Wafangdian Bearing Company Limited
Auditor's Report and Financial Statements
For the Year Ended 31 December 2025
ENGLISH TRANSLATION OF
AUDITOR’S REPORT AND FINANCIAL
STATEMENTS FOR THE YEAR ENDED
IF THERE IS ANY CONFLICT
BETWEEN THE CHINESE VERSION
AND ITS ENGLISH TRANSLATION,
THE CHINESE VERSION WILL
PREVAIL
Wafangdian Bearing Company Limited
Auditor's Report and Financial Statements
(From 1 January 2025 to 31 December 2025)
Table of Contents Page
I. Auditor's Report 1-5
II. Financial Statements
Consolidated and Company's Balance Sheets 1-4
Consolidated and Company's Income Statements 5-7
Consolidated and Company's Statements of Cash Flows 8-9
Consolidated and Company's Statements of Changes in Owners' 10-13
Equity
Notes to the Financial Statements 14-145
Auditor's 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
Key Audit Matters
audit process
For details of the accounting policy for The audit procedures we performed on
revenue recognition and analysis of revenue, revenue recognition consisted primarily of:
please refer to the accounting policy 1. Understanding, evaluating and testing the
described in Note (22) of the Notes to effectiveness of the design and
Consolidated Financial Statements "III. implementation of management's key
Audit repot 1
How these matters were addressed in the
Key Audit Matters
audit process
Significant Accounting Policies and internal controls related to revenue
Accounting Estimates" and Note (39) of the recognition;
Notes to Consolidated Financial Statements. 2. Performing analytical review procedures
to analyze the reasonableness of changes in
Revenue from sales of various types of revenue and gross profit margin;
bearings in the consolidated statements of 3. Select a sample to examine sales contracts,
operations of Wafangdian Bearing Company identify contractual provisions related to the
for fiscal 2025 amounted to CNY transfer of control of goods, and evaluate
Wafangdian Bearing Company Corporation
Since revenues and profits from bearing sales meets the requirements of the Enterprise
have a significant impact on The Group's Accounting Standards;
results, the recognition of revenues depends 4. Selecting samples of revenue transactions
on the ability to properly assess whether the recorded during the year, verifying whether
product sales satisfy the agreement on the the book revenue, sales invoices and
conditions for the transfer of control in the customer confirmation sheets are consistent,
sales contract. The complexity of the and evaluating whether the relevant revenue
commercial agreements, however, requires recognition is in accordance with the revenue
separate judgment. For this reason, we recognition accounting policy of Wafangdian
identified revenue as a key audit matter. Bearing Company;
customers. 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;
sheet 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 The audit procedures we performed on the
analysis of accounts receivable, please refer to collectability of accounts receivable
the accounting policies described in Note (ix) consisted primarily of:
to the consolidated financial statements under 1. understanding, evaluating and testing the
"III. Significant Accounting Policies and effectiveness of management's design and
Estimates" and Note (iv) to the consolidated implementation of internal controls related to
financial statements under "V. Notes to the aging analysis of accounts receivable and
Consolidated Financial Statements". the determination of the allowance for bad
debts on accounts receivable;
The balance of accounts receivable in the 2. reviewing management's consideration
consolidated financial statements as of and objective evidence related to the
December 31, 2025 was CNY impairment testing of accounts receivable
debts was CNY 162,642,804.00, net of adequately identified items that have been
CNY 872,114,645.31.The balance of impaired;
contractual assets was CNY7,119,828.52, 3. for accounts receivable for which
Audit repot 2
How these matters were addressed in the
Key Audit Matters
audit process
provision for impairment of contract assets management has provided for bad debts
was CNY1,861,067.28, net of contractual according to a combination of credit risk
assets was CNY 5,258,761.24. characteristics, evaluating whether the
percentage of provision for bad debts
We identified the collectability of accounts determined by management is reasonable;
receivable as a key audit matter because 4. Implemented the correspondence
estimating the collectability of accounts procedure and reconciled the results of the
receivable and testing for impairment correspondence with the amounts recorded
involves significant accounting estimates and by management;
judgments by management, and the impact on 5. Evaluating the reasonableness of the
the financial statements if the accounts provision for bad debts reserves by
receivable are not collected on time or are management in conjunction with the
uncollectible is more significant. post-period payback examination.
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.
Audit repot 3
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. 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
Audit repot 4
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 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
Audit repot 5
Wafangdian Bearing Company Limited
Consolidated Balance Sheets
（CNY）
ITEMS No 2025- 12-31 2024- 12-31
Current Assets:
Monetary funds V. 1 65,287,519.84 239,398,923.10
Settlement fund
Outgoing call loan
Tradable financial assets V. 2 246,536.22 221,882.59
Derivative Financial instrument
Notes receivable V.3 500,110,673.70 597,196,581.19
Accounts receivable V.4 872,114,645.31 1,026,226,986.45
Financing receivable V.5 64,928,833.08 48,925,906.07
Prepayments V.6 9,287,712.68 10,948,524.83
Insurance receivables
Reinsurance Receivable
Provision of reinsurance contract reserve receivable
Other receivables V.7 10,631,908.31 7,962,213.75
including: interest receivable
dividend receivable
Financial instrument purchased under agreement to resell
Inventories V.8 636,325,993.85 688,440,738.43
Contractual assets V.9 5,258,761.24 11,498,470.21
Held for sale assets
Non-current assets due within 1-year
Other current assets V. 10 50,298,808.19 53,298,611.95
Total Current Assets 2,214,491,392.42 2,684,118,838.57
Non-Current Assets
Loan and payment on other's behalf disbursed
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment
Other equity instrument investment V. 11 8,705,393.14 11,906,928.35
Other non-current Financial instrument
Investments properties V. 12 73,919,295.42 71,679,927.05
Fixed assets V. 13 406,111,493.56 437,398,315.29
Construction in process V. 14 10,513,430.99 34,740,635.71
Production biological assets
Oil-gas assets
Use-right assets
Intangible assets VI. 15 66,301,236.59 70,121,059.58
Development cost
Goodwill
Long-term unamortized expenses V. 16 6,949,581.27 6,602,412.97
Deferred tax asset V. 17
Other non-current assets V. 18 282,900.00
Total Non-current Assets 572,783,330.97 632,449,278.95
Total Assets 2,787,274,723.39 3,316,568,117.52
legal representative ： head of the accounting work： the person in charge of the accounting office ：
Financial statements 1
Consolidated Balance Sheet ( continued)
December 31, 2025
Name of Enterprise ： Wafangdian Bearing Co. , Ltd Amount Unit: CNY
ITEMS No 2025- 12-31 2024- 12-31
Current Liabilities:
Short- term borrowings V.20 82,053,118.00 570,000,000.00
Loans from central bank
Loans from other banks
Tradable financial liability
Derivative financial liabilities
Notes payable V.21 370,597.50 401,129,901.60
Accounts payable V.22 1,261,731,806.69 1,663,816,039.46
Received in advance
Contractual liability V.23 31,776,246.33 34,098,145.99
Financial instrument sold under agreements to repurchase
Deposits received and hold for others
Entrusted trading of securities
Entrusted underwriting of securities
Employee payables V.24 49,061,641.96 42,089,354.01
Taxes and duties payable V.25 8,932,707.47 12,064,219.60
Other payables V.26 587,079,378.98 135,258,184.75
including: interest payable
dividend payable
Fees and commissions payable
Amount due to reinsurance
Held for sale liabilities
Non- current liabilities due within 1 - year V.27 98,350,000.00
Other current liabilities V.28 469,016,692.21 4,417,479.62
Total Current Liabilities 2,490,022,189.14 2,961,223,325.03
Non- current Liabilities:
Insurance contract provision
Long- term borrowings
Bonds Payable
including: preference share
perpetual debt
Leasing liability
Long- term payables V.29 344,974.84 344,974.84
Long- term employee payables
Provision V.30 62,247,622.41 55,771,671.86
Deferred income V.31 34,847,189.82 37,719,857.35
Deferred Tax liabilities V. 17 788,788.84 524,485.21
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
Owners Equity( or Shareholders Equity) :
Paid- in capital ( Share capital) V.32 402,600,000.00 402,600,000.00
Other equity instrument
Including: preference share
perpetual capital securities
Capital reserve V.33 485,691,050.47 485,691,050.47
Less: Treasury stock
Other comprehensive income V.34 -3,201,535.21
Chartered reserve V.35 1,639,850.97 2,305,094.24
Surplus reserves V.36 136,770,391.01 136,770,391.01
△ Provision for general risk
Undistributed profit V.37 -824,475,798.90 -766,382,732.49
Equity attributable to equity holders of The Group 199,023,958.34 260,983,803.23
* Minority interest
Total Equity 199,023,958.34 260,983,803.23
Total Liabilities and Equity 2,787,274,723.39 3,316,568,117.52
The accompanying notes to the financial statements are an integral part of the financial statements.
legal representative ： head of the accounting work ： the person in charge of the accounting office ：
Financial statements 2
Balance Sheet of Parent Company
December 31, 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd Amount Unit: CNY
ITEMS No 2025-12-31 2024-12-31
Current Assets:
Monetary funds 62,726,188.11 237,603,355.24
Tradable financial assets 246,536.22 221,882.59
Derivative Financial instrument
Notes receivable 497,182,824.72 598,162,807.95
Accounts receivable XIV. 1 867,794,392.68 990,716,081.66
Financing receivable 64,457,568.41 44,303,611.96
Prepayments 8,815,214.66 10,125,500.59
Other receivables XIV. 2 245,164,992.88 265,704,686.03
Inventories 525,147,258.82 437,173,417.69
Contractual assets 5,258,761.24 11,498,470.21
Held for sale assets
Non-current assets due within 1-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
Available- for- sale Financial instrument
Other debt investment
Long- term receivables
Long- term equity investment XIV. 3 226,488,897.67 226,488,897.67
Other equity instrument investment 8,705,393.14 11,906,928.35
Other non- current Financial instrument
Investments properties 68,679,455.19 66,151,054.38
Fixed assets 271,405,080.88 289,356,808.71
Construction in process 10,050,847.29 31,415,493.14
Production biological assets
Oil- gas assets
Use- right assets
Intangible assets 53,357,540.82 56,459,406.17
Development cost
Goodwill
Long- term unamortized expenses 6,949,581.27 6,602,412.97
Deferred tax asset
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
legal representative ： head of the accounting work ： the person in charge of the accounting office ：
Financial statements 3
Balance Sheet of Parent Company (continued)
December 31, 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd Amount Unit: CNY
ITEMS No 2025-12-31 2024-12-31
Current Liabilities:
Short-term borrowings 82,053,118.00 570,000,000.00
Tradable financial liability
Derivative financial liabilities
Notes payable 370,597.50 401,129,901.60
Accounts payable 1,231,268,246.54 1,465,053,380.82
Received in advance
Contractual liability 31,755,996.33 34,060,441.72
Employee payables 39,804,727.20 34,267,209.57
Taxes and duties payable 5,817,395.80 10,016,846.15
Other payables 574,587,108.18 122,802,562.47
Held for sale liabilities
Non-current liabilities due within 1-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 borrowings
Bonds Payable
including: preference share
perpetual debt
Leasing liability
Long-term payables 244,974.84 244,974.84
Long-term employee payables
Provision for liabilities 61,798,365.54 55,730,460.81
Deferred income 8,229,767.64 11,203,199.32
Deferred 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
Owners Equity(or Shareholders Equity):
Paid-in capital (Share capital) 402,600,000.00 402,600,000.00
Other equity instrument
Including: preference share
perpetual capital securities
Capital reserve 485,678,443.26 485,678,443.26
Less: Treasury stock
Other comprehensive income -3,201,535.21
Chartered reserve 2,607.15
Surplus reserves 136,770,391.01 136,770,391.01
Undistributed profit -551,829,520.90 -495,179,558.47
Total Equity 470,020,385.31 529,869,275.80
Total Liabilities and Equity 2,972,669,403.26 3,337,145,576.75
The accompanying notes to the financial statements are an integral part of the financial statements.
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 4
Consolidated Income Statement
For the year of 2025
Name of Enterprise ： Wafangdian Bearing Co., Ltd
., Amount Unit: CNY
Item No Current year Last year
Total operating revenue 2,351,123,992.31 2,053,626,920.80
Including: Operating revenue V.39 2,351,123,992.31 2,053,626,920.80
Interest income
Earned premiums
Fees and commission income
Total cost of operation 2,385,929,003.78 2,166,982,902.74
Including: Cost of operation V.39 1,948,741,941.06 1,725,976,671.44
Interest expenses
Fees and commission expenses
Payments to surrenders of insurance contracts
Net amount of insurance claims expenses
Net charges of provision for insurance contracts
Dividends policy expenses
Reinsurance expenses
Taxes and surcharges V.40 17,413,689.15 13,031,682.18
Selling and distribution expenses V.41 132,802,981.57 160,646,188.33
Administrative expenses V.42 131,424,173.68 125,074,518.31
R&D V.43 143,367,714.53 113,321,379.95
Financial expenses V.44 12,178,503.79 28,932,462.53
Including: Interest expenses 13,220,559.41 33,560,937.47
Interest income 857,113.68 2,209,880.01
add: other income V.45 13,756,342.64 28,480,421.16
investment income (Loss listed with "-") V.46 20,520,044.53 18,100,303.03
Including: income from investments in associates and joint ventures
Gain arising from derecognition of financial assets measured at amortized cost
Exchange gain (Loss listed with "-")
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") V.47 24,653.63 7,704.26
Loss on impairment of credit(Loss listed with "-") V.48 -17,419,600.21 -23,901,979.00
Loss on impairment of assets(Loss listed with "-") V.49 -41,776,370.87 -25,973,978.91
Gain on asset disposal(Loss listed with "-") V.50 760,241.48 892,931.71
Operating profit (Loss listed with "-") -58,939,700.27 -115,750,579.69
Add: Non- operating income V.51 1,670,266.87 6,391,353.58
Less: Non- operating expenses V.52 559,329.38 901,627.76
Total profit (Loss listed with "-") -57,828,762.78 -110,260,853.87
Less: Income tax expenses V.53 264,303.63 -48,372.34
Net profit (Net loss listed with "-") -58,093,066.41 -110,212,481.53
(I) Classification by continuity
(II) Classification by ownership
Other comprehensive income net off tax -3,201,535.21
Net other comprehensive income net off tax attributable to equity holders( shareholders) of the paren company
( Ⅰ)Items that may not be reclassified subsequently to the income
( Ⅱ ) Items that may be reclassified subsequently to the income statement
Financial statements 5
Net other comprehensive income net of tax attributable to Minority interest
Total comprehensive income -61,294,601.62 -110,212,481.53
Total comprehensive income attributable to parent Company -61,294,601.62 -110,212,481.53
Total comprehensive income attributable to minority interest
Earnings per share
( Ⅰ)Basic earnings per share -0.1443 -0.2738
(Ⅱ)Diluted earnings per share -0.1443 -0.2738
legal representative ： head of the accounting work： the person in charge of the accounting office ：
Financial statements 6
Income Statement of Parent Company
For the year of 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd Amount Unit: CNY
Item No Current year Last year
perating revenue XIV.4 2,318,556,077.65 2,086,835,411.85
Less: Cost of operation XIV.4 1,976,004,065.36 1,781,586,806.99
Taxes and surcharges 12,256,333.35 10,134,670.34
Selling and distribution expenses 132,175,203.41 150,288,974.22
Administrative expenses 105,840,750.24 96,859,925.78
Research &Development 103,805,185.57 94,235,738.46
Financial expenses 12,068,895.78 28,979,772.05
Including: Interest expenses 11,086,150.49 20,931,843.91
Interest income 3,244.09 28,320.12
Add: Other income 11,258,488.77 26,337,091.91
Investment income (Loss listed with "-") XIV.5 12,357,574.87 13,308,581.11
Including: income from investments in associates and joint ventures
Gain arising from derecognition of financial assets measured at amortized cost
Gain on hedging of net exposure (Loss listed with "-")
Gain on FV change (Loss listed with "-") 24,653.63 7,704.26
Loss on impairment of credit(Loss listed with "-") -17,232,989.76 -24,126,616.19
Loss on impairment of assets(Loss listed with "-") -41,210,346.26 -18,939,937.86
Gain on asset disposal(Loss listed with "-") 756,856.52 609,426.05
Operating profit (Loss listed with "-") -57,640,118.29 -78,054,226.71
Add: Non-operating income 1,445,803.44 5,692,303.60
Less: Non-operating expenses 455,647.58 840,700.60
Total profit (Loss listed with "-") -56,649,962.43 -73,202,623.71
Less: Income tax expenses
Net profit (Net loss listed with "-") -56,649,962.4 -73,202,623.71
Other comprehensive income net off tax -3,201,535.21
( Ⅰ)Items that may not be reclassified subsequently to the income statement
invested company that may not be reclassified subsequently to the income statement
(Ⅱ)Items that may be reclassified subsequently to the income statement
company that may be reclassified subsequently to the income statement
Total comprehensive income -59,851,497.61 -73,202,623.71
Earnings per share
( Ⅰ)Basic earnings per share
(Ⅱ)Diluted earnings per share -59,851,497.61 2,086,835,411.85
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 7
Consolidated Cash Flow Statement
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd Amount Unit: CNY
Item No Current year Last year
Cash receipts from sale of goods or rendering of services 1,050,075,409.91 1,219,026,500.82
Refunds of taxes 10,600,282.59 19,803,922.16
Other cash receipts in operating activities V.55 32,763,176.46 36,527,104.69
Sub-total of cash inflows from operating activities 1,093,438,868.96 1,275,357,527.67
Cash payments for goods and services acquired 160,704,366.19 591,448,981.33
Cash payments to and on behalf of employees 370,233,440.01 388,636,266.43
Tax and duties payments 82,545,566.67 49,043,695.10
Other cash payments for operating activities V.55 94,774,051.23 140,509,591.55
Sub-total of cash outflows from operating activities 708,257,424.1 1,169,638,534.41
Net cash flows from operating activities V.56 385,181,444.86 105,718,993.26
Cash receipts from return of investments
Cash receipts from investments income 1,002,352.64 1,000,000.00
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets 1,471,704.09 704,614.05
Net cash receipts from disposal of subsidiaries and other businesses
Other cash receipts in investing activities
Sub-total of cash inflows from investing activities 2,474,056.73 1,704,614.05
Cash payments for acquired fixed assets, intangible assets and other long-term assets 1,892,244.21 5,996,953.69
Cash payments for investment
Net increase of pledged loan
Net cash payments for acquisition of subsidiaries and other businesses
Other cash payments in investing activities
Sub-total of cash outflows from investing activities 1,892,244.21 5,996,953.69
Net cash flows from investment activities 581,812.52 -4,292,339.64
Cash received from capital injection
Including: Cash received by subsidiaries from investment absorpotion of minority interest
Cash receipts from borrowings 162,000,000.00 708,000,000.00
Cash received from issue of bonds
Other cash receipts in financing activities V.55 582,988,414.20 603,690,323.73
Sub-total of cash inflows from financing activities 744,988,414.20 1,311,690,323.73
Cash paid for settlement of borrowings 748,350,000.00 737,100,000.00
Cash paid for dividends, profits appropriation or payments of interest 16,466,942.52 30,782,037.07
Including: Dividens and profits paid to minority interest
Other cash payments in financing activities V.55 463,579,253.82 597,417,026.60
Sub-total of cash outflows 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
Add: the beginning balance of cash and cash equivalent 160,907,298.24 110,664,560.63
legal representative： head of the accounting work： the person in charge of the accounting office
Financial statements 8
Cash Flow Statement of Parent Company
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd Amount Unit: CNY
Item No Current year Last year
Cash receipts from sale of goods or rendering of services 1,031,973,351.26 1,183,896,172.53
Refunds of taxes 10,597,748.36 19,803,922.16
Other cash receipts in operating activities 29,373,398.35 34,114,009.77
Sub- total of cash inflows from operating activities 1,071,944,497.97 1,237,814,104.46
Cash payments for goods and services acquired 263,140,602.60 680,302,711.04
Cash payments to and on behalf of employees 295,109,312.76 316,404,978.59
Tax and duties payments 51,478,056.59 34,004,251.18
Other cash payments for operating activities 77,797,628.19 97,245,640.59
Sub- total of cash outflows from operating activities 687,525,600.14 1,127,957,581.40
Net cash flows from operating activities 384,418,897.83 109,856,523.06
Cash receipts from return of investments
Cash receipts from investments income 1,002,352.64 1,000,000.00
Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets 1,468,904.09 342,614.05
Net cash receipts from disposal of subsidiaries and other businesses
Other cash receipts in investing activities
Sub- total of cash inflows from investing activities 2,471,256.73 1,342,614.05
Cash payments for acquired fixed assets, intangible assets and other long- term assets 1,892,244.21 3,707,420.59
Cash payments for investment
Net cash payments for acquisition of subsidiaries and other businesses
Other cash payments in investing activities
Sub- total of cash outflows from investing activities
Net cash flows from investment activities
-2,364,806.54
Cash received from capital injection
Cash receipts from borrowings 162,000,000.00 708,000,000.00
Cash received from issue of bonds
Other cash receipts in financing activities 582,988,414.20 603,690,323.73
Sub- total of cash inflows from financing activities 744,988,414.2 1,311,690,323.73
Cash paid for settlement of borrowings 748,350,000.00 737,100,000.00
Cash paid for dividends, profits appropriation or payments of interest 16,466,942.52 30,782,037.07
Other cash payments in financing activities 463,579,253.82 597,417,026.60
Sub- total of cash outflows 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
Add: the beginning balance of cash and cash equivalent 159,111,730.38 102,803,929.87
legal representative： head of the accounting work： the person in charge of the accounting office
Financial statements 9
Consolidated Statement of Changes in Shareholders’ Equity
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd Amount Unit:RMB
Current year
Equity attributable to the equity holders of The Group
Item Other equity instrument Other △ General Minority
Paid-up capital Less: Treasury Special Undistributed Total equity
preference perpetual Capital reserves comprehensive Surplus reserves risk Others Sub-total interests
(share capital) others shares reserves profits
share bond income provision
Add: Changes in accounting policies
Correction of prior periods errors
Business combination within the same control
Others
-3,201,535.21 -58,093,066.41 -61,294,601.62 -61,294,601.62
listed with "-")
( Ⅰ ) Total of comprehensive income
( Ⅱ ) Capital contribution and reduction
holders
( III) Profit appropriations
(IV) Transfer within equity
capital)
capital)
remeasurements on defined benefit plan
earnings
( V) Special reserves -665,243.27 -665,243.27 -665,243.27
( VI) Others
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 10
Consolidated Statement of Changes in Shareholder s’ Equity( continued)
For the Year of 2025
Name of Enterprise ： Wafangdian Bearing Co. , Ltd Amount Unit: RMB
Last year
Equity attributable to the equity holders of The Group
Other equity instrument Other
Item △ General Minority
Paid- up capital Less: Treasury comprehensiv Undistributed Total equity
preference perpetual Capital reserves Special reserves Surplus reserves risk Others Sub- total interests
( share capital) others shares e profits
share bond provision
income
Add: Changes in accounting policies
Correction of prior periods errors
Business combination within the same control
Others
-109,783.39 -110,212,481.53 -110,322,264.92 -110,322,264.92
with "-")
( Ⅰ ) Total of comprehensive income -110,212,481.53 -110,212,481.53 -110,212,481.53
( Ⅱ ) Capital contribution and reduction
holders
( III) Profit appropriations
( IV) Transfer within equity
remeasurment on defined benefit plan
( V) Special reserves -109,783.39 -109,783.39 -109,783.39
( VI) Others
legal representative ： head of the accounting work ： the person in charge of the accounting office ：
Financial statements 11
Statement of Changes in Shareholders’ Equity of Parent Company
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd
Current year
Other equity instrument Other
Item Paid-up capital Less: Treasury Undistributed
Capital reserves comprehensive Special reserves Surplus reserves Others Total equity
(share capital) preference share perpetual bond others shares profits
income
Add: Changes in accounting policies
Correction of prior periods errors
Others
-3,201,535.21 -56,649,962.43 -59,851,497.64
with "-")
( Ⅰ ) Total of comprehensive income
( Ⅱ ) Capital contribution and reduction
( III) Profit appropriations
( IV) Transfer within equity
remeasurment on defined benefit plan
( V) Special reserves 2,607.15 2,607.15
( VI) Others
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 12
Statement of Changes in Shareholders’ Equity of Parent Company(continued)
For the Year of 2025
Name of Enterprise：Wafangdian Bearing Co., Ltd
Last year
Other equity instrument Other
Item Paid-up capital Less: Treasury Special
preference Capital reserves comprehensive Surplus reserves Undistributed profits Others Total equity
(share capital) perpetual bond others shares reserves
share income
Add: Changes in accounting policies
Correction of prior periods errors
Others
-73,202,623.71 -73,202,623.71
with "-")
( Ⅰ ) Total of comprehensive income -73,202,623.71 -73,202,623.71
( Ⅱ ) Capital contribution and reduction
( III) Profit appropriations
(IV) Transfer within equity
remeasurment on defined benefit plan
( V) Special reserves
( VI) Others
legal representative： head of the accounting work： the person in charge of the accounting office ：
Financial statements 13
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31,
(The currency is in RMB Yuan except otherwise indicated)
I.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, 1997.
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,
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
registered 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,
Notes to the Financial Statements 14
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
accounting for 19.7% of the total share capital. After the implementation of this plan,
The Company's 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.
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).
Notes to the Financial Statements 15
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
These financial statements were approved by The Company's Board of Directors on April
II.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.
(2) Going concern
This financial statements are prepared on the assumption of going concern.
III. 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
（3）Operating cycle
Notes to the Financial Statements 16
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 17
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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
Notes to the Financial Statements 18
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 19
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Notes to the Financial Statements 20
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
Notes to the Financial Statements 21
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Based on The Group's business model for managing financial assets and the contractual
cash flow 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.
Notes to the Financial Statements 22
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
portfolio 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
Notes to the Financial Statements 23
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 24
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
assets transfers
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:
Notes to the Financial Statements 25
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(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 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.
Notes to the Financial Statements 26
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
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
Notes to the Financial Statements 27
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 30 days past due, unless there is conclusive
evidence that the credit risk of the financial instrument 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 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.
Notes to the Financial Statements 28
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
Receivables other than the above related party
Account receivable aging portfolio
Portfolio
（3）Financing receivable
Portfolio Name Basis for Determining the Portfolio
Notes receivable that are held both for collecting
Notes receivable
contractual cash flows and for sale
Notes to the Financial Statements 29
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Supply chain certificates that are held both for
Supply Chain E-Credential
collecting 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
Account receivable aging portfolio
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;
(2) The one-time reversal method is used for packaging.
Notes to the Financial Statements 30
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
treatment
Notes to the Financial Statements 31
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
Notes to the Financial Statements 32
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 33
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
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.
Notes to the Financial Statements 34
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 35
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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.
Notes to the Financial Statements 36
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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:
Estimated net Annual
Category Useful life (years) residual 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
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,
Notes to the Financial Statements 37
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 38
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 commercial production or use.
Notes to the Financial Statements 39
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
Notes to the Financial Statements 40
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
Notes to the Financial Statements 41
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(20) Employee compensation
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
Notes to the Financial Statements 42
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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;
Notes to the Financial Statements 43
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(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 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.
Notes to the Financial Statements 44
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 45
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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:
Notes to the Financial Statements 46
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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:
- 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:
services related to the asset
Notes to the Financial Statements 47
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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.
Notes to the Financial Statements 48
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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.
Notes to the Financial Statements 49
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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;
Notes to the Financial Statements 50
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
- 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;
- 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.
Notes to the Financial Statements 51
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
Notes to the Financial Statements 52
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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;
Notes to the Financial Statements 53
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
- 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 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
Notes to the Financial Statements 54
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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.
Notes to the Financial Statements 55
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 liabilities, please refer to Note
(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
Notes to the Financial Statements 56
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 57
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
provision for bad debts is made on an
provision for accounts receivable and ≥ RMB 1 million
individual basis
Significant amount of recovery or reversal of Amount recovered or reversed ≥ 3% of the total bad
bad debt provision for accounts receivable debt provision for accounts receivable and ≥ RMB 1
during the period million
Significant write- off of accounts receivable Write- off amount ≥ 3% of the total bad debt provision
during the period for accounts receivable and ≥ RMB 1 million
(29) Changes in significant accounting policies and accounting estimates
Notes to the Financial Statements 58
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
IV.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
Value-added tax (VAT) 13%,9%,6%,5%
tax law, and after 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
Notes to the Financial Statements 59
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
V. Notes to Consolidated Financial Statements
i. Monetary Funds
Items Closing balance Opening balance
Cash on hand
Cash in bank 63,915,454.70 160,907,298.24
Other cash and cash equivalents 1,372,065.14 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
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
and RMB 416.84 frozen due to litigation.
ii. Transactional financial assets
Items Closing balance Opening balance
through 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
Notes to the Financial Statements 60
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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 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 %
Notes to the Financial Statements 61
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 Collect/carry
Accrued Written-off Balance
over
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
Total 405,338,560.48
iv. Accounts receivable
Aging Closing Balance Opening balance
Within1 year 840,257,060.95 957,607,035.33
Over 5 years 46,268,131.14 36,635,851.02
Total 1,034,757,449.31 1,171,376,684.29
Less: Provision for bad debt 162,642,804.00 145,149,697.84
Total 872,114,645.31 1,026,226,986.45
Closing Balance
Items
Notes to the Financial Statements 62
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Booking balance Provision
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
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
Notes to the Financial Statements 63
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Notes to the Financial Statements 64
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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
Notes to the Financial Statements 65
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 741,167,982.75 37,003,252.87 5.00
Over 5 years 1,233,239.51 1,233,239.51 100.00
Related Party Portfolio 61,408,096.15 1,164,045.66 1.90
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
Notes to the Financial Statements 66
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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
assets balance 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 19,707,278.02 281,230.48 19,988,508.50 1.92 1,914,272.93
Notes to the Financial Statements 67
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
subsidiaries
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 299,775,562.73 1,417,841.61 301,193,404.34 28.91 14,869,054.44
v. Financing receivable
Items Closing Balance Opening Balance
Bank acceptance
Supply Chain E-Credential
Total
Less: Provision for bad debt
Total
Closing 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 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)
Notes to the Financial Statements 68
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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-Credential 61,823,908.71 40,930,120.06 20,893,788.65
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
Items
Amount Percentage (%) Amount Percentage (%)
Within 1 year
More than 3 years 82,603.74 0.89 56,027.74 0.51
Notes to the Financial Statements 69
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Total 9,287,712.68 100.00 10,948,524.83 100.00
Company name Closing Balance Proportion of receivable (%)
Daye Special Steel co.,Ltd
Wafangdian Bearing Power Co., Ltd
Northeast Special Steel Group Co., Ltd
Bengang Steel Plates Co.,Ltd.
Dalian Wazhou Group Bearing Equipment
Manufacturing Co., Ltd 478,000.00 5.15
Total 7,922,452.06 85.30
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 5,504,440.80 6,289,261.93
Total 18,945,486.36 16,411,773.60
Less:Provision for bad debt 8,313,578.05 8,449,559.85
Total 10,631,908.31 7,962,213.75
(2) Categories of other receivables
Notes to the Financial Statements 70
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance
Items
Booking balance Provision Booking
Amount % Amount % balance
Provision for bad debts is
made on an individual basis 5,206,086.42 27.48 5,206,086.42 100.00
Provision for bad debts by 13,739,399.94 72.52 3,107,491.63 22.62 10,631,908.31
portfolio
Including:
Accounts receivable 12,422,514.57 65.57 3,107,491.63 25.01 9,315,022.94
aging portfolio
Reserve fund portfolio 1,291,885.37 6.82 1,291,885.37
Related party portfolio 25,000.00 0.13 25,000.00
Total 18,945,486.36 — 8,313,578.05 — 10,631,908.31
(Continued)
Opening Balance
Items Booking balance Provision Booking
Amount % Amount % balance
Provision for bad debts is
made on an individual basis 6,079,333.51 37.04 6,079,333.51 100.00
Provision for bad debts by
portfolio 10,332,440.09 62.96 2,370,226.34 22.94 7,962,213.75
Including:
Accounts receivable
aging portfolio 10,173,479.37 61.99 2,370,226.34 25.25 10,173,479.37
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
Notes to the Financial Statements 71
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Provision for bad debts by portfolio:
Combined accrual items:
Closing Balance
Items
Other receivables Bad debts Accrual rate(%）
Accounts receivable
aging portfolio 25,000.00
Risk-free portfolio 1,291,885.37
Related party portfolio 12,422,514.57 3,107,491.63 25.01
Total 13,739,399.94 3,107,491.63 ——
（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 737,541.29 -723,073.26 14,468.03
Reversed
Recollected
Written off 276.00 150,173.83 150,449.83
Others
Closing Balance 3,107,491.63 5,206,086.42 8,313,578.05
（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 8,449,559.85 14,468.03 150,449.83 8,313,578.05
Notes to the Financial Statements 72
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Change during the year
Opening Closing
Category Collected/
balance Accrued Written-off Balance
reversed
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
（6） The categories of other receivables by nature
Nature Closing Balance Opening Balance
Security deposit 9,440,995.28 6,973,511.88
Personal petty cash 3,714,719.01 1,365,292.16
Others 5,789,772.07 8,072,969.56
Total 18,945,486.36 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
Notes to the Financial Statements 73
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
(Continued)
Closing Balance
Items Provision for decline in
Book value Net book value
value of inventories
Raw materials
Low-value
consumable 458,772.00 185,271.20 273,500.80
Finished goods
Goods on transit
Semi-finished goods
Total
performance costs
Increase Decrease
Opening Closing
Items Reverse/Writt Others
Balance Accrual Other
en-off transferred Balance
Raw materials
Low-value
consumable 185,271.20 417,607.38 602,878.58
Finished goods
Semi-finished
goods 11,500,641.54 5,884,743.44 767,772.42 5,263,742.64 11,353,869.92
Total
ix. Contract assets
Notes to the Financial Statements 74
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance Opening balance
Provision
Items Provision Net book Net book
Book value Book value for
for decline value value
decline
contract to
be 7,119,828.52 1,861,067.28 5,258,761.24
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
Booking balance bad debts
Items
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 7,119,828.52 — 1,861,067.28 — 5,258,761.24
(Continued)
Opening Balance
Booking balance bad debts
Items
Amount Rate (%) Amount Rate Booking value
(%)
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:
Notes to the Financial Statements 75
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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
xi. Other equity instrument investment
Investments in other equity instruments
Items Closing Balance Opening Balance
Shanghai ME Mechanical & Electrical Equipment
Chain Co., Ltd 8,705,393.14 2,000,000.00
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
share） 7,423,089.69
Total 8,705,393.14 11,906,928.35
xii. Investment property
Investment property measured as cost method
Item Property Land use
Total
right
Notes to the Financial Statements 76
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Property Land use
Total
right
（1）Opening Balance
（2） Increase
—Purchase
—Transferred from FA
—Increase in business combinations
（3）Decrease
—Disposal
—Transfer to others
（4）Closing Balance
（1）Opening Balance
（2）Opening Balance
—Accrued
—Transferred from FA
（3）Decrease
—Disposal
—Transfer to others
（4）Closing Balance
（1）Opening Balance
（2） Increase
—Accrued
（3）Decrease
—Decrease
（4）Closing Balance
（1）Closing book value
（2）Opening book value
xiii. Fixed assets
Notes to the Financial Statements 77
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Closing Balance Opening Balance
Fixed assets 406,111,493.56 437,398,315.29
Total
Notes to the Financial Statements 78
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Machinery Transportation
Item Property Electronic Device Other Equipment Total
Equipment Equipment
（1）Opening Balance
（2）Increase
—Purchase
—Transferred from
construction- in-progress 4,465,509.78 23,207,136.49 79,646.02 4,285,020.79 163,716.81 32,201,029.89
（3）Decrease
—Disposal
—Transfer out to
investment property 13,049,355.22 13,049,355.22
—Transferred out
construction- in-progress 2,314,603.14 2,314,603.14
—Transfer-out by
gratuitous allocation 68,273.85 68,273.85
（4）Closing Balance
Depreciation
（1）Opening Balance
（2）Increase
—Accrued
—Transferred from
construction- in-progress
Notes to the Financial Statements 79
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
— Changes in fixed asset
classes
（3）Decrease
—Disposal
—Transfer out to
investment property 9,199,442.41 9,199,442.41
—Transfer-out by
gratuitous allocation 54,670.60 54,670.60
（4）Closing Balance
（1） Opening Balance
（2） Increase
—Accrued
（3）Decrease
—Disposal
（4）Closing Balance
（1）Closing book value
（2）Opening book value
Notes to the Financial Statements 80
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Initial Cost Accumulated Provision Book Value
Deprecation
Property
Machinery equipment
Transportation equipment
Electronic device others
equipment
Total
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
Notes to the Financial Statements 81
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance
Item
Book Balance Provision Book Value
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
(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
Notes to the Financial Statements 82
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Opening Balance
Item
Book Balance Provision Book Value
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
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
Notes to the Financial Statements 83
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
（2）Increase
—Transferred from
construction- in-progress 188,679.15 188,679.15
（3） Decrease
—Disposal
（4） Closing balance
（1）Opening balance
（2）Increase
—Accrual
（3）Decrease
—Disposal
（4）Closing balance
（1）Opening balance
（2）Increase
—Accrual
（3）Decrease
—Disposal
（4）Closing balance
（1） Closing Book value
Notes to the Financial Statements 84
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Land use right ERP software Total
（2）Opening Book value
xvi. Long-term unamortized expense
Opening Other Closing
Items Increase Amortization
Balance Decrease Balance
Fixed asset improvement
expenses
Building maintenance
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 790,821,313.82 856,258,144.28
Total 1,109,367,772.47 1,146,826,174.19
Year Closing Balance Opening Balance Memo
Notes to the Financial Statements 85
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 282,900.00
Notes to the Financial Statements 86
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Note receivable 20,888,325.70 20,888,325.70 Trade Pledge of notes
Notes to the Financial Statements 87
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
acceptance
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 mature at the end
Accounts receivable 59,547,219.71 59,547,219.71 E-Credential of year
Total 466,527,980.49 466,527,980.49 117,060,762.95 117,060,762.95
Notes to the Financial Statements 88
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 919,158,607.52 1,127,827,193.29
Over 3 years 77,986,335.79 85,377,912.48
Total 1,261,731,806.69 1,663,816,039.46
Items Closing balance Reasons
Wafangdian Bearing Group Co., Ltd. and its subsidiaries 214,672,446.65 Settlement not yet due
Anshan City Grinding Wheel Co., Ltd. 4,579,300.99 Settlement not yet due
Beijing Longxuan Rubber & Plastic Co., Ltd. 6,946,148.88 Settlement not yet due
Beijing Rongsheng Runde Trading Co., Ltd. 13,539,152.66 Settlement not yet due
Dalian Binhai Grinding Wheel Co., Ltd. 4,328,517.25 Settlement not yet due
Liaoning Huan Bohai Industrial Co., Ltd. 7,172,159.01 Settlement not yet due
Shijiazhuang Iron and Steel Co., Ltd. 4,140,401.80 Settlement not yet due
Wafangdian Jinguanda Bearing Manufacturing Co., Ltd. 4,445,922.29 Settlement not yet due
Zibo Yijia Power Machinery Co., Ltd. 6,829,338.66 Settlement not yet due
Anhui Liyuan Transmission Technology Co., Ltd. 3,919,752.91 Settlement not yet due
Beijing Waye Metallurgical Technology Co., Ltd. 3,782,032.13 Settlement not yet due
Notes to the Financial Statements 89
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Closing balance Reasons
Total 274,355,173.23
xxiii. Contract liability
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
Notes to the Financial Statements 90
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Opening Closing
Items Increase Decrease
balance balance
Total 4,705,119.59 35,772,709.47 35,824,651.18 4,653,177.88
xxv. Tax payables
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 148,637.64 168,808.45
City maintenance and construction tax 336,765.59 120,272.26
Real estate tax 769,261.38 758,803.28
Resource tax 5,258.80
Education surcharge 138,331.21 45,825.66
Land use tax 613,163.82 613,163.82
local education surcharge 92,220.79 30,088.25
Stamp duty 547,277.47 700,665.55
Total 8,932,707.47 12,064,219.60
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 82,966,684.78 87,659,998.50
borrowings and interest 460,329,726.03
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
Notes to the Financial Statements 91
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
yet matured at the balance sheet date 227,644,005.26
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
Notes to the Financial Statements 92
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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 37,719,857.350 1,260,000.00 4,132,667.53 34,847,189.82
Notes to the Financial Statements 93
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 158,600,000.00 158,600,000.00
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
Other capital reserves
Total
xxxv. Other comprehensive income
Change for current period
Less: Less:
Reclassificatio Reclassificatio
Pre-tax
n of previously n of previously After-tax
Openin amoun Less: After-tax Closin
recognized recognized amount
Items g t
other other
Income
attributabl
amount g
balance arising tax attributable to balance
comprehensive comprehensive e to the
in the expens non-controllin
income to income to parent
current e g interests
profit or loss in retained company
year
the current earnings in the
period current period
Notes to the Financial Statements 94
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Change for current period
Less: Less:
Reclassificatio Reclassificatio
Pre-tax
n of previously n of previously After-tax
Openin amoun Less: After-tax Closin
recognized recognized amount
Items g t
other other
Income
attributabl
amount g
balance arising tax attributable to balance
comprehensive comprehensive e to the
in the expens non-controllin
income to income to parent
current e g interests
profit or loss in retained company
year
the current earnings in the
period current period
that will
not be
reclassified
to profit or
loss
Including:
Fair value
changes of
other -3,201,535.2
-3,201,535.21 -3,201,535.21
equity 1
instrument
investment
s
Total -3,201,535.2
-3,201,535.21 -3,201,535.21
xxxvi. Special reserve
Items Opening balance Increase Decrease Closing balance
Safety production fee
Total
xxxvii. Surplus reserves
Items Opening balance Increase Decrease Closing balance
Statutory surplus
reserve
Discretionary surplus
reserve
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
Notes to the Financial Statements 95
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
company in the year -58,093,066.41 -110,212,481.53
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
Total
Current year Prior year
Items
Sales revenue Cost of sales Sales revenue Cost of sales
Notes to the Financial Statements 96
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Business Type：
Export
Domestic
Including:
Transportation vehicle
bearings
Special use bearings
General use bearings
Industrial Operations 78,400,518.64 49,861,556.12 80,821,041.73 50,159,866.67
Total
xl. Taxes and surcharges
Items Current year Prior year
City construction tax
Education surcharge
Local Education surcharge
Stamp duty
Property tax
Tax on land use
Others
Total
xli. Selling expenses
Items Current period Previous period
Employee benefit
Compensation for quality default
Transportation expense
Travel expense
Trademark use fee
Business activity
Leasing
Conference expense
Others
Notes to the Financial Statements 97
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current period Previous period
Total
xlii. Administrative expenses
Items Current year Prior year
Employee benefit
Intangible assets amortization
Guide and fire fighting expense
Depreciation expense
Travel expense
Business entertaining expense
Consulting expense
Other expense
Total
xliii. R&D expenses
Items Current year Prior year
Materials input
Design, new process development fee
Labor cost
Depreciation and amortization of long term expense
Fuel power
R&D equipment repair and leasing fee
Processing fee
Others fee
Total
xliv. Financial expenses
Items Current year Prior year
Interest expenses
Less: Interest income
Exchange gain
-1,361,118.21 -2,897,876.15
Add: Others expenditure
Total
xlv. Other income
Notes to the Financial Statements 98
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current year Prior year
Government grant
Input tax credits
Withholding of personal income tax handling fee
Direct VAT relief
Total
xlvi. Investment income
Items Current year Prior year
Dividend income from other equity instrument
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
Total
xlviii. Loss on credit impairment (loss listed as “-”)
Items Current year Prior year
Bad debt loss of notes receivable
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
Notes to the Financial Statements 99
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Amounts recognized into current
Item Current year Prior year
non-recurring profit or loss
Gain on non-current assets disposal 760,241.48 892,931.71 760,241.48
Total 760,241.48 892,931.71 760,241.48
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
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
Notes to the Financial Statements 100
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current year
Total profit -57,828,762.78
Income tax expense at the statutory [or applicable] tax rate -8,674,314.42
Effect of different tax rates applied to subsidiaries 235,809.82
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
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
Notes to the Financial Statements 101
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Items Current period Previous period
Notes to the Financial Statements 102
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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:
Net profit -58,093,066.41 -110,212,481.53
Add: Provision for asset impairment 41,776,370.87 23,901,979.00
Credit asset impairment loss 17,419,600.21 25,973,978.91
Depreciation of fixed assets 68,914,375.76 64,470,904.93
Amortization of intangible assets 4,008,502.14 4,377,251.51
Amortization of long-term deferred expenses 1,599,441.26 1,357,613.92
Losses on disposal of fixed assets, intangible assets and -760,241.48 -892,931.71
Notes to the Financial Statements 103
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
additional materials Current period Previous period
other long-term assets
Loss on scrapping of fixed assets -31,501.10 539,208.59
Loss from changes in fair value -24,653.63 -7,704.26
Financial expenses 12,838,013.35 33,560,937.47
Investment loss -20,520,044.53 -18,100,303.03
Decrease in deferred income tax assets
Increase in deferred income tax liabilities 264,303.63 -51,211.90
Inventories reduction 35,734,872.95 -62,534,134.99
Decrease in operating receivables 225,464,168.43 -41,221,086.90
Increase in operating payables 56,591,303.41 184,556,973.25
Other
Net cash flow from operating activities 385,181,444.86 105,718,993.26
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 63,645,319.54 160,907,298.24
Less: cash balance at the beginning of the year 160,907,298.24 110,664,560.63
Plus: the year-end balance of cash equivalents
Less: the beginning balance of cash equivalents
Net increase in cash and cash equivalents -97,261,978.70 50,242,737.61
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
Notes to the Financial Statements 104
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Closing balance Opening balance
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 470,924.79
Include：USD 79.95 7.0288 561.95
Euro 57,114.06 8.2355 470,362.84
Accounts Receivable 9,223,854.84
Include：USD 1,154,193.58 7.0288 8,112,595.84
Euro 134,935.22 8.2355 1,111,259.00
lviii. Leases
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
VI. 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
Notes to the Financial Statements 105
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Items Current period Previous period
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
Notes to the Financial Statements 106
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
VII. 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
Notes to the Financial Statements 107
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
VIII. Government Grants
i. Liability items involving government grants
Recognized
in
Liability Opening non-operating Transferred to Charged Other Closing
items Balance New grants income other gains to costs changes Balance Asset-related/revenue-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 940,144.73 243,070.78
Notes to the Financial Statements 108
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
full provincial openness in 2022
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
IX. Risk Related to Financial Instruments
i. Types of risks arising from financial instruments
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.
Notes to the Financial Statements 109
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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
Over
items 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
Notes to the Financial Statements 110
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
-1,355,000.00 -1,355,000.00
increases by 25 basis points
RMB benchmark interest rate
decreases by 25 basis points
(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:
items Current year
Notes to the Financial Statements 111
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Notes endorsed and outstanding Bank acceptance 227,644,005.26 Non-derecognition
Finance company
Notes endorsed and outstanding 3,112,995.33 Non-derecognition
acceptance
Notes endorsed and outstanding Trade acceptance 174,581,559.89 Non-derecognition
Supply Chain
Notes endorsed and outstanding 59,547,219.71
E-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
Notes to the Financial Statements 112
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
X. 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
The Group obtains the unadjusted closing price on the public stock exchange at December
for trading.
XI .Related Parties Relationship and Transactions
Notes to the Financial Statements 113
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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
Notes to the Financial Statements 114
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
company and ultimate controlling party
Wafangdian Bearing Power Co.,Ltd Other entity controlled by the same parent
Wazhou Group National Bearing Engineering Other entity controlled by the same parent
Technology 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.,
Other related party
Ltd
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 Purchase of goods 107,168,247.67 144,626,560.11
Notes to the Financial Statements 115
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Retainer Co.
Wafangdian Tongda Bearing
Manufacturing Co. Acceptance of labor 92,748,683.99 2,988,120.82
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
Notes to the Financial Statements 116
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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.
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.
Notes to the Financial Statements 117
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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
Notes to the Financial Statements 118
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 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.
Notes to the Financial Statements 119
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Notes to the Financial Statements 120
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Increased Increased
Lessor assets rent low-value included in expense on low-value included in expense on
Rent paid right-to-use Rent paid right-to-use
in asset leases the lease liabilities asset leases the lease liabilities
assets assets
with measurement assumed with measurement assumed
simplified of lease simplified of lease
processing liabilities processing liabilities
Wafangdian
Bearing Group Houses
Co.,Ltd 13,403,472.00 13,403,472.00 13,228,071.75 13,228,071.75
Wafangdian
Bearing Group Factory
Co.,Ltd 2,257,002.49 2,257,002.49 2,316,263.45 2,316,263.45
Wafangdian
Bearing Group Land
Co.,Ltd 3,163,105.03 3,163,105.03 3,209,151.27 3,209,151.27
Dalian Waxial
Group Bearing
Equipment Land
Manufacturing
Co. 117,744.50 117,744.50
Notes to the Financial Statements 121
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Total 18,941,324.02 18,941,324.02 18,753,486.47 18,753,486.47
Notes to the Financial Statements 122
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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. 75,501.75
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. 102,564.12
Wafangdian Bearing Group Precision
Gain on debt restructuring 304,683.51
Rolling Body Co.
Wafangdian Bearing Group Co. Gain on debt restructuring 1,333,933.48 1,499,522.53
Wafangdian Bearing Group Co. Debt restructuring losses 12,172.66 316,437.26
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
Notes to the Financial Statements 123
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Closing Balance Opening balance
Items Related party
Book
Provision Book balance Provision
balance
Receivable
Wafangdian Bearing Group
High-end Automobile Bearing 3,930,178.86
Co.
Wafangdian Bearing Group
Wind Power Bearing Co. 549,479.30
Wafangdian Bearing Group
Precision Rolling Bodies Co.
Wazhou Group (USA) Bearing
Co. 10,320,032.49
Dalian Waxial Group Bearing
Equipment Manufacturing Co. 47,236.74
Wafangdian Bearing Group
Precision Transmission Bearing 9,557,749.30
Co.
Wafangdian Bearing Group
Special Precision Bearing Co.
Leipzig Roller Ball Bearing
Manufacturing Co. 1,480,632.66
Wafangdian Bearing Group
Dalian Wind Power Spindle
Bearing Co.
Wafangdian Bearing Precision
Forging & Pressing Co. 33,136,359.29
Dalian Zhixin Machinery
Trading Co., Ltd
Dalian Rubber & Plastic
Machinery Co. 674,439.52
Dalian Huarui Special
Transmission Equipment Co. 4,592,838.82
Dalian Dazhong Mechanical
and Electrical Installation 33,559.16
Engineering Co.
Dalian Great Oak Machinery
Manufacturing Co. 1,267,342.70 3,443,664.58
Dalian Huarui Heavy Industry
Coke Oven Vehicle Equipment 50,878.14
Co.
Notes to the Financial Statements 124
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Dalian Huarui Heavy Industry
Special Spare Parts 11,806.70
Manufacturing Co.
Dalian Huarui Heavy Industry
Crane Co. 1,689,596.19
Dalian Huarui Heavy Industry
Casting Co. 3,119.72
Dalian Ruifeng Heavy Duty
Machinery & Materials Co. 79.00
Dalian Heavy Industry
Mechanical & Electrical 7,128.00
Equipment Sets Co.
Dalian Dazhong Inspection
Technology Service Co. 87,634.52
Shanxi Huarui Heavy Industry
Mechanical & Electrical 7,961.93
Equipment Co.
Dalian Jinzhou Heavy
Machinery Group Co. 670.73
Dalian Huarui Heavy Industry
Group Co. 66,033.09 91,068,770.97
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.
Notes to the Financial Statements 125
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Dalian Waxial Group Bearing
Equipment Manufacturing Co. 478,000.00
Total
Other
receivables
Wafangdian Bearing Group Co.
Total
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 161,491.71
Notes to the Financial Statements 126
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
XII. Commitments and contingencies
As of December 31, 2025, the Group has significant commitments or material
contingencies that do not require disclosure.
XIII. 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
Notes to the Financial Statements 127
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Over 5 years
Total
Less: Provision for bad debt
Total
Notes to the Financial Statements 128
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(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
debt provision
Accounts receivable
with bad debt
provision based on
the characters of 1,060,517,197.88 93.70 69,801,116.22 6.58 990,716,081.66
credit risk portfolio
-Aging portfolio 893,147,194.64 78.91 64,611,273.63 7.23 828,535,921.01
-Related party
portfolio
Total 1,131,851,569.41 — 141,135,487.75 — 990,716,081.66
Notes to the Financial Statements 129
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Notes to the Financial Statements 130
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
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
Notes to the Financial Statements 131
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 1,233,239.51 1,233,239.51 100.00
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
Notes to the Financial Statements 132
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Item Written-off Amount
Accounts receivable written off 199,992.65
Notes to the Financial Statements 133
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Significant amount written off
Whether arising from
Debtors name Nature Amounts Reasons Write-off procedures connected
transactions
Qinghai Yinhe New Energy Materials Co., Ltd payment for goods 198,987.78 uncollectable Internal approvals N
Total 198,987.78
Notes to the Financial Statements 134
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
(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
assets balance 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 297,698,896.94 1,417,841.61 299,116,738.55 28.93 14,869,054.44
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
Notes to the Financial Statements 135
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Booking balance
Amount % Amount %
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 — 245,164,992.88
(Continued)
Opening Balance
Items
Booking balance Provision
Booking balance
Amount % Amount %
Notes to the Financial Statements 136
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 267,895,752.37 98.12 2,191,066.34 0.82 265,704,686.03
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
individual
bad debt
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
Notes to the Financial Statements 137
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Secured fund & Deposit
Petty cash
Others
Total 252,364,143.71 273,039,818.66
Company name Category closing Ageing Rate of Bad debts
Notes to the Financial Statements 138
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
balance other
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 226,488,897.67 226,488,897.67 226,488,897.67 226,488,897.67
Investment in JV,
associates
Total
Notes to the Financial Statements 139
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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
Notes to the Financial Statements 140
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
iv. Operating revenue and cost
current year prior year
Item
Revenue Cost Revenue Cost
Revenue from main operation
Revenue from other operation
Total
Principle operation - classified according to Industries
current year prior year
Industries Sales revenue Cost of sales Sales revenue Cost of sales
Export
Domestic
Including:
Transportation
vehicle bearings
Special use
bearings
General use
bearings
Industrial
Operations
Other operating
income
Total
Revenues generated from customer contracts during the period were as follows:
Current year
Items
Sales revenue Cost of sales
Business Type：
Export
Notes to the Financial Statements 141
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
Domestic
Including:
Transportation vehicle bearings
Special use bearings
General use bearings
Industrial Operations
Total
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
XV. 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 8,186,389.05
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, 24,653.63
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
Notes to the Financial Statements 142
Wafangdian Bearing Co., Ltd
Notes to financial statements for the year ended as at December 31, 2025
( The currency is in RMB Yuan except otherwise indicated)
(English translation for reference only)
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 Earnings per share (EPS)
average return
Profit of report period
on net assets
Basic EPS Diluted EPS
(%)
Net profit attributable to shareholders of parent -25.26 -0.1443 -0.1443
company
Net profit after deducting non-recurring gains and -43.33 -0.2475 -0.2475
losses attributable to shareholders of parent
company
Wafangdian Bearing Co., Ltd
April 24, 2026
Notes to the Financial Statements 143
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