversed or recovered during the
period Related party portfolio
Amount during the period
Opening Charge Closing
Category Balance Accrued Received off Others balance
Provision
for bad
debts 141,135,487.75 30,372,813.11 12,255,059.49 199,992.65 -1,964.00 159,055,212.72
Total 141,135,487.75 30,372,813.11 12,255,059.49 199,992.65 -1,964.00 159,055,212.72
Significant amount Received
Debtors name Amount Reasons of received Method of recovery
Shenzhen Jiyang Intelligent Technology Co.,
Ltd. 2,296,400.00 Collection received Cash
Heilongjiang Longmei Logistics Co., Ltd. 2,290,000.00 Collection received Cash
Germany Leipzig Roller Ball Bearing
Production Co., Ltd. 1,480,632.66 Collection received Cash
GKNDrivelineJapan.Ltd 1,251,441.84 Collection received Cash
Total 7,318,474.50
(3) Accounts receivable written off in current period
Item Written-off Amount
Accounts receivable written off 199,992.65
Wafangdian Bearing Co., Ltd. 2025 annual report
Significant amount written off
Whether arising from connected
Debtors name Nature Amounts Reasons Write-off procedures
transactions
Qinghai Yinhe New Energy Materials Co., Ltd payment for goods 198,987.78 uncollectable Internal approvals N
Total 198,987.78
Wafangdian Bearing Co., Ltd. 2025 annual report
(4) The top five significant accounts receivable categorized by debtors
Closing Balance Proportion Receivable bad
of total debts &
Debtors name Contractual closing contractual
Receivable Total balance assets
assets
(%) impairment
China National
Railway Group
Corporation and
subsidiaries 186,841,512.74 118,996.41 186,960,509.15 18.08 9,504,415.75
Wafangdian Bearing
Group Corporation
and subsidiaries 58,323,662.74 58,323,662.74 5.64 1,300,236.23
China Railway Group
Corporation
(CRGC)and
subsidiaries 19,707,278.02 281,230.48 19,988,508.50 1.93 1,914,272.93
Shanghai Ouyeel
Purchasing
Information
Technology Co., Ltd 17,163,102.48 17,163,102.48 1.66 858,155.12
Chongqing Gearbox
Co., Ltd 15,663,340.96 1,017,614.72 16,680,955.68 1.61 1,291,974.41
Total
ii. Other receivables
Items Closing Balance Opening Balance
Interest receivable
Dividends receivable
Other receivables 245,164,992.88 265,704,686.03
Total 245,164,992.88 265,704,686.03
(1) Other receivables
Aging Closing Balance Opening Balance
Within 1 year 6,510,728.91 263,191,579.22
Over 5 years 4,395,509.22 5,169,834.71
Subtotal 252,364,143.71 273,039,818.66
Related Party Portfolio 7,199,150.83 7,335,132.63
Total 245,164,992.88 265,704,686.03
Closing Balance
Items
Booking balance Provision
Wafangdian Bearing Co., Ltd. 2025 annual report
Amount % Amount % Booking balance
Other receivables with
individual bad debt
provision
Other receivables identified
bad debt provision based
on the characters of credit
risk portfolio
-Aging combination
-Risk-free portfolio
-Related party portfolio
Total 252,364,143.71 — 7,199,150.83 —
(Continued)
Opening Balance
Items
Booking balance Provision
Booking balance
Amount % Amount %
Other receivables with
individual bad debt 5,144,066.29 1.88 5,144,066.29 100.00
provision
Other receivables identified
bad debt provision based
on the characters of credit
risk portfolio
-Aging combination
-Risk-free portfolio
-Related party portfolio
Total 273,039,818.66 — 7,335,132.63 265,704,686.03
Other receivables with individual bad debt provision
Closing Balance Opening Balance
Items Book Rate Book
bad debts Reasons bad debts
balance (%) balance
Other
receivables
with 5,206,086.42 5,206,086.42 100.00 uncollectable 5,144,066.29 5,144,066.29
individual
bad debt
Wafangdian Bearing Co., Ltd. 2025 annual report
Closing Balance Opening Balance
Items Book Rate Book
bad debts Reasons bad debts
balance (%) balance
provision
Total 5,206,086.42 5,206,086.42 5,144,066.29 5,144,066.29
Expected
Provision for bad credit loss Expected credit Expected credit
Total
debt within loss within life loss within life
following 12 time(unimpaired) time(impaired)
months
Balance on January 1st,
On January 1, 2023 Other
receivables carrying
amount on the book
--get into 2nd stage
--get into 3rd stage
nd
--reverse into 2 stage
-reverse into 1st stage
Accrual for the period -197,725.93 212,193.96 14,468.03
Reversal
Write-offs during the
period
Write-offs during the
period 276.00 150,173.83 150,449.83
Other changes
Closing balance 1,993,064.41 5,206,086.42 7,199,150.83
Opening Amount during the period Closing
Category
Balance Accrued Received Charge off Balance
bad debt 7,335,132.63 14,468.03 150,449.83 7,199,150.83
Total 7,335,132.63 14,468.03 150,449.83 7,199,150.83
Items written off
Other receivables written off in current period 150,449.83
Nature Closing Balance Opening Balance
Loans from related parties 236,702,647.05 257,881,433.00
Secured fund & Deposit
Wafangdian Bearing Co., Ltd. 2025 annual report
Petty cash 3,714,719.01 1,365,292.16
Others
Total 252,364,143.71 273,039,818.66
Rate of
closing
Company name Category Ageing other Bad debts
balance
receivables
Wazhou Liaoyang Bearing Related Within 3
Manufacturing Co. Party Loans years
Dalian Wazhou Precision
Related Within 3
Motorized Automotive 114,575,829.47 45.40
Party Loans years
Bearing Co.
Wazhou Precision Spherical
Related Within 3
Roller Bearing (Wafangdian) 19,639,030.39 7.78
Party Loans years
Co.
Within 4
Anhui Conch Cement Co. Margin 1,300,000.00 0.52 650,000.00
years
National Railway Materials Within 4
Margin 1,424,095.25 0.56 86,684.76
Co., Ltd years
Total 238,550,111.69 94.53 736,684.76
iii. Long-term equity investments
Closing Balance Opening Balance
Item
Book Provision Book Value Book Provision Book Value
balance balance
Investment in
subsidiaries
Investment in JV,
associates
Total 226,488,897.67 226,488,897.67 226,488,897.67 226,488,897.67
Wafangdian Bearing Co., Ltd. 2025 annual report
Changes during the period
Provision for Closing
Investee Opening Balance Provision Provision
Additional Reduced impairment for the Others Balance
period
Wazhou Liaoyang Bearing
Manufacturing Co.
Dalian Wazhou Precision Motorized
Automotive Bearing Co.
Wazhou Precision Spherical Roller
Bearing (Wafangdian) Co.
Total 226,488,897.67 226,488,897.67
Wafangdian Bearing Co., Ltd. 2024 annual report
iv. Operating revenue and cost
current year prior year
Item
Revenue Cost Revenue Cost
Revenue from main operation 2,255,675,365.40 1,938,672,450.64
Revenue from other operation 62,880,712.25 37,331,614.72
Total 2,318,556,077.65 1,976,004,065.36
Principle operation - classified according to Industries
current year prior year
Industries Sales revenue Cost of sales Sales revenue Cost of sales
Export 57,170,837.03 44,226,168.02 127,671,159.01 120,312,728.38
Domestic 2,107,069,255.12 1,830,314,035.19 1,700,340,843.31 1,539,714,332.72
Including:
Transportation
vehicle bearings 377,933,278.06 346,971,768.14 401,974,392.80 377,161,064.61
Special use
bearings 833,382,877.03 663,750,257.29 636,375,687.63 541,235,976.42
General use
bearings 895,753,100.03 819,592,009.76 661,990,762.88 621,317,291.69
Industrial
Operations 91,435,273.25 64,132,247.43 101,433,849.83 70,772,674.77
Other operating income 62,880,712.25 37,331,614.72 157,389,559.70 50,787,071.12
Total 2,318,556,077.65 1,976,004,065.36 2,086,835,411.85 1,781,586,806.99
Revenues generated from customer contracts during the period were as follows:
Current year
Items Sales revenue Cost of sales
Business Type：
Export 57,170,837.03 44,226,168.02
Domestic
Including:
Transportation vehicle bearings 377,933,278.06 346,971,768.14
Special use bearings 833,382,877.03 663,750,257.29
General use bearings 895,753,100.03 819,592,009.76
Wafangdian Bearing Co., Ltd. 2024 annual report
Industrial Operations 91,435,273.25 64,132,247.43
Total 2,255,675,365.40 1,938,672,450.64
v. Investment income
Items Current year Prior year
Dividend income earned during the holding period of investments in other
equity instruments 1,002,352.64 1,000,000.00
Investment income from debt restructuring 11,355,222.23 12,308,581.11
Total 12,357,574.87 13,308,581.11
XX. Supplementary Information
i. Non-operating profit or loss in current year
Items Amounts Instruction
Gains and losses on disposal of non-current assets, including the offsetting portion of
the provision for asset impairment already made
Government grants recognized in profit or loss for the current period, except for
government grants that are closely related to The Group's normal business
operations, in compliance with national policies and in accordance with defined
criteria, and that have a sustainable impact on The Group's profit or loss
Gains and losses arising from changes in fair value of financial assets and financial
liabilities held by non-financial enterprises and gains and losses arising from the
disposal of financial assets and financial liabilities, except for effective hedging
business related to The Group's normal business operations
Reversal of provision for impairment of receivables individually tested for
impairment
Gains and losses on debt restructuring 19,517,691.89
Non-operating income and expenses other than those listed above 1,079,436.39
Others
Subtotal 41,570,453.36
Income tax effect
Minority interests impact amount (after tax)
Total 41,570,453.36
ii. Return on equity and earnings per share
Weighted average return Earnings per share (EPS)
Profit of report period
on net assets (%) Basic EPS Diluted EPS
Net profit attributable to shareholders of parent company -25.26 -0.1443 -0.1443
-43.33 -0.2475 -0.2475
Net profit after deducting non-recurring gains and
losses attributable to shareholders of parent company
iii. Differences in accounting data under domestic and foreign accounting standards
(1) The difference between net profit and net assets in financial reports disclosed under both international
accounting standards and Chinese accounting standards
Wafangdian Bearing Co., Ltd. 2024 annual report
□ Applicable? Not applicable
(2) The difference between net profit and net assets in financial reports disclosed under both foreign accounting
standards and Chinese accounting standards
? Applicable? Not applicable
(3) Explanation of the reasons for the difference of accounting data under domestic and foreign accounting
standards, the name of the overseas audit institution should be indicated if the difference adjustment is made to
the data audited by the overseas audit institution
iv. Others
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