Zhejiang NHU Company Ltd.
August 2026
Section I Important Notes, Contents, and Definitions
The Board of Directors and its members and senior executives of the Company
hereby guarantee that the information presented in this semi-annual report is
authentic, accurate, complete and free of false records, misleading statements or
material omissions, and they will bear individual and joint liabilities for such
information.
Hu Baifan, the Company’s legal representative, Shi Guanqun, the officer in
charge of accounting, and Wang Xiaobi, the head of accounting department
hereby declare that they guarantee the financial statements in this semi-annual
report are authentic, accurate and complete.
All members of the Board of Directors have attended the meeting of the Board
of Directors for deliberation of this semi-annual report.
The future plan and other forward-looking information disclosed in this semi-
annual report shall not be regarded as a substantive commitment to investors.
Investors are hereby cautioned to be mindful of investment risks. For a detailed
description of potential operational risks of the Company and relevant
countermeasures, refer to Item X Risks and Countermeasures under Section III
Management’s Discussion and Analysis of this Report. Investors are hereby
cautioned to be mindful of investment risks.
The profit distribution proposal reviewed and approved by the Board of
Directors at this meeting is as follows: Based tentatively on 3,068,717,398 shares
[Note], which is the total share capital of 3,073,421,680 shares as of July 31, 2026
after deducting 4,704,282 repurchased shares held in the special repurchase
account, a cash dividend of RMB 2.00 (tax inclusive) per 10 shares will be
distributed to all shareholders. No bonus shares (tax inclusive) will be issued,
and no capitalization of capital reserves will be made.
[Note] The Company currently has a total share capital of 3,073,421,680 shares, of which
Share Repurchases by Listed Companies, shares held in the special repurchase account are not
entitled to profit distribution or capitalization of capital reserve.
If the total share capital of the Company changes prior to the implementation of
the distribution plan due to factors such as conversion of convertible bonds,
share repurchases, exercise of equity incentive options, or listing of new shares
from refinancing, the total amount to be distributed will be adjusted accordingly
while the distribution ratio per share remains unchanged.
This Semi-Annual Report is an English translation of the Chinese Semi-Annual Report. In case the English version does not
conform to the Chinese version, the Chinese version prevails.
Contents
Documents Available for Reference
I. Financial statements signed and sealed by the Company’s legal representative, officer in charge of accounting,
and head of accounting department;
II. Originals of all the Company’s documents and announcements published in newspapers designated by CSRC
during the reporting period;
III. Other documents for reference.
Definitions
Abbreviations Refers to Contents of definitions
The Company, NHU Refers to ZHEJIANG NHU CO., LTD.
CSRC Refers to China Securities Regulatory Commission
PPS Refers to Polyphenylene Sulfide
Section II Company Profile and Key Financial Indicators
I. Company profile
Stock abbreviation NHU Stock code 002001
Stock Exchange Shenzhen Stock Exchange
Company Name in Chinese 浙江新和成股份有限公司
Company Abbreviation in
新和成
Chinese
Company name in foreign
ZHEJIANG NHU COMPANY LTD.
language (if any)
Company Abbreviation in
NHU
foreign language (if any)
Legal representative Hu Baifan
II. Contact information
Items Board secretary Securities affairs representative
Name 石观群（Shi Guanqun） 曾淑颖 (Zeng Shuying)
No.418 Xinchang Dadao West Road, No.418 Xinchang Dadao West Road,
Contact address
Xinchang, Zhejiang, P.R.China Xinchang, Zhejiang, P.R.China
Tel. +86 575 86017157 +86 575 86017157
Fax +86 575 86125377 +86 575 86125377
E-mail address sgq@cnhu.com 002001@cnhu.com
III. Other Information
Whether the Company’s registered address, office address, zip code, website and e-mail address has changed during the reporting
period
?Applicable ?Not applicable
The Company’s registered address, office address, zip code, website and e-mail address have not changed during the reporting
period, which can be found in the 2025 Annual Report.
Whether information disclosure and location of documents for public inspection has changed during the reporting period
?Applicable?Not applicable
The name of the Company’s selected information disclosure newspaper, the URL of the website designated by the CSRC where
the semi-annual report is posted, and the place where the Company’s semi-annual report is available have not changed during the
reporting period, which can be found in the 2025 Annual Report.
Whether other relevant information has changed during the reporting period
?Applicable ?Not applicable
IV. Key accounting data and financial indicators
Whether the Company needs to perform a retroactive adjustment or restatement on the financial data of prior years
? Yes ? No
Items Current Reporting Period Prior-Year Period YoY Change(%)
Operating revenue (yuan) 13,129,300,260.89 11,100,632,836.78 18.28
Net profit attributable to
shareholders of the listed 4,010,733,454.55 3,603,323,979.16 11.31
company (yuan)
Net profit attributable to
shareholders of the listed
company after deducting non-
recurring profit or loss (yuan)
Net cash flows from operating
activities (yuan)
Basic earnings per share
(yuan/share)
Diluted earnings per share
(yuan/share)
Weighted average return on
equity
Items June 30, 2026 December 31, 2025 Change(%)
Total assets (yuan) 46,685,231,500.76 45,606,449,805.48 2.37
Net assets attributable to
shareholders of the listed 34,880,103,504.10 32,805,654,181.90 6.32
company (yuan)
V. Differences in Accounting Data Under Chinese Accounting Standards and Overseas
Accounting Standards
Standards and Chinese Accounting Standards
? Applicable ? Not applicable
During the reporting period, the Company has no difference in net profit or net assets in financial reports disclosed respectively
under IFRS Standards and Chinese accounting standards.
Accounting Standards and Chinese Accounting Standards
? Applicable ? Not applicable
During the reporting period, the Company has no difference in net profit or net assets in financial reports disclosed respectively
under overseas accounting standards and Chinese accounting standards.
VI. Non-Recurring Profit or Loss
? Applicable ? Not applicable
Unit: RMB Yuan
Items Amount Remarks
Gains or losses on disposal of non-
current assets, including write-off of -35,306,533.70
provision for impairment
Government grants included in profit or
loss (excluding those closely related to
operating activities of the Company,
satisfying government policies and 37,824,754.25
regulations, enjoyed based on certain
standards, and having a continuing
impact on the Company's profit or loss)
Gains or losses on changes in fair value
of financial assets and financial liabilities
held by non-financial enterprises and
gains or losses arising from disposal of
financial assets and financial liabilities,
excluding those arising from effective
hedging business related to the
Company's normal operating activities
Gains or losses on assets consigned to
the third party for investment or 16,602,412.40
management
Other non-operating revenue or
-8,309,061.39
expenditures
Less: Enterprise income tax affected 20,142,157.25
Non-controlling interest affected (after
tax)
Total 91,796,890.83
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
? Applicable ? Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.
Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria
for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
? Applicable ? Not applicable
The Company has no situation of defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information
Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss.
Section III Management Discussion and Analysis
I. Principal Business Activities During the Reporting Period
There were no material changes to the Company's core business operations during the reporting period. For details, please refer to
the company's 2025 annual report.
II. Core Competitiveness analysis
There were no material changes to the Company’s core competitiveness during the reporting period. For details, please refer to the
Company’s 2025 annual report.
III. Principal Business Activities Analysis
Overview
In the first half of the year, guided by the operating principle of “expanding markets and increasing sales, pursuing innovative
development, empowering with smart manufacturing, and improving quality and efficiency,” the Company actively responded to
the complex and changing domestic and international environment, seized development opportunities, and achieved steady growth
in key operating indicators. During the reporting period, the Company achieved operating revenue of RMB 13.13 billion,
representing a year-on-year increase of 18.28%; total profit of RMB 4.70 billion, an increase of 11.06% year-on-year; and net
profit attributable to shareholders of the listed company of RMB 4.01 billion, an increase of 11.31% year-on-year.
During the reporting period, the Company coordinated production, sales, and procurement to continuously improve operating
quality and efficiency. On the sales side, the Company actively seized product market opportunities, continued to expand high-
value application fields, and achieved good results in developing “Four-New” markets. The market demand and price of
methionine, a key product in the nutrition segment, rose significantly, and the methionine business achieved growth in both
volume and price. Other segments also showed stable and improving sales. On the production side, the Company continued to
promote cost reduction and efficiency improvement through measures such as shared-line production, centralized startup and
shutdown, and high output with low consumption. On the procurement side, the Company accurately judged market conditions
and effectively strengthened its supply chain risk defense.
During the reporting period, the Company upheld the philosophy of innovation-driven development and growth through market
competition, and key projects progressed in an orderly manner. The civil construction of the Tianjin New Materials Nylon Industry
Chain Project was basically completed and handed over for installation, with equipment arriving and installation commencing. The
PPS Phase IV project began construction. The civil works for HA Phase II started smoothly. Other technical upgrading and
management improvement projects advanced steadily, while reserve projects and new project planning were carried out in an
orderly manner.
During the reporting period, the Company consistently adhered to innovation-driven development. On the one hand, it continued
to deepen the research and development of new products, steadily advanced new product research subjects, and continuously
expanded product categories. On the other hand, it reviewed special subjects on improving the competitiveness of existing
products, continued to improve and innovate, and continuously enhanced product competitiveness. Through building a technology
resource library and a unit technology database, the Company continued to strengthen technology platform capabilities, laying a
solid foundation for technological innovation.
During the reporting period, the Company continued to advance its global layout. Sales, R&D, and other overseas operations are
accelerating localization. The Japan Research Institute was completed and put into use. At the same time, the Company continued
to improve its international management system, promoted the construction of overseas warehousing resources in key regions,
improved its overseas talent introduction and development mechanisms, and deepened employer brand building, laying a solid
foundation for the Company’s internationalization strategy.
During the reporting period, the Company continued to deepen full-process risk management, promoted confidentiality system
development, consolidated supply chain security, upgraded information protection capabilities, and enhanced systemic risk control
capabilities. Meanwhile, the Company continued to improve internal control management, strengthened risk prevention and
process management, and comprehensively ensured compliant and efficient operation, laying a solid foundation for long-term
sustainable development.
During the reporting period, the Company relied on digital and intelligent transformation to achieve refined management, focusing
on three major areas—smart factories, smart operations, and artificial intelligence-enabled management—and steadily advanced
the digital and intelligent construction of each base. The smart operation system continued to iterate, and self-developed platforms
were continuously optimized, pushing the digital and intelligent transformation from “point-based pilots” to “full-domain
empowerment” and injecting digital momentum into the Company’s high-quality development.
Year-on-year Changes in Key Financial Data
Unit: RMB Yuan
Current Reporting
Item Prior-Year Period YoY Change(%) Reasons for Changes
Period
Operating Revenue 13,129,300,260.89 11,100,632,836.78 18.28
Operating Cost 7,323,675,460.81 6,006,367,357.09 21.93
Sales Expenses 88,987,069.94 88,602,406.65 0.43
Administration
Expenses
It was mainly due to
increased exchange
loss caused by
Financial Expenses 257,803,128.41 -178,098,697.47 244.75
exchange rate
fluctuations during the
reporting period.
Income Tax Expenses 669,297,246.91 607,906,795.85 10.10
R&D Expenses 605,728,077.64 522,723,563.18 15.88
Net Cash Flows from
Operating Activities
It was mainly due to an
Net Cash Flows from increase in land
-1,643,359,986.70 -1,108,314,695.05 -48.28
Investing Activities payments during the
reporting period.
Net Cash Flows from
-2,427,781,067.80 -2,154,111,363.13 -12.70
Financing Activities
It was mainly due to an
Net Increase in Cash
-423,489,717.70 -12,707,478.21 -3,232.60 increase in land
and Cash Equivalents
payments and dividend
Current Reporting
Item Prior-Year Period YoY Change(%) Reasons for Changes
Period
distributions during the
reporting period.
Taxes and surcharges 147,102,530.45 126,138,622.06 16.62
Significant changes in the composition of the Company’s profit or sources of profit during the reporting period
? Applicable ? Not applicable
No significant changes in the composition of the Company’s profit or sources of profit during the reporting period.
Composition of Operating Revenue
Unit: RMB Yuan
Current Reporting Period Prior-Year Period
Items % to operating % to operating YoY Change(%）
Amount Amount
revenue revenue
Total operating
revenue
By industry
Pharmaceutical
chemicals
Others 1,228,437,301.15 9.36% 1,085,082,268.32 9.77% 13.21%
By product
Nutrition 8,805,591,681.68 67.07% 7,199,720,687.58 64.86% 22.30%
Aroma chemicals 2,022,263,282.57 15.40% 2,104,560,598.28 18.96% -3.91%
New materials 1,165,989,510.74 8.88% 1,038,207,401.78 9.35% 12.31%
Others 1,135,455,785.90 8.65% 758,144,149.14 6.83% 49.77%
By region
Domestic sales 5,457,466,507.97 41.57% 4,657,675,802.41 41.96% 17.17%
Overseas sales 7,671,833,752.92 58.43% 6,442,957,034.37 58.04% 19.07%
By sales model
Direct selling 9,952,153,084.05 75.80% 8,176,473,106.34 73.66% 21.72%
Agent sales 3,177,147,176.84 24.20% 2,924,159,730.44 26.34% 8.65%
Industries, Products, and Regions That Account for More Than 10% of the Total Operating Revenue or Operating Profit
? Applicable ? Not applicable
Unit: RMB Yuan
Growth
Growth rate of
Gross rate of Growth rate of gross
Items Operating revenue Operating cost operating
rate operating rate
revenue
cost
By industry
Pharmaceutical
chemicals
By product
Nutrition 8,805,591,681.68 4,678,820,058.45 46.87% 22.30% 24.46% -0.92pp
Aroma
chemicals
By region
Growth
Growth rate of
Gross rate of Growth rate of gross
Items Operating revenue Operating cost operating
rate operating rate
revenue
cost
Domestic sales 5,457,466,507.97 3,430,671,277.53 37.14% 17.17% 25.63% -4.23pp
Overseas sales 7,671,833,752.92 3,893,004,183.28 49.26% 19.07% 18.85% 0.10pp
In case the statistical caliber of the Company’s main business data was adjusted during the reporting period, the Company’s main
business data of the preceding period adjusted according to the caliber at the end of the reporting period shall be indicated
? Applicable ? Not applicable
IV. Non-Main Business Analysis
? Applicable ? Not applicable
Unit: RMB Yuan
% to total profit before Whether has
Items Amount Reason for balance
tax continuity
It was mainly due to an
increase in investment
income from associates
Investment income 204,498,489.13 4.35% No
and financial products
during the reporting
period.
It was mainly due to
Gains on changes in changes in fair value of
fair value 65,993,991.83 1.40% forward foreign exchange No
(or less: losses) settlement and sales during
the reporting period.
It was mainly due to
impairment losses arising
from provisions for
Assets impairment loss
-29,423,561.32 -0.63% inventory write-downs and No
(or less: losses)
asset impairment made
during the reporting
period.
It was mainly due to
Non-operating revenue 2,189,167.24 0.05% No
compensation income.
It was mainly due to losses
on retirement of assets and
Non-operating
expenditures
during the reporting
period.
It was mainly due to
government grants
Other income 120,757,490.82 2.57% No
received during the
reporting period.
It was mainly due to an
increase in accounts
Credit impairment loss receivable during the
-34,278,518.19 -0.73% No
(or less: losses) reporting period, which led
to an increase in the
provision for bad debts.
V. Assets and Liabilities Analysis
Unit: RMB Yuan
Current Reporting Period Prior-Year Period Remarks
on
Items % to total % to total Percentage of change
Amount Amount significan
assets assets t changes
Cash and bank
balances
Accounts
receivable
Inventories 4,769,240,242.26 10.22% 4,648,749,467.43 10.19% 0.03pp
Long-term
equity 1,144,592,243.55 2.45% 965,350,549.43 2.12% 0.33pp
investments
Fixed assets 19,538,428,936.53 41.85% 20,298,898,673.14 44.51% -2.66pp
Construction in
progress
Right-of-use
assets
Short-term
borrowings
Contract
liabilities
Long-term
borrowings
Lease liabilities 2,307,786.86 0.00% 2,500,183.66 0.01% -0.01pp
Trading
financial assets
Non current
liabilities due 2,745,428,550.04 5.88% 3,165,413,873.49 6.94% -1.06pp
within one year
?Applicable ?Not applicable
?Applicable ?Not applicable
Unit: RMB Yuan
Accumulated Provision for Amount sold
Gains on changes in Amount purchased
changes in fair impairment during the Other
Items Opening balance fair value in the during the reporting Closing balance
value included made in the reporting changes
current period period
in equity current period period
Financial assets
trading
financial assets
(derivative
financial assets
excluded)
financial assets
Subtotal of
financial assets
Total 2,168,275,092.55 16,751,880.65 -1,385,852.99 400,000,000.00 2,583,641,120.21
Financial
liabilities
Remarks on other changes: None
Whether the Company has significant changes in the measurement attributes of its main assets during the reporting period
?Yes ? No
Unit: RMB Yuan
Closing book Closing carrying
Items Type of restriction Reasons for restrictions
balance amount
Cash and bank
balances
Receivables financing 114,794,927.96 114,794,927.96 Pledged Establish bank acceptance bill pledge
Fixed assets 98,344,608.36 75,698,163.27 Mortgage Mortgaged for bank borrowings
Intangible assets 108,525,632.40 85,879,187.31 Mortgage Mortgaged for bank borrowings
Total 383,490,203.13 338,197,312.95
VI. Investment Status Analysis
? Applicable ? Not applicable
Investments during the reporting period Investments of the preceding period
Percentage of change
(yuan) (yuan)
? Applicable ? Not Applicable
? Applicable ? Not Applicable
(1) investments in securities
? Applicable ? Not Applicable
There is no investment in securities during the reporting period.
(2) Investments in Derivatives
? Applicable ? Not applicable
? Applicable ? Not applicable
Unit:RMB'0,000
Accumul
Gains on Proportion of
ated Amount Amount
changes in investments
Categories Initial changes purchased sold during
Opening fair value Closing to net assets
of derivative investment in fair during the the
balance in the balance at the end of
investments amount value reporting reporting
current the reporting
included period period
period period
in equity
Forward
contracts
Structured
forward 34,800.50 34,800.50 313.29 0 44,717.05 79,517.55 0 0.00%
contracts
Futures 0 0 -102.94 0 1,383.61 205.94 1,177.67 0.03%
Total 160,884.35 160,884.35 5,917.58 0 1,056,363.90 801,156.39 416,091.86 11.87%
Remarks on
whether The Company accounts for the hedge business conducted in accordance with the relevant provisions and guidelines
there were of the Ministry of Finance's "CASBE 22 — Financial Instruments: Recognition and Measurement", "CASBE 23 —
significant Transfer of Financial Assets", and "CASBE 37 — Presentation of Financial Instruments". There were no significant
changes in changes in accounting policies and specific principles of accounting compared with the previous reporting period.
the
accounting
policies and
specific
accounting
principles
for the
Company’s
hedging
business
during the
reporting
period
compared to
the previous
reporting
period
In order to reduce the impact of exchange rate fluctuations on the Company's operating results, the Company carried
out foreign exchange hedging business in accordance with a certain percentage of its export business, with business
Explanation varieties mainly including forward exchange settlement and other foreign exchange derivative products, all of which
of actual were within the expected scale of sales business, and the actual gain on derivatives at the end of the reporting period
profit or loss was 79.5826 million yuan.
for the In order to reduce the impact of material prices fluctuations on the Company's operating results, the Company carried
reporting out material futures hedging business in accordance with a certain percentage of its procurement business,with
period business varieties mainly including the bulk raw materials required for the daily production of the company, all of
which were within the expected scale of procurement business.The loss of futures instruments was 183,000 yuan,and
the floating loss of positions was 1.0294 million yuan.
Explanation The Company conducts foreign exchange hedge business and material futures hedging business to reduce exchange
of hedge rate risk arising from exchange rate fluctuations and material prices risks from material prices fluctuations, aiming to
effectiveness reduce foreign exchange losses and effectively control operating risks.
Fund source Own funds.
Remarks on
risk analysis
and control
measures for
holding
derivative
positions
during the
reporting In order to prevent exchange rate risks and material prices risks, the Company and its subsidiaries carried out
period derivative instrument businesses. The Company and its subsidiaries strictly implemented the Management Measures
(including on Foreign Exchange Hedging Business and Material Futures Hedging Business.
but not
limited to
market risk,
liquidity
risk, credit
risk,
operational
risk, legal
risk, etc.)
In the case
of changes
in market
Fair value gains on derivatives as at period-end amounted to 59.1758 million yuan.
prices or fair
value of
invested
derivatives
during the
reporting
period, the
analysis on
fair value of
derivatives
shall
disclose the
specific
methods for
their uses,
and the
setting of
relevant
assumptions
and
parameters
Conditions
of involved
None
lawsuits (if
applicable)
Disclosure
date of the
Board of
Directors
announceme
April 16, 2026; April 29, 2026
nt for the
approval of
derivatives
investment
(if any)
?Applicable ? Not applicable
The Company had no derivative investments for speculative purposes during the reporting period.
?Applicable ? Not applicable
The Company did not utilize any proceeds from fundraising activities during the reporting period.
VII. Sale of Major Assets and Equities
?Applicable ? Not applicable
There is no sale of major assets during the reporting period.
?Applicable ? Not applicable
VIII. Major Entities Controlled or Invested by the Company
?Applicable ? Not applicable
Major subsidiaries and associates accounting for more than 10% of the Company’s net profit
Unit:RMB'0,000
Name of Main Registere Operating Operating
Categories Total assets Net assets Net profit
companies businesses d capital revenue profit
Shandong
Production
NHU
and sales
Amino- Subsidiary 110,000 1,600,737.62 1,481,128.89 482,580.09 233,858.20 201,264.80
of
acids Co.,
methionine
Ltd.
Shandong
NHU Fine
Production
Chemical
and sales
Science Subsidiary 90,000 599,925.58 465,695.08 198,858.72 75,335.05 61,925.57
of feed
and
additives
Technology
Co., Ltd.
Shandong
Production
NHU
and sales
Pharmaceut Subsidiary 59,000 666,425.60 596,578.94 213,404.44 81,788.04 70,559.90
of
ical Co.,
fragrances
Ltd.
Details of the acquisition and disposal of subsidiaries during the reporting period
?Applicable ? Not applicable
Method for acquisition and disposal of Effect on the overall production,
Name of companies
subsidiaries during the reporting period operation, and performance
NHU Life Science North America LLC Investment and establishment No significant effect at the initial stage.
Shandong Xinshuang'an Biotechnology
Deregistered No significant effect at the initial stage.
Co., Ltd.
Remarks on major holding investees
Not applicable
IX.Structured entities controlled by the Company
?Applicable ? Not applicable
X. The risks faced by the Company and the countermeasures
（1）Macroeconomic Risk
The international environment remains complex and volatile, with intensifying geopolitical rivalry and unresolved regional
conflicts contributing to uncertainties in the global macroeconomy. The Company will accelerate its internationalization process
and expedite its global strategic layout. It will strengthen localized operations and service capabilities to ensure steady progress in
its international expansion. The Company will continue to improve its global innovation, sales, and information centers, and build
diversified innovation chains, supply chains, and customer bases to promote sound and sustainable development.
（2）Industry and Market Competition Risk
The Company faces competition from peers in both domestic and international markets. Competitors continue to enhance their
overall competitiveness in terms of technology, capital, talent reserves, and sales channels. The transition between old and new
production capacity has further intensified market competition, presenting greater challenges to the Company within the industry.
In the future, the Company will continue to strengthen its R&D and innovation capabilities, focus on core strategic directions,
deepen its industrial chain layout, upgrade product technology and service levels, improve management efficiency, enhance value
creation capabilities, and increase its overall competitiveness.
（3）Raw Material Price Fluctuation Risk
Geopolitical conflicts have heightened uncertainties in global raw material supply and increased price volatility. As raw material
costs account for a relatively high proportion of the Company’s total costs, fluctuations in raw material prices may affect the
Company’s profitability. In the future, the Company will mitigate the adverse effects of raw material price fluctuations by
strengthening market research and analysis, establishing strategic partnerships with suppliers, and improving raw material
utilization efficiency.
(4) Risks of Product Market Price Fluctuation
Due to changes in market supply and demand and other factors, the market prices of the Company's products fluctuate, which has
a certain impact on the Company's operating performance. The Company will continuously strengthen market expansion, deepen
its industrial-chain layout, optimize its product architecture, improve quality and efficiency, fully tap potential, enhance product
value and application, and service capabilities. It will also build technological and cost moats and reduce the risks posed by market
price fluctuations.
(5) Exchange Rate and Trade Risks
The current international environment has grown increasingly complex, with rising uncertainty in global geopolitical risks and
more variable trade and tariff policies, which may have a certain impact on the Company's sales revenue and profitability. Going
forward, the Company will strengthen market assessment, closely monitor changes in the international situation, and mitigate risks
through the use of hedge instruments and by advancing the Company’s international market expansion, striving to consolidate the
Company’s international market position and actively explore new sources of economic growth.
(6) Risks of Changes in Environmental Protection Policies
With the increased social awareness of environmental protection, the promotion of the ecological civilization construction of the
CPC Central Committee, and the strategic goal of "carbon emission peak and carbon neutrality", the requirements for energy
conservation, emission reduction, safety, and environmental protection in the chemical and pharmaceutical manufacturing industry
in which the Company operates are stricter than before. The Company will operate with higher standards, fully integrate ESG and
carbon reduction requirements into the management framework, and explore more environmentally friendly ways of production to
achieve sustainable development.
XI. Development and implementation of market value management system and valuation
enhancement plan
Whether the Company has formulated a market value management system.
?Yes ? No
Whether the Company has disclosed the valuation enhancement plan.
?Yes ? No
The Company considered and passed the Market Value Management System at the Eleventh Meeting of the Ninth Session of the
Board of Directors of the Company held on April 11, 2025, which specifies the institutions and responsibilities of market value
management, the main methods of market value management, the monitoring and early warning mechanism and the contingency
measures, etc., as detailed in the announcement of the Company published on the CNINFO (http://www.cninfo.com.cn) on April
XII. Implementation of the “Quality-Return dual improvement” action plan
Whether the Company disclosed the “quality-return dual improvement” action plan.
?Yes ? No
In line with the guiding principles set forth at the meeting of the Political Bureau of the CPC Central Committee to “revitalize the
capital market and boost investor confidence,” and at the State Council executive meeting to “vigorously enhance the quality and
investment value of listed companies, and adopt more effective measures to stabilize the market and bolster confidence,” and with
a view to safeguarding the rights and interests of all shareholders, strengthening investor confidence, and promoting the
Company’s long-term sustainable development, the Company disclosed the Announcement on the Action Plan for “Dual
Enhancement of Quality and Return” (2024-002) on March 9, 2024. The Action Plan focuses on four key areas: “Innovation?
Driven Development and Core Business Excellence,” “Contributor? Oriented Approach and Sharing the Fruits of Development,”
“Deepening Corporate Governance and Enhancing Standardized Operations,” and “Compliant Information Disclosure and Sincere
Two? Way Communication.”
During the reporting period, the Company actively advanced and implemented the “Quality and Return Dual Enhancement”
Action Plan, continued to deepen the execution of various measures, consolidated and improved its operational quality and
governance standards, and placed strong emphasis on shareholder returns and the communication of corporate value. Remarkable
results have been achieved in multiple aspects. For details, please refer to the Announcement on the Implementation Progress of
the “Quality and Return Dual Enhancement” Action Plan (2026-036) published by the Company on August 20, 2026 in designated
information disclosure media and on the CNINFO（(http://www.cninfo.com.cn).
Section IV Corporate Governance, Environmental and Society
I.Changes of directors and senior executives
?Applicable ? Not applicable
The Company’s directors and senior executives remains unchanged during the current reporting period, please refer
to the 2025 Annual Report for details.
II. Profit distribution and conversion of capital reserve into share capital
?Applicable ? Not applicable
Bonus Shares per 10 shares (shares) 0
Dividends per 10 shares (yuan) (tax included) 2
Total Shares as Base for Distribution Plan (shares) 3,068,717,398
Cash Dividend Amount (yuan, pre-tax) 613,743,479.60
Cash Distributed via Other Methods (e.g., Share Repurchase) (yuan) 0
Total Cash Distribution (Including Other Methods) (yuan) 613,743,479.60
Distributable Profit (yuan) 5,826,201,879.72
Proportion of total cash dividends (including those by other methods) to total profit distribution 100%
Cash Dividend Policy Requirement
For companies in the growth phase with significant capital expenditure arrangements, the cash dividend ratio shall account for at least
Details on proposals on profit distribution or conversion of capital reserve into share capital
The profit distribution proposal reviewed and approved by the Board of Directors at this meeting is as follows: Based tentatively on
repurchased shares held in the special repurchase account, a cash dividend of RMB 2.00 (tax inclusive) per 10 shares will be distributed
to all shareholders. No bonus shares (tax inclusive) will be issued, and no capitalization of capital reserves will be made.
Note: The Company currently has a total share capital of 3,073,421,680 shares, of which 4,704,282 shares are held in the special
repurchase account. In accordance with the Rules on Share Repurchases by Listed Companies, shares held in the special repurchase
account are not entitled to profit distribution or capitalization of capital reserve.
If the total share capital of the Company changes prior to the implementation of the distribution plan due to factors such as conversion
of convertible bonds, share repurchases, exercise of equity incentive options, or listing of new shares from refinancing, the total amount
to be distributed will be adjusted accordingly while the distribution ratio per share remains unchanged.
III. Implementation of equity incentive plans, employee stock ownership plans or other
employee incentive programs
?Applicable ? Not applicable
Not applicable.
?Applicable ? Not applicable
All active employee stock ownership plans during the reporting period
Proportion to total
Number of Total Sources of fund to
Scope of employees Changes share capital of
employees shares held implement the plan
the Company
The fifth phase of employee stock
Legal remuneration of
ownership plan：directors, senior
the employees, self-
executives, eligible regular
raised funds and other
employees of the Company and its 602 21,454,310 N/A 0.70%
methods permitted by
holding subsidiaries or wholly-
laws and administrative
owned subsidiaries who meet the
regulations
criteria
Shareholdings of directors and senior executives in the employee stock ownership plan during the reporting period
Number of shares held Number of shares
Proportion to total share
Name Position at the beginning of the held at the end of the
capital of the Company
reporting period reporting period
The fifth phase of employee
stock ownership plan:Hu
Baifan, Hu Baishan, Shi Directors and
Guanqun, Wang Xuewen, senior 0 5,481,601 0.18%
Wang Zhengjiang, Zhou executives
Guiyang, Yu Hongwei, Zhang
Liying
Changes in asset management agency during the reporting period
?Applicable ? Not applicable
Changes in equity during the reporting period due to disposal of shares by holders
?Applicable ? Not applicable
Exercise of shareholders’ rights during the reporting period
Pursuant to the Fifth Phase of Employee Stock Ownership Plan , such plan voluntarily waives the voting rights of
holding shares in the Board of Shareholders of the Company, while shares acquired through the employee stock
ownership plan carry no voting rights in the Board of Shareholders. During the reporting period, the employee stock
ownership plan did not exercise the voting rights of holding shares in the Board of Shareholders, but still enjoyed the
right to profit distribution.
Other relevant situations and remarks of the employee stock ownership plan during the reporting period
?Applicable ? Not applicable
Change in membership of the management committee of employee stock ownership plan
?Applicable ? Not applicable
The second holders’ meeting of the Company’s Fifth Phase Employee Stock Ownership Plan was held on June 23,
committee members of the Fifth Phase Employee Stock Ownership Plan of Zhejiang NHU Co., Ltd., and in order to
better safeguard the overall interests of the employee stock ownership plan, this holders’ meeting elected Ms. Wang
Xiaobi as a member of the management committee of the Fifth Phase Employee Stock Ownership Plan. Together
with Ms. Xi Chun, Mr. Cao Ying, Mr. Yu Weiguo and Ms. Zeng Shuying elected at the first holders’ meeting, they
jointly form the management committee of the Company’s Fifth Phase Employee Stock Ownership Plan, with a term
of office equal to the duration of the Company’s Fifth Phase Employee Stock Ownership Plan.
Financial impact of employee stock ownership plan on the Company in the reporting period and related accounting
treatments
?Applicable ? Not applicable
Termination of employee stock ownership plan during the reporting period
?Applicable ? Not applicable
Other Notes:
The number of shares held by directors and senior management in the employee stock ownership plan is calculated
based on the proportion of the holders’ shares to the total shares of the employee stock ownership plan.
?Applicable ? Not applicable
IV. Environmental Information Disclosure
Whether the listed company and its major subsidiaries are included in the list of enterprises required to disclose environmental
information in accordance with the law
?Applicable ? Not applicable
Number of enterprises included in the list
of enterprises required to disclose
environmental information in accordance
with the law (number of companies)
No. Company name Reference index for environmental information disclosure reports
Zhejiang Enterprise Environmental Information Disclosure System, website:
https://mlzj.sthjt.zj.gov.cn/eps/index/enterprise-
list?input=%E6%B5%99%E6%B1%9F%E6%96%B0%E5%92%8C%E6%88%90%E8%8
Zhejiang Enterprise Environmental Information Disclosure System, website:
https://mlzj.sthjt.zj.gov.cn/eps/index/enterprise-
Shangyu NHU Bio-Chem Co.,
Ltd.
C%E5%8F%B8&area=
Zhejiang Enterprise Environmental Information Disclosure System, website:
Zhejiang NHU Pharmaceutical https://mlzj.sthjt.zj.gov.cn/eps/index/enterprise-
Co., Ltd. list?input=%E6%B5%99%E6%B1%9F%E6%96%B0%E5%92%8C%E6%88%90%E8%8
D%AF%E4%B8%9A%E6%9C%89%E9%99%90%E5%85%AC%E5%8F%B8&area=
Zhejiang Enterprise Environmental Information Disclosure System, website:
https://mlzj.sthjt.zj.gov.cn/eps/index/enterprise-
Zhejiang NHU Specialty
Materials Co., Ltd.
C%E5%8F%B8&area=
Zhejiang Enterprise Environmental Information Disclosure System, website:
Shaoxing Yuchen New https://mlzj.sthjt.zj.gov.cn/eps/index/enterprise-
Materials Co., Ltd. list?input=%E7%BB%8D%E5%85%B4%E8%A3%95%E8%BE%B0%E6%96%B0%E6%
Shandong Enterprise Environmental Information Disclosure System, website:
Shandong NHU
Pharmaceutical Co., Ltd.
?comDetailFrom=0&id=91370700665726586C
Shandong Enterprise Environmental Information Disclosure System, website:
Shandong NHU Amino-acids
Co., Ltd.
?comDetailFrom=0&id=91370700068724427K
Shandong NHU Fine Chemical Shandong Enterprise Environmental Information Disclosure System, website:
Ltd. ?comDetailFrom=0&id=91370700MA3DJKFLX8
Shandong NHU Fine Chemical Shandong Enterprise Environmental Information Disclosure System, website:
Ltd. Vitamins Branch ?comDetailFrom=0&id=91370700MAE7CDAE8F
Shandong Enterprise Environmental Information Disclosure System, website:
Weifang Haicheng Thermal
Power Co., Ltd.
?comDetailFrom=0&id=91370700MA3M9W2793
Heilongjiang Enterprise Environmental Information Disclosure System, website:
Heilongjiang Xinhao Thermal
Power Co., Ltd.
list?input=%E9%BB%91%E9%BE%99%E6%B1%9F%E6%96%B0%E6%98%8A&area=
Heilongjiang Enterprise Environmental Information Disclosure System, website:
Heilongjiang NHU http://111.40.190.123:8082/eps/index/enterprise-
Biotechnology Co., Ltd. list?input=%E9%BB%91%E9%BE%99%E6%B1%9F%E6%96%B0%E5%92%8C%E6%8
V. Social responsibilities
Not applicable
Section V Significant Events
I. Commitment performance fulfilled during the reporting period and overdue commitments
as of the end of the reporting period by parties related to commitments including the actual
controller of the Company, shareholders, related parties, acquirers and the Company itself.
?Applicable ? Not applicable
Parties making Types of Content of Time of Term of
Commitments Performance
commitments commitments commitments commitment commitment
Commitments
to shares None None None None None
reform
Commitments
made in reports
on acquisition None None None None None
and changes in
equity
Commitments
made in asset None None None None None
restructuring
The signing of
"Commitment
on No
NHU Holding Engagement in
Group Co., Ltd. Horizontal
and Zhang Commitments Competition"
Pingyi, Shi on horizontal and
Cheng, Yuan competition, commitments
Strictly
Yizhong, Hu related party on no June 25, 2004 Long-term
performed
Baishan, Shi transactions engagement in
Guanqun, and occupation business
Wang Xuewen, of funds activities result
Cui Xinrong, in horizontal
Wang Xulin competition
with operations
Commitments of the Company
made in IPO or after listing
refinancing The Company’s
directors, senior
management
committed to
Hu Baifan; Hu perform their
Baishan; Shi duties faithfully
Guanqun; and diligently
Wang Xuewen; to safeguard the January 12, Strictly
Long-term
Cui Xinrong; legitimate 2017 performed
Wang rights and
Zhengjiang; interests of the
Zhou Guiyang Company and
shareholders,
and make the
following
commitments
Parties making Types of Content of Time of Term of
Commitments Performance
commitments commitments commitments commitment commitment
in accordance
with the
relevant
provisions of
the CSRC for
the full
performance of
measures on
filling
immediate
returns: 1. not
to transfer
benefits to
other entities or
individuals
without
compensation
or on unfair
terms, and not
to use other
means to harm
benefits of the
Company; 2. to
impose
restrictions on
duty
consumption of
member of the
Board of
Directors and
senior
management; 3.
not to use
assets of the
Company to
engage in
investment or
consumption
activities not
related to duty
performance; 4.
to link
remuneration
system
formulated by
the Board of
Directors or
remuneration
committee to
the
implementation
of measures on
filling
immediate
returns; 5. to
Parties making Types of Content of Time of Term of
Commitments Performance
commitments commitments commitments commitment commitment
link vesting
conditions of
equity incentive
to be published
in the future to
the
implementation
of measures on
filling
immediate
returns.
Not to interfere
in the
Company’s
business and
management
activities in
excess of
Hu Baifan; authority; not to
January 12, Strictly
NHU Holding encroach on the Long-term
Group Co., Ltd. benefits of the
Company; to
perform
measures on
filling
immediate
returns in a
practical way.
Commitments
to equity None None None None None
incentive
Other
commitments
to minority None None None None None
shareholders of
the Company
Other
None None None None None
commitments
Whether
commitments
Yes
are performed
on time
If commitment
performance is
not fulfilled on
time, please
Not applicable
explain detailed
reasons for it
and the next
work plans.
II. Non-operating occupation of funds over listed companies by controlling shareholders and
other related parties
?Applicable ? Not applicable
There is no non-operating occupation of funds over listed companies by controlling shareholders and other related
parties during the reporting period.
III. Illegal external guarantees
?Applicable ? Not applicable
There is no illegal external guarantee during the reporting period.
IV.Engagement and dismissal of accounting firms
Whether the semi-annual report has been audited or not
?Yes ? No
The semi-annual report has not been audited.
V. Statements by the Board of Directors on the “Modified Auditor’s Report” issued by the
accounting firm during the reporting period
?Applicable ? Not applicable
VI. Explanations by the Board of Directors on the “Modified Auditor’s Report” issued by the
accounting firm last year
?Applicable ? Not applicable
VII. Matters related to bankruptcy and restructuring
?Applicable ? Not applicable
There are no matters related to bankruptcy and restructuring during the reporting period.
VIII. Lawsuits
Significant lawsuits and arbitration
?Applicable ? Not applicable
There is no significant lawsuit and arbitration during the reporting period.
Other lawsuits
?Applicable ? Not applicable
IX. Penalties and rectification
?Applicable ? Not applicable
There is no instance of penalty or rectification for the Company during the reporting period.
X. Integrity of the Company, its controlling shareholders and the actual controller
?Applicable ? Not applicable
XI. Significant related party transactions
?Applicable ? Not applicable
There is no related party transaction relevant to daily operations during the reporting period.
?Applicable ? Not applicable
There is no related party transaction in purchase or sale of assets or equities during the reporting period.
?Applicable ? Not applicable
There is no related party transaction in joint external investments during the reporting period.
?Applicable ? Not applicable
There is no related creditor’s rights or debts during the reporting period.
?Applicable ? Not applicable
There is no business of deposits, loans, credit granting or other financial businesses between the Company and its
related financial companies.
parties
?Applicable ? Not applicable
There is no business of deposits, loans, credit granting or other financial businesses between financial companies
controlled by the Company and the Company’s related parties.
?Applicable ? Not applicable
There is no other material connected transactions during the reporting period.
XII. Significant contracts and performance
(1) Trusteeship
?Applicable ? Not applicable
There is no trusteeship during the reporting period.
(2) Contracting
?Applicable ? Not applicable
There is no contracting during the reporting period.
(3) Leases
?Applicable ? Not applicable
There is no lease during the reporting period.
?Applicable ? Not applicable
Unit:RMB'0,000
External guarantees by the Company and its subsidiaries to third parties (guarantees to subsidiaries are excluded)
Announcem
Actual Whether
ent date of Actual Counter Whether
Guaranteed Amount commenc Types of Collateral Period of the
disclosure amount guarantees (if guarantee for
parties guaranteed ement guarantees s (if any) guarantee guarantee is
of amount guaranteed any) related parties
date mature
guaranteed
None
Total amount of actual external
Total amount of external guarantees
approved during the reporting period (A1)
(A2)
Total amount of external guarantees Total balance of actual external
approved at the end of the reporting period 0 guarantees at the end of the reporting 0
(A3) period (A4)
The Company’s guarantees to subsidiaries
Announcem
Actual Whether
ent date of Actual Counter Whether
Guaranteed Amount commenc Types of Collateral Period of the
disclosure amount guarantees (if guarantee for
parties guaranteed ement guarantees s (if any) guarantee guarantee is
of amount guaranteed any) related parties
date mature
guaranteed
Xinchang Joint and
NHU 12/16/20 several 2021.12.16-
Vitamins 21 liability 2026.12.25
Co., Ltd. guarantee
Zhejiang Joint and
NHU 6/24/202 several 2022.06.24-
Pharmaceuti 2 liability 2027.06.23
cal Co., Ltd. guarantee
Xinchang Joint and
NHU 10/14/20 several 2022.10.14-
Vitamins 22 liability 2027.10.14
Co., Ltd. guarantee
Shandong
Joint and
NHU Fine
Chemical 5/20/2023 58,600 58,600 0 0 No No
Science and
guarantee
Technology
Co., Ltd.
NHU (Hong Joint and
Kong) 11/20/20 several 2023.11.08-
Trading Co., 23 liability 2026.11.08
Ltd. guarantee
NHU (Hong Joint and
Kong) 8/01/202 several 2024.08.01-
Trading Co., 4 liability 2027.08.01
Ltd. guarantee
NHU (Hong Joint and
Kong) 5/19/202 several 2025.05.19-
Trading Co., 5 liability 2026.05.08
Ltd. guarantee
NHU (Hong Joint and
Kong) 6/13/202 several 2025.06.13-
Trading Co., 5 liability 2026.02.26
Ltd. guarantee
Zhejiang Joint and
NHU Import 7/08/202 several 2025.07.08-
& Export 5 liability 2026.07.07
Co., Ltd. guarantee
NHU (Hong Joint and
Kong) 8/06/202 several 2025.08.06-
Trading Co., 5 liability 2026.05.15
Ltd. guarantee
NHU (Hong Joint and
Kong) 10/28/20 several 2025.10.28-
Trading Co., 25 liability 2026.03.04
Ltd. guarantee
NHU (Hong Joint and
Kong) 11/27/20 several 2025.11.27-
Trading Co., 25 liability 2026.04.08
Ltd. guarantee
NHU (Hong Joint and
Kong) 01/22/20 several 2026.01.22-
Trading Co., 26 liability 2026.06.04
Ltd. guarantee
NHU (Hong Joint and
Kong) 03/03/20 several 2026.03.03-
Trading Co., 26 liability 2026.07.14
Ltd. guarantee
NHU (Hong Joint and
Kong) 06/10/20 several 2026.06.10-
Trading Co., 26 liability 2027.06.20
Ltd. guarantee
NHU (Hong Joint and
Kong) 06/15/20 several 2026.06.15-
Trading Co., 26 liability 2026.09.02
Ltd. guarantee
Total amount of guarantees Total amount actually
approved for subsidiaries guaranteed for subsidiaries
during the reporting period during the reporting period
(B1) (B2)
Total amount of guarantees Total balance of actual
approved for subsidiaries external guarantees for
at the end of the reporting subsidiaries at the end of
period (B3) the reporting period (B4)
Guarantees by subsidiaries to subsidiaries
Announcem
Actual Whether
ent date of Actual Counter Whether
Guaranteed Amount commenc Types of Collateral Period of the
disclosure amount guarantees (if guarantee for
parties guaranteed ement guarantees s (if any) guarantee guarantee is
of amount guaranteed any) related parties
date mature
guaranteed
None
Total amount of guarantees Total amount actually
approved for subsidiaries guaranteed for subsidiaries
during the reporting period during the reporting period
(C1) (C2)
Total amount of guarantees Total balance of actual
approved for subsidiaries external guarantees for
at the end of the reporting subsidiaries at the end of
period (C3) the reporting period (C4)
Total amount guaranteed by the Company (namely, the sum of the above three items)
Total amount of guarantees Total amount actually
approved during the guaranteed during the
reporting period reporting period
(A1+B1+C1) (A2+B2+C2)
Total amount of guarantees Total balance of actual
approved at the end of the guarantees at the end of the
reporting period reporting period
(A3+B3+C3) (A4+B4+C4)
Proportion of the total guarantee balance (A4+B4+C4)
to net assets of the Company
Including:
Balance of guarantees for shareholders, the actual
controller and its related parties (D)
Balance of debt guarantee directly or indirectly for
guaranteed parties with debt to asset ratio exceeding 157,425.27
The amount of the total amount guaranteed exceeding
Total amount guaranteed of three items above
(D+E+F)
Remarks on unexpired guarantee contracts with
guarantee liabilities incurred or evidence indicating the
None
possibility of undertaking joint liquidation liabilities
during the reporting period (if applicable)
Remarks on external guarantee in violation of
None
provisions (if applicable)
Specific description of the use of composite guarantees: None
? Applicable ? Not applicable
Unit:RMB'0,000
Balance of entrusted
Amount overdue and not
Product category Risk characteristics financing during the reporting
recovered
period
Low risk type with high
Bank financial products 255,000 0
security and good liquidity
Details of the Company's activities, as the sole entruster, in commissioning financial institutions to conduct asset management, or
investments in high-risk entrusted wealth-management products that have lower safety and poorer liquidity
? Applicable ? Not applicable
? Applicable ? Not applicable
There is no other significant contract during the reporting period.
XIII. Research, Communications, and Interviews Received by the Company During the
Reporting Period
? Applicable ? Not applicable
Major contents
Index for
of the
basic
Date of Way of Type of conversation
Reception site Visitors information of
reception reception visitor and
the
information
investigation
provided
Please refer to
the Investor
Relations
Introduce the Activities
Shanghai Pudong operating Record Sheet
Participating organizations:
January Shangri-La Hotel; conditions of on January 22-
Field For details, please refer to
research the disclosures on CNINFO
(http://www.cninfo.com.cn).
Meeting Room questions from the website
investors http://irm.cnin
fo.com.cn/sses
sgs/S002001
for details.
Please refer to
the Investor
Relations
Introduce the Activities
operating Record Sheet
China World Participating organizations:
conditions of on March 18-
March 18- Hotel, Beijing; Field For details, please refer to
Institution the Company 19, 2026,
and answer published at
Wuhan (http://www.cninfo.com.cn).
questions from the website
investors http://irm.cnin
fo.com.cn/sses
sgs/S002001
for details.
Major contents
Index for
of the
basic
Date of Way of Type of conversation
Reception site Visitors information of
reception reception visitor and
the
information
investigation
provided
Please refer to
the Investor
Relations
Shenzhen Stock Introduce the Activities
Exchange, Network operating Record Sheet
Participating organizations:
"Interactive Easy" platform conditions of on April 29,
April 29, For details, please refer to
platform, "Cloud online Others the Company 2026,
Interview": communicati and answer published at
(http://www.cninfo.com.cn).
http://irm.cninfo.c on questions from the website
om.cn investors http://irm.cnin
fo.com.cn/sses
sgs/S002001
for details.
Please refer to
the Investor
Relations
Introduce the Activities
operating Record Sheet
Company Participating organizations:
conditions of on May 15,
May 15, Headquarters 2nd Field For details, please refer to
Institution the Company 2026,
and answer published at
Hall. (http://www.cninfo.com.cn).
questions from the website
investors http://irm.cnin
fo.com.cn/sses
sgs/S002001
for details.
XIV. Other significant matters
? Applicable ? Not applicable
The Company held the 16th meeting of the Ninth Board of Directors and the 11th meeting of the Ninth Supervisory Board on
December 10, 2025, and the third extraordinary general meeting of 2025 on December 26, 2025, at which it reviewed and approved
the employee stock ownership plan-related proposals, including the Draft of the Fifth Phase Employee Stock Ownership Plan of
Zhejiang NHU Co., Ltd. and Its Summary, and agreed to implement the Fifth Phase Employee Stock Ownership Plan. The Fifth
Phase Employee Stock Ownership Plan was actually subscribed by 602 participants, with actual subscription funds of RMB 259.49
million. The controlling shareholder, NHU Holding Group Co., Ltd., provided a matching loan of RMB 259.49 million, and the total
funds of the Fifth Phase Employee Stock Ownership Plan amounted to RMB 518.98 million. As of January 26, 2026, the Company
received the Securities Transfer Registration Confirmation issued by the Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited. The 21,454,310 shares of the Company held in the Company’s special repurchase securities account
were transferred by way of non-trading transfer to the dedicated securities account of “Zhejiang NHU Co., Ltd. – Fifth Phase
Employee Stock Ownership Plan” on January 23, 2026, accounting for 0.6981% of the Company’s total share capital, at a transfer
price of RMB 24.19 per share. The lock-up period for the underlying shares acquired by the Fifth Phase Employee Stock Ownership
Plan is 12 months, calculated from the date on which the Company announced the registration and transfer of the last batch of
underlying shares to the name of the Plan, i.e., from January 27, 2026 to January 26, 2027. The duration of the underlying shares
acquired under this Employee Stock Ownership Plan is 24 months, calculated from the date on which the Company announced the
registration and transfer of the last batch of underlying shares to the name of the Plan. For details, please refer to the relevant
announcements published by the Company on the designated information disclosure media and CNINFO
(http://www.cninfo.com.cn).
The second holders’ meeting of the Company’s Fifth Phase Employee Stock Ownership Plan was held on June 23, 2026 by means of
communication voting. In view of the work adjustment of Ms. Liu Fanglu, one of the management committee members of the Fifth
Phase Employee Stock Ownership Plan of Zhejiang NHU Co., Ltd., and in order to better safeguard the overall interests of the
employee stock ownership plan, this holders’ meeting elected Ms. Wang Xiaobi as a member of the management committee of the
Fifth Phase Employee Stock Ownership Plan. Together with Ms. Xi Chun, Mr. Cao Ying, Mr. Yu Weiguo and Ms. Zeng Shuying
elected at the first holders’ meeting, they jointly form the management committee of the Company’s Fifth Phase Employee Stock
Ownership Plan, with a term of office equal to the duration of the Company’s Fifth Phase Employee Stock Ownership Plan.. For
details, please see the Announcement on Adjustment of Members of the Management Committee for the Fifth Phase Employee Stock
? ownership Plan disclosed on June 24, 2026 via designated information disclosure media and CNINFO (http://www.cninfo.com.cn).
At the 20th meeting of the Ninth Board of Directors held on June 23, 2026, the Company reviewed and approved the Proposal on the
Share Repurchase Plan, agreeing to use its own funds to repurchase part of the Company’s publicly issued shares through centralized
bidding transactions, for the purpose of implementing equity incentive plans or employee stock ownership plans. The repurchase
amount is in the range of RMB 300 million to RMB 600 million, and the repurchase price shall not exceed RMB 45.50 per share.
The specific number of repurchased shares and its proportion to the total share capital shall be subject to the actual number of shares
repurchased upon expiration of the repurchase period. For details, please refer to the Announcement on the Company’s Share
Repurchase Plan(2026-027) published by the Company on the designated information disclosure media and CNINFO
(http://www.cninfo.com.cn).
As of June 30, 2026, the Company had not yet commenced the share repurchase. For details, please refer to the Announcement on
the Progress of Share Repurchase and the First Share Repurchase of the Company (2026-031) published by the Company on the
designated information disclosure media and CNINFO (http://www.cninfo.com.cn).
XV. Significant matters of the subsidiaries of the Company
? Applicable ? Not applicable
Section VI Movements in Share Capital and Shareholders
I. Movements in Share
Unit: Share
Before Movements After
Issue Conversion
Items of Bonus of capital
Quantity % to total Others Subtotal Quantity % to total
new shares reserve
shares into shares
I. Restricted
shares
owned
shares
state-owned
legal
persons
other
domestic
parties
Including:
Held by
domestic
legal
persons
Held by
domestic
natural
persons
overseas
parties
Including:
Held by
overseas
legal
persons
Held by
overseas
natural
persons
II.
Unrestricted 3,036,861,928 98.81% -9,000 -9,000 3,036,852,928 98.81%
shares
Before Movements After
Issue Conversion
Items of Bonus of capital
Quantity % to total Others Subtotal Quantity % to total
new shares reserve
shares into shares
ordinary
shares
Domesticall
y listed
foreign
shares
listed
foreign
shares
III. Total
shares
Reason for movements
? Applicable ? Not applicable
During the reporting period, there is no change in the total share capital of the Company. As the supervisory board had been
cancelled in the previous period, the lock-up shares attributable to the resigned supervisors (as part of the senior management lock-
up shares) changed accordingly, resulting in corresponding changes in restricted shares.
Approval on movements in shares
? Applicable ? Not applicable
Transfer of shares
? Applicable ? Not applicable
Actual progress of share repurchase
? Applicable ? Not applicable
The 20th meeting of the Ninth Board of Directors of the Company held on June 23, 2026, deliberated and approved the Proposal
on the Share Repurchase Scheme. It was approved that the Company would repurchase part of its publicly held shares using its
own funds through centralized bidding transactions, for the purpose of implementing an equity incentive plan or an employee
stock ownership plan, with the total repurchase amount ranging from RMB 300 million to RMB 600 million. As of June 30, 2026,
the Company had not yet commenced the implementation of the share repurchase.
Implementation progress of shareholding reduction for shares repurchased through centralized bidding
? Applicable ? Not applicable
Effect of changes in shares on financial indicators of preceding year and preceding period such as basic EPS and diluted EPS, net
assets per share attributable to shareholders of ordinary shares
? Applicable ? Not applicable
Other contents the Company considered as necessary or securities regulatory institutions required disclosure
? Applicable ? Not applicable
? Applicable ? Not applicable
Unit: Share
Opening Decrease due to Reason for Date of
Shareholders Increase Closing balance
balance unlocking restriction unlocking
Managed in
accordance
with the
Executive lock- relevant
Others 0 0 9,000 9,000
in provisions on
locked-up
shares of senior
executives.
Total 0 0 9,000 9,000 -- --
Note: The shares listed under the “Others” column of shareholders in the table represent the shares held by the company’s former
supervisors.
II. Issuance and listing of securities
? Applicable ? Not applicable
III. Number of shareholders of the Company and their shareholding conditions
Unit: Share
Total number of ordinary Total number of preferred shareholders
shareholders at the end of 78,891 whose voting rights were restored at the 0
the reporting period end of the reporting period
Shareholders with holding proportion over 5% or the top 10 shareholders with largest holding proportions
Quantity of Shares pledged, marked or frozen
Nature of Movements Quantity of Quantity of
Holding ordinary shares at
Shareholders shareholder during the restricted unrestricted
proportion the end of the Condition Quantity
s reporting period shares shares
reporting period
Domesti
c non-
NHU Holding state- 1,539,232,43
Group Co., Ltd. owned 1
legal
person
Hong Kong
Securities Oversea
Clearing s legal 6.02% 184,907,234 5,973,646 0 184,907,234 N/A 0
Company person
Limited
National Social
Security Fund
Others 0.87% 26,600,007 -1,400,073 0 26,600,007 N/A 0
No.503
Portfolio
China
Construction
Bank
Others 0.81% 24,983,011 4,460,629 0 24,983,011 N/A 0
Corporation - E
Fund CSI 300
Healthcare ETF
Zhejiang NHU
Co., Ltd. –
Others 0.70% 21,454,310 21,454,310 0 21,454,310 N/A 0
Fifth Employee
Stock
Ownership Plan
Domesti
Hu Baishan c natural 0.47% 14,595,929 0 10,946,947 3,648,982 N/A 0
person
Domesti
Hu Baifan c natural 0.45% 13,922,998 0 10,442,248 3,480,750 N/A 0
person
China Universal
Asset
Management
Co., Ltd. – Others 0.38% 11,765,192 11,765,192 0 11,765,192 N/A 0
Social Security
Fund Portfolio
Zhejiang Domesti
Baofang c non-
state-
Printing and 0.36% 11,048,410 3,982,200 0 11,048,410 N/A 0
owned
Dyeing Co., legal
Ltd. person
Domesti
Yu Baomu c natural 0.36% 10,934,700 385,800 0 10,934,700 N/A 0
person
Strategic investors or
ordinary legal persons that
became one of the top 10 N/A
shareholders due to the
allotment of new shares
The above shareholder, Hu Baifan is the chairman, general manager, and actual controller of NHU
Holding Group Co., Ltd.; Hu Baishan is a director of NHU Holding Group Co., Ltd. Hu Baifan and
Remarks on relationships or
Hu Baishan are brothers. Hu Baifan and Hu Baishan have an affiliated relationship with Zhejiang
concerted action between
NHU Co., Ltd. – Fifth Employee Stock Ownership Plan due to their participation in the
the top 10 shareholders with
largest holding proportions employee stock ownership plan. The Company does not know whether other shareholders have
relationships and whether they are persons acting in concert as defined in “Administration of the
Takeover of Listed Companies Procedures”.
Remarks on proxy voting
and waiver of voting right N/A
of the above shareholders
Special remarks on top 10
shareholders with special N/A
repurchase accounts
Top 10 shareholders with unrestricted shares (excluding shares lent through transfer facility and shares locked up by executives)
Quantity of unrestricted shares at the end of the Category of shares
Shareholders
reporting period Category Quantity
RMB ordinary
NHU Holding Group Co.,
Ltd. shares
RMB ordinary
Hong Kong Securities
Clearing Company Limited shares
RMB ordinary
National Social Security
Fund No.503 Portfolio shares
China Construction Bank RMB ordinary
Corporation - E Fund CSI 24,983,011 24,983,011
shares
Zhejiang NHU Co., Ltd. – RMB ordinary
Fifth Employee Stock 21,454,310 21,454,310
shares
Ownership Plan
China Universal Asset RMB ordinary
Management Co., Ltd. – 11,765,192 11,765,192
shares
Social Security Fund
Portfolio 16032
RMB ordinary
Zhejiang Baofang Printing
and Dyeing Co., Ltd. shares
RMB ordinary
Yu Baomu 10,934,700 10,934,700
shares
Industrial and Commercial
Bank of China Limited – RMB ordinary
China Universal Value 10,859,600 10,859,600
shares
Selected Mixed Securities
Investment Fund
RMB ordinary
Wu Wenping 10,512,214 10,512,214
shares
Remarks on relationships or
concerted action between
the top 10 shareholders with
Hu Baifan is the chairman, general manager, and actual controller of NHU Holding Group Co.,
unrestricted shares, and
Ltd.; Hu Baishan is a director of NHU Holding Group Co., Ltd. The Company does not know
between the top 10
whether other shareholders have relationships and whether they are persons acting in concert as
shareholders with
defined in “Administration of the Takeover of Listed Companies Procedures”.
unrestricted shares and the
top 10 shareholders with
largest holding proportions.
Zhejiang Baofang Printing and Dyeing Co., Ltd. holds 7,066,210 shares through the customer
Remarks on top 10
credit transaction collateral securities account of Guotai Haitong Securities Co., Ltd.; Yu Baomu
shareholders of ordinary
holds 10,718,900 shares through the customer credit transaction collateral securities account of
shares participating in
Guotai Haitong Securities Co., Ltd.; Wu Wenping holds 10,512,214 shares through the customer
securities margin trading
credit transaction collateral securities account of Caitong Securities Co., Ltd.
The participation of shareholders holding more than 5% of shares, the top 10 shareholders and the top 10 shareholders with
unlimited shares in circulation in lending of shares in the transfer and financing business
? Applicable ? Not applicable
Top 10 shareholders and top 10 shareholders with unlimited shares outstanding Change from the previous period due to
lending/returning of convertible bonds
? Applicable ? Not applicable
Did the top 10 common shareholders and the top 10 unrestricted common shareholders of the company engage in any agreed
repurchase transactions during the reporting period
? Yes ? No
The top 10 common shareholders and the top 10 unrestricted common shareholders of the company did not engage in any agreed
repurchase transactions during the reporting period.
IV.Changes in shareholdings of directors and senior executives
? Applicable ? Not applicable
The shareholdings of the company’s directors and senior management personnel did not change during the reporting period. For
details, please refer to the 2025 Annual Report.
V. Changes in controlling shareholders or actual controllers
If the Company has previously disclosed that its actual controller is planning a change of control but the change has not yet been
completed, please describe the progress of the change of control.
? Applicable ? Not applicable
Changes of holding shareholders during the reporting period
? Applicable ? Not applicable
The Company has no changes of holding shareholders during the reporting period.
Changes of actual controller within the reporting period
? Applicable ? Not applicable
The Company has no changes in actual controller within the reporting period.
VI. Details of Preferred Stock
? Applicable ? Not applicable
The Company has no preferred shares during the reporting period.
Section VII Bonds
? Applicable ? Not applicable
I. Enterprise Bond
? Applicable ? Not applicable
During the reporting period, the Company had no outstanding enterprise bonds.
II. Corporate Bond
? Applicable ? Not applicable
During the reporting period, the Company had no outstanding corporate bonds.
III. Non-financial Enterprise Debt Financing Instruments
? Applicable ? Not applicable
Unit: RMB Yuan
Repaym
Interest ent and
Bond Full Bond Short Maturity Outstanding Coupon Trading
Bond Code Issuance Date Commencem Interest
Name Name Date Bond Balance Rate Venue
ent Date Payment
Method
Zhejiang Lump-sum
NHU repayment
Company of
SCP001 (Sci- Inter? bank
Ltd.technolog February October principal
Tech 012680341.IB February 1,2026 500,000,000 1.57% Bond
y innovation 2,2026 30,2026 and
Innovation Market
bond in the interest
Bond)
first phase of upon
Investor
Suitability
Qualified institutional investors in the inter-bank bond market (excluding those prohibited from purchasing by national laws and
Arrangeme
regulations)
nts (if
applicable)
Applicable
Trading Trading Mechanisms of China’s Inter-bank Bond Market
Mechanism
Risk of
delisting (if
applicable)
None
and
Counterme
asures
Overdue Unpaid Bonds
? Applicable ? Not applicable
Clauses
? Applicable ? Not applicable
? Applicable ? Not applicable
Safeguard Measures during the Reporting Period and Their Impact on Bond Investors’ Rights and
Interests
? Applicable ? Not applicable
IV. Convertible Corporate Bonds
? Applicable ? Not applicable
During the reporting period, the Company had no outstanding convertible corporate bonds.
V. Loss in consolidated scope during the reporting period exceeding 10% of net assets at
end of prior year
? Applicable ? Not applicable
VI. As of the end of the reporting period, the company's main accounting data and financial
indicators for the past two years
Items Closing balance Opening balance YoY growth rate
Current Ratio 2.69 2.63 2.28%
Debt- to- Assets Ratio 24.96% 27.73% -2.77pp
Acid-test Ratio 2.01 1.97 2.03%
Items Current period Prior period YoY growth rate
Net Profit Excluding Non-recurring Gains and
Losses（Unit:RMB'0,000）
EBITDA-to-Total Debt Ratio 270.00% 179.00% 91.00pp
Interest Coverage Ratio 61.55 38.39 60.33%
Cash- based Interest Coverage Ratio 39.95 69.16%
EBITDA Interest Coverage Ratio 141.00 70.16%
Loan Repayment Ratio 100.00% 100.00% Unchanged
Interest Payment Ratio 100.00% 100.00% Unchanged
Section VIII Financial Report
I. Audit Reports
Has the semi-annual report been audited
?Yes ? No
The Company’s semi-annual report has not been audited.
II. Financial Statements
The monetary unit of the financial statements is Renminbi (RMB) Yuan.
Prepared by Zhejiang NHU Co., Ltd.
June 30, 2026
Unit: RMB Yuan
Items June 30, 2026 January 1, 2026
Current assets:
Cash and bank balances 7,458,042,805.72 7,966,270,131.17
Deposit reservation for balance
Lending to banks and other financial
institutions
Trading Financial Assets 2,583,641,120.21 2,168,275,092.55
Derivative financial assets
Notes receivable
Accounts receivable 3,769,816,701.75 3,331,434,677.27
Receivables financing 920,577,788.17 813,062,385.73
Prepayments 296,698,192.81 178,450,145.87
Insurance premium receivable
Reinsurance accounts receivable
Reserves for reinsurance contract
receivable
Other receivables 261,081,058.41 274,052,669.41
Including: Interest receivable
Dividends receivable
Financial assets purchased under resale
agreement
Inventories 4,769,240,242.26 4,648,749,467.43
Among them: data resources
Contracted assets
Assets held for sale
Non-current assets due within one year
Other current assets 86,282,299.41 55,037,719.63
Items June 30, 2026 January 1, 2026
Total current assets 20,145,380,208.74 19,435,332,289.06
Non-current assets:
Granting of loans and advances
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 1,144,592,243.55 965,350,549.43
Other equity instrument investment 22,446,147.55 60,126,147.55
Other non-current financial assets
Investment property
Fixed assets 19,538,428,936.53 20,298,898,673.14
Construction in progress 1,006,512,957.55 745,117,350.86
Productive biological assets
Oil and gas assets
Right-of-use assets 8,544,176.48 9,116,717.87
Intangible assets 3,626,997,348.57 2,590,073,891.40
Among them: data resources
Development expenditure
Among them: data resources
Goodwill 3,622,704.97 3,622,704.97
Long-term deferred expenses 14,079,928.37 19,477,100.43
Deferred tax assets 5,030,160.91 2,692,450.99
Other non-current assets 1,169,596,687.54 1,476,641,929.78
Total non-current assets 26,539,851,292.02 26,171,117,516.42
Assets in total 46,685,231,500.76 45,606,449,805.48
Current liabilities:
Short-term borrowings 962,032,277.99 675,172,682.37
Borrowings from the central bank
Borrowing from banks and financial
institutions
Financial liabilities held for trading 1,663,300.90
Derivative financial liabilities
Notes payable 43,197,229.37 70,054,101.63
Accounts payable 1,889,531,581.58 1,780,307,765.08
Advance receipts
Contract liabilities 351,344,836.57 294,819,090.20
Financial assets sold for repurchase
Deposits and interbank deposits received
Receiving from Vicariously Traded
Securities
Receiving from Vicariously Sold
Securities
Items June 30, 2026 January 1, 2026
Employee compensation payable 307,941,186.16 511,515,144.15
Taxes and fees payable 530,467,264.25 669,468,878.66
Other payables 96,098,501.09 131,685,145.99
Including: Interests payable
Dividends payable
Charges and commissions payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one year 2,745,428,550.04 3,165,413,873.49
Other current liabilities 562,644,066.41 99,358,351.24
Total current liabilities 7,490,348,794.36 7,397,795,032.81
Non-current liabilities:
Provision for insurance contracts
Long-term borrowings 3,170,163,350.48 4,187,178,569.02
Bonds payable
Including: Preferred stocks
Perpetual bonds
Lease liabilities 2,307,786.86 2,500,183.66
Long-term accounts payable
Long-term payroll payable
Estimated liabilities
Deferred income 848,203,512.02 906,007,748.59
Deferred income tax liabilities 140,244,113.07 152,052,864.16
Other non-current liabilities
Total non-current liabilities 4,160,918,762.43 5,247,739,365.43
Liabilities in total 11,651,267,556.79 12,645,534,398.24
Owner’s equity:
Share capital 3,073,421,680.00 3,073,421,680.00
Other equity instruments
Including: Preferred stocks
Perpetual bonds
Capital reserve 3,171,219,081.42 3,135,683,253.49
Less: Treasury stock 70,972,212.67 556,161,195.70
Other comprehensive income 52,359,128.04 67,743,496.72
Special reserves 176,658,517.35 162,056,373.58
Surplus reserves 1,545,453,678.00 1,545,453,678.00
General risk reserve
Undistributed profits 26,931,963,631.96 25,377,456,895.81
Total owners’ equity attributed to parent
company
Minority shareholders’ equity 153,860,439.87 155,261,225.34
Total owner's equity 35,033,963,943.97 32,960,915,407.24
Total liabilities and owners' equity 46,685,231,500.76 45,606,449,805.48
Legal Representative: Hu Baifan Chief Accountant in Charge: Shi Guanqun Chief of Accounting Institution: Wang Xiaobi
Unit: RMB Yuan
Items June 30, 2026 January 1, 2026
Current assets:
Cash and bank balances 923,654,750.93 1,555,965,210.51
Trading Financial Assets 150,517,808.22 451,800,000.01
Derivative financial assets
Notes receivable
Accounts receivable 1,105,033,234.29 1,092,272,295.09
Receivables financing 148,138,925.57 270,401,584.88
Prepayments 19,799,719.62 3,263,824.89
Other receivables 227,803,286.35 476,588,831.47
Including: Interest receivable
Dividends receivable
Inventories 344,403,780.03 311,443,142.04
Among them: data resources
Contracted assets
Assets held for sale
Non-current assets due within one year
Other current assets 12,823,637.94 14,680,703.63
Total current assets 2,932,175,142.95 4,176,415,592.52
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 13,825,651,896.58 12,816,459,007.72
Other equity instrument investment 72,446,147.55 110,126,147.55
Other non-current financial assets
Investment property
Fixed assets 694,097,657.13 723,262,231.62
Construction in progress 81,115,219.68 60,024,286.84
Productive biological assets
Oil and gas assets
Right-of-use assets 2,228,119.48 2,308,653.88
Intangible assets 149,338,474.14 155,849,630.44
Among them: data resources
Development expenditure
Among them: data resources
Goodwill
Long-term deferred expenses
Deferred tax assets
Other non-current assets 523,308,060.09 524,620,404.55
Items June 30, 2026 January 1, 2026
Total non-current assets 15,348,185,574.65 14,392,650,362.60
Assets in total 18,280,360,717.60 18,569,065,955.12
Current liabilities:
Short-term borrowings 71,376,375.00 170,756,694.44
Financial liabilities held for trading 1,029,440.00
Derivative financial liabilities
Notes payable
Accounts payable 608,082,792.55 449,516,671.19
Advance receipts
Contract liabilities 8,867,748.92 6,104,710.14
Employee compensation payable 59,052,823.84 101,012,594.64
Taxes and fees payable 26,364,904.89 38,789,811.12
Other payables 23,022,867.07 24,009,833.99
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one year 1,316,998,077.29 2,110,742,905.69
Other current liabilities 498,434,598.56 4,863,857.53
Total current liabilities 2,613,229,628.12 2,905,797,078.74
Non-current liabilities:
Long-term borrowings 2,296,471,907.76 2,560,775,206.87
Bonds payable
Including: Preferred stocks
Perpetual bonds
Lease liabilities 2,307,786.86 2,486,246.32
Long-term accounts payable
Long-term payroll payable
Estimated liabilities
Deferred income 15,732,662.72 15,536,053.20
Deferred income tax liabilities 16,063,817.31 18,965,367.73
Other non-current liabilities
Total non-current liabilities 2,330,576,174.65 2,597,762,874.12
Liabilities in total 4,943,805,802.77 5,503,559,952.86
Owner’s equity:
Share capital 3,073,421,680.00 3,073,421,680.00
Other equity instruments
Including: Preferred stocks
Perpetual bonds
Capital reserve 2,906,255,131.36 2,871,264,474.99
Less: Treasury stock 70,972,212.67 556,161,195.70
Other comprehensive income 20,444,554.43 36,492,554.43
Special reserves 35,750,203.99 29,335,599.82
Surplus reserves 1,545,453,678.00 1,545,453,678.00
Undistributed profits 5,826,201,879.72 6,065,699,210.72
Items June 30, 2026 January 1, 2026
Total owner's equity 13,336,554,914.83 13,065,506,002.26
Total liabilities and owners' equity 18,280,360,717.60 18,569,065,955.12
Legal Representative: Hu Baifan Chief Accountant in Charge: Shi Guanqun Chief of Accounting Institution: Wang Xiaobi
Unit: RMB Yuan
Items 2026 Semi-Annual 2025 Semi-Annual
I. Total operating income 13,129,300,260.89 11,100,632,836.78
Including: Operating revenue 13,129,300,260.89 11,100,632,836.78
Interest income
Earned premiums
Service charge and commission
income
II. Total Operating Cost 8,715,888,097.93 6,875,351,657.25
Including: Operating cost 7,323,675,460.81 6,006,367,357.09
Interest expenses
Handling charge and commission
expenses
Surrender value
Net claims paid
Net Amount of Withdrawn Reserve
for Insurance Liability Contract
Policyholder Dividend Expense
Reinsurance cost
Taxes and surcharges 147,102,530.45 126,138,622.06
Selling expenses 88,987,069.94 88,602,406.65
Administrative expenses 292,591,830.68 309,618,405.74
R&D expenses 605,728,077.64 522,723,563.18
Financial expenses 257,803,128.41 -178,098,697.47
Including: Interest expenses 77,290,550.93 112,615,701.07
Interest income 33,892,368.94 39,620,525.39
Add: Other income 120,757,490.82 121,765,131.08
Investment income (“-” for loss) 204,498,489.13 18,237,922.39
Including: Income from
investment in associates and joint ventures
Income recognized at the
termination of financial assets measured at
amortized cost
Exchange gains (“－” for loss)
Net-exposure hedging income (“-”
for loss)
Items 2026 Semi-Annual 2025 Semi-Annual
Incomes from changes in fair value
(“-” for loss)
Credit impairment losses (“-” for
-34,278,518.19 7,613,141.39
loss)
Assets impairment loss (“-” for
-29,423,561.32 -33,272,405.82
loss)
Gains from asset disposal ("-" for
loss)
III. Operating Profit ("-" for loss) 4,742,211,405.89 4,231,182,444.44
Add: Non-operating income 2,189,167.24 1,218,592.90
Less: Non-operating expenses 47,056,112.99 2,998,696.24
IV. Total Profit Before Tax (“-” for total
losses)
Less: Income tax expense 669,297,246.91 607,906,795.85
V. Net Profit (“-” for net loss) 4,028,047,213.23 3,621,495,545.25
(I) Classification by business continuity
(“-” for net loss)
operations (“-” for net loss)
(II) Classification by ownership
of the parent company
VI. Net Amount after Tax of Other
-34,098,912.83 -19,129,756.45
Comprehensive Income
Net amount of other comprehensive
income after tax attributed to the owners of -15,384,368.68 -18,585,337.91
parent company
(I) Other comprehensive income that
-16,048,000.00
cannot be reclassified into profit or loss
benefit plan due to re-measurement
can not be converted into profits and losses
under the equity method
-16,048,000.00
investment in other equity instruments
enterprise's own credit risk
(II) Other comprehensive income that
will be reclassified into profit or loss
can be converted to profit or loss under the
equity method
investments on bonds
reclassified into other comprehensive income
Items 2026 Semi-Annual 2025 Semi-Annual
impairment of investment in other creditor's
rights
financial statement translation
Net amount of other comprehensive
income after tax attributed to minority -18,714,544.15 -544,418.54
shareholders
VII. Total Comprehensive Income 3,993,948,300.40 3,602,365,788.80
Total comprehensive income attributable
to owners of the parent company
Total comprehensive income attributable
-1,400,785.47 17,627,147.55
to minority shareholders
VIII. Earnings per Share
(I) Basic earnings per share 1.30 1.17
(II) Diluted earnings per share 1.30 1.17
Legal Representative: Hu Baifan Chief Accountant in Charge: Shi Guanqun Chief of Accounting Institution: Wang Xiaobi
The net profit realized by the merged entity before the combination in the current period where a same-control business
combination occurred is: RMB 0.00, and the net profit realized in the prior period is: RMB 0.00.
Unit: RMB Yuan
Items 2026 Semi-Annual 2025 Semi-Annual
I. Operating revenue 2,338,627,557.40 2,288,910,353.91
Less: Operating cost 1,789,112,272.04 1,621,351,248.43
Taxes and surcharges 13,699,998.31 17,236,515.74
Selling expenses 29,087,591.81 21,103,533.89
Administrative expenses 77,289,076.08 89,152,501.14
R&D expenses 124,508,073.92 124,532,788.27
Financial expenses 38,336,635.53 45,720,895.39
Including: Interest expenses 52,205,734.84 65,621,366.30
Interest income 15,399,257.26 19,823,918.91
Add: Other income 7,954,559.07 20,424,472.11
Investment income (“-” for loss) 1,973,669,970.26 1,793,286,828.79
Including: Income from investment
in associates and joint ventures
Gains from derecognition of
financial assets measured at amortized cost
(“-” for loss)
Net-exposure hedging income (“-”
for loss)
Incomes from changes in fair value
-480,460.93
(“-” for loss)
Credit impairment losses (“-” for
loss)
Items 2026 Semi-Annual 2025 Semi-Annual
Assets impairment loss (“-” for
-1,463,709.32 -15,460,631.24
loss)
Gains from asset disposal ("-" for
-2,533,390.86 -643,654.25
loss)
II. Operating Profit (“-” for loss) 2,253,937,123.98 2,178,272,035.76
Add: Non-operating income 175,749.42 202,867.23
Less: Non-operating expenses 1,834,943.97 215,135.17
III. Total profit (“-” for total loss) 2,252,277,929.43 2,178,259,767.82
Less: Income tax expense 35,548,542.03 50,709,150.24
IV. Net Profit (“-” for net loss) 2,216,729,387.40 2,127,550,617.58
(I) Net Profit as a Going Concern (Mark "-
" for Net Loss)
(II) Net Profit of Discontinued Operation
(Mark "-" for Net Loss)
V. Net Amount of Other Comprehensive
-16,048,000.00
Incomes After Tax
(I) Other comprehensive income that
-16,048,000.00
cannot be reclassified into profit or loss
benefit plan due to re-measurement
can not be converted into profits and losses
under the equity method
-16,048,000.00
investment in other equity instruments
enterprise's own credit risk
(II) Other comprehensive income that
will be reclassified into profit or loss
can be converted to profit or loss under the
equity method
investments on bonds
reclassified into other comprehensive income
impairment of investment in other creditor's
rights
financial statement translation
VI. Total Comprehensive Income 2,200,681,387.40 2,127,550,617.58
VII. Earnings Per Share
(I) Basic earnings per share
(II) Diluted earnings per share
Legal Representative: Hu Baifan Chief Accountant in Charge: Shi Guanqun Chief of Accounting Institution: Wang Xiaobi
Unit: RMB Yuan
Items 2026 Semi-Annual 2025 Semi-Annual
I. Cash flows generated from operating
activities:
Cash received from the sale of
commodities and rendering of labor 11,935,154,736.56 11,266,097,495.55
services
Net increase in deposit from customers
and interbank
Net increase in borrowing from central
bank
Net increase in borrowings from other
financial institutions
Cash receipts from premiums under
direct insurance contracts
Net Amount Arising from Reinsurance
Business
Net Increase in Deposits and
Investments from Policyholders
Cash Arising from Interests, Service
Charges and Commissions
Net Increase in Borrowings from
Banks and Other Financial Institutions
Net increase in repurchase business
capital
Net Amount of Cash Received from
the Vicariously Traded Securities
Tax Refund 456,665,226.07 460,059,989.38
Cash received relating to other
operating activities
Subtotal of cash inflows from operating
activities
Cash payments for goods acquired and
services received
Net increase in customer loans and
advances
Net increase in deposits in central
bank and interbank
Cash payments for original insurance
contract claims
Net increase in lending funds from
banks and other financial institutions
Cash payments for interest, fee, and
commission
Cash payments for insurance
policyholder dividends
Cash paid to and on behalf of
employees
Cash payments for taxes 1,502,033,083.17 1,144,724,413.30
Items 2026 Semi-Annual 2025 Semi-Annual
Other cash payments relating to
operating activities
Subtotal of cash outflows from operating
activities
Net cash flows from operating activities 3,640,144,282.94 3,242,727,802.31
II. Cash Flows from Investing Activities:
Cash receipts from investment
withdrawal
Cash receipts from returns on
investments
Net cash receipts from disposals of
fixed assets, intangible assets and other 120,800.00
long-term assets
Net cash received from disposal of
subsidiaries and other business units
Other cash receipts relating to
investing activities
Subtotal of cash inflows from investing
activities
Cash Paid for the Purchase and
Construction of Fixed Assets, Intangible 1,370,546,337.73 634,342,800.27
Assets, and Other Long-term Assets
Cash payments for investment
Net increase in pledged loans
Net Cash Paid for Acquisition of
Subsidiaries and Other Business Units
Other Paid Cashes Related to
Investment Activities
Subtotal of cash outflows from investing
activities
Net cash flows from investing activities -1,643,359,986.70 -1,108,314,695.05
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
investment of minority shareholder from
subsidiary
Cash received from borrowings 2,314,460,068.77 1,737,092,525.26
Other cash receipts relating to
financing activities
Subtotal of cash inflows from financing
activities
Cash repayments of amounts
borrowed
Cash payments for distribution of
dividends, profits, or cash payments for 2,546,662,425.93 2,276,198,922.57
interest expenses
Including: Dividends and profits paid
to minority shareholders by subsidiaries
Other cash paid related to financing
activities
Subtotal of cash outflows from financing
activities
Net cash flows from financing activities -2,427,781,067.80 -2,154,111,363.13
Items 2026 Semi-Annual 2025 Semi-Annual
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net Increase in Cash and Cash
-423,489,717.70 -12,707,478.21
Equivalents
Add: Beginning balance of cash and
cash equivalents
VI. Closing Balance of Cash and Cash
Equivalents
Legal Representative: Hu Baifan Chief Accountant in Charge: Shi Guanqun Chief of Accounting Institution: Wang Xiaobi
Unit: RMB Yuan
Items 2026 Semi-Annual 2025 Semi-Annual
I. Cash flows generated from operating
activities:
Cash received from the sale of
commodities and rendering of labor 2,400,001,550.91 2,612,605,837.48
services
Tax Refund 105,938,944.72 87,585,823.10
Cash received relating to other
operating activities
Subtotal of cash inflows from operating
activities
Cash payments for goods acquired and
services received
Cash paid to and on behalf of
employees
Cash payments for taxes 54,607,219.18 37,783,744.06
Other cash payments relating to
operating activities
Subtotal of cash outflows from operating
activities
Net cash flows from operating activities 561,653,642.95 587,285,431.98
II. Cash Flows from Investing Activities:
Cash receipts from investment
withdrawal
Cash receipts from returns on
investments
Net cash receipts from disposals of
fixed assets, intangible assets and other 120,800.00
long-term assets
Net cash received from disposal of
subsidiaries and other business units
Other cash receipts relating to
investing activities
Subtotal of cash inflows from investing
activities
Cash Paid for the Purchase and
Construction of Fixed Assets, Intangible 47,123,229.09 67,230,055.13
Assets, and Other Long-term Assets
Cash payments for investment 840,000,000.00 288,000,000.00
Items 2026 Semi-Annual 2025 Semi-Annual
Net Cash Paid for Acquisition of
Subsidiaries and Other Business Units
Other Paid Cashes Related to
Investment Activities
Subtotal of cash outflows from investing
activities
Net cash flows from investing activities 1,564,468,581.85 2,036,118,116.58
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings 1,200,000,000.00 999,000,000.00
Other cash receipts relating to
financing activities
Subtotal of cash inflows from financing
activities
Cash repayments of amounts
borrowed
Cash payments for distribution of
dividends, profits, or cash payments for 2,505,659,195.73 2,220,631,198.81
interest expenses
Other cash paid related to financing
activities
Subtotal of cash outflows from financing
activities
Net cash flows from financing activities -2,643,838,685.16 -2,359,862,875.38
IV. Effect of foreign exchange rate
-801,154.25 414,212.64
changes on cash and cash equivalents
V. Net Increase in Cash and Cash
-518,517,614.61 263,954,885.82
Equivalents
Add: Beginning balance of cash and
cash equivalents
VI. Closing Balance of Cash and Cash
Equivalents
Legal Representative: Hu Baifan Chief Accountant in Charge: Shi Guanqun Chief of Accounting Institution: Wang Xiaobi
Amount of the current period
Unit: RMB Yuan
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
I. Balance at the
end of the period 3,073,421,680.00 3,135,683,253.49 556,161,195.70 67,743,496.72 162,056,373.58 1,545,453,678.00 25,377,456,895.81 32,805,654,181.90 155,261,225.34 32,960,915,407.24
of previous year
Add: Changes to
accounting
policies
Correction of
errors from
previous periods
Others
II. Opening
balance of this 3,073,421,680.00 3,135,683,253.49 556,161,195.70 67,743,496.72 162,056,373.58 1,545,453,678.00 25,377,456,895.81 32,805,654,181.90 155,261,225.34 32,960,915,407.24
year
III. Increase or
decrease in the
current period 35,535,827.93 -485,188,983.03 -15,384,368.68 14,602,143.77 1,554,506,736.15 2,074,449,322.20 -1,400,785.47 2,073,048,536.73
(“-” for
decrease)
(I) Total
comprehensive -15,384,368.68 4,010,733,454.55 3,995,349,085.87 -1,400,785.47 3,993,948,300.40
income
(II) Capital
injection and
reduction by
owners
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
stock invested by
the owner
contributed by
holders of other
equity
instruments
share-based
payments
recorded into the
owners' equity
(III) Profit
-2,456,226,718.40 -2,456,226,718.40 -2,456,226,718.40
distribution
n of surplus
reserve
n of general risk
reserve
to owners (or -2,456,226,718.40 -2,456,226,718.40 -2,456,226,718.40
shareholders)
(iv) Internal
transfers of
owner's equity
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
of capital
reserves to
increased capital
(or capital stock)
of surplus
reserves to
increased capital
(or capital stock)
losses by surplus
reserves
changes in the
defined benefit
plan carried over
to the retained
earnings
comprehensive
income carried
over to retained
earnings
(v) Special
reserves
in current period
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
-55,218,410.20 -55,218,410.20 -55,218,410.20
current period
(VI) Others 1,745,052.06 1,745,052.06 1,745,052.06
IV. Balance at the
End of This 3,073,421,680.00 3,171,219,081.42 70,972,212.67 52,359,128.04 176,658,517.35 1,545,453,678.00 26,931,963,631.96 34,880,103,504.10 153,860,439.87 35,033,963,943.97
Period
Amount of the previous period
Unit: RMB Yuan
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
I. Balance at the
end of the period 3,073,421,680.00 3,132,519,968.42 91,513,343.50 106,348,864.91 1,545,453,678.00 21,375,740,194.12 29,324,997,728.95 120,552,533.98 29,445,550,262.93
of previous year
Add: Changes to
accounting
policies
Correction of
errors from
previous periods
Others
II. Opening
balance of this
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
year
III. Increase or
decrease in the
current period 11,681.07 309,134,899.57 -18,585,337.91 35,207,710.56 1,452,562,653.16 1,160,061,807.31 17,627,147.55 1,177,688,954.86
(“-” for
decrease)
(I) Total
comprehensive -18,585,337.91 3,603,323,979.16 3,584,738,641.25 33,066,557.55 3,617,805,198.80
income
(II) Capital
injection and
reduction by
owners
stock invested
by the owner
contributed by
holders of other
equity
instruments
share-based
payments
recorded into the
owners' equity
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
(III) Profit
-2,150,761,326.00 -2,150,761,326.00 -15,439,410.00 -2,166,200,736.00
distribution
on of surplus
reserve
on of general
risk reserve
to owners (or -2,150,761,326.00 -2,150,761,326.00 -15,439,410.00 -2,166,200,736.00
shareholders)
(iv) Internal
transfers of
owner's equity
of capital
reserves to
increased capital
(or capital stock)
of surplus
reserves to
increased capital
(or capital stock)
Equity attributable to owners of the parent company
Items Other equity instruments Minority
Other General Total owner's
shareholders’
Less: Treasury Special Undistributed
Share capital Capital reserve comprehensive Surplus reserves risk Others Subtotal equity equity
Preferred Perpetual
Others stock reserves profits
stocks bonds income reserve
losses by surplus
reserves
changes in the
defined benefit
plan carried over
to the retained
earnings
comprehensive
income carried
over to retained
earnings
(v) Special
reserves
in current period
-24,134,834.46 -24,134,834.46 -24,134,834.46
current period
(VI) Others 11,681.07 11,681.07 11,681.07
IV. Balance at
the End of This 3,073,421,680.00 3,132,531,649.49 309,134,899.57 72,928,005.59 141,556,575.47 1,545,453,678.00 22,828,302,847.28 30,485,059,536.26 138,179,681.53 30,623,239,217.79
Period
Amount of the current period
Unit: RMB Yuan
Other equity instruments
Items Other
Less: Treasury Undistributed
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve Surplus reserve Others Total equity
shares profit
Others income
stocks bonds
I. Balance at the
end of the
period of
previous year
Add: Changes to
accounting
policies
Correction of
errors from
previous periods
Others
II. Opening
balance of this 3,073,421,680.00 2,871,264,474.99 556,161,195.70 36,492,554.43 29,335,599.82 1,545,453,678.00 6,065,699,210.72 13,065,506,002.26
year
III. Increase or
decrease in the
current period 34,990,656.37 -485,188,983.03 -16,048,000.00 6,414,604.17 -239,497,331.00 271,048,912.57
(“-” for
decrease)
(I) Total
comprehensive -16,048,000.00 2,216,729,387.40 2,200,681,387.40
income
(II) Capital
injection and
reduction by
owners
Other equity instruments
Items Other
Less: Treasury Undistributed
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve Surplus reserve Others Total equity
shares profit
Others income
stocks bonds
stock invested
by the owner
contributed by
holders of other
equity
instruments
share-based
payments
recorded into
the owners'
equity
(III) Profit -
-2,456,226,718.40
distribution 2,456,226,718.40
on of surplus
reserve
n to owners (or -2,456,226,718.40
shareholders)
(iv) Internal
transfers of
owner's equity
of capital
reserves to
Other equity instruments
Items Other
Less: Treasury Undistributed
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve Surplus reserve Others Total equity
shares profit
Others income
stocks bonds
increased capital
(or capital
stock)
of surplus
reserves to
increased capital
(or capital
stock)
of losses by
surplus reserves
changes in the
defined benefit
plan carried
over to the
retained
earnings
comprehensive
income carried
over to retained
earnings
(v) Special
reserves
in current period
Other equity instruments
Items Other
Less: Treasury Undistributed
Share capital Preferred Perpetual Capital reserve comprehensive Special reserve Surplus reserve Others Total equity
shares profit
Others income
stocks bonds
-1,184,370.57 -1,184,370.57
current period
(VI) Others 1,199,880.50 1,199,880.50
IV. Balance at
the End of This 3,073,421,680.00 2,906,255,131.36 70,972,212.67 20,444,554.43 35,750,203.99 1,545,453,678.00 5,826,201,879.72 13,336,554,914.83
Period
Amount of the previous period
Unit: RMB Yuan
Other equity instruments Other
Items Less: Treasury Special Undistributed Total owner's
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserves Others
Others stock reserves profits equity
stocks bonds income
I. Balance at the
end of the period 3,073,421,680.00 2,871,231,553.94 506,954.43 19,478,463.14 1,545,453,678.00 6,481,153,549.07 13,991,245,878.58
of previous year
Add: Changes to
accounting
policies
Correction of
errors from
previous periods
Others
II. Opening
balance of this 3,073,421,680.00 2,871,231,553.94 506,954.43 19,478,463.14 1,545,453,678.00 6,481,153,549.07 13,991,245,878.58
year
III. Increase or
decrease in the
current period
(“-” for
Other equity instruments Other
Items Less: Treasury Special Undistributed Total owner's
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserves Others
Others stock reserves profits equity
stocks bonds income
decrease)
(I) Total
comprehensive 2,127,550,617.58 2,127,550,617.58
income
(II) Capital
injection and
reduction by
owners
stock invested by
the owner
contributed by
holders of other
equity
instruments
share-based
payments
recorded into the
owners' equity
(III) Profit -
-2,150,761,326.00
distribution 2,150,761,326.00
on of surplus
reserve
to owners (or -2,150,761,326.00
shareholders)
Other equity instruments Other
Items Less: Treasury Special Undistributed Total owner's
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserves Others
Others stock reserves profits equity
stocks bonds income
(iv) Internal
transfers of
owner's equity
of capital
reserves to
increased capital
(or capital stock)
of surplus
reserves to
increased capital
(or capital stock)
losses by surplus
reserves
changes in the
defined benefit
plan carried over
to the retained
earnings
comprehensive
income carried
over to retained
earnings
(v) Special
reserves
Other equity instruments Other
Items Less: Treasury Special Undistributed Total owner's
Share capital Preferred Perpetual Capital reserve comprehensive Surplus reserves Others
Others stock reserves profits equity
stocks bonds income
in current period
-1,370,965.56 -1,370,965.56
current period
(VI) Others 11,681.07 11,681.07
IV. Balance at
the End of This 3,073,421,680.00 2,871,243,235.01 309,134,899.57 506,954.43 25,263,983.23 1,545,453,678.00 6,457,942,840.65 13,664,697,471.75
Period
III. Basic Information about the Company
Zhejiang NHU Co., Ltd. (hereinafter referred to as the Company or this Company) was established with the approval of the former
Securities Committee of the People's Government of Zhejiang Province under document Zhe Zheng Wei [1999] No. 9. It was
jointly established by Xinchang Synthetic Chemical Plant (renamed NHU Holding Group Co., Ltd. on November 17, 2009)
together with nine individuals: Zhang Pingyi, Yuan Yizhong, Shi Cheng, Hu Baiyan, Shi Guanqun, Wang Xuewen, Shi Sanfu, Cui
Xinrong, and Wang Xulin. The Company was registered with the Zhejiang Provincial Administration for Industry and Commerce
on April 5, 1999, and is headquartered in Shaoxing City, Zhejiang Province. The Company currently holds a business license with
unified social credit code 91330000712560575G, registered capital RMB 3,073,421,680.00, and a total of 3,073,421,680 shares
(par value of RMB 1 per share). Among them, outstanding shares A subject to sale restrictions: 36,568,752 shares; outstanding
shares A not subject to sale restrictions: 3,036,852,928 shares. The Company's shares were listed and began trading on the
Shenzhen Stock Exchange on June 25, 2004.
The Company is in the pharmaceutical manufacturing industry. The main operating activities are research and development,
production, and sales of nutritional products, aroma chemicals, and new polymer materials.
These financial statements have been approved for external disclosure by the Company at the 21st meeting of the ninth session of
the Board of Directors on August 18, 2026.
IV. Basis for Preparing the Financial Statement
The financial statements of the Company are prepared on the basis of a going concern.
There are no events or circumstances that would give rise to major concerns as to the Company's capability to continue as a going
concern for 12 months from the end of the reporting period.
V. Significant Accounting Policies and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
The Company has established specific accounting policies and accounting estimates for transactions or matters such as impairment
of financial instruments, inventories, depreciation of fixed assets, construction in progress, intangible assets, and revenue
recognition based on the characteristics of its actual production and operations.
The financial statements prepared by the Company conform to the requirements of the accounting standards for business
enterprises, and truly and completely reflect the relevant information of the Company, such as its financial status, operating results,
and cash flow.
The fiscal year starts from January 1 to December 31 of the Gregorian calendar.
Except for the real estate industry, the business cycle of the Company is short, and 12 months is taken as the liquidity division
criteria for assets and liabilities. The operating cycle in the real estate industry, from property development to realization through
sale, generally exceeds 12 months. The specific cycle is determined based on the circumstances of the development project, and
the operating cycle is used as the criterion for classifying the liquidity of assets and liabilities.
The Company and its domestic subsidiaries use RMB as their currency for accounting purposes. Overseas subsidiaries such as
NHU (Hong Kong) Trading Co., Ltd., NHU EUROPE GMBH, NHU Singapore Pte. Ltd., NHU/Chr.Olesen Latin America A/S,
NHU LIFE SCIENCE GmbH, CONG TY TNHH NHU VIETNAM, NHU Japan Co., Ltd., NHU North America LLC, and NHU
BESLENME GIDA SANAYi VE TiCARET LiMiTED SIRKETI conduct overseas operations and have chosen the currency of the
primary economic environment in which they operate as their currency for accounting purposes.
? Applicable □ Not applicable
Items Importance standards
Significant write-offs of accounts receivable The amount of a single item exceeds 0.5% of the total assets
Important prepayments with an aging of more than one year The amount of a single item exceeds 0.5% of the total assets
Important construction in progress projects The amount of a single item exceeds 0.5% of the total assets
Important accounts payable with an aging of more than one
The amount of a single item exceeds 0.5% of the total assets
year
Other important accounts payable with an aging of more than
The amount of a single item exceeds 0.5% of the total assets
one year
Important contract liabilities aged above 1 year The amount of a single item exceeds 0.5% of the total assets
Significant changes in the carrying amount of contract
The amount of a single item exceeds 0.5% of the total assets
liabilities
The cash flow amount from a single investing activity exceeds
Significant cash flows from investing activities
Total assets/total revenue/total profit exceed the corresponding
Important overseas businesses
items in the consolidated financial statements by 15%.
Total assets/total revenue/total profit exceed the corresponding
Important subsidiary and non-wholly-owned subsidiary
items in the consolidated financial statements by 15%.
The carrying amount of a single long-term equity investment
exceeds 15% of the Group's net assets / The investment income
Important associates and joint ventures
of a single investment accounted for under the equity method
exceeds 15% of the Group's total profit
business combinations not involving enterprises under common control
(1) The accounting treatment of business combinations involving enterprises under common control
For a business combination under common control, the acquirer measures the assets and liabilities of the acquiree obtained in the
combination at the carrying amounts of the acquiree in the consolidated financial statements of the ultimate controlling party as of
the date of the combination. The difference between the carrying amount of the consideration transferred in a business
combination and the carrying amount of the net assets acquired in the combination is adjusted to capital reserve; if the capital
reserve is insufficient to offset it, retained earnings are adjusted.
Business combination under common control achieved in stages through multiple transactions
The assets and liabilities of the acquiree obtained in the consolidation are measured at their carrying amounts in the ultimate
controlling party’s consolidated financial statements on the acquisition date; the difference between the sum of the carrying
amount of the investment held before the consolidation and the carrying amount of the consideration newly paid on the acquisition
date and the carrying amount of the net assets acquired in the consolidation adjusts capital reserve; if the capital reserve is
insufficient to offset the difference, retained earnings are adjusted. The long-term equity investment held by the merging party
prior to the acquisition of the control right of the merged party, and the relevant profits and losses, other comprehensive income
and other changes in owners’ equity have been confirmed from the later date on which the original equity is acquired and the
merging party and the merged party are under common control to the date of merger are offset against the beginning retained
earnings or current profits and losses of the comparative statement period respectively.
(2) The accounting treatment of business combinations not involving enterprises under common control
Business combination involving entities not under common control: The cost of combination is the fair value of the assets paid, the
liabilities incurred or assumed, and the equity securities issued to acquire the control of the acquiree on the date of acquisition. On
the acquisition date, the assets, liabilities, and contingent liabilities acquired from the acquiree are recognized at fair value.
Where the cost of combination is higher than the fair value of the identifiable net assets acquired from the merging party in
business combination, such difference shall be recognized as goodwill, subsequently measured at cost less accumulated
impairment losses.; where the cost of combination is less than the fair value of the identifiable net assets acquired from the
merging party in business combination, such difference shall be charged to the profit or loss for the period after review.
Business combination under non?common control achieved through multiple transactions in stages
The cost of a business combination is the sum of the consideration transferred on the purchase date and the fair value on the
purchase date of the equity interests in the acquiree that were already held before the purchase date. For equity interests in the
acquiree that were held before the acquisition date, remeasure those equity interests at their fair value at the acquisition date; the
difference between fair value and their carrying amount is recognized in investment income for the current period. If the acquiree's
pre?acquisition equity holdings relate to other comprehensive income or other changes in owners' equity that are reclassified to
income on the acquisition date, those amounts are reclassified to income for the current period, except for other comprehensive
income arising from remeasurement of the investee's defined benefit plan net liability or net asset and except for other
comprehensive income related to non?trading equity instrument investments that were originally designated at fair value with
changes recognized in other comprehensive income.
(3) Treatment of transaction costs in business combinations
Acquisition-related costs including auditing fees, legal services fees, valuation advice fees and other relevant management fees are
generally recognized in profit or loss as incurred. The transaction costs of equity securities or debt securities issued as the
consideration of combination are included in the initial recognition amount of equity securities or debt securities.
(1) Assessment of control
The scope of consolidation of the consolidated financial statements is determined on the basis of control. Control means that the
investor has the power with respect to the Company to obtain variable returns by engaging in relevant activities of the invested
entity, and has the ability to influence the amount of its returns by applying its power with respect to the invested entity. Once any
changes in relevant facts and circumstances cause the changes in relevant elements concerned in the definition of control, a
reassessment shall be made by the Company.
When determining whether to include a structured entity within the scope of consolidation, the Company assesses whether it
controls that structured entity based on all facts and circumstances, including evaluating the structured entity’s purpose and design,
identifying the types of variable returns, and whether it is exposed to some or all of the variability of those returns through its
involvement in the relevant activities.
(2) Preparation method of consolidated financial statements
The Company prepares its consolidated financial statements based on the financial statements of the Company and its subsidiaries,
as well as other relevant information prepared by the Company. When preparing the consolidated financial statements, the
Company and its subsidiaries are required to maintain consistent accounting policies and accounting periods, and significant
intercompany transactions and balances are eliminated.
During the reporting period, subsidiaries and businesses added as a result of business combinations under common control are
treated as having been included in the Company's consolidated scope from the date they came under the common control of the
ultimate controlling party; their operating results and cash flows from that date are included, respectively, in the consolidated
income statement and the consolidated cash flow statement.
During the reporting period, subsidiaries and businesses added through business combinations not under common control have
their revenue, expenses, and profit from the acquisition date to the end of the reporting period included in the consolidated income
statement, and their cash flows included in the consolidated cash flow statement.
The portion of a subsidiary's shareholders' equity that is not owned by the Company is presented separately as non-controlling
interests under shareholders' equity on the consolidated balance sheet; the portion of the subsidiary's net profit or loss for the
period attributable to minority shareholders is presented under the net profit item on the consolidated income statement as the
"profit or loss of minority shareholders" item. Where losses of a subsidiary attributable to the minority shareholders exceed the
minority shareholders' interest entitled in the owners’ equity of the subsidiary at the beginning of the period, the remaining balance
is allocated against the minority shareholders’ interest.
(3) Purchase of minority equity of subsidiaries
If there is a difference between the cost of the newly acquired long-term equity investment as a result of the purchase of minority
shares and the share of the subsidiary's net assets continuously calculated from the purchase date or the merger date based on the
increased shareholding ratio, and without losing control, if there is a difference between the disposal price of partial disposal of the
equity investment in the subsidiary and the corresponding share of the subsidiary's net assets continuously calculated from the
acquisition date or the merger date of the long-term equity investment disposal, the capital reserves in the consolidated balance
sheet shall be adjusted. Where the capital reserve is insufficient to offset, retained earnings are adjusted.
(4) Treatment of loss of control of a subsidiary
If control over a former subsidiary is lost due to disposal of part of an equity investment or for other reasons, the remaining equity
interest shall be remeasured at its fair value on the date control is lost; the difference between the sum of the consideration
received for the disposed equity and the fair value of the remaining equity, and the sum of the portion of the former subsidiary’s
net assets’ carrying amount attributable based on the original shareholding proportion and measured from the acquisition date,
together with goodwill, shall be recognized as investment income in the period in which control is lost.
Other comprehensive income related to equity investments in the former subsidiary shall, upon loss of control, be accounted for on
the same basis as the direct disposal of the assets or liabilities related to the former subsidiary. Other changes in owners' equity
related to the former subsidiary that arise under the equity method shall be transferred to profit or loss for the current period upon
loss of control.
A joint arrangement is an arrangement that is jointly controlled by two or more parties. Joint venture arrangements of the
Company are classified into joint operations and joint ventures.
(1) Joint operation
Joint operation means the joint venture arrangement in which the Company has the assets and assumes the liabilities related to
such arrangement.
The Company recognizes the following items related to its interest in the joint operation and carries out accounting treatment in
accordance with relevant accounting standards for business enterprises:
① The assets separately held by the Company and assets jointly held as recognized by its share;
② The liabilities separately assumed by the Company and liabilities jointly assumed as recognized by its share;
③ Income from selling the share of the Company in the output of the joint operation;
④ Income from joint operation of the sold output as recognized by its share;
⑤ The expenses separately incurred and expenses jointly incurred as recognized by its share;
(2) Joint venture
A joint venture is a joint arrangement where the Company has rights only to the net assets of the arrangement.
The Company accounts for its investment in associates in accordance with the equity method of accounting for long-term
investments.
Cash shown in the cash flow statement refers to the cash on hand and the deposits that can be used for payment at any time. Cash
equivalents mean the investments held by the Company that are short-term, highly liquid, easy to convert into known amounts of
cash, and have little risk of value change.
(1) Foreign currency transactions
The Company translates foreign-currency transactions into the currency in which the accounts are kept using exchange rates
determined by the system through a reasonable method that approximate the spot exchange rates on the transaction date.
The monetary items of foreign currency on the balance sheet date shall be converted by adoption of the spot exchange rate on the
balance sheet date. The exchange difference arising from the difference between the spot exchange rate on the balance sheet date
and that at the time of initial recognition or the previous balance sheet date shall be included into the current profits and losses;
The non-monetary items of foreign currency measured at historical cost shall still be converted at the approximate spot exchange
rate on the transaction date; The non-monetary items of foreign currency measured at fair value shall be converted at the spot
exchange rate of the fair value on the recognition date. The difference between the converted and original amount of recording
currency shall be included into the current profits and losses, or other comprehensive income for the current period, depending on
the nature of the non-monetary item.
(2) Translation of foreign currency financial statements
On the balance sheet date, when the foreign currency financial statement of overseas subsidiaries is converted, the items of assets
and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance sheet date, while the item of
shareholders’ equity, excluding the item of "undistributed profit", shall be converted at the spot exchange rate on the date of
occurrence.
Items of income and expenses in the income statement are converted at a rate similar to the spot rate on the date of occurrence of
the transaction determined in a systematic and reasonable manner.
All items in the statement of cash flows are converted using exchange rates determined by a systematic and reasonable method that
approximate the spot exchange rates on the dates the cash flows occur. The influence of changes in exchange rate on cash shall be
taken as adjustment items, and it shall be separately presented and reflected in the item of "influence of changes in exchange rate
on cash and cash equivalents" in the cash flow statement.
The difference arising from financial statement conversion shall be reflected in the item of "other comprehensive income" under
the item of “shareholders’ equity” in the balance sheet.
When the Group disposes of, and loses control over, an overseas operation, exchange differences from translation which are
presented in “equity” of the balance sheet and related to the overseas operation are, all or based on the disposal proportion,
transferred to the profit or loss of the period of disposal.
Financial instruments mean the contracts that form the financial assets of one Party and the financial liabilities or equity
instruments of the other Party.
(1) Recognition and derecognition of financial instruments
A financial asset or financial liability shall be recognized when the Company becomes a party to a financial instrument contract.
In case of meeting one of the following conditions, the financial assets shall be derecognized: ① The contractual right of
collecting the cash flow of such financial assets is terminated; ② The financial assets have been transferred and comply with the
following derecognition conditions for the transfer of financial assets.
If all or partial current obligations of financial liabilities have been cancelled, such financial liabilities or part of such financial
liabilities shall be derecognized. If the Company (debtor) signs an agreement with the creditor, so as to replace the existing
financial liabilities in the way of undertaking the new financial liabilities, and the contract clauses regarding the new financial
liabilities are substantially different from those regarding the existing financial liabilities, the existing financial liabilities shall be
derecognized, and meanwhile, the new financial liabilities shall be recognized.
If the financial assets are transacted in a conventional manner, accounting recognition and derecognition shall be conducted on the
transaction date.
(2) Classification and measurement of financial assets
Pursuant to the business model of managing financial assets and the contractual cash flow characteristics of financial assets upon
initial recognition, the financial assets are classified into three categories as below: Financial assets measured at amortized cost,
financial assets measured at fair value with changes included in other comprehensive income, and financial assets measured at fair
value with changes included in the current profits and losses.
When financial assets are initially recognized, they shall be measured at their fair values. For the financial assets measured at fair
value through profit and loss, the related transaction costs shall be included directly in the current profits and losses. For the
financial assets or financial liabilities of other categories, the related transaction costs shall be included in the initially recognized
amount. For receivables arising from the sale of products or the provision of labor services, which do not include or consider
major financing components, the amount of consideration that the Company is expected to be entitled to be taken as the initial
confirmation amount.
The financial assets which satisfy the following conditions, and are not designated as financial assets at fair value through profit or
loss will be classified by the Company as financial assets at amortized cost:
① The Company's business model for managing the financial asset is aimed at collecting the contractual cash flows;
② The contractual terms of the financial assets specify that the cash flow generated on a specific date is only the payment of
principal and interest based on the amount of outstanding principal.
After initial recognition, the amortized cost is applied for measurement with the effective interest rate method with respect to these
financial assets. The profits and losses, arising from a financial asset which is measured at the amortized cost and is not a part of
any hedging relationship shall be included in the current profits and losses when it is terminated from recognition, or is amortized
according to the actual interest rate method, or is recognized as impaired.
The financial assets which satisfy the following conditions, and are not designated as financial assets at fair value through profit or
loss will be classified by the Company as the financial assets at fair value through other comprehensive income:
① The Company manages the financial asset under a business model that has both the objective of collecting contractual cash
flows and the objective of selling the financial asset;
② The contractual terms of the financial assets specify that the cash flow generated on a specific date is only the payment of
principal and interest based on the amount of outstanding principal.
After initial recognition, the financial assets are subsequently measured at fair value. The interest, impairment loss or gain, and
exchange gain or loss calculated by the effective interest rate method are included in current profits and losses, while other gains
or losses are included in other comprehensive income. Upon the termination of recognition, the accumulated gains or losses
previously included in other comprehensive income shall be transferred out of other comprehensive income and included in the
current profits and losses.
Except for the financial assets at amortized cost, and financial assets at fair value through other comprehensive income, all the
remaining financial assets are classified as the financial assets at fair value through profit or loss. At initial recognition, to
eliminate or significantly reduce the accounting mismatch, the Company may irrevocably designate part of the financial assets
measured at amortized cost, or the financial assets measured at fair value with changes included in other comprehensive income,
as those measured at fair value with changes included in the current profits and losses.
After initial recognition, the financial assets are subsequently measured at fair value. The gains or losses generated (including
interest and dividend income) shall be included in the current profits and losses, unless such financial assets are part of the hedging
relationship.
The business model for managing financial assets refers to how the Company manages financial assets to generate cash flows. The
business model determines whether the cash flows of the financial assets managed by the Company are derived from collecting
contractual cash flows, from selling financial assets, or from both. The Company determines the business model for managing
financial assets based on objective facts and on the specific business objectives for managing financial assets determined by key
management personnel.
The Company assesses the contractual cash flow characteristics of financial assets to determine whether, on a specified date, the
contractual cash flows of the relevant financial assets are solely payments of principal and interest on the outstanding principal
amount. Among them, principal refers to the fair value of the financial asset at initial recognition; interest includes consideration
for the time value of money, the credit risk associated with the amount of principal outstanding over a specific period, and other
basic lending risks, costs, and profits. In addition, the Company assesses contractual terms that could result in changes to the
timing or amount of the contractual cash flows of a financial asset to determine whether they meet the requirements of the
contractual cash flow characteristics described above.
Reclassification shall occur only when the Company changes the business model for managing financial assets. In such cases, all
affected financial assets shall be reclassified on the first day of the first reporting period after the change in business model;
otherwise, financial assets shall not be reclassified after initial recognition.
(3) Classification and measurement of financial liabilities
The financial liabilities of the Company, when initially recognized, are classified as: financial liabilities at fair value through profit
or loss and financial liabilities at amortized cost. For the financial liabilities unclassified to be those measured at fair value and
changes of which are included into the current profits and losses, the relevant transaction expenses shall be included into the initial
recognition amount.
The financial liabilities measured at fair value with changes recorded in the current profits and losses when initially recognized
shall include transaction financial liabilities and financial liabilities designated as those measured at fair value through profit or
loss. For such financial liabilities subsequently measured at fair value, gains or losses generated from changes in fair value, and the
dividends and interest expenses related to the financial liabilities are included in the current profits and losses.
For other financial liabilities, the subsequent measurement shall be conducted by adoption of the effective interest rate method at
the amortized cost, and the gains or losses arising from derecognition or amortization shall be included into the current profits and
losses.
Financial liabilities are liabilities that meet one or more of the following conditions:
① a contractual obligation to deliver cash or another financial asset to another.
② a contractual obligation to exchange financial assets or financial liabilities with another under conditions that are potentially
unfavorable to the Company.
③ a contract that will or may be settled in the Company's own equity instruments, and a non-derivative instrument for which the
enterprise will be obliged to deliver a variable number of its own equity instruments.
④ a contract that is a derivative instrument that will or may be settled in the enterprise's own equity instruments, other than by the
exchange of a fixed amount of cash or another financial asset for a fixed number of the enterprise's own equity instruments.
Equity instruments refer to the contract which can prove that certain enterprise holds the residual equity of the assets after the
deduction of all liabilities.
If the Company fails to avoid performing a contractual obligation with cash payment or other financial assets unconditionally, then
the contractual obligation complies with the definition of financial liabilities.
Where a financial instrument will or may be settled in the Company's own equity instrument, considerations shall be given to
whether the enterprise's own equity instrument as used to settle the financial instrument is a substitute of cash or another financial
asset or for the purpose of entitling the holders of the financial instrument to the residual interests in the issuer's assets less all of its
liabilities. If the former, this instrument is the financial liabilities of the Company; If the latter, this instrument is the equity
instrument of the Company.
(4) Derivative financial instruments and embedded derivative instruments
The derivative financial instruments of the Company shall include forward foreign exchange contracts and foreign exchange
option contracts, etc. It shall be initially measured at fair value on the date when the derivative transaction contract is signed and
subsequently measured at its fair value. The derivative financial instrument with positive fair value shall be recognized as an asset,
and that with negative fair value shall be recognized as a liability. The gains or losses which do not comply with the hedge
accounting provisions arising from changes in fair value shall be directly included into the current profits and losses.
For hybrid instruments that contain embedded derivatives, where the host contract is a financial asset, the hybrid instrument as a
whole shall be subject to the relevant provisions on the classification of financial assets. If the host contract is not a financial asset,
and the hybrid instrument is not measured at fair value with changes recognized in profit or loss, and the embedded derivative is
not closely related to the economic characteristics and risks of the host contract, and a standalone instrument with the same terms
as the embedded derivative meets the definition of a derivative, the embedded derivative is separated from the hybrid instrument
and accounted for as a standalone derivative financial instrument. If it is impossible to conduct separate measurement to the
embedded derivative instrument when it is obtained or on the subsequent balance sheet date, the hybrid instrument shall be
designated entirely as the financial assets or financial liabilities measured at fair value and changes of which are included into the
current profits and losses.
(5) Fair value of financial instruments
The methods for determining the fair value of financial assets and financial liabilities are set out in Note 12 of Section V of the
financial report.
(6) Impairment of financial assets
The Company measures impairment and recognizes loss allowances for the following items on the basis of expected credit losses:
① Financial assets measured at amortized cost;
② Receivables and investments in debt instruments measured at fair value with changes recorded in through other comprehensive
income;
③ Contracted assets as defined in the Accounting Standards for Business Enterprises No. 14 - Revenue;
④ Lease receivables;
⑤ Financial guarantee contracts (except for those measured at fair value with changes recognized in profit or loss, or those arising
from transfers of financial assets that do not meet the conditions for derecognition or from continuing involvement in transferred
financial assets).
Measurement of expected credit loss
The “expected credit loss” refers to the weighted average of the credit losses of financial instruments weighted by the risk of
default. The “credit loss” means the difference between all contractual cash flows receivable by the Company under a contract and
discounted at the original actual interest rate, and all cash flows expected to be received, i.e., the present value of all cash shortages.
Taking into the reasonable and well-grounded information including past matters, current situation and prediction of future
economic conditions, the Company calculates the possibly 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 the risk of default as the weight, and
recognizes the expected credit loss.
The Company measures the expected credit losses for financial instruments at different stages separately. If the credit risk has not
increased significantly since the initial recognition of the financial instruments and has been in the first stage, its loss provision is
measured by the Company according to the amount equivalent to the expected credit loss in the next 12 months. In the second
stage, if there is a significant increase in credit risk since initial recognition of the financial instruments but there is no credit
impairment, its loss provision is measured by the Company according to the amount equivalent to the expected credit loss of the
instruments throughout the duration. In the third stage, if there have been credit-impaired financial assets since initial recognition
of the financial instruments, its loss provision is measured by the Company according to the amount equivalent to the expected
credit loss of the instruments throughout the duration.
For financial instruments with relatively low credit risks on the balance sheet date, the Company assumes that their credit risks
have not increased significantly since the initial recognition, and measures the provision for loss based on the expected credit loss
within the next 12 months.
Lifetime expected credit losses refer to the expected credit losses resulting from all possible default events that may occur over the
entire expected life of a financial instrument. Expected credit losses over the next 12 months refer to anticipated credit losses
resulting from potential default events on financial instruments that may occur within 12 months after the balance sheet date (or
the expected life of the financial instruments if it is less than 12 months). These losses form part of the expected credit losses over
the entire duration.
When measuring expected credit losses, the Company shall consider the longest contractual period over which it is exposed to
credit risk (including consideration of renewal options).
For financial instruments in the first stage and the second stage, as well as those with lower credit risk, the Company calculates
interest income based on the gross carrying amount before impairment provisions and the effective interest rate. For financial
instruments in the third stage, interest income is calculated based on the amortized cost after impairment provisions have been
deducted and the effective interest rate.
For notes receivable, accounts receivable, receivables financing, other receivables, contract assets, and other receivable items, if a
customer's credit risk characteristics are significantly different from those of other customers in the portfolio, or if that customer's
credit risk characteristics change significantly, the Company individually recognizes an allowance for doubtful accounts for that
receivable. Except for receivables for which allowance for doubtful accounts is recognized individually, the Company classifies
receivables into portfolios based on credit risk characteristics and calculates the allowance for doubtful accounts on a portfolio
basis.
Notes receivable, accounts receivable, and contract assets
For notes receivable, accounts receivable, and contracted assets, regardless of whether there exist significant financing components,
the Company always measures the loss reserve according to the amount equivalent to the expected credit loss in the entire duration.
When it is impossible to assess the expected credit losses of a single financial asset or contracted asset based on reasonable costs,
the Company will, according to the feature of credit risks, classify notes receivable, accounts receivable, and contracted assets into
different portfolios, measure the expected credit loss on a portfolio basis, and determine the basis of the portfolios as below:
①Notes receivable
Notes receivable portfolio 1 - bank acceptance bills
Notes receivable portfolio 2 - commercial acceptance bills
②Accounts receivable
Accounts receivable portfolio 1: Aging composition
For notes receivable classified as portfolio, the expected credit loss shall be calculated in light of the current conditions and
forecasts of future economic condition, by referring to historical credit loss experience and through default risk exposure and
expected credit loss rate throughout the life.
For account receivable portfolio, the expected credit loss shall be calculated in light of the current conditions and forecasts of
future economic condition, by referring to historical credit loss experience and preparing the comparison table between aging of
the accounts receivable and expected credit loss rate throughout the life. The aging of accounts receivable is calculated from the
date of recognition.
Other receivables
The Company will, according to the feature of credit risks, classify accounts receivable into portfolios, measure the expected credit
loss on portfolio basis and determine the portfolios as follows:
① Other receivables portfolio 1: Tax refund receivables
② Other receivables portfolio 2: Land deposit receivables portfolio
③ Other receivables portfolio 3: Guarantee deposits receivable from customs and tax authorities
④ Other receivables portfolio 4: Special capital injection funds group
⑤ Other receivables portfolio 5: Other receivables
For other receivables classified as portfolio, the expected credit loss shall be calculated by the Company using the default risk
exposure and the expected credit loss rate in the next 12 months or throughout the life. For other receivables grouped by aging, the
aging is calculated from the date of recognition.
Debt investments, and other debt investments
For debt investments and other debt investments, the Company calculates expected credit losses based on the nature of the
investments and the various types of counterparties and risk exposures, by applying the default risk exposure and the expected
credit loss rates within the next 12 months or over the entire remaining life.
(7) Transfer of financial assets
Transfer of financial assets refers to that the financial assets are transferred or delivered to the other party (transferee) other than
the issuer of such financial assets.
If the Company has transferred nearly all of the risks and remunerations related to the ownership of financial assets to the
transferee, such financial assets shall be derecognized; if nearly all the risks and remunerations related to the ownership of
financial assets are retained, such financial assets shall not be derecognized.
If the Company does not transfer or retain nearly all of the risks and remunerations related to the ownership of financial assets, it
shall deal with it according to the following situations respectively: If the Company gives up the control over such financial assets,
such financial assets shall be derecognized, and the assets and liabilities generated shall be recognized; If the Company does not
give up the control over such financial assets, the relevant financial assets shall be recognized according to the degree of its
continuous involvement in the financial assets transferred, and the relevant liabilities shall be recognized accordingly.
(8) Offset of financial assets and financial liabilities
When the Company has the legal right to offset the recognized financial assets and financial liabilities, which is enforceable for the
time being, and the Company plans to settle on a netting basis or capitalize financial assets and serve financial liabilities, any
amount from netting of financial assets and financial liabilities is presented in the balance sheet. Apart from this, financial assets
and financial liabilities shall be presented separately in the balance sheet and shall not offset each other.
Fair value refers to the price that market participants can receive by selling an asset or need to pay by transferring a liability in the
orderly transactions on the measurement date.
The Company measures related assets or liabilities at fair value, assuming that the orderly transaction of selling assets or
transferring liabilities is conducted in the main market of related assets or liabilities; If there is no principal market, the Company
assumes that the transaction will be conducted in the most favorable market of related assets or liabilities. The main market (or the
most favorable market) is the trading market that the Company can enter on the measurement day. The Company adopts the
assumptions used by market participants to maximize their economic benefits when pricing the assets or liabilities.
The fair value of financial assets or financial liabilities in an active market (if any) is determined by the Company at the price
quoted in the active market. If there is no financial instrument in an active market, its fair value is determined by the Company via
valuation technique.
When measuring non-financial assets at fair value, the ability of market participants to apply the assets for the best purpose to
generate economic benefits or the ability to sell the assets to other market participants for the best purpose to generate economic
benefits shall be considered.
The Company adopts the valuation technology which is applicable in the current situation and supported by sufficient available
data and other information, and gives priority to the relevant observable input values. The unobservable input values are used only
when the relevant observable input values are unavailable or impracticable.
For assets and liabilities measured or disclosed at fair value in financial statements, the fair value level is determined according to
the lowest level input value which is of great significance to fair value measurement as a whole: The first-level input value is the
unadjusted quotation of the same assets or liabilities that can be obtained on the measurement date in an active market; The
second-level input value is directly or indirectly observable input value of related assets or liabilities except the first-level input
value; The third-level input value is the unobservable input value of related assets or liabilities.
On each balance sheet date, the Company reassesses the assets and liabilities recognized in the financial statements that are
continuously measured at fair value to determine whether there is a conversion between the fair value measurement levels.
(1) Classification of inventory
The Company’s inventories are classified as raw material, work in progress, finished goods, goods dispatched, materials entrusted
for processing, low-value consumables, packaging materials, development costs, etc.
(2) Determination of cost
The Company's inventories are valued at actual cost on acquisition. The raw material and merchandise inventory are priced
according to the weighted average method when it is delivered.
(3) Basis for determination and method of calculation for inventory falling price reserves
On the balance sheet date, inventory is measured at cost or net realizable value (whichever is lower). If the net realizable value is
lower than its cost, the provision for inventory depreciation shall be made. The net realizable value is the amount obtained by
deducting the estimated incurred cost till completion, estimated selling expenses and the relevant taxes and dues from the
estimated selling price of inventory. In determining net realizable value of an inventory, based on obtained proof, the Group
considers the purpose of the inventory and the impact of any matters occurring after the balance sheet date. The Company usually
provides for inventory write-down on an individual inventory item basis. At the balance sheet date, if the factors that previously
caused a write-down of inventory value have ceased to exist, the provision for inventory write-down shall be reversed to the extent
of the amount previously recognized.
(4) Inventory system of inventory
The inventory system of the Company adopts a perpetual inventory system.
(5) Amortization of low-value consumables and packaging materials
The Company expenses low-value consumables using the one-time write-off method upon issuance. Packaging materials for
turnover are amortized using the one-time write-off method.
Long-term equity investments include equity investments in subsidiaries, associates, and joint ventures. Where the Company can
exercise significant influence over the investee, the investee is an associate of the Company.
(1) Determination of initial investment cost
For the long-term equity investment formed by business merger: For the long-term equity investment obtained through the
business combination under the common control, the share of book value in the consolidated financial statement of the owner’s
equity which the final control party has obtained from the merged party on the merger date shall be taken as the investment cost;
For the long-term equity investment obtained through the business combination under the non-common control, the merger cost
shall be taken as the investment cost of long-term equity investment.
For the long-term equity investment obtained by other means: For the long-term equity investment obtained through cash payment,
the purchase price actually paid shall be taken as the initial investment cost; For the long-term equity investment obtained through
issuance of equity securities, the fair value of the equity securities issued shall be taken as the initial investment cost.
(2) Method of subsequent measurement and recognition of profit and loss
The Company’s investment in subsidiaries shall be subject to accounting by using the cost method unless the investment meets the
criteria for held for sale, and the investment in associates and joint ventures shall be subject to accounting by using the equity
method.
For long-term equity investments measured according to the cost method, except for actual price paid when the investment is
obtained or the cash dividends or profits that are included in the consideration that has been declared but not yet paid, the cash
dividend or profit declared by the invested entity will be recognized as the investment income, and included into the current profits
and losses.
When the equity method is adopted for calculation of the long-term equity investment, if the initial investment cost of long-term
equity investment is more than the share of fair value of the identifiable net assets of the invested unit that shall be enjoyed at the
time of investment, the investment cost of long-term equity investment shall not be adjusted; If the initial investment cost is less
than the share of fair value of the identifiable net assets of the invested unit that shall be enjoyed at the time of investment, the
book value of long-term equity investment shall be adjusted, and the difference shall be included into the current profits and losses.
When the equity method is adopted, according to the share of the net profit and loss and other comprehensive income realized by
the invested entity, the investment income and other comprehensive income shall be recognized respectively, and adjusts the book
value of the long-term equity investment; The book value of the long-term equity investment is reduced correspondingly in
accordance with the portion of the profits or cash dividends declared and distributed by the invested entity; For changes in owner’s
equity other than net profit and loss, other comprehensive income and profit distribution of the invested entity, the book value of
long-term equity investment is adjusted and included in capital reserves (other capital reserves). When confirming the share of net
profit and loss of the invested entity, based on the fair value of various identifiable assets of the invested entity when the
investment is made, the net profit of the invested entity is recognized after adjustment in accordance with the accounting policies
and accounting periods of the Company.
In the case of being able to exert a significant influence on the invested unit or implement joint control (but not constitute control)
due to investment increase and other reasons, the sum of the fair value of the equity originally held and the new investment cost on
the date of conversion shall be taken as the initial investment cost calculated according to the equity method. For equity
investments that were originally classified as non?trading equity instruments measured at fair value with changes recognized in
other comprehensive income, the cumulative fair value changes previously recognized in other comprehensive income relating to
them are transferred to retained earnings when they are subsequently accounted for under the equity method.
If, due to the disposal of part of an equity investment or for other reasons, joint control of or significant influence over an investee
is lost, the remaining equity interest after the disposal shall be accounted for, from the date on which joint control or significant
influence is lost, in accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments, and the difference between its fair value and carrying amount shall be recognized in profit or loss for the
current period. Other comprehensive income recognized by the original equity investment due to the adoption of the equity
method is calculated on the same basis as the invested entity's direct disposal of related assets or liabilities when the equity method
is terminated. Other changes in equity related to original equity investments are transferred to current profit or loss.
If the Company loses control over an investee due to the disposal of part of its equity investment and the remaining equity can be
used upon disposal to exercise joint control or significant influence over the investee, the equity method shall be used for
accounting instead and the remaining equity shall be deemed to be accounted and adjusted by using the equity method when it is
acquired. If the remaining equity upon disposal cannot be used to exercise joint control or significant influence over the investee,
the accounting treatment shall be carried out in accordance with the provisions of Accounting Standards for Business Enterprises
No. 22 - Recognition and Measurement of Financial Instruments, and the difference between the fair value and the book value
when the control is deprived of shall be included in the current profits and losses.
If, due to additional capital injections by other investors, the Company’s shareholding percentage decreases and the Company
thereby loses control but can still exercise joint control over or exert significant influence on the investee, the Company shall,
based on the new shareholding percentage, recognize the portion of the investee’s net asset increase resulting from the capital
increase that the Company is entitled to, and shall include in current profit or loss the difference between that amount and the
original carrying amount of the long?term equity investment corresponding to the portion of the shareholding percentage to be
transferred; thereafter, the Company shall, under the new shareholding percentage, make adjustments by treating the investment as
having been accounted for using the equity method from the date of acquisition.
For the unrealized profits and losses from the internal transaction incurred between the Company and the associates or joint
ventures, the part that belongs to the Company shall be calculated according to the shareholding proportion, and the investment
profits and losses shall be recognized on the basis of offset. However, if the unrealized loss from the internal transaction between
the Company and the invested unit belongs to the impairment loss of the assets transferred, the offset shall not be conducted.
(3) Criteria for judging joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when requiring the unanimous
consent of the parties sharing control before making decisions about the relevant activities of the arrangement. When determining
whether joint control exists, first determine whether the arrangement is collectively controlled by all the parties or by a
combination of the parties, and then determine whether decisions about the arrangement's relevant activities require the unanimous
consent of those parties that collectively control the arrangement. If all parties, or a group of parties, must act in concert to
determine the relevant activities of an arrangement, those parties are considered to collectively control the arrangement; if there
exists a combination of two or more parties that can collectively control an arrangement, joint control does not exist. When
assessing whether there is joint control, protective rights are not taken into account.
Significant influence refers to the investor’s right to participate in an invested entity's financial and business decision-making, but
not to control or jointly control the formulation of these policies with other parties. In determining whether the investor can exert
significant influence over the investee, the investor considers the voting rights held directly or indirectly in the investee, as well as
the impact of exercisable potential voting rights held by the investor and other parties, assuming their conversion into equity
interests in the investee. This includes the effects of warrants, share options, and convertible corporate bonds issued by the
investee.
When the Company directly or indirectly via subsidiaries owns more than 20% (20% inclusive) but less than 50% of the voting
shares of the invested unit, it will be generally regarded as having a significant influence on the invested unit, except there is a
clear evidence proving that the Company cannot participate in the production and business decision-making thereby not having a
significant influence on the invested unit under this situation; Generally, when the Company owns less than 20% (exclusive) of the
voting shares of the invested unit, it will be regarded as having no significant influence on the invested unit, except there is a clear
evidence proving that the Company can participate in production and business decision-making thereby having a significant
influence on the invested unit under this situation.
(4) Impairment test method and impairment provision accrual method
For investments in subsidiaries, associates and joint ventures, the method of providing for asset impairment is set out in Note 20 of
Section V of the financial report.
(1) Recognition criteria
Fixed assets of the Company mean the tangible assets held for the production of goods, provision of labor services, leasing or
management, and with a useful life exceeding one fiscal year.
Only when the economic benefits related to such fixed assets are likely to flow into the enterprise, and the cost of such fixed assets
can be reliably measured, the fixed assets can be recognized.
The fixed assets of the Company shall be initially measured at the actual cost at the time of obtaining.
Subsequent expenditures related to fixed assets shall be included in the cost of the fixed assets when it is probable that the related
economic benefits will flow to the Company and their costs can be measured reliably; routine repair expenses of fixed assets that
do not meet the capitalization criteria for subsequent expenditures shall, when incurred, be charged to current profit or loss or to
the cost of the related asset based on the beneficiary. For the replaced parts, derecognize their carrying amount.
(2) Depreciation method
Ratio of remaining Yearly depreciation
Categories Depreciation method Depreciable life (years)
value (%) (%)
Houses and buildings Straight-line method 7 -70 5 13.57-1.36
General equipment Straight-line method 5 -10 5 19.00-9.50
Dedicated equipment Straight-line method 5 -15 5 19.00-6.33
Means of transport Straight-line method 5 -7 5 19.00-13.57
The cost of construction in progress of the Company is determined at the actual construction expense, including various necessary
construction expenditures incurred during the period of construction, capitalizable borrowing costs and other related expenses
before the project reaches the predetermined conditions for use.
Construction in progress shall be transferred to fixed assets when it has reached the working condition for its intended use.
The method for making impairment provisions for construction in progress is set out in Note 20 of Section V of the financial
report.
(1) Criteria for recognition of capitalized borrowing costs
If the borrowing costs incurred by the Company can be directly attributed to the acquisition or production of assets that meet the
capitalization requirements, they are capitalized and included in the relevant asset costs; Other borrowing costs, when incurred, are
recognized as expenses according to the amount incurred, and included in the current profits and losses. Capitalization of
borrowing costs begins when the following three conditions are fully satisfied:
① expenditures for the assets (including cash paid, transferred non-currency assets or expenditure for holding debt liability for the
acquisition, construction or production of assets qualified for capitalization) have been incurred;
② borrowing costs have been incurred;
③ acquisition, construction or production that are necessary to enable the asset reach its intended usable or saleable condition
have commenced.
(2) Capitalization period of borrowing costs
When the assets eligible for capitalization for acquisition and construction or production of the Company reach the estimated
serviceable or marketable condition, the capitalization of borrowing costs shall be stopped. The borrowing costs incurred after the
assets eligible for capitalization reach the estimated serviceable or marketable condition shall be recognized as expense according
to the incurred amount at the time of occurrence and included into the current profits and losses.
If the assets eligible for capitalization are interrupted abnormally in the acquisition and construction or production process, and the
interruption time lasts for more than 3 months continuously, the capitalization of borrowing costs shall be suspended; The
capitalization of borrowing costs during the normal interruption period shall be continued.
(3) Calculation of capitalization rate and amount of borrowing costs
The amount to be capitalized is the actual interest expense incurred on the designated borrowings less any bank interest earned
from unused funds of the designated borrowings or any investment income on the temporary investment of those funds. The
amount to be capitalized on the general borrowings is calculated by applying a capitalization rate to the weighted average of the
excess amounts of cumulative expenditures on the asset over and above the amounts of the designated borrowings. Capitalization
rate is calculated and determined based on the weighted average interest rate of general loans.
During the period of capitalization, exchange differences arising from special borrowings in a foreign currency shall be fully
capitalized, and exchange differences arising from general borrowings in a foreign currency shall be recognized in profits and
losses.
(1) Measurement method, useful lives and impairment test
The intangible assets of the Company shall include land use right, software, patent right, non-patented technologies, etc.
The intangible assets shall be initially measured at cost and its service life shall be analyzed and judged at the time of obtaining the
intangible assets. If the useful life is limited, from the date when the intangible assets are available, the amortization method which
can reflect the expected realization method of the economic benefits related to such assets shall be adopted for amortization within
the expected useful life; If the expected realization method is unable to be reliably recognized, the intangible assets shall be
amortized according to the straight-line method; The intangible assets with uncertain service life shall not be amortized.
The amortization method of intangible assets with limited service life is as follows:
Basis for determining Amortization
Category Useful life Notes
useful life method
According to the period
Land use right 50 years and 70 years Method of line
stated in the certificate.
According to the
Software 10 years Method of line
estimated useful life
Patent right 10 years According to the Method of line
Basis for determining Amortization
Category Useful life Notes
useful life method
estimated useful life
Non-patented According to the
technologies estimated useful life
The Company shall review the useful life and amortization method of intangible assets with the limited useful life at the end of
each year. If the result is different from the previous estimate, the original estimate shall be adjusted, and it shall be disposed
according to the changes in accounting estimates.
If it is expected that certain intangible asset is unable to bring the future economic benefits to the enterprise on the balance sheet
date, the book value of such intangible asset shall be completely transferred into the current profits and losses.
The method used to provide for impairment of intangible assets is set out in Note 20 of Section V of the financial report.
(2) Scope of R&D expenditures and related accounting treatment
The R&D expenses of the Company are the expenses directly related to its R&D activities, including: salaries and wages of R&D
personnel; directly incurred expenses; depreciation expenses and long-term deferred expenses; amortization of intangible assets;
design expenses; equipment commissioning and testing expenses; commissioned R&D expenses; and other expenses. The salaries
of R&D personnel are allocated to R&D expenses based on project hours.
The expenses for internal research and development projects of the Company are divided into expenses in the research phase and
expenses in the development phase.
Expenses in the research phase are recorded into the profits and losses for the current period when they occur.
Expenditures during the development phase can only be capitalized when they satisfy the following conditions simultaneously: It
is technically feasible to finish intangible assets for use or sale; there is an intention to complete and use or sell the intangible
assets; the methods for the intangible assets to generate economic benefits, including those which can prove that there is a market
for the products manufactured by applying the intangible assets or that there is a market for the intangible assets themselves and
that the intangible assets will be used internally, can prove their usefulness; there are sufficient technologies, financial resources
and other resources that can support the development of the intangible assets, and the enterprise is able to use or sell the intangible
assets; and the development expenditures of the intangible assets can be reliably measured. Development expenditures that do not
meet the above conditions are recognized in profit or loss for the current period.
The research and development projects of the Company will enter the development stage after the above conditions are met, the
technical and economic feasibility studies are completed, and the project is approved.
Capitalized development-stage expenditures are presented on the balance sheet as development expenditures and are transferred to
intangible assets on the date the project reaches its intended use.
The R&D expenses of the Company are the expenses directly related to its R&D activities, including: salaries and wages of R&D
personnel; directly incurred expenses; depreciation expenses and long-term deferred expenses; amortization of intangible assets;
design expenses; equipment commissioning and testing expenses; commissioned R&D expenses; and other expenses. The salaries
of R&D personnel are allocated to R&D expenses based on project hours.
The expenses for internal research and development projects of the Company are divided into expenses in the research phase and
expenses in the development phase.
Expenses in the research phase are recorded into the profits and losses for the current period when they occur.
Expenditures during the development phase can only be capitalized when they satisfy the following conditions simultaneously: It
is technically feasible to finish intangible assets for use or sale; there is an intention to complete and use or sell the intangible
assets; the methods for the intangible assets to generate economic benefits, including those which can prove that there is a market
for the products manufactured by applying the intangible assets or that there is a market for the intangible assets themselves and
that the intangible assets will be used internally, can prove their usefulness; there are sufficient technologies, financial resources
and other resources that can support the development of the intangible assets, and the enterprise is able to use or sell the intangible
assets; and the development expenditures of the intangible assets can be reliably measured. Development expenditures that do not
meet the above conditions are recognized in profit or loss for the current period.
The research and development projects of the Company will enter the development stage after the above conditions are met, the
technical and economic feasibility studies are completed, and the project is approved.
Capitalized development-stage expenditures are presented on the balance sheet as development expenditures and are transferred to
intangible assets on the date the project reaches its intended use.
The impairment of assets such as long-term equity investments in subsidiaries, associates and joint ventures, investment properties
subsequently measured using the cost model, fixed assets, construction in progress, right-of-use assets, intangible assets, goodwill,
etc. (excluding inventories, deferred tax assets and financial assets) shall be determined as follows:
To judge whether there is a sign of possible impairment in the assets on the balance sheet date, if there is a sign of impairment, the
Company shall estimate its recoverable amount to conduct impairment test. An impairment test will be conducted every year for
intangible assets whose goodwill and service life are uncertain due to a business combination, and intangible assets not yet
available for their intended use, regardless of whether there are signs of impairment.
The recoverable amount is determined based on the higher of the net value of the fair value less cost of disposal and the present
value of the estimated future cash flow of assets. The Company shall estimate its recoverable amount based on a single asset; for
the recoverable amount of a single asset which is difficult to estimate, the recoverable amount of the assets group shall be
recognized on the basis of the assets group to which such asset attributes. The identification of an asset group is based on whether
the main cash inflows generated by the asset group are independent of the cash inflows of other assets or asset groups.
When the recoverable amount of assets or assets group is less than its book value, the Company shall write down its book value to
the recoverable amount, with the written-down amount included into the current profits and losses, and withdraw the
corresponding assets impairment provision simultaneously.
For the impairment test to goodwill, the Company shall, as of the purchasing day, allocate on a reasonable basis the book value of
the goodwill formed by merger of enterprises to the relevant asset groups, or if there is a difficulty in allocation, to allocate it to the
sets of asset groups. Relevant asset groups or the sets of asset groups mean those can benefit from the synergy of business
combination and are not larger than the reportable segment determined by the Company.
When carrying out impairment testing, if an asset group or a combination of asset groups related to goodwill shows indications of
impairment, first perform impairment testing on the asset group or combination of asset groups that do not include goodwill,
calculate the recoverable amount, and recognize the corresponding impairment loss. Then an impairment test is performed on the
asset group or combination of asset groups that includes goodwill, comparing its carrying amount with its recoverable amount. If
the recoverable amount is lower than the carrying amount, an impairment loss on goodwill is recognized.
The assets impairment loss shall not be reversed in the following accounting periods once recognized.
The long-term deferred expenses incurred by the Company are measured at actual cost and amortized on a straight-line basis over
the estimated benefit period. For long-term deferred expense items that cannot benefit future accounting periods, their amortized
value shall be fully charged to profit or loss for the current period.
(1) Accounting treatment method of short-term compensation
During the accounting period when the employees provide services, the Company shall recognize the actual employee wage,
bonus and housing accumulation fund, as well as such social insurance premium as medical insurance premium, industrial injury
insurance premium and maternity insurance premium paid for the employee according to the specified benchmark and proportion,
as liabilities and include them into the current profits and losses or relevant assets cost.
(2) Accounting treatment of post-employment benefits
The welfare after demission plans shall include defined contribution plans and defined benefit plans. Wherein, defined
contribution plans refer to that the enterprise shall not undertake any further payment obligations on the welfare after demission
plans after depositing a fixed expense to the independent fund; Defined benefit plans refer to the welfare after demission plans
except the defined contribution plans.
Defined contribution plans shall include basic endowment insurance, unemployment insurance, etc.
During the accounting period when the employees provide services, the amount to be deposited according to the defined
contribution plans is recognized as a liability and included in the current profits and losses or related asset costs.
For the defined benefit plans, the actuarial evaluation shall be conducted by the independent actuary on the annual balance sheet
date, and the cost to provide welfare by the expected accumulated welfare unit method shall be recognized. The employee
compensation costs arising from the Company's defined benefit plans include the following components:
① Service cost, including current service cost, previous service cost and settlement gains or losses. Wherein, current service cost
refers to the increase amount of the present value of the obligations in the defined benefit plans due to employee services during
the current period; Previous service cost refers to the increase or decrease of the present value of the obligations in the defined
benefit plans related to the employee services during the previous period due to the changes in the defined benefit plans.
② The net interest of the net liability or net asset in the defined benefit plans shall include the interest income of the planed assets,
the interest expenses of the obligations in the defined benefit plans and the interest affected by the upper limit of assets.
③ Changes in net liability or net asset from re-measurement of defined benefit plans.
Unless other accounting standards require or permit employee benefit costs to be included in the cost of assets, the Company will
recognize the above items ① and ② in profit or loss for the current period; item ③ will be recognized in other comprehensive
income and will not be reclassified to profit or loss in subsequent accounting periods, and upon termination of the originally
established defined benefit plan, the portions previously recognized in other comprehensive income will be fully transferred to
retained earnings within equity.
(3) Accounting treatment of dismissal welfare
If the dismissal welfare is provided by the Company to employees, the employee compensation liabilities arising from the
dismissal welfare shall be determined at the earliest of the following two, and included in the current profits and losses: When the
Company cannot unilaterally withdraw the dismissal welfare provided due to the termination of labor relations plan or layoff
proposal; When the Company determines the costs or expenses associated with the restructuring involving the payment of
dismissal welfare.
For the employee’s internal retirement plan, the economic compensation before the official retirement date belongs to the
dismissal welfare, and the intended payment of the wage and social insurance premium of the internal retirement employees,
during the period when the employees stop providing services until the official retirement date, shall be included into the current
profits and losses at one time.The economic compensation (such as normal pension) after the official retirement date shall be
disposed according to the welfare after demission.
(4) Accounting treatment methods of other long-term employee benefits
Other long-term employee welfare provided by the Company for employees which complies with the conditions of defined
contribution plans shall be disposed according to the above relevant provisions of defined contribution plans. For those complying
with the defined benefit plans, they shall be disposed according to the above relevant provisions of defined benefit plans, but
“Changes in net liability or net asset from re-measurement of defined benefit plans” of the relevant employee remuneration cost
shall be included into the current profits and losses or relevant assets cost.
The Company shall recognize the obligations related to contingencies as provisions, when all of the following conditions are
satisfied:
(1) The obligation is a present obligation of the Company;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
Provisions are initially measured at the best estimate of the expenditure required to settle the present obligation, taking into
account factors such as risks, uncertainties and the time value of money related to contingent matters. Where the effect of the time
value of money is material, the best estimate shall be determined by discounting the related future cash outflow. The Company
reviews the carrying amounts of provisions at the balance sheet date and adjusts the carrying amounts to reflect the best current
estimates.
If all or part of the expenses required to pay off the provisions are expected to be compensated by a third party or other parties, the
amount of compensation is recognized separately as an asset when it is basically recognized that it can be received. The amount
recognized for the reimbursement shall not exceed the book value of the estimated liability.
(1) Type of share-based payment
Share-based payment is classified into cash-settled share-based payment and equity-based share-based payment.
(2) Determination method of the fair value of equity instruments
The fair value of equity instruments, such as options, granted by the Company in an active market is determined by the price
quoted in the active market. The fair value of granted equity instruments such as options without active market is determined by
option pricing model. The selected option pricing model considers the following factors: A. The exercise price of options; B. The
validity period of the option; C. The current price of the underlying shares; D. Estimated volatility of share price; E. Expected
dividend of shares; F. Risk-free interest rate within the validity period of the option.
(3) Basis for determining the best estimation of feasible equity instruments
On each balance sheet date during the waiting period, the Company makes the best estimate based on the latest available follow-up
information such as changes in the number of employees with feasible rights, and revises the estimated number of equity
instruments with feasible rights. On the vesting date, the final estimated number of vesting rights and interests instruments shall be
consistent with the actual number of vesting rights.
(4) Accounting treatment related to implementation, modification and termination of share-based payment plan
Equity-settled share-based payment is measured at the fair value of equity instruments granted to employees. If the right is
exercised immediately after the grant, the relevant costs or expenses shall be included in the fair value of equity instruments on the
grant date, and the capital reserve shall be increased accordingly. I If the rights can be exercised only after the services within the
waiting period are completed or the specified performance conditions are met, on each balance sheet date within the waiting period,
based on the best estimate of the number of equity instruments available, the services obtained in the current period shall be
included in the relevant costs or expenses and capital reserve according to the fair value on the grant date of equity instruments.
After the vesting date, the recognized related costs or expenses and the total owner's equity will not be adjusted.
Cash-settled share-based payment shall be measured according to the fair value of liabilities calculated and determined on the
basis of shares or other equity instruments undertaken by the Company. If the right is exercised immediately after the grant, the
fair value of the liabilities assumed by the Company shall be included in the relevant costs or expenses on the grant date, and the
liabilities shall be increased accordingly. For cash-settled share-based payment that is feasible only after the service within the
waiting period is completed or the specified performance conditions are met, on each balance sheet date within the waiting period,
based on the best estimation of the feasibility and according to the fair value of the liabilities assumed by the Company, the
services obtained in the current period are included in the costs or expenses and corresponding liabilities. On each balance sheet
date and settlement date before the settlement of related liabilities, the fair value of liabilities shall be re-measured, and the
changes shall be included in the current profits and losses.
When the Company modifies the share-based payment plan, if the fair value of the granted equity instruments is increased by
modification, the increase of the services obtained shall be recognized according to the increase of the fair value of the equity
instruments; If the number of granted equity instruments is increased by modification, the fair value of the increased equity
instruments will be recognized as the increase in services obtained accordingly. The increase of fair value of equity instruments
refers to the difference between the fair values of equity instruments before and after modification on the modification date. If the
total fair value of share-based payment is reduced by modification or the terms and conditions of the share-based payment plan are
modified in other ways that are unfavorable to employees, the accounting treatment of the obtained services will continue, as if
with no changes unless the Company cancels some or all of the granted equity instruments.
During the waiting period, if the granted equity instruments are cancelled (except those cancelled due to non-market conditions
that do not meet the feasible rights conditions), the Company will treat the cancellation of the granted equity instruments as an
accelerated exercise, and immediately record the amount to be recognized in the remaining waiting period into the current profits
and losses, and recognize the capital reserve at the same time. If the employee or other party can choose to meet the non-feasible
right condition but fails to meet it during the waiting period, the Company will treat it as a cancellation for granting equity
instruments.
Disclose the accounting policies adopted for revenue recognition and measurement according to the type of business
(1) General principles
The Company recognizes the revenue when it performs its obligations under the contract, that is, when the customer obtains the
control right of related goods or services.
If the contract contains two or more performance obligations, the Company, at the beginning of the contract, allocates the
transaction price to each individual performance obligation according to the relative proportion of the individual selling price of
the goods or services committed by each individual performance obligation. The Company measures the income according to the
transaction price allocated to each individual performance obligation.
If one of the following conditions is met, it belongs to the performance obligation within a certain period of time; otherwise, it
belongs to the performance obligation at a certain time point:
① The customer acquires and consumes the economic benefits arising from the Company's performance while the Company
performs the contract.
② Customers can control the goods under construction during the performance of the Company.
③ The commodities produced by the Company during the performance possess have irreplaceable usage, and the Company has
the right to collect payment for the performance part accumulated so far during the entire contract period.
For the performance obligations performed within a certain period of time, the Company recognizes the revenue according to the
performance schedule within that period of time,. If the performance schedule cannot be reasonably determined and the costs
already incurred by the Company are expected to be compensated, the Company recognizes the revenue according to the amount
of the incurred costs until the performance schedule can be reasonably determined.
For the performance obligations performed at a certain point of time, the Company will recognize the revenue when the customer
acquires the right of control over relevant commodities or services. While determining whether the customer has acquired the
control over the commodities or services, the Company will take the following into consideration:
① The Company has the current collection right for the such commodities or services, that is, the customer has the current
payment obligation for such commodities.
② The Company has transferred the legal title of such commodities to the customer, that is, the customer already has the legal
title of such commodities.
③ The Company has transferred the physical commodities to the customer, that is, the customer has possessed the physical
commodities.
④ The Company has transferred the major risks and rewards of the commodity title to the customer, that is, the customer has
acquired the major risks and rewards of the commodity title.
⑤ The customer has accepted the goods or services.
⑥ Other signals that the customer has acquired control over commodities.
(2) Specific methods
Sales revenue from commodities
The Company primarily sells nutrition products, aroma chemicals products, and new materials, which are performance obligations
satisfied at a point in time. Domestic sales revenue is recognized when the Company delivers the product to the contractually
agreed delivery location, the customer confirms acceptance, payment has been received or the right to receive payment has been
obtained, and it is probable that related economic benefits will flow to the Company. For export sales settled on an FOB or CIF
basis, revenue is recognized when the Company has declared the products to customs in accordance with the contract, obtained the
bill of lading, and has received payment or obtained the right to receive payment, provided that it is probable that the related
economic benefits will flow in; for export sales settled on a DDP basis, revenue is recognized when the Company has delivered the
goods to the designated destination in the importing country and the customer has confirmed acceptance, and payment has been
received or the right to receive payment has been obtained, provided that it is probable that the related economic benefits will flow
in.
Different operating modes in the same kind of business lead to different revenue recognition methods and measurement
methods
None
Contract costs include incremental costs incurred to obtain the contract and costs of contract performance.
Incremental cost incurred to obtain the contract refers to the cost that will not be incurred if the Company does not obtain the
contract (such as sales commission, etc.). If such costs are expected to be recoverable, the Company recognizes them as costs to
obtain a contract and records them as an asset. The Company recognizes other costs incurred in obtaining a contract in profit or
loss when incurred, except for incremental costs that are expected to be recovered.
Costs incurred to fulfill a contract that do not fall within the scope of other enterprise accounting standards such as inventory, and
simultaneously meet the following conditions, will be recognized by the company as a contract fulfillment cost and recognized as
an asset:
① The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing costs (or
similar costs), costs clearly borne by customers, and other costs only incurred due to the contract;
② The costs enrich the Company's resources for future contract performance;
③ The cost is expected to be recovered.
Assets recognized as costs of obtaining a contract and assets recognized as costs of fulfilling a contract (hereinafter referred to as
"assets related to contract costs") are amortized on the same basis as the recognition of revenue from the goods or services related
to the asset and are charged to profit or loss for the period; if the amortization period does not exceed one year, they are expensed
as incurred.
In case the book value of assets related to contract costs is higher than the difference between the two items below, the Company
will accrue the impairment provision for the extra part, and recognize that part as an impairment loss:
① Estimated residual consideration to be obtained by the Company from the transfer of commodities or services related to the
assets;
② The costs expected to be incurred for the transfer of the relevant goods or services.
The government subsidies shall be recognized when the conditions attached thereto are satisfied and the subsidies can be received.
The governmental subsidy of monetary assets shall be measured according to the amount received or to be received. The
governmental subsidy of non-monetary assets shall be measured at the fair value; If the fair value cannot be reliably obtained, it
shall be measured according to the nominal amount of RMB 1.
Governmental subsidy related to assets refers to the governmental subsidy obtained by the Company and used for acquisition and
construction, or forming long-term assets by other means; otherwise, it shall be taken as the governmental subsidy related to
income.
If government documents do not specify the object of subsidy, and long-term assets can be formed, the part of government subsidy
corresponding to the value of assets shall be regarded as the government subsidy related to assets, and the rest as the government
subsidy related to income. If it is difficult to distinguish them, the whole government subsidy shall be regarded as the government
subsidy related to income.
If asset-related government subsidies are recognized as a deferred income, they shall be included in the profits and losses in stages
according to a reasonable and systematic method within the use period of the relevant assets. Governmental subsidy related to
income, which is used to compensate the relevant cost or loss already incurred, shall be included into the current profits and losses;
Those used for compensation of the relevant cost or loss in the subsequent periods shall be included into the deferred income, and
shall be included into the current profits and losses during the recognition period of the relevant cost or loss. The governmental
subsidy measured at the nominal amount shall be directly included in the current profits and losses. The Company shall adopt the
same method to dispose the same or similar governmental subsidy business.
Government subsidies related to daily activities shall be included in other income based on the economic substance of the
transactions. Government subsidies unrelated to the daily activities are included in non-operating revenue.
When a recognized government grant must be returned: if at initial recognition it reduced the carrying amount of the related asset,
adjust the asset's carrying amount; if there is a balance of related deferred income, offset that deferred income balance and
recognize the excess in profit or loss; in other cases, recognize the refund directly in profit or loss.
For policy-based preferential loan interest subsidies received, when the finance department disburses the subsidy funds to the
lending bank, the actual loan amount received will be recorded as the loan value. Borrowing costs will be calculated based on the
loan principal and the applicable policy-based preferential interest rate. If the finance department directly disburses the interest
subsidy to the Company, the interest subsidy shall be offset against borrowing costs.
Income tax comprises current income tax and deferred income tax. Except for deferred tax arising from adjustments to goodwill
resulting from a business combination, or deferred tax related to transactions or events recognized directly in owner's equity, all
other deferred tax is recognized as income tax expense in profit or loss.
The Company recognizes deferred taxes using the balance sheet liability method based on temporary differences between the
carrying amounts of assets and liabilities at the balance sheet date and their taxable bases.
All taxable temporary differences shall be recognized as deferred income tax liabilities, except for the taxable temporary
differences that arise from the following transactions:
(1) The initial recognition of goodwill, or the initial recognition of assets or liabilities arising from transactions that have the
following characteristics: the transaction is not a business combination, and at the time of the transaction neither accounting profit
nor taxable profit is affected (except for individual transactions in which the initial recognition of the assets and liabilities gives
rise to equivalent taxable temporary differences and deductible temporary differences);
(2) For taxable temporary differences associated with investments in subsidiaries, associates, and joint ventures, the Company 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.
For deductible temporary differences, and deductible losses and tax credits that can be carried forward to later years, the Company
recognizes the resulting deferred tax assets to the extent that it is probable that taxable profits will be available in the future, unless
those deductible temporary differences arise in the following transactions:
(1) The transaction is not a business combination, and at the time of the transaction neither accounting profit nor taxable profit is
affected (except for individual transactions in which the initial recognition of the assets and liabilities gives rise to equivalent
taxable temporary differences and deductible temporary differences);
(2) The deferred income tax assets shall be recognized if the deductible temporary differences associated with investments in
subsidiaries, associates, and joint ventures simultaneously meet the following conditions: It is probable that the temporary
difference will reverse in the foreseeable future and that taxable profits will be available in the future against which the temporary
difference can be utilized.
On the balance sheet date, the Company measures deferred tax assets and deferred tax liabilities at the tax rates that are expected to
apply to the periods when the asset is expected to be recovered or the liability is expected to be settled, and reflects on the balance
sheet date the tax effects of the expected manner of recovery of the asset or settlement of the liability.
On the balance sheet date, the Company will review the carrying amount of the deferred income tax assets. If no sufficient taxable
income is likely to be obtained to offset the benefits of deferred income tax assets in the future, the carrying amount of deferred
income tax assets shall be written down. The amount written down shall be reversed when it is probable that sufficient taxable
profit will be available.
On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities will be presented by the net
amount after offsetting when the following conditions are fulfilled:
(1) The taxable entity within the Company is granted the legal rights of net settlement of current income tax assets and current
income tax liabilities;
(2) Deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same tax authority on the
same taxable entity within the Company.
(1) Accounting treatment method for leasing by the lessee
At the commencement date of the lease term, the Company recognizes all right-of-use assets and lease liabilities, except for short-
term leases and low-value asset leases according to applicable business standards.
The accounting policies for right-of-use assets are set out in Note 30 of Section V of this financial report.
Lease liabilities are initially measured at the present value of the lease payments not yet paid as of the lease commencement date,
discounted using the interest rate implicit in the lease. The incremental borrowing rate will be adopted as the discount rate if the
interest rate implicit in the lease is not determinable. The lease payment includes fixed amount (and the substantially fixed amount)
less the relative amount of any lease incentives enjoyed if there are lease incentives; the index or rate-based variable amount; the
exercise price of a purchase option, provided that the lessee reasonably determines that it will exercise the option; the payment for
exercising the option to terminate the lease, provided that it is reflected in the lease period that the lessee will exercise the option to
terminate the lease; and the estimated amount to be paid according to the residual value of guarantee provided by the lessee. The
interest expense of the lease liabilities during each period of the lease term will be calculated at a fixed periodic interest rate later
and include it in the current profit or loss. Variable lease payments not included in the measurement of lease liabilities shall be
included in the current profits and losses when they are actually incurred.
The short-term lease refers to the lease that does not contain the purchase option and has a lease period of no more than 12 months
from the lease commencement date.
The Company records the lease payments under short-term leases into the cost of the related assets or to current income or loss on
a straight-line basis over the respective periods of the lease term.
For short-term leases, the Company, by category of leased asset, selects to apply the simplified approach described above to items
within asset types that qualify as short-term leases.
The Company records the lease payments under low-value asset leases into the cost of the related assets or to current income or
loss on a straight-line basis over the respective periods of the lease term.
For leases of low-value assets, the Company selects, based on the specific circumstances of each lease, to apply the simplified
approach described above.
The Company accounts for a lease change as a separate lease if the change occurs and both of the following conditions are met:
① the lease change increases the scope of the lease by adding the right to use one or more underlying assets; and ② the
consideration for the lease increases by an amount and the scope of the lease increased by an extent that is commensurate with the
stand-alone price for the increase in consideration and scope as adjusted for the particular circumstances of the contract.
If the lease change is not subject to accounting treatment as a separate lease, on the effective date of the lease change, the
Company will re-apportion the consideration of the changed contract, re-determine the lease term, and remeasure the lease
liabilities at the present value worked out according to the changed lease payment and the revised discount rate.
If the lease change results in narrower scope of lease or shorter lease term, the Company will reduce the carrying amount of the
right-of-use assets accordingly, and will include relevant gain or loss from partial or full termination of the lease in the current
profit or loss.
If other lease changes result in re-measurement of the lease liabilities, the Company will adjust the carrying amount of the right-of-
use assets accordingly.
(2) Accounting treatment method for leasing by the lessor
When the Company acts as a lessor, leases that substantially transfer all the risks and rewards incidental to ownership of the asset
are recognized as finance leases, while leases other than finance leases are recognized as operating leases.
For operating leases, rental payments are recognized by the Company on a straight-line basis in profit or loss for each period
during the lease term. The initial direct expenses related to an operating lease incurred shall be capitalized, apportioned during the
lease term on the same recognition basis as rental income, and included into the current profit and loss by installments. The
variable lease amount received under an operating lease, which is not included in the lease receipt, is included in the profit or loss
of the current period at the time of actual occurrence.
In the case of any change to the operating lease, the Company will conduct accounting treatment with respect to the changed
operating lease as a new lease as of the effective date of the change, and the lease payments received in advance or receivable with
respect to the lease before the change will be taken as the lease receipts for the new lease.
The Company accounts for a finance lease change as a separate lease if the change occurs and both of the following conditions are
met ① the change increases the scope of the lease by adding the right to use one or more underlying assets; and ② the
consideration for the lease increases by an amount and the scope of the lease increased by an extent that is commensurate with the
stand-alone price for the increase in consideration and scope as adjusted for the particular circumstances of the contract.
If changes to a finance lease are not subject to accounting treatment as a separate lease, the Company will treat the changed lease
in the following circumstances: ① If assuming that the change takes effective at the lease commencement date, and the lease is
classified into operating leases, the Company will, from the effective date of the lease change, consider the change as a new lease
and the net lease investment prior to the effective date of the lease commencement as the carrying value of the leased asset; ②
Assuming that the change takes effective at the lease commencement date, and the lease is classified into financing leases, the
Company will apply the provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments concerning the modification or re-negotiation of contract.
(1) Conditions for recognition of right-of-use assets
Right-of-use asset refers to the Company's right, as lessee, to use the leased asset during the lease term.
On the lease commencement date, the right-of-use assets are initially measured at cost. Such cost includes: the initial measurement
amount of the lease liability; lease payments made at or before the commencement date, less the portion relating to any lease
incentives received; initial direct costs incurred by the Company as lessee; and an estimate of costs expected to be incurred by the
Company as lessee for dismantling and removing the leased asset, restoring the site on which it is located, or restoring the leased
asset to the condition required by the terms of the lease. The Company, as a lessee, recognizes and measures costs such as
dismantling, restoration, and similar items in accordance with Accounting Standards for Business Enterprises No. 13 -
Contingencies. Subsequent adjustments are made for any remeasurement of lease liabilities.
(2) Depreciation method of right-of-use assets
The Company shall withdraw the depreciation according to the straight-line method. If the Company, as a lessee, can reasonably
determine that it will obtain ownership of the leased asset when the lease term expires, the right-of-use asset is depreciated over
the remaining useful life of the leased asset. If the Company cannot reasonably determine that it will obtain the ownership of
leased assets when the lease term expires, the right-of-use asset is depreciated over the shorter of the lease term and the remaining
service life of the leased assets.
(3) The impairment test method for right-of-use assets and the impairment provision accrual method are set out in Note 20 of
Section V of this financial report.
The Company makes provisions for work safety funds in accordance with the Administrative Measures for the Collection and
Utilization of Enterprise Work Safety Funds (C.Z. [2022] No. 136) jointly issued by the Ministry of Finance and the Ministry of
Emergency Management.
Work safety funds, when appropriated, are included in the cost of the related products or recognized in profit or loss for the current
period, and are simultaneously recorded in the “special reserve” account.
When work safety funds are appropriated and utilized for expense-type expenditures, they directly reduce the special reserve.
Expenditures that result in the formation of fixed assets are first accumulated in the "construction in progress" account; upon
completion and attainment of the intended usable state, they are recognized as fixed assets. Concurrently, the special reserve is
reduced by the cost of the fixed assets formed, and the same amount of accumulated depreciation will be recognized. These fixed
assets will not be depreciated in subsequent periods.
The shares repurchased by the Company are held as treasury stock prior to cancellation or transfer, and all expenses incurred for
the repurchase of shares shall be recorded as the cost of treasury stock. The consideration paid and transaction costs in a share
repurchase reduce equity; gains or losses are not recognized on the repurchase, transfer, or cancellation of the Company's shares.
When treasury shares are transferred, the difference between the actual proceeds received and the carrying amount of the treasury
shares shall be recorded in capital reserve; if the capital reserve is insufficient to absorb the difference, surplus reserve and retained
earnings shall be reduced to cover the shortfall. When treasury shares are cancelled, share capital is reduced by the par value per
share and the number of shares canceled, and the difference between the carrying amount of the cancelled treasury shares and their
par value will write off the capital reserve; if the capital reserve is insufficient to absorb the difference, surplus reserve and
retained earnings shall be reduced to cover the shortfall.
The Company continuously evaluates the significant accounting estimates and key assumptions it uses, based on historical
experience and other factors, including reasonable expectations about future events. Below are the major accounting estimates and
key assumptions that may pose a significant risk of material adjustments to the carrying values of assets and liabilities in the
upcoming financial year:
The Company’s significant judgments in determining the classification of financial assets include analysis of the business model
and the characteristics of the contractual cash flows.
The Company establishes its business model for managing financial assets at the portfolio level by considering various factors.
These include how the performance of financial assets is assessed and communicated to key management personnel, the risks
influencing asset performance and their management, as well as the compensation structure for the relevant business managers.
When evaluating whether the contractual cash flows of a financial asset align with a basic lending arrangement, the Company
primarily considers the following key judgments: whether the principal amount may vary in timing or amount throughout the
instrument’s term due to prepayment or other factors; and whether the interest reflects only the time value of money, credit risk,
other fundamental lending risks, and appropriate compensation for costs and profit. For instance, it is important to determine
whether the early repayment amount includes only the outstanding principal, the interest accrued on that principal, and any
reasonable compensation for the early termination of the contract.
The Company calculates expected credit losses on accounts receivable using the accounts receivable exposure to default risk and
the expected credit loss rate, and determines the expected credit loss rate based on the probability of default and the loss in the
event of default. When determining the expected credit loss rate, the Company relies on its internal historical credit loss
experience along with other data, and adjusts the historical data to reflect current conditions and forward-looking information.
When considering forward-looking information, the Company takes into account various indicators such as the risk of an
economic downturn, shifts in the external market environment, technological developments, and customer conditions, among
others. The Company regularly monitors and reviews the assumptions related to the calculation of expected credit losses.
The Company conducts an annual assessment to determine whether there has been any impairment of goodwill. This requires
estimating the value in use of the asset group to which goodwill has been assigned. When estimating value in use, the Company
needs to project the future cash flows generated by the asset group and apply a suitable discount rate to determine the present value
of those cash flows.
If and to the extent that it is likely that there will be enough taxable profits to cover the losses, the Company recognizes deferred
tax assets for all unused tax losses. In this case, the management has to use significant judgment to estimate the time and amount
of future taxable profits and, in combination with its tax plan, to determine the amount of deferred tax assets that should be
recognized.
None
(1) Changes in significant accounting policies
□ Applicable ? Not applicable
(2) Changes in significant accounting estimates
□ Applicable ? Not applicable
(3) Adjustments to related items of the financial statements at the beginning of the year of initial application of the new
accounting standards (effective from 2025)
□ Applicable ? Not applicable
VI. Taxation
Tax categories Taxation basis Tax rate
The applicable tax rates are20%, 13%,
Exported goods benefit from the
Taxable amount of added value (taxable
"exemption, offset, and refund" tax
amount is the balance calculated as the
policy, with rebate rates ranging from 0%
following formula: taxable sales amount
VAT to 13%. Additionally, our subsidiary,
multiplies the applicable tax rate, then
Zhejiang NHU Import & Export
deducts the input tax allowable for
Company Ltd., exports goods under the
deduction of the current period)
"tax collection first, refund later" policy,
also with rebate rates between 0% and
Urban maintenance and construction tax Actual paid turnover tax amount 5%, 7%
Corporate income tax Taxable income
For property tax assessed on a value
basis, payment is calculated as 1.2% of
the residual value after a one-time 30%
House property tax deduction from the original property 1.2%, 12%
value; for property tax assessed on a
rental basis, payment is calculated as
Education surcharge Actual paid turnover tax amount 3%
Local education surcharges Actual paid turnover tax amount 2%
Solidarity surcharge [Note] Amount of income tax payable 5.5%
Trade tax [Note] Taxable income 13.3%
A four-grade progressive tax system is
The incremental amount arising from the adopted. The rates are: 30% for
transfer of state-owned land use right and appreciated value not over 50% of total
Land appreciation tax
the buildings and structures that are deductible amount; 40% for appreciated
constructed on the land value over 50% but not over 100% of
total deductible amount; 50% for
Tax categories Taxation basis Tax rate
appreciated value over 100% but not
over 200% of total deductible amount;
and 60% for appreciated value over
[Note] This information is applicable to the subsidiaries NHU EUROPE GMBH, NHU Performance Materials GmbH,
Bardoterminal GmbH and NHU Life Science GmbH.
If there are taxable entities with different tax rates of enterprise income tax, disclose the specific information
Name of taxable entity Rate of income tax
The Company 15%
Shangyu NHU Bio-Chem Co., Ltd. 15%
Shandong NHU Pharmaceutical Co., Ltd. 15%
Shandong NHU Amino-acids Co., Ltd. 15%
Zhejiang NHU Specialty Materials Co., Ltd. 15%
Heilongjiang NHU Biotechnology Co., Ltd. 15%
Zhejiang NHU Pharmaceutical Co., Ltd. 15%
Shandong NHU Fine Chemical Science and Technology Co.,
Ltd.
Taxation is based on the territorial source principle. For profits
sourced from Hong Kong, the first HKD 2,000,000 are taxed at
NHU (Hong Kong) Trading Co., Ltd. a profits tax rate of 8.25%; subsequent profits sourced from
Hong Kong are taxed at 16.5%. Profits earned outside of Hong
Kong are not subject to profits tax within the region.
NHU EUROPE GMBH 15%
NHU Performance Materials GMBH 15%
Bardoterminal GmbH 15%
NHU LIFE SCIENCE GmbH 15%
NHU Singapore Pte. Ltd. 17%
CONG TY TNHH NHU VIETNAM 20%
NHU North America LLC 21%
NHU Life Science North America LLC 21%
NHU/Chr. Olesen Latin America A/S 22%
NHU/CHR. OLESEN MEXICO SAPI DE CV 25.5%
NHU/CHR. OLESEN BRASIL LTDA 34%
NHU Japan Co., Ltd. 15%
Other taxable entities not previously specified 25%
(1) Corporate income tax incentives
① High-tech enterprise tax incentives
The Company has been officially recognized as a high-tech enterprise, as confirmed by the High-tech Enterprise Certificate
(GR202333009429) issued by the Department of Science and Technology of Zhejiang Province, the Zhejiang Provincial
Department of Finance, and the Zhejiang Provincial Tax Service, State Taxation Administration. As a result, the Company will
benefit from high-tech enterprise tax incentives from 2023 through 2025, with a corporate income tax rate of 15% applicable in
The subsidiary, Shangyu NHU Bio-Chem Co., Ltd., has been officially recognized as a high-tech enterprise, as confirmed by the
High-tech Enterprise Certificate (GR202533006963) issued by the Department of Science and Technology of Zhejiang Province,
the Zhejiang Provincial Department of Finance, and the Zhejiang Provincial Tax Service, State Taxation Administration. As a
result, it will benefit from high-tech enterprise tax incentives from 2025 through 2027, with a corporate income tax rate of 15%
applicable in 2026.
The subsidiary, Shandong NHU Pharmaceutical Co., Ltd., has been officially recognized as a high-tech enterprise, as confirmed
by the High-tech Enterprise Certificate (GR202337003609) issued by the Department of Science & Technology of Shandong
Province, the Shandong Provincial Department of Finance, and the Shandong Provincial Tax Service, State Taxation
Administration. As a result, it will benefit from high-tech enterprise tax incentives from 2023 through 2025, with a corporate
income tax rate of 15% applicable in 2026 temporarily.
The subsidiary, Shandong NHU Amino-acids Co., Ltd., has been officially recognized as a high-tech enterprise, as confirmed by
the High-tech Enterprise Certificate (GR202437003425) issued by the Department of Science & Technology of Shandong
Province, the Shandong Provincial Department of Finance, and the Shandong Provincial Tax Service, State Taxation
Administration. As a result, it will benefit from high-tech enterprise tax incentives from 2024 through 2026, with a corporate
income tax rate of 15% applicable in 2026 temporarily.
The subsidiary, Zhejiang NHU Specialty Materials Co., Ltd., has been officially recognized as a high-tech enterprise, as confirmed
by the High-tech Enterprise Certificate (GR202433008150) issued by the Economy and Information Technology Department of
Zhejiang, the Zhejiang Provincial Department of Finance, and the Zhejiang Provincial Tax Service, State Taxation Administration.
As a result, it will benefit from high-tech enterprise tax incentives from 2024 through 2026, with a corporate income tax rate of
The subsidiary, Heilongjiang NHU Biotechnology Co., Ltd., has been officially recognized as a high-tech enterprise, as confirmed
by the High-tech Enterprise Certificate (GR202423000652) issued by the Department of Science and Technology of Heilongjiang
Province, the Finance Bureau of Heilongjiang Province, and the Heilongjiang Provincial Tax Service, State Taxation
Administration. As a result, it will benefit from high-tech enterprise tax incentives from 2024 through 2026, with a corporate
income tax rate of 15% applicable in 2026.
The subsidiary, Zhejiang NHU Pharmaceutical Co., Ltd., has been officially recognized as a high-tech enterprise, as confirmed by
the High-tech Enterprise Certificate (GR202533005415) issued by the Department of Science and Technology of Zhejiang
Province, the Zhejiang Provincial Department of Finance, and the Zhejiang Provincial Tax Service, State Taxation Administration.
As a result, it will benefit from high-tech enterprise tax incentives from 2025 through 2027, with a corporate income tax rate of
The subsidiary, Shandong NHU Fine Chemical Science and Technology Co., Ltd., has been officially recognized as a high-tech
enterprise, as confirmed by the High-tech Enterprise Certificate (GR202537002216) issued by the Department of Science &
Technology of Shandong Province, the Shandong Provincial Department of Finance, and the Shandong Provincial Tax Service,
State Taxation Administration. As a result, it will benefit from high-tech enterprise tax incentives from 2025 through 2027, with a
corporate income tax rate of 15% applicable in 2026.
② Tax incentives for overseas enterprises
Pursuant to Chapter 112 of the Laws of Hong Kong, the Tax Ordinance, Section 14, Hong Kong adopts the territorial source
principle for taxation: only profits arising in Hong Kong are subject to tax in Hong Kong, while profits arising elsewhere are not
subject to Hong Kong profits tax. The subsidiary, NHU (Hong Kong) Trading Co., Ltd., calculates and pays corporate income tax
at the applicable preferential tax rate.
(2) VAT preference
Pursuant to the Announcement on VAT Additional Deduction Policy for Advanced Manufacturing Enterprises (No. 43
Announcement of Ministry of Finance and State Administration of Taxation in 2023), from January 1, 2023, to December 31,
VAT payable. The Company and its subsidiaries Shangyu NHU Bio-Chem Co., Ltd., Zhejiang NHU Pharmaceutical Co., Ltd.,
Zhejiang NHU Specialty Materials Co., Ltd., Shandong NHU Amino-acids Co., Ltd., Shandong NHU Pharmaceutical Co., Ltd.,
Shandong NHU Fine Chemical Science and Technology Co., Ltd., and Heilongjiang NHU Biotechnology Co., Ltd. enjoy a
preferential policy of additional deduction/offset of input VAT.
VII. Notes to consolidated financial statements
Unit: RMB Yuan
Items Closing balance Opening balance
Cash on hand 9,176.31 19,519.80
Bank deposits 7,366,196,213.60 7,919,727,704.51
Other monetary funds 91,837,415.81 46,522,906.86
Total 7,458,042,805.72 7,966,270,131.17
Including: Total amounts deposited
abroad
Other notes: Monetary funds that are subject to usage restrictions and are not classified as cash or cash equivalents are detailed in
the financial report, specifically in Note 19 of Section VII, and Note 57(3)(4) of Section VII.
Unit: RMB Yuan
Items Closing balance Opening balance
Financial assets measured at fair value
through profit or loss
Including:
Derivative financial assets 29,965,130.86 13,213,250.21
Principal-protected floating-yield wealth
management product
Total 2,583,641,120.21 2,168,275,092.55
(1) Disclosure by aging
Unit: RMB Yuan
Aging Closing book balance Opening balance
Within 1 year (including 1 year) 3,967,129,766.78 3,502,674,400.14
Over 3 years 2,770,460.98 2,120,460.98
Over 5 years 2,106,280.80 2,106,280.80
Total 3,974,023,694.46 3,510,178,567.73
(2) Classification and disclosure by bad debt provision method
Unit: RMB Yuan
Closing balance Opening balance
Categor Book balance Bad-debt provision Book balance Bad-debt provision
ies Carrying Carrying
% to Rate of amount % to Rate of amount
Amount Amount Amount Amount
total provision total provision
Includi
ng:
Accoun
ts
receiva
ble with
provisio
n for
bad 3,974,023,694.46 100.00% 204,206,992.71 5.14% 3,769,816,701.75 3,510,178,567.73 100.00% 178,743,890.46 5.09% 3,331,434,677.27
debts
reserve
based
on
portfoli
o
Total
Closing balance Opening balance
Categor Book balance Bad-debt provision Book balance Bad-debt provision
ies Carrying Carrying
% to Rate of amount % to Rate of amount
Amount Amount Amount Amount
total provision total provision
Includi
ng:
Includi
ng:
Provision for bad debts is made on a portfolio basis: Accounts receivable grouped by aging for bad debt provision
Unit: RMB Yuan
Closing balance
Name
Book balance Bad-debt provision Rate of provision
Within 1 year 3,967,129,766.78 198,356,488.43 5.00%
Over 3 years 2,770,460.98 2,770,460.98 100.00%
Total 3,974,023,694.46 204,206,992.71
Explanation of the basis for determining the grouping: Provision for bad debts is made based on aging groups
If the provision for bad debts on accounts receivable is based on the general model of expected credit losses:
□ Applicable ? Not applicable
(3) Provision, recovery or reversal of bad debt reserve in current period
Provision for bad debts of this period:
Unit: RMB Yuan
Changes in amount of the current period
Opening
Categories Recovery or Closing balance
balance Provision Write off Others
reversal
Provision for
bad debts by 178,743,890.46 25,463,102.25 204,206,992.71
portfolio
Total 178,743,890.46 25,463,102.25 204,206,992.71
(4) The status of accounts receivable and contract assets in the top five of the ending balance collected
according to debtors
Unit: RMB Yuan
Ending balance of
Proportion of total
Ending balance allowance for bad debts
Ending balance balance of accounts
Ending balance of accounts on accounts receivable
Company name of accounts receivable and
of contract assets receivable and and impairment
receivable contract assets at the
contract assets provision for contract
end of the period
assets
Customer I 386,381,331.37 386,381,331.37 9.72% 19,319,066.57
Customer II 158,170,660.67 158,170,660.67 3.98% 7,908,533.03
Customer III 150,208,538.46 150,208,538.46 3.78% 7,510,426.92
Customer IV 82,854,984.52 82,854,984.52 2.08% 4,142,749.23
Customer V 59,186,605.22 59,186,605.22 1.49% 2,959,330.26
Total 836,802,120.24 836,802,120.24 21.05% 41,840,106.01
(1) Financing of accounts receivable by classification
Unit: RMB Yuan
Items Closing balance Opening balance
Bank acceptance bills 920,577,788.17 813,062,385.73
Total 920,577,788.17 813,062,385.73
(2) Classification and disclosure by bad debt provision method
Unit: RMB Yuan
Closing balance Opening balance
Bad-debt Bad-debt
Book balance Book balance
provision provision
Catego
ries Rate Carrying Rate Carrying
% to Amo of amount % to Amo of amount
Amount Amount
total unt prov total unt provisi
ision on
Including:
Provisi
on for
bad
debts 920,577,788.17 100.00% 920,577,788.17 813,062,385.73 100.00% 813,062,385.73
by
portfol
io
Including:
Bank
accept
ance
bills
Total 920,577,788.17 100.00% 920,577,788.17 813,062,385.73 100.00% 813,062,385.73
Provision for bad debts by portfolio: Bank acceptance bills
Unit: RMB Yuan
Opening balance Closing balance
Name Bad-debt Bad-debt Rate of Reason for
Book balance Book balance
provision provision provision accrual
Portfolio of
bank 813,062,385.73 920,577,788.17
acceptance bills
Total 813,062,385.73 920,577,788.17
(3) Receivables financing pledged at the end of the period
Unit: RMB Yuan
Items Closing balance of pledged notes
Bank acceptance 114,794,927.96
Subtotal 114,794,927.96
(4) Receivables financing endorsed or discounted by the Company at the end of the period and not yet
due on the balance sheet date
Unit: RMB Yuan
Items Closing balance derecognized Closing balance not yet derecognized
Bank acceptance 1,346,436,608.90
Total 1,346,436,608.90
Unit: RMB Yuan
Items Closing balance Opening balance
Other receivables 261,081,058.41 274,052,669.41
Total 261,081,058.41 274,052,669.41
(1) Other receivables
Unit: RMB Yuan
Nature of payment Closing book balance Opening balance
Export tax rebates and other refundable
taxes and fees
Deposits and guarantee deposits 24,669,635.84 35,191,248.50
Employee petty cash 16,480,508.83 21,857,847.92
Others 11,812,279.05 6,774,582.72
Total 275,445,652.27 288,024,973.01
Unit: RMB Yuan
Aging Closing book balance Opening balance
Within 1 year (including 1 year) 242,989,686.74 252,007,141.35
Over 3 years 23,086,635.08 23,032,987.75
Over 5 years 15,470,736.31 13,870,595.67
Total 275,445,652.27 288,024,973.01
? Applicable □ Not applicable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Rate Carrying Rate Carrying
Categories
% to of amount % to of amount
Amount Amount Amount Amount
total prov total provi
ision sion
Including:
Provision
for bad
debts by
portfolio
Total 275,445,652.27 100.00% 14,364,593.86 5.22% 261,081,058.41 288,024,973.01 100.00% 13,972,303.60 4.85% 274,052,669.41
Category name for bad debt provisions calculated by combination: Other receivables for which bad debt provisions are calculated
by combination
Unit: RMB Yuan
Closing balance
Name
Book balance Bad-debt provision Rate of provision
Export Refund Receivable
Portfolio
Land deposit receivables
portfolio
VAT refund receivable
portfolio
Aging portfolio 35,631,849.77 11,966,455.83 33.58%
Including: Within one year 20,530,377.74 1,026,518.88 5.00%
Over 3 years 5,732,141.58 5,732,141.58 100.00%
Total 275,445,652.27 14,364,593.86
Provision for bad debts under the general model of expected credit losses:
Unit: RMB Yuan
First stage Second stage Third stage
Bad-debt provision Expected credit loss for Expected credit loss for
Expected credit losses Total
the entire duration (no the entire duration
over the next 12
credit impairment (credit impairment has
months
occurred) occurred)
Balance as at January
The balance as of
January 1, 2026 is in
the current period
-- Transferred to the
-190,639.08 190,639.08
second stage
-- Transferred to the
-1,111,309.77 1,111,309.77
third stage
First stage Second stage Third stage
Bad-debt provision Expected credit loss for Expected credit loss for
Expected credit losses Total
the entire duration (no the entire duration
over the next 12
credit impairment (credit impairment has
months
occurred) occurred)
Accrual in the current
-190,554.24 -283,411.66 866,256.16 392,290.26
period
Balance as at June 30,
Criteria for dividing each stage and the bad-debt reserves calculation and withdrawal proportion
Classification criteria for stages are as follows: Accounts with an aging period of up to one year and those undergoing individual
impairment assessment are categorized as Stage I; accounts aged between one and two years fall under Stage II; and accounts
exceeding two years in age are designated as Stage III.
Significant changes in the carrying amounts of items with material changes in the allowance for losses during the period
□ Applicable ? Not applicable
Provision for bad debts of this period:
Unit: RMB Yuan
Changes in amount of the current period
Opening Closing balance
Categories Recovery or Charge-off or
balance Provision Others
reversal write-off
Provision for
bad debts by 13,972,303.60 392,290.26 14,364,593.86
portfolio
Total 13,972,303.60 392,290.26 14,364,593.86
Unit: RMB Yuan
Ratio in the total
Nature of the Ending balance of
Company name Closing balance Aging ending balance of
amounts bad debt provision
other receivables
State
Export tax rebates
Administration of
and other
Taxation (Export 164,630,292.23 Within one year 59.77% 1,646,302.92
refundable taxes
tax rebates
and fees
receivable)
Export tax rebates
Servicio de
and other
Administración 41,336,245.67 Within one year 15.01% 413,362.46
refundable taxes
Tributaria
and fees
Shandong Weifang
Binhai Economic
Development Zone Deposits and
Fiscal Treasury guarantee deposits
Centralized
Payment Center
Ratio in the total
Nature of the Ending balance of
Company name Closing balance Aging ending balance of
amounts bad debt provision
other receivables
Export tax rebates
Secretaria da and other
Fazenda do Estado refundable taxes
and fees
Export tax rebates
Hauptzollamt and other
Hamburg Zollamt refundable taxes
and fees
Total 237,880,647.56 86.36% 2,378,806.49
(1) Presentation of advance payments by age of account
Unit: RMB Yuan
Closing balance Opening balance
Aging
Amount % to total Amount % to total
Within 1 year 295,510,045.01 99.60% 177,889,226.14 99.68%
Over 3 years 316,482.97 0.11% 296,151.06 0.17%
Total 296,698,192.81 178,450,145.87
Explanation of reasons why prepayments with more than 1 year's age and significant amount are not settled in time: None
(2) Top five ending balances of prepayments, grouped by payee
Company name Book balance Ratio of total balance of prepayment
Supplier A 28,601,323.42 9.64%
Supplier B 25,000,000.00 8.43%
Supplier C 22,989,023.22 7.75%
Supplier D 17,437,277.20 5.88%
Supplier E 11,515,112.60 3.88%
Subtotal 105,542,736.44 35.58%
Whether the Company needs to comply with disclosure requirements of real estate industry
No
(1) Inventory classification
Unit: RMB Yuan
Closing balance Opening balance
Provision for Provision for
inventory write- inventory write-
Items down or down or
Carrying
Book balance provision for Book balance provision for Carrying amount
amount
impairment of impairment of
contract contract
fulfillment costs fulfillment costs
Raw material 459,814,614.91 995,589.29 458,819,025.62 335,723,544.36 930,697.19 334,792,847.17
Work in
process
Merchandise
inventory
Goods
dispatched
Work in
process - 1,504,782.46 893,791.28 610,991.18 11,563,462.74 1,068,326.66 10,495,136.08
outsourced
Packaging 23,318,817.56 23,318,817.56 19,714,407.90 19,714,407.90
Low value
consumables
Total 4,913,162,123.92 143,921,881.66 4,769,240,242.26 4,890,500,028.96 241,750,561.53 4,648,749,467.43
(2) Provision for inventory write-downs and impairment provision for contract performance costs
Unit: RMB Yuan
Increased amount in the current Decreased amount in the current
Opening period period
Items Closing balance
balance Reversed or
Provision Others Others
charged-off
Raw material 930,697.19 64,892.10 995,589.29
Work in
process
Merchandise
inventory
Goods
dispatched
Work in
process - 1,068,326.66 174,535.38 893,791.28
outsourced
Total 241,750,561.53 30,106,714.53 127,935,394.40 143,921,881.66
The specific criteria used to determine the net realizable value, along with the explanations for any reversals or write-offs of
inventory impairment provisions during the current period
The explanations for any reversals or write-offs of
The specific criteria used to determine the net
Items inventory impairment provisions during the current
realizable value
period
Raw material The net realizable value is calculated by
taking the estimated selling price of the
finished goods and subtracting the estimated
Work in process costs to complete, selling expenses, and
applicable taxes Reversal of inventory write-down provision: The net
realizable value of inventory for which inventory
Merchandise inventory The net realizable value is determined by write-down provisions were made in previous periods
subtracting the estimated selling expenses and has increased; write-off of inventory write-down
related taxes from the estimated selling price provision: During the current period, inventory for
Goods dispatched
of the finished products. which write-down provisions were made at the
beginning of the period has been
The net realizable value is calculated by consumed/sold/scrapped
taking the estimated selling price of the
Work in process - outsourced finished goods and subtracting the estimated
costs to complete, selling expenses, and
applicable taxes
Accrual standard of provision for inventory obsolescence by portfolio: None
Unit: RMB Yuan
Items Closing balance Opening balance
Prepaid VAT or input VAT pending
deduction
Deferred service fees 11,863,665.02 14,539,548.75
Deferred insurance expense 7,436,052.58 4,306,345.86
Advance payment of enterprise income tax 534,863.03
Prepaid rent fees 967,808.27 1,175,757.55
Total 86,282,299.41 55,037,719.63
Unit: RMB Yuan
Losses
included Reasons for
Losses
Gains accumulat designation
included
included in ed in as financial
Gains included in other Dividend
other other assets
in other compreh income
Closing Opening comprehensiv comprehe measured at
Project name comprehensive ensive recognized in
balance balance e income at nsive fair value
income in the income the current
the end of the income at through
current period in the period
current the end of other
current
period the comprehensi
period
current ve income
period
Zhejiang
Second
Losses
included Reasons for
Losses
Gains accumulat designation
included
included in ed in as financial
Gains included in other Dividend
other other assets
in other compreh income
Closing Opening comprehensiv comprehe measured at
Project name comprehensive ensive recognized in
balance balance e income at nsive fair value
income in the income the current
the end of the income at through
current period in the period
current the end of other
current
period the comprehensi
period
current ve income
period
Pharma Co.,
Ltd.
Shanghai
NewMargin
Yongjin
Equity 52,336,000.00 -37,680,000.00 2,948,000.00 14,656,000.00
Enterprise
(Limited
Partnership)
Total 60,126,147.55 -37,680,000.00 2,948,000.00 22,446,147.55
Derecognition in the current period: None
Other notes: The above investments are investments that the Company plans to hold long-term for strategic purposes, and the
Company has designated them as financial assets measured at fair value with changes recognized in other comprehensive income.
Unit: RMB Yuan
Opening Increase or decrease in the current period
Closing
Opening balance balance of
Inves Recognized Declared Provision
Other Other Closing balance balance of
Invested entity (Carrying impairment
Additional tment investment gain payment of cash for
comprehensive changes in Others (Carrying amount) impairment
amount) provision
investment decre and loss under dividends or impairmen
income adjustments equity provision
ase equity method profits t reserve
I. Joint ventures
Ningbo Zhenhai
Refining and
Chemical NHU 418,125,357.72 116,968,195.93 29,858,295.39 564,951,849.04
Biotechnology
Co., Ltd.
Subtotal 418,125,357.72 116,968,195.93 29,858,295.39 564,951,849.04
II. Associates
Envalior NHU
Engineering
Materials 45,409,060.43 8,930,489.80 -2,894,464.62 51,445,085.61
(Zhejiang) Co.,
Ltd.
Zhejiang
Chunhui
Environmental 338,826,562.59 22,409,394.80 40,660.57 361,276,617.96
Protection
Energy Co., Ltd.
Zhejiang Saiya
Chemical
Opening Increase or decrease in the current period
Closing
Opening balance balance of
Inves Recognized Declared Provision
Other Other Closing balance balance of
Invested entity (Carrying impairment
Additional tment investment gain payment of cash for
comprehensive changes in Others (Carrying amount) impairment
amount) provision
investment decre and loss under dividends or impairmen
income adjustments equity provision
ase equity method profits t reserve
Materials Co.,
Ltd.
CysBio ApS 26,800,937.20 -106,505.66 -830,856.51 1,271.61 25,864,846.64
Shandong Bin'an
Vocational
Training School
Co., Ltd.
Anhui Yingna
Weixun
Technology Co.,
Ltd.
Subtotal 547,225,191.71 35,883,199.44 -830,856.51 -2,637,140.13 579,640,394.51
Total 965,350,549.43 152,851,395.37 -830,856.51 27,221,155.26 1,144,592,243.55
The recoverable amount is determined based on the net of fair value less disposal costs.
□ Applicable ? Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows.
□ Applicable ? Not applicable
Unit: RMB Yuan
Items Closing balance Opening balance
Fixed assets 19,538,428,936.53 20,298,898,673.14
Total 19,538,428,936.53 20,298,898,673.14
(1) Status of fixed assets
Unit: RMB Yuan
Houses and Dedicated
Items General equipment Means of transport Total
buildings equipment
I. Original
carrying amount:
balance
increased in the 13,082,760.98 23,940,570.00 358,439,560.99 762,870.21 396,225,762.18
current period
(1) Purchase 1,839,140.68 21,656,187.65 45,822,598.40 762,870.21 70,080,796.94
(2) Transfer from
construction in 11,243,620.30 2,284,382.35 312,616,962.59 326,144,965.24
progress
amount in the
Houses and Dedicated
Items General equipment Means of transport Total
buildings equipment
current period
(1) Disposal or
scrapping
II. Accumulated
depreciation
balance
increased in the 109,593,470.54 14,758,354.99 994,435,863.55 2,415,350.92 1,121,203,040.00
current period
(1) Provision 109,593,470.54 14,758,354.99 994,435,863.55 2,415,350.92 1,121,203,040.00
amount in the 372,495.07 5,913,326.36 27,811,596.99 679,593.56 34,777,011.98
current period
(1) Disposal or
scrapping
III. Impairment
Provision
balance
increased in the
current period
(1) Provision
amount in the 61,930.01 61,930.01
current period
(1) Disposal or
scrapping
IV. Carrying
amount
amount at the end 6,839,226,301.79 96,069,861.41 12,590,381,957.30 12,750,816.03 19,538,428,936.53
of the period
amount at the
beginning of
period
(2) Fixed assets temporarily idle
Unit: RMB Yuan
Original carrying Accumulated Depreciation
Items Carrying amount Notes
amount depreciation reserves
Houses and
buildings
General equipment 16,581.19 13,835.89 1,916.23 829.07
Dedicated
equipment
Other devices 43,071.25 33,683.29 9,387.96
Total 636,612,912.14 427,216,700.39 19,536,850.88 189,859,360.87
(3) Fixed assets leased out through operating leases
Unit: RMB Yuan
Items Closing carrying amount
Houses and buildings 27,794,593.54
(4) Fixed assets for which title certificates have not been obtained
Unit: RMB Yuan
Reasons for not completing the title
Items Carrying amount
certificate
The relevant procedures have not yet
Houses and buildings 554,681,952.52
been completed
Total 554,681,952.52
(5) Impairment testing of fixed assets
□ Applicable ? Not applicable
Unit: RMB Yuan
Items Closing balance Opening balance
Construction in progress 1,006,512,957.55 745,117,350.86
Total 1,006,512,957.55 745,117,350.86
(1) Conditions of construction in progress
Unit: RMB Yuan
Closing balance Opening balance
Items Depreciation Depreciation Carrying
Book balance Carrying amount Book balance
reserves reserves amount
New materials
industry chain 468,842,005.69 468,842,005.69 183,041,766.17 183,041,766.17
project
Methionine
integrated
Closing balance Opening balance
Items Depreciation Depreciation Carrying
Book balance Carrying amount Book balance
reserves reserves amount
upgrade project
Workshop 615
aldehyde-series
production
switching
project
year
glufosinate-
ammonium 43,217,681.54 43,217,681.54 52,444,438.35 52,444,438.35
process and
legalization
project
Workshop 663
technological
transformation
project
CH phase II
major
production 43,202,621.11 43,202,621.11 24,294,749.08 24,294,749.08
engineering
project
Integration
project for
fluoroalkanes 20,473,131.25 20,473,131.25 21,521,655.66 21,521,655.66
and plant
alcohols
Linalool series
products
capacity 252,511.54 252,511.54 17,291,367.93 17,291,367.93
expansion
project
Other sporadic
projects
Total 1,012,806,991.25 6,294,033.70 1,006,512,957.55 751,411,384.56 6,294,033.70 745,117,350.86
(2) Increase or decrease of significant construction in progress in current period
Unit: RMB Yuan
Interest
Other Including: capitaliz
Amount The proportion Accumulated
Increased decreased Amount of ation
Project Budget transferred to fixed of total project Project amount of Capital
Opening balance amount in the amount in Closing balance interest rate for
name (RMB'0,000) assets in current input to the progress interest source
current period the current capitalization in the
period budget capitalization
period the current period current
period
New
materials
industry 403,624.00 183,041,766.17 285,800,239.53 468,842,005.70 26.91% 16,022,465.50 7,567,338.87 2.67% Others
chain
project
Interest
Other Including: capitaliz
Amount The proportion Accumulated
Increased decreased Amount of ation
Project Budget transferred to fixed of total project Project amount of Capital
Opening balance amount in the amount in Closing balance interest rate for
name (RMB'0,000) assets in current input to the progress interest source
current period the current capitalization in the
period budget capitalization
period the current period current
period
Methionin
e
integrated 25,138.70 80,059,496.68 5,235,437.39 84,351,046.65 943,887.42 100.00% Others
upgrade
project
Workshop
aldehyde-
series 11,687.27 79,928,124.42 5,496,278.41 85,424,402.83 100.00% Others
productio
n
switching
project
Total 440,449.97 343,029,387.27 296,531,955.33 169,775,449.48 469,785,893.12 16,022,465.50 7,567,338.87
(3) Provision for impairment of construction in progress in the current period
Unit: RMB Yuan
Increase in the Decrease in the Reasons for
Items Opening balance Closing balance
current period current period provision
Other sporadic
projects
Total 6,294,033.70 6,294,033.70 --
(4) Impairment testing of construction in progress
? Applicable ? Not applicable
(1) Status of right-of-use assets
Unit: RMB Yuan
Items Houses and buildings Total
I. Original carrying amount
period
period
II. Accumulated depreciation
Items Houses and buildings Total
period
(1) Provision 2,172,801.55 2,172,801.55
III. Carrying amount
period
of period
(2) Impairment testing of the right-of-use assets
□ Applicable ? Not applicable
(1) Status of intangible assets
Unit: RMB Yuan
Non-patented
Items Land use rights Patent right Software Total
technologies
I. Original carrying
amount
in the current period
(1) Purchase 1,072,677,433.57 6,400,802.96 1,079,078,236.53
(2) Transfer from
construction in
progress
(3) Transfer to
inventories
in the current period
(1) Disposal 6,215,754.79 6,215,754.79
II. Accumulated
amortization
in the current period
(1) Provision 29,782,782.06 129,292.89 5,286,879.61 5,873,656.39 41,072,610.95
III. Carrying amount
at the end of the 3,450,577,773.27 21,890,928.34 78,496,757.97 76,031,888.99 3,626,997,348.57
period
Non-patented
Items Land use rights Patent right Software Total
technologies
at the beginning of 2,407,683,121.76 28,235,976.02 83,783,637.58 70,371,156.04 2,590,073,891.40
period
At the end of this period, the proportion of intangible assets formed through internal research and development of the Company to
the balance of intangible assets is 0.00%.
(2) Impairment testing of intangible assets
? Applicable ? Not applicable
(1) Original carrying amount of goodwill
Unit: RMB Yuan
Increase in the current period Decrease in the current period
The name of the
invested unit or Opening Foreign Closing balance
Formed by
items forming balance currency
business Disposal Other decreases
goodwill translation
combination
reserves
Bardoterminal
GmbH
NHU/Chr.Olese
n Latin America 3,622,704.97 3,622,704.97
A/S
Total 5,990,524.21 -134,671.43 5,855,852.78
(2) Impairment provision for goodwill
Unit: RMB Yuan
Increase in the current period Decrease in the current period
The name of the
invested unit or Opening Foreign
currency Closing balance
items forming balance Provision Disposal Other decreases
goodwill translation
reserves
Bardoterminal
GmbH
Total 2,367,819.24 -134,671.43 2,233,147.81
(3) Information about the asset group or combination of asset groups of goodwill
Composition and Basis of the Asset
Consistency with Previous
Name Group or Portfolio to Which It Operating Division and Basis
Years
Belongs
For an independently accounted
overseas warehousing and logistics
Independent warehousing and
Bardoterminal GmbH company, the management will Yes
logistics company
recognize it as a single asset group
from the date of acquisition
NHU/Chr. Olesen For sales entities with independent Independent sales entity Yes
Composition and Basis of the Asset
Consistency with Previous
Name Group or Portfolio to Which It Operating Division and Basis
Years
Belongs
Latin America A/S accounting overseas, the management
identifies them as a single asset group
from the time of acquisition
Changes in an asset group or a combination of asset groups: None
(4) Specific methods for determining the recoverable amount
The recoverable amount is determined based on the net of fair value less disposal costs.
? Applicable ? Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows.
? Applicable ? Not applicable
Unit: RMB Yuan
Increased amount Amortized amount
Other decreased
Items Opening balance in the current in the current Closing balance
amount
period period
Renovation costs 1,242,479.65 -33,191.99 778,111.54 431,176.12
Catalyst expenses 18,234,620.78 4,585,868.53 13,648,752.25
Total 19,477,100.43 -33,191.99 5,363,980.07 14,079,928.37
(1) Non-offset deferred income tax assets
Unit: RMB Yuan
Closing balance Opening balance
Items Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Provision for
impairment of assets
Unrealized profit from
internal transaction
Deferred income 143,438,204.97 21,515,730.75 166,211,235.01 24,931,685.24
Sales rebates 20,616,580.75 3,092,487.11 45,143,439.52 6,771,515.93
Lease liabilities 2,428,007.47 364,201.12 2,603,650.85 390,547.63
Changes in fair value
of trading financial
instruments and 6,243.72 1,560.93
derivative financial
instruments
Total 378,480,354.66 60,150,183.16 416,684,840.28 63,610,931.40
(2) Non-offset deferred income tax liabilities
Unit: RMB Yuan
Closing balance Opening balance
Items Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Full pre-tax deduction
for fixed assets
Fair value of other
equity instruments
investment at the end
of the period
Right-of-use assets 6,451,630.53 967,744.58 7,940,001.94 1,191,000.29
Changes in fair value
of trading financial
instruments and 312,250.00 78,062.50
derivative financial
instruments
Total 1,302,309,387.43 195,364,135.32 1,419,444,319.73 212,971,344.57
(3) Deferred income tax assets or liabilities presented by netting after offset
Unit: RMB Yuan
Amount of deferred
Amount of deferred Ending balance of Opening balance of
income tax assets and
income tax assets and deferred income tax deferred income tax
Items liabilities mutually-
liabilities mutually- assets or liabilities after assets or liabilities after
offset beginning of the
offset end of the period offset offsetting
period
Deferred income tax
assets
Deferred income tax
liabilities
(4) Details of unrecognized deferred income tax assets
Unit: RMB Yuan
Items Closing balance Opening balance
Deductible temporary differences 15,906,871.54 1,194,450,604.18
Deductible loss 3,508,448,767.45 3,640,655,005.58
Total 3,524,355,638.99 4,835,105,609.76
(5) The deductible loss of unrecognized deferred income tax assets will expire in the following years
Unit: RMB Yuan
Year Closing balance Opening balance Notes
Year Closing balance Opening balance Notes
Non-offsettable losses of
overseas companies
Total 3,508,448,767.45 3,640,655,005.58
Unit: RMB Yuan
Closing balance Opening balance
Depreci
Items Deprecia
ation
Book balance tion Carrying amount Book balance Carrying amount
reserve
reserves
s
Emission trading
rights fee
Coal quota
payment
Certificate of
deposit of large 415,629,000.00 415,629,000.00 411,144,444.44 411,144,444.44
amount
Prepaid land
transfer payment
Prepaid for long-
term asset funds
Total 1,169,596,687.54 1,169,596,687.54 1,476,641,929.78 1,476,641,929.78
Unit: RMB Yuan
End of the period Beginning of the period
Items Carrying Type of Restriction Carrying Type of Restriction
Book balance Book balance
amount restriction situations amount restriction situations
Guarantee Guarantee
Cash and deposit of deposit of
bank 61,825,034.41 61,825,034.41 Pledged bank 46,418,753.27 46,418,753.27 Pledged bank
balances acceptance acceptance
bills, etc. bills, etc.
Mortgaged Mortgaged
Fixed assets 98,344,608.36 75,698,163.27 Mortgage for bank 102,070,345.08 79,042,144.12 Mortgage for bank
borrowings borrowings
Mortgaged Mortgaged
Intangible
assets
borrowings borrowings
Receivables Establish Establish
financing bank bank
End of the period Beginning of the period
Items Carrying Type of Restriction Carrying Type of Restriction
Book balance Book balance
amount restriction situations amount restriction situations
acceptance acceptance
bill pledge bill pledge
Total 383,490,203.13 338,197,312.95 294,637,253.31 271,609,052.35
(1) Classification of short-term loans
Unit: RMB Yuan
Items Closing balance Opening balance
Guaranteed borrowing 26,470,505.77 6,604,793.50
Credit loans 935,561,772.22 668,567,888.87
Total 962,032,277.99 675,172,682.37
Unit: RMB Yuan
Items Closing balance Opening balance
Financial liabilities held for trading 1,663,300.90
Including:
Financial liabilities classified as
measured at fair value, with changes 1,663,300.90
recognized in profit or loss
Including: Derivative financial liabilities 1,663,300.90
Total 1,663,300.90
Unit: RMB Yuan
Type Closing balance Opening balance
Bank acceptance bills 43,197,229.37 70,054,101.63
Total 43,197,229.37 70,054,101.63
(1) Presentation of accounts payable
Unit: RMB Yuan
Items Closing balance Opening balance
Materials and labor payments 1,374,755,480.43 1,040,052,507.44
Payment for engineering and equipment 514,776,101.15 740,255,257.64
Total 1,889,531,581.58 1,780,307,765.08
Unit: RMB Yuan
Items Closing balance Opening balance
Other payables 96,098,501.09 131,685,145.99
Total 96,098,501.09 131,685,145.99
(1) Other payables
Unit: RMB Yuan
Items Closing balance Opening balance
Accrued and unpaid expenses 35,633,532.02 77,784,423.40
Deposits and guarantee deposits 36,405,806.40 30,090,146.97
Temporary receipts payable 4,952,835.29 13,548,987.92
Others 19,106,327.38 10,261,587.70
Total 96,098,501.09 131,685,145.99
Unit: RMB Yuan
Items Closing balance Opening balance
Advances from customers 351,344,836.57 294,819,090.20
Total 351,344,836.57 294,819,090.20
(1) Presentation of employee benefits payable
Unit: RMB Yuan
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
I. Short-term employee
benefits
II. Post-employment
benefits - defined 96,793,564.13 96,793,564.13
contribution plans
III. Dismissal welfare 2,835,729.03 2,835,729.03
Total 511,515,144.15 1,286,058,718.40 1,489,632,676.39 307,941,186.16
(2) Presentation of short-term compensation
Unit: RMB Yuan
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
allowances and 494,168,073.67 1,031,124,478.39 1,233,891,886.36 291,400,665.70
subsidies
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
fee
premium
Incl.: Medical
insurance premium
Industrial injury
insurance premium
Maternity insurance
premium
fund
expenditure and
employee education
expenses
Total 511,515,144.15 1,186,429,425.24 1,390,003,383.23 307,941,186.16
(3) Presentation of defined contribution plans
Unit: RMB Yuan
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
insurance
insurance expense
Total 96,793,564.13 96,793,564.13
Unit: RMB Yuan
Items Closing balance Opening balance
VAT 84,310,856.32 116,722,251.38
Corporate income tax 410,973,109.91 476,673,438.77
Individual income tax 3,385,769.32 16,171,313.03
Urban maintenance and construction tax 6,164,102.74 10,415,102.16
House property tax 9,976,702.40 20,982,936.57
Land use tax 10,596,636.04 20,379,197.51
Educational surcharge (local education
surcharge)
Stamp duty 432,588.63 180,237.73
Total 530,467,264.25 669,468,878.66
Unit: RMB Yuan
Items Closing balance Opening balance
Long-term loans due within one year 2,744,932,425.31 3,164,135,175.76
Lease liabilities due within one year 496,124.73 1,278,697.73
Total 2,745,428,550.04 3,165,413,873.49
Unit: RMB Yuan
Items Closing balance Opening balance
Short-term bonds payable 503,204,520.55
Output VAT to be transferred 33,838,891.89 32,397,758.57
Sales rebates 25,600,653.97 66,960,592.67
Total 562,644,066.41 99,358,351.24
Changes in short-term bonds payable:
Unit: RMB Yuan
Excess
Interest
Coupo Release Bond Opening discount Repay Closing
Name Denomination Amount Issued accrued at Default
n rate date term balance amortiz ment balance
face value
ation
Zhejiang NHU
Company
Ltd.technology February
innovation bond 1st,2026
in the first phase
of 2026
Total 500,000,000.00 500,000,000.00 500,000,000.00 3,204,520.55 503,204,520.55
(1) Classification of long-term borrowings
Unit: RMB Yuan
Items Closing balance Opening balance
Mortgage loan 6,913,122.89 19,737,123.37
Credit loans 3,163,250,227.59 4,167,441,445.65
Total 3,170,163,350.48 4,187,178,569.02
Unit: RMB Yuan
Items Closing balance Opening balance
Outstanding lease payment 3,128,476.17 3,380,508.75
Unamortized financing costs -820,689.31 -880,325.09
Total 2,307,786.86 2,500,183.66
Unit: RMB Yuan
Increase in the Decrease in the
Items Opening balance Closing balance Cause of formation
current period current period
Government grants
related to assets
received by the
Company are
Government amortized
subsidies according to the
depreciation
schedule of the
corresponding
assets
Revenue-related
government grants
received by the
Government
subsidies
amortized to match
the actual expenses
incurred
Total 906,007,748.59 25,128,500.00 82,932,736.57 848,203,512.02
Unit: RMB Yuan
Increase or decrease in the change (+, -)
Conversion Closing balance
Items Opening balance Issue of new Bonus of capital
Others Subtotal
shares shares reserve into
shares
Total shares 3,073,421,680.00 3,073,421,680.00
Unit: RMB Yuan
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
Capital premium
(Share premium)
Other capital reserve 281,658,334.41 1,745,052.06 283,403,386.47
Total 3,135,683,253.49 35,535,827.93 3,171,219,081.42
Other explanations, including the increase and decrease in the current period and the explanation of the reasons for the
changes:Other capital reserve increased by RMB 1,745,052.06 in the period, due to increases in the special reserves of the
Company's associates Zhejiang Chunhui Environmental Protection Energy Co., Ltd., Zhejiang Saiya Chemical Materials Co., Ltd.
And Ningbo Zhenhai Refining and Chemical NHU Biotechnology Co., Ltd.,resulting in a change in the Company's share of net
assets. On January 23,2026, the 21,454.310 shares of company stock held in the company's repurchase special securities account
were transferred to the "Zhejiang NHU Co., Ltd. - Fifth Phase Employee Stock Ownership Plan" special securities account through
non trading transfer, reducing treasury stocks by RMB 485,188,983.03 and increasing capital reserves by RMB 33,790,775.87.
Unit: RMB Yuan
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
Treasury stock 556,161,195.70 485,188,983.03 70,972,212.67
Total 556,161,195.70 485,188,983.03 70,972,212.67
Other notes, including changes during the period and explanations of the reasons for the changes: The increase in treasury shares
during the period was due to the Company repurchasing part of the publicly held shares, intended to be used to implement the
equity incentive plan or the employee stock ownership plan.
Unit: RMB Yuan
Amount incurred in the current period
Less: Included in Less: Included in
Amount other comprehensive other comprehensive Closing
Attributable Attributable to
Opening incurred income for the income for the Less:
Items to the parent minority balance
balance before income previous period and previous period and Income tax
company after shareholders
tax in the transferred in profit transferred in retained expense
tax after tax
current period or loss for the earnings for the
current period current period
I. Other
comprehensive
income that cannot 35,985,600.00 35,985,600.00
be reclassified into
profit or loss
Changes in the fair
value of
investments in 35,985,600.00 35,985,600.00
other equity
instruments
II. Other
comprehensive
income that will be 31,757,896.72 -34,098,912.83 -15,384,368.68 -18,714,544.15 16,373,528.04
reclassified into
profit or loss
Including: other
comprehensive
income under the
equity method that
can be reclassified
to profit or loss
Translation
differences of 31,250,942.29 -34,098,912.83 -15,384,368.68 -18,714,544.15 15,866,573.61
financial
Amount incurred in the current period
Less: Included in Less: Included in
Amount other comprehensive other comprehensive Closing
Attributable Attributable to
Opening incurred income for the income for the Less:
Items to the parent minority balance
balance before income previous period and previous period and Income tax
company after shareholders
tax in the transferred in profit transferred in retained expense
tax after tax
current period or loss for the earnings for the
current period current period
statements
denominated in
foreign currency
Total other
comprehensive 67,743,496.72 -34,098,912.83 -15,384,368.68 -18,714,544.15 52,359,128.04
incomes
Unit: RMB Yuan
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
Safety production
expense
Total 162,056,373.58 69,820,553.97 55,218,410.20 176,658,517.35
Other explanations, including the increase and decrease in the current period and the explanation of the reasons for the changes:
In accordance with the Administrative Measures for the Collection and Utilization of Enterprise Work Safety Funds, hazardous
goods production and storage enterprises shall base the extraction on the actual operating revenue of the previous year, using a
progressive decreasing rate method to extract monthly on average according to the following standards: 1) For operating revenue
not exceeding RMB 10 million, extract at 4.5%; 2) For the portion of operating revenue exceeding RMB 10 million up to RMB
In accordance with the Administrative Measures for the Collection and Utilization of Enterprise Work Safety Funds, the power
production and supply enterprises shall base the extraction on the actual operating revenue of the previous year, adopting a
progressive decreasing rate method to extract monthly on average according to the following standards: 1) For operating revenue
not exceeding RMB 10 million, extract at 3%; 2) For the portion of operating revenue exceeding RMB 10 million up to RMB 100
million, extract at 1.5%; 3) For the portion of operating revenue exceeding RMB 100 million up to RMB 1 billion, extract at 1%; 4)
For the portion of operating revenue exceeding RMB 1 billion up to RMB 5 billion, extract at 0.8%; 5) For the portion of
operating revenue exceeding RMB 5 billion up to RMB 10 billion, extract at 0.6%; 6) For the portion of operating revenue
exceeding RMB 10 billion, extract at 0.2%.
Unit: RMB Yuan
Increase in the current Decrease in the current
Items Opening balance Closing balance
period period
Statutory surplus
reserves
Total 1,545,453,678.00 1,545,453,678.00
Explanation of surplus reserves, including the increase and decrease in the current period and the explanation of the reasons for the
change:
In accordance with the Company Law of the People's Republic of China and the Articles of Association, the Company shall set
aside 10% of the parent company's net profit as a statutory surplus capital reserve; when the accumulated statutory surplus capital
reserve reaches 50% of the registered capital, no further statutory surplus capital reserve need be set aside.
Unit: RMB Yuan
Items Current period Prior period
Undistributed profits at the end of the
last period before adjustment
Undistributed profits at the beginning of
the period after adjustment
Plus: net profit attributable to owners of
the parent company in the current period
Less: Dividends payable on common
stock
Undistributed profits at the end of the
period
Unit: RMB Yuan
Amount incurred in the current period Amount incurred in the previous period
Items
Revenue Cost Revenue Cost
Main business 13,077,825,612.26 7,308,975,788.97 11,072,628,572.89 5,996,026,761.47
Other business 51,474,648.63 14,699,671.84 28,004,263.89 10,340,595.62
Total 13,129,300,260.89 7,323,675,460.81 11,100,632,836.78 6,006,367,357.09
Including: with
customers
Revenue from
contracts
Breakdown of the operating revenue and operating cost:
Unit: RMB Yuan
Classification of contracts Operating revenue Operating cost
Business Type
Including:
Nutrition 8,805,591,681.68 4,678,820,058.46
Aroma chemicals 2,022,263,282.57 1,032,127,702.98
New materials 1,165,989,510.74 784,932,943.49
Others 1,132,468,606.90 827,420,303.84
Subtotal 13,126,313,081.89 7,323,301,008.77
Classified according to operation
regions
Including:
Domestic 5,454,479,328.97 3,430,296,825.49
Overseas 7,671,833,752.92 3,893,004,183.28
Subtotal 13,126,313,081.89 7,323,301,008.77
Classification by timing of goods
transfer
Including:
Revenue recognized at a point in time 13,126,313,081.89 7,323,301,008.77
Subtotal 13,126,313,081.89 7,323,301,008.77
By sales channel
Including:
Direct selling 9,949,165,905.05 5,550,738,905.46
Agent sales 3,177,147,176.84 1,772,562,103.31
Subtotal 13,126,313,081.89 7,323,301,008.77
Information related to the transaction price allocated to remaining performance obligations:
At the end of the reporting period, the amount of income corresponding to the obligations under the contract that have been signed
but have not been performed or have not been completely performed is RMB 3,625,468,392.22. Of this amount, RMB
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Urban maintenance and construction tax 50,368,259.68 39,551,225.95
Education surcharge 38,752,322.82 31,641,245.23
House property tax 22,261,080.14 22,065,671.62
Land use tax 24,408,489.99 23,618,662.08
Vehicle and vessel use tax 30,281.63 18,249.52
Stamp duty 9,742,543.54 7,240,307.89
Environmental protection tax 1,506,080.65 1,965,289.57
Water resource tax 33,472.00 37,970.20
Total 147,102,530.45 126,138,622.06
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Employee compensation 159,066,799.27 169,842,730.77
Depreciation expense and amortization
of intangible assets
Office expenses and travel expenses 25,793,927.39 24,292,173.92
Business entertainment expenses 10,553,178.69 8,226,105.71
Consulting fee 9,889,172.71 12,834,499.47
Insurance expenses 11,706,197.12 9,121,780.69
Others 18,827,283.34 27,763,916.53
Total 292,591,830.68 309,618,405.74
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Employee compensation 47,169,548.77 37,142,722.42
Sales commission 19,177,714.24 28,787,391.62
Office expenses and travel expenses 13,369,693.37 12,935,899.47
Advertising and promotion expenses, and
business entertainment expenses
Others 1,248,106.00 2,464,632.41
Total 88,987,069.94 88,602,406.65
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Employee compensation 254,986,435.45 243,369,740.34
Direct input 273,425,309.24 194,855,941.97
Depreciation expense and amortization
of intangible assets
Outsourcing expenses 8,883,018.87 7,801,144.90
Office expenses and travel expenses 224,352.55 4,910,364.40
Others 24,484,887.47 26,087,072.40
Total 605,728,077.64 522,723,563.18
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Interest expenses 77,290,550.93 112,615,701.07
Less: interest income 33,892,368.94 39,620,525.39
Exchange gains and losses (“-” for
gains)
Others 13,064,708.28 10,898,031.47
Total 257,803,128.41 -178,098,697.47
Unit: RMB Yuan
Sources of other incomes Amount incurred in the current period Amount incurred in the previous period
Government grants related to assets 82,932,736.57 68,463,990.57
Government grants related to income 36,014,059.37 51,815,263.87
Refund of service charges for
withholding and paying personal income 1,810,694.88 1,485,876.64
tax
Total 120,757,490.82 121,765,131.08
Unit: RMB Yuan
Sources of income from changes in fair
Amount incurred in the current period Amount incurred in the previous period
values
Trading Financial Assets 7,437,903.65 16,328,109.27
Including: fair value change income
from derivative financial instruments
Financial liabilities held for trading 58,556,088.18 -123,188,493.71
Including: Gains from changes in
the fair value of financial liabilities
classified as measured at fair value
through profit or loss
Total 65,993,991.83 -106,860,384.44
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Return on long-term equity investments
measured by the equity method
Investment income from disposal of
trading (held-for-trading) financial assets
Including: Financial assets classified as
at fair value through profit or loss
Including: Financial liabilities classified
as at fair value through profit or loss
Income of bank financial products and 16,602,412.40 8,184,998.28
Items Amount incurred in the current period Amount incurred in the previous period
structural deposits
Interest on discounted bills -267,359.89
Dividend income from investment in
other equity instruments during the 5,292,000.00
holding period
Total 204,498,489.13 18,237,922.39
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Accounts receivables bad debt losses
-32,588,767.26 10,931,120.90
(“-” for losses)
Other receivables bad debt losses (“-”
-1,689,750.93 -3,317,979.51
for losses)
Total -34,278,518.19 7,613,141.39
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Losses from inventory write-downs and
impairment losses on contract fulfillment -29,423,561.32 -33,272,405.82
costs (“-” for losses)
Total -29,423,561.32 -33,272,405.82
Unit: RMB Yuan
Source of income from asset disposal Amount incurred in the current period Amount incurred in the previous period
Gains from disposal of non-current assets
(“-” for losses)
Total 1,251,350.66 -1,582,139.69
Unit: RMB Yuan
Amount included in current
Amount incurred in the Amount incurred in the
Items non-recurring gains and
current period previous period
losses
Compensation income 1,423,403.03 689,062.82 1,423,403.03
Others 765,764.21 529,530.08 765,764.21
Total 2,189,167.24 1,218,592.90 2,189,167.24
Unit: RMB Yuan
Amount included in current
Amount incurred in the Amount incurred in the
Items non-recurring gains and
current period previous period
losses
External donation 1,897,281.80 157,421.42 1,897,281.80
Loss of damage and scrapping
of non-current assets
Others 8,600,946.83 2,448,868.23 8,600,946.83
Total 47,056,112.99 2,998,696.24 47,056,112.99
(1) Income tax expense statement
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Current income tax expense 680,189,197.19 618,501,260.17
Deferred income tax expense -10,891,950.28 -10,594,464.32
Total 669,297,246.91 607,906,795.85
(2) Adjustment process of accounting profit and income tax expenses
Unit: RMB Yuan
Items Amount incurred in the current period
Total profits 4,697,344,460.14
Income tax expense calculated at statutory/applicable tax rate 704,601,669.02
Influence of different tax rates applied to subsidiaries 9,424,779.57
Influence of adjusting income tax in previous periods 24,840,698.12
Influence of non-taxable income -26,666,163.74
Influence of non-deductible costs, expenses and losses 6,390,991.19
Influence of deductible temporary differences or deductible
losses of unrecognized deferred income tax assets in this period
Tax impact of additional deduction for research and
-89,726,917.13
development expenses (indicated with "-")
Income tax expenses 669,297,246.91
See Note 36 of Section VII of the financial report for details.
(1) Cash relating to operating activities
Other cash receipts relating to operating activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Interest income from bank deposits 34,303,334.57 46,489,138.86
Government grants received 39,922,197.95 46,323,276.36
Recovery of temporary loans, deposits,
and guarantee deposits
Net amount received from other items
and transactions
Total 106,192,435.92 104,830,537.50
Other cash paid related to operating activities
Unit: RMB Yuan
Items Current period cumulative Preceding period comparative
Cash payments for research and
development
Office expenses and travel expenses 19,979,929.10 17,645,221.94
Advertising and promotion expenses, and
business entertainment expenses
Sales commission 30,487,691.74 36,152,773.52
Insurance expenses 11,684,890.84 7,687,775.66
Payment of land deposit 207,370,000.00
Other expenses and net amount of
transactions
Total 187,247,181.89 526,136,284.30
(2) Cash flows relating to investing activities
Other cash received from investing activities
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Redemption of wealth management
products and certificates of deposit
Total 2,251,950,000.00 2,150,000,000.00
Other cash paid related to investment activities
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Purchase of wealth management
products, large-denomination certificates 2,550,000,000.00 2,651,950,000.00
of deposit, and structured deposits
Deposit futures investment funds 20,000,000.00
Total 2,570,000,000.00 2,651,950,000.00
(3) Cash relating to financing activities
Other cash received from financing activities
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Transfer of treasury stock 518,979,758.90
Total 518,979,758.90
Other cash payments related to financing activities
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Payment of bank financing fees 414,172.14 245,325.87
Share repurchase 309,134,899.57
Total 414,172.14 309,380,225.44
Changes in various liabilities generated from financing activities
? Applicable □ Not applicable
Unit: RMB Yuan
Increase in the current period Decrease in the current period
Closing balance
Items Opening balance Non-cash Non-cash
Changes in cash Changes in cash
changes changes
Short-term
borrowings
Long-term
borrowings
Lease liabilities 3,778,881.39 80,936.15 1,055,905.95 2,803,911.59
Dividends payable 2,456,226,718.40 2,456,226,718.40
Total 8,030,265,308.54 1,792,387,666.65 2,459,135,002.02 5,401,856,011.84 6,879,931,965.37
(4) Notes to cash flows reported on a net basis
Relevant facts and
Items Basis for net presentation Financial impact
circumstances
The cash flows related to the Company's
investment business involve projects with quick
turnover, large amounts, and short terms, covering
both cash inflows and outflows. Reporting these
cash flows on a net basis better illustrates their
Other cash receipts Redemption of wealth
impact on the Company's payment and debt
relating to investing management products 4,350,000,000.00
repayment capabilities, and is more helpful for
activities and structured deposits
evaluating the Company's payment and debt
repayment abilities as well as analyzing its future
cash flows. Therefore, the Company reports the
related cash flows generated from the above
business on a net basis.
The cash flows related to the Company's
investment business involve projects with quick
turnover, large amounts, and short terms, covering
both cash inflows and outflows. Reporting these
cash flows on a net basis better illustrates their
Other Paid Cashes Purchase of wealth
impact on the Company's payment and debt
Related to Investment management products 4,350,000,000.00
repayment capabilities, and is more helpful for
Activities and structured deposits
evaluating the Company's payment and debt
repayment abilities as well as analyzing its future
cash flows. Therefore, the Company reports the
related cash flows generated from the above
business on a net basis.
(5) Significant activities that do not involve cash receipts or payments in the current period but affect the
enterprise’s financial position or may affect its future cash flows, together with their financial impacts
(1) Supplementary Information for Cash Flow Statement
Unit: RMB Yuan
Supplementary information Amount of the current period Amount of the previous period
flows from operating activities
Net profit 4,028,047,213.23 3,621,495,545.25
Add: provision for impairment of
assets
Depreciation of fixed assets,
depletion of oil and gas assets, and
depreciation of productive biological
assets
Depreciation of right-of-use
assets
Amortization of intangible assets 41,072,610.95 37,129,744.10
Amortization of long-term
deferred expenses
Losses on disposal of fixed
assets, intangible assets, and other long- -1,251,350.66 1,582,139.69
term assets ("-" for income)
Loss on retirement of fixed assets
("-" for income)
Losses on changes in fair value
-65,993,991.83 106,860,384.44
("-" for income)
Financial expenses ("-" for
income)
Investment loss ("-" for income) -204,498,489.13 -18,237,922.39
Decrease in deferred income tax
-3,460,748.24 -19,028,941.15
assets ("-" for increase)
Increase in deferred income tax
liabilities (“-” for decrease)
Decrease in inventory ("-" for
-22,662,094.96 -468,703,390.51
increase)
Decrease of operating receivable
-708,273,835.15 -313,836,326.44
items ("-" for increase)
Increase in operational payables
-840,916,965.27 -716,826,527.74
("-" for decrease)
Others
Net cash flows from operating
activities
activities not involving cash receipt and
payment
Supplementary information Amount of the current period Amount of the previous period
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets under finance lease
equivalents:
Ending balance of cash 7,396,217,771.31 5,508,745,188.26
Less: Opening balance of cash 7,819,707,489.01 5,521,452,666.47
Add: Ending balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase of cash and cash
-423,489,717.70 -12,707,478.21
equivalents
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
Items Closing balance Opening balance
I. Cash 7,396,217,771.31 7,819,707,489.01
Including: cash on hand 9,176.31 19,519.80
Bank deposits that can be used
for payment at any time
Other monetary funds that can be
used for payment at any time
II. Cash and cash equivalents at the end
of the period
Including: Cash and cash equivalents
with restricted use by the parent 352,187,586.16 231,285,799.32
company or a subsidiary of the group
(3) Situations where the scope of use is restricted but still listed as cash and cash equivalents
Unit: RMB Yuan
Reasons for still being
Amount of the previous
Items Amount of the current period classified as cash and cash
period
equivalents
Monetary funds deposited
Cash and bank balances 352,187,586.16 231,285,799.32
overseas
Total 352,187,586.16 231,285,799.32
(4) Monetary funds that do not belong to cash and cash equivalents
Unit: RMB Yuan
Reasons for not being
Amount of the previous
Items Amount of the current period classified as cash and cash
period
equivalents
Large-denomination
interest
Cash and bank balances
Long-suspended account
balance
Wage guarantee deposit for
project engineering labor
Deposit on the Yipaike
platform
Total 61,825,034.41 146,562,642.16
(1) Foreign currency monetary items
Unit: RMB Yuan
Ending foreign currency Converted RMB balance at
Items Converted exchange rate
balance the end of the period
Cash and bank balances 676,341,424.49
Including: USD 65,896,817.96 6.810900 448,816,637.44
EUR 23,283,525.32 7.767100 180,845,469.51
HKD 713,076.73 0.868550 619,342.79
JPY 61,046,238.00 0.042045 2,566,689.08
GBP 131,637.27 9.014500 1,186,644.17
BRL 18,637,057.01 1.316400 24,533,821.85
MXN 11,609,747.40 0.389681 4,524,097.98
SGD 579,851.25 5.260500 3,050,307.50
PLN 59,601.43 1.812119 108,004.88
VND 15,617,996,522.00 0.000259 4,045,061.10
TRY 41,461,018.55 0.145808 6,045,348.19
Accounts receivable 2,808,639,410.46
Including: USD 310,989,994.06 6.810900 2,118,121,750.54
EUR 60,214,104.15 7.767100 467,688,968.34
GBP 2,334,216.66 9.014500 21,041,796.08
BRL 152,585,309.56 1.316400 200,863,301.50
VND 3,566,000,000.00 0.000259 923,594.00
Other receivables 68,211,100.95
Including: USD 61,391.05 6.810900 418,128.30
Ending foreign currency Converted RMB balance at
Items Converted exchange rate
balance the end of the period
EUR 2,150,120.44 7.767100 16,700,200.47
HKD 31,700.00 0.868550 27,533.04
JPY 16,946,280.00 0.042045 712,506.34
BRL 6,506,107.03 1.316400 8,564,639.29
MXN 106,216,788.06 0.389681 41,390,664.19
SGD 54,721.20 5.260500 287,860.87
PLN 3,174.11 1.812119 5,751.87
VND 27,000,000.00 0.000259 6,993.00
TRY 664,048.47 0.145808 96,823.58
Short-term borrowings 26,456,085.80
Including: USD 2,433,496.64 6.810900 16,574,302.27
EUR 1,119,654.57 7.767100 8,696,469.01
DKK 1,140,628.13 1.039177 1,185,314.52
Accounts payable 445,671,030.02
Including: USD 6,908,520.90 6.810900 47,053,245.00
EUR 27,454,483.52 7.767100 213,241,718.95
JPY 754,795.00 0.042045 31,735.36
BRL 137,267,171.72 1.316400 180,698,504.85
MXN 8,065,337.45 0.389681 3,142,908.76
DKK 29.40 1.039177 30.55
CHF 50,880.60 8.422799 428,557.07
VND 3,014,215,124.00 0.000259 780,681.72
TRY 2,013,934.52 0.145808 293,647.76
Other payables 46,646,134.31
Including: USD 3,712,670.89 6.810900 25,286,630.16
EUR 2,632,198.90 7.767100 20,444,552.08
HKD 41,079.00 0.868550 35,679.17
BRL 546,000.00 1.316400 718,754.40
SGD 18,682.68 5.260500 98,280.24
PLN 9,631.13 1.812119 17,452.75
CHF 2,969.00 8.422799 25,007.29
VND 6,281,136.00 0.000259 1,626.81
TRY 124,488.43 0.145808 18,151.41
Long-term borrowings 7,366,283.15
Including: USD
EUR 948,395.56 7.767100 7,366,283.15
HKD
Non-current liabilities that
mature within one year
Including: USD 12,799.73 6.810900 87,177.68
EUR 961,662.00 7.767100 7,469,324.92
HKD 106,563.99 0.868550 92,556.15
BRL 148,448.53 1.316400 195,417.64
(2) Explanation of overseas operating entities, including for important overseas operating entities, the
main overseas operating places, bookkeeping base currency and selection basis shall be disclosed, and the
reasons for changes in bookkeeping base currency shall also be disclosed.
?Applicable ? Not applicable
(1) The Company acts as the lessee
? Applicable □ Not applicable
Variable lease payments not included in the measurement of lease liabilities
□ Applicable ? Not applicable
Lease expenses for simplified treatment of short-term leases or low-value asset leases
? Applicable □ Not applicable
Section V of this financial report. The amounts of short-term lease expenses and low-value asset lease expenses recognized in the
current profit or loss are as follows:
Unit: RMB Yuan
Amount of the current Amount at the same period
Items
period last year
Short-term lease expenses 2,502,954.96 865,262.56
Total 2,502,954.96 865,262.56
Unit: RMB Yuan
Amount of the current Amount at the same period
Items
period last year
Interest charges on lease liabilities 70,338.10 65,137.59
Total cash outflows related to the leases 3,265,314.23 1,795,192.45
the financial report.
(2) The Company acts as the lessor
Operating lease as a lessor
? Applicable □ Not applicable
Unit: RMB Yuan
Including: Income related to variable
Items Lease income lease payments not included in rental
receipts
Lease income 2,981,065.53
Total 2,981,065.53
Financial lease as a lessor
□ Applicable ? Not applicable
Undiscounted lease receipts for each of the next five years
? Applicable □ Not applicable
Unit: RMB Yuan
Undiscounted lease receipts for each year
Items
Closing balance Opening balance
First Year 1,880,218.11 1,371,619.12
Second Year 623,853.21
Third Year 293,577.98
Total undiscounted lease receipts after
five years
(3) Profit or loss on sales of finance leases recognized as a producer or distributor
? Applicable ? Not applicable
VIII. Research and development expenses
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Employee compensation 254,986,435.45 243,369,740.34
Direct input 273,425,309.24 194,855,941.97
Depreciation expense and amortization
of intangible assets
Outsourcing expenses 8,883,018.87 7,801,144.90
Office expenses and travel expenses 224,352.55 4,910,364.40
Others 24,484,887.47 26,087,072.40
Total 605,728,077.64 522,723,563.18
Including: expensed R&D expenditures 605,728,077.64 522,723,563.18
IX. Changes in the scope of consolidation
Explain changes in the scope of consolidation caused by other reasons (for example, newly established subsidiaries, liquidated
subsidiaries, etc.) and the related details:
(1) Increase in the scope of consolidation
Equity
Capital contribution
Name of companies acquisition Equity acquisition date Capital contribution
proportion (%)
method
NHU Life Science North America
Establishment January 28, 2026 USD 150,000 100.00%
LLC
(2) Decrease of consolidation scope
Equity disposal Disposal of daily Disposal of daily net
Name of companies Equity acquisition date
method net assets profit
Shandong Xinshuang'an Biotechnology Co., Ltd. Deregistration January 30, 2026 RMB 98,918.40 RMB -67.99
X. Interests in other entities
(1) Composition of enterprise group
Name of Main place Registration Business Holding proportion
Registered capital Acquisition method
subsidiary of business place nature Direct Indirect
NHU (Hong Hong
Hong Kong,
Kong) Trading USD2,400,000.00 Kong, Business 100.00% Establishment
China
Co., Ltd. China
Shandong
Weifang, Weifang, Manufacturi
NHU Amino- RMB1,100,000,000.00 100.00% Establishment
Shandong Shandong ng industry
acids Co., Ltd.
List significant subsidiaries; the materiality criteria are set out in Note 5 of Section V of the financial report.
(1) Summary financial information of insignificant (immaterial) joint ventures or associates
Unit: RMB Yuan
Ending balance/amount incurred in Beginning balance/amount incurred in
Items
current period previous period
Joint ventures:
Total carrying amount of investment 564,951,849.04 418,125,357.72
The total of the following items
calculated according to the shareholding
ratio
--Net profit 145,667,271.39 -15,076,323.59
--Total comprehensive income 145,667,271.39 -15,076,323.59
Associates:
Total carrying amount of investment 568,684,576.58 547,225,191.71
The total of the following items
calculated according to the shareholding
Ending balance/amount incurred in Beginning balance/amount incurred in
Items
current period previous period
ratio
--Net profit 40,676,371.27 38,312,710.19
--Total comprehensive income 40,676,371.27 38,312,710.19
XI. Government subsidies
□ Applicable ? Not applicable
Reasons for not receiving the expected amount of government subsidies at the anticipated time
□ Applicable ? Not applicable
? Applicable □ Not applicable
Unit: RMB Yuan
Amount
included Other
Amount
Amount of in non- variatio
transferred in Asset-
Accounting Opening new subsidies operating ns in
other income in Closing balance related/income-
items balance in the current revenue the
the current related
period of the current
period
current period
period
Deferred 899,431,748.59 25,128,500.00 81,533,952.31 843,026,296.28 Asset-related
income 6,576,000.00 1,398,784.26 5,177,215.74 Related to income
Total 906,007,748.59 25,128,500.00 82,932,736.57 848,203,512.02
? Applicable □ Not applicable
Unit: RMB Yuan
Accounting items Amount incurred in the current period Amount incurred in the previous period
Government grants included in other income 118,946,795.94 120,279,254.44
XII. Risks related to financial instruments
The Company's major financial instruments include cash and cash equivalents, notes receivable, accounts receivable, receivables
financing, other receivables, other current assets, financial assets held for trading, investments in other equity instruments, notes
payable, accounts payable, other payables, short-term borrowings, financial liabilities held for trading, non-current liabilities due
within one year, long-term borrowings, and lease liabilities. Detailed information on the various financial instruments has been
disclosed in the related notes. Risks related to the financial instruments and the Company’s risk management policy used for
reducing these risks are described as follows. The Company’s management governs and monitors these exposures to ensure that
these risks are controlled within the limited scope.
(1) Risk management goals and policies
The main risks arising from the Company's financial instruments are credit risk, liquidity risk, and market risk (including exchange
rate risk, interest rate risk, and commodity price risk).
The Company’s risk management aims to reach proper balance between risks and benefits, to minimize the negative impact of
risks on the Company's operating results, and to maximize the interests of shareholders and other equity investors. Based on these
risk management goals, the Company’s basic strategy for risk management is to determine and analyze various risks faced by the
Company, establish an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a timely
and reliable manner to control the risks within a limited scope.
The Company has formulated risk management policies to identify and analyze the risks it faces. These risk management policies
clearly specify particular risks and cover a wide range of areas, including market risk, credit risk, and liquidity risk management.
The Company regularly assesses changes in the market environment and in its operating activities to determine whether to update
its risk management policies and systems. The Company's Internal Audit Department conducts periodic reviews of risk
management controls and procedures, and reports the review results to the Audit Committee of the Company.
The Company manages financial instrument risks by appropriately diversifying its investments and business portfolio. It also
mitigates risks concentrated in a single industry, specific region, or particular counterparty by implementing targeted risk
management policies.
Credit risk refers to the risk that a counterparty's failure to perform its contractual obligations will cause the Company to incur
financial loss.
The Company oversees credit risk through the classification of its portfolio. Credit risk mainly arises from bank deposits, notes
receivable, accounts receivable, and other receivables.
The Company's bank deposits are primarily held with reputable financial institutions that have high credit ratings. The Company
expects that there are no significant credit risks associated with these bank deposits.
For notes receivable, accounts receivable, and other receivables, the Company has established policies to control credit risk
exposure. The Company assesses customers' creditworthiness based on their financial condition, credit records, and other factors,
such as current market conditions, and sets the corresponding credit terms accordingly. The Company will regularly monitor
customers' credit records. For those with less favorable credit records, the Company will implement measures such as sending
written collection notices, reducing credit terms, or discontinuing credit arrangements to maintain overall credit risk within
manageable limits.
The debtors of the Company's accounts receivable are customers distributed across different industries and regions. The Company
continuously assesses the creditworthiness of accounts receivable and, when appropriate, purchases credit guarantee insurance.
The maximum credit risk exposure of the Company is the carrying amount of the financial assets in the balance sheet. The
Company has not provided any other guarantees that could potentially expose it to credit risk.
Accounts receivable from the top five customers represented 19.54% of the Company’s total accounts receivable (compared to
receivables (compared to 83.54% in 2025).
Liquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle by delivering cash or other
financial assets.
When managing liquidity risk, the Company maintains and monitors cash and cash equivalents the management deem sufficient to
meet the Company's operating needs and to reduce the impact of cash flow fluctuations. To control such risk, the Company applies
various financing methods, such as bill settlement and bank loans, in appropriate combination of long-term and short-term
financing ways to optimize the financing structure and keep the balancing between financing sustainability and flexibility. The
Company has obtained lines of credit from several commercial banks to satisfy its working capital demand and capital expenditure.
As of the end of the period, the Company’s financial liabilities are categorized based on the maturities of the undiscounted
remaining contractual cash flows as follows (Unit: RMB Yuan):
Closing balance
Items Within one year One to three years Three years or more Total
Financial liabilities:
Bank loans 3,334,376,783.83 3,082,434,213.49 676,313,419.45 7,093,124,416.77
Notes payable 43,197,229.37 43,197,229.37
Accounts payable 1,889,531,581.58 1,889,531,581.58
Other payables 96,098,501.09 96,098,501.09
Lease liabilities 496,124.73 714,285.69 2,652,285.72 3,862,696.14
Total financial liabilities 5,363,700,220.60 3,083,148,499.18 678,965,705.17 9,125,814,424.95
At the end of the previous year, the Company’s financial liabilities are categorized based on the maturities of the undiscounted
remaining contractual cash flows as follows (Unit: RMB Yuan):
Balance at the end of the previous year
Items
Within one year One to three years Three years or more Total
Financial liabilities:
Balance at the end of the previous year
Items
Within one year One to three years Three years or more Total
Bank loans 3,980,899,147.47 3,784,283,730.64 536,333,678.12 8,301,516,556.23
Notes payable 70,054,101.63 70,054,101.63
Accounts payable 1,780,307,765.08 1,780,307,765.08
Other payables 131,685,145.99 131,685,145.99
Lease liabilities 1,421,784.44 714,285.72 2,652,285.72 4,788,355.88
Total financial liabilities 5,964,367,944.61 3,784,998,016.36 538,985,963.84 10,288,351,924.81
The financial liabilities presented in the table above represent undiscounted contractual cash flows and may therefore differ from
the carrying amounts reported on the balance sheet.
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial instruments will fluctuate
due to market price changes, including interest rate risk, exchange rate risk and other price risks.
① Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments will fluctuate due to changes in
market interest rates. Interest rate risk can arise from both recognized interest-bearing financial instruments and unrecognized
instruments, such as certain loan commitments.
The Company's interest rate risk arises primarily from long-term bank loans and other long-term interest-bearing debts. Floating-
rate financial liabilities expose the Company to cash flow interest rate risk, while fixed-rate financial liabilities expose the
Company to fair value interest rate risk. The Company determines the relative proportions of fixed-rate and floating-rate contracts
based on the prevailing market conditions at the time, and maintains an appropriate portfolio of fixed and floating rate instruments
through regular reviews and monitoring.
The Company closely monitors the effects of interest rate fluctuations on its overall interest rate risk. The Company has not yet
implemented a formal interest rate hedging policy. However, management is responsible for monitoring interest rate risk and will
consider hedging significant interest rate risks as necessary. An increase in interest rates will raise the cost of newly incurred
interest-bearing debts and the Company's outstanding interest expenses on floating-rate interest-bearing debts, significantly
adversely affecting the Company's financial performance. Management will make timely adjustments based on the latest market
conditions, which may include arrangements for interest rate swaps to reduce interest rate risk.
As of June 30, 2026, the Company's bank borrowings bearing interest at floating rates amounted to RMB 5,011,708,469.43
(December 31, 2025: RMB 5,685,241,467.24). Assuming other variables remain constant, an interest rate change of 50 basis
points would not have a material impact on the Company's total profit and shareholders' equity.
For financial instruments held at the balance sheet date that expose the Company to fair value interest rate risk, the effects on net
profit and shareholders' equity in the above sensitivity analysis assume a change in interest rates at the balance sheet date and
reflect the impact of remeasuring those financial instruments using the new rates. For floating-rate non-derivative instruments held
as of the balance sheet date that expose the Company to cash flow interest rate risk, the impact on net profit and shareholders'
equity shown in the sensitivity analysis reflects the estimated annual effect of the specified interest rate changes on interest
expense or income. The analysis for the previous year was based on the same assumptions and methods.
② Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments will fluctuate due to the change
of foreign exchange rate. Exchange rate risk can occur with financial instruments that are denominated in currencies different from
the functional currency.
The Company's principal operations are located in China, and its primary business is settled in RMB. However, the foreign-
currency assets and liabilities already recognized by the Company and future foreign-currency transactions (the currencies in
which such foreign-currency assets, liabilities and transactions are denominated are primarily the U.S. dollar, the euro and the
Japanese yen) continue to be exposed to foreign exchange risk.
For details of the Company's foreign-currency monetary assets and liabilities at the end of the reporting period, see Note 58 of
Section VII of the financial report.
The Company closely monitors the impact of exchange rate fluctuations on its exchange rate risk. The Company consistently
monitors the volume of the Group's foreign currency transactions, as well as its foreign currency assets and liabilities, to
effectively manage and minimize foreign exchange risk. To mitigate this risk, the Company may engage in forward foreign
exchange contracts or currency swap agreements as hedging strategies.
③ Other price risks
Other price risk refers to the risk of volatility resulting from market price fluctuations beyond exchange rate and interest rate risks.
These fluctuations may stem from factors specific to individual financial instruments or their issuers, as well as from factors
affecting all comparable financial instruments traded in the market. Other price risks may arise from changes in commodity prices,
stock market indices, equity instrument prices, and other risk variables.
The Company closely monitors the impact of price fluctuations on the price risk of its investments in equity securities.
Management is responsible for monitoring other price risks and will, if necessary, consider maintaining a diversified portfolio of
equity securities to mitigate the price risk associated with equity investments.
(1) The Company conducts hedging activities for risk management.
? Applicable □ Not applicable
other derivative contracts as hedge instruments; some of the expected foreign-currency cash flows related to anticipated purchase
and sale transactions were designated as the hedged items, in order to mitigate the risk that fluctuations in foreign exchange market
prices would cause variability in the Company's expected future cash flows from those anticipated purchases and sales.
foreign exchange contracts as hedging instruments, and designated certain foreign currency deposits as hedged items, thereby
mitigating the risk the Company bears of fluctuations in its existing foreign currency deposits due to movements in foreign
exchange market prices.
hedging tools to cope with fluctuations in bulk raw material prices and ensure business stability.
(2) The Company conducts qualified hedging activities and applies hedge accounting.
? Applicable ? Not applicable
(3) The Company engages in hedging activities for risk management purposes and expects to achieve its risk management
objectives, but has not applied hedge accounting.
? Applicable ? Not applicable
Items Reasons for not applying hedge accounting Impact on financial statements
The Company widely uses foreign exchange forward
contracts and other instruments globally to manage
foreign exchange risk related to the conversion
Derivative financial assets: RMB 29,965,130.86
Foreign between currencies such as the USD, EUR, RMB,
Derivative financial liabilities: RMB 633,860.90
exchange swap and JPY. Because there is a certain offsetting
Investment income: RMB 35,495,335.97
contract relationship in exchange rate fluctuations between
Income from changes in fair value: RMB 60,205,247.49
different currencies, this can to some extent achieve
the same effect as hedge accounting; therefore,
hedge accounting has not been applied.
The Company continuously purchase or sell,
dynamically adjust futures positions, and manage
the overall net risk exposure, rather than individual,
identifiable hedged items. The standard requires a
Raw material formal written designation of the corresponding Investment income: RMB -182,990.00
futures contracts relationship between the hedging instrument and the Income from changes in fair value: RMB -1,029,440.00
specific hedged item at the beginning of the hedging
process. Rolling, batch, and combination exposures
are difficult to match on a transaction by transaction
basis, making it impossible to complete the
Items Reasons for not applying hedge accounting Impact on financial statements
designation of the hedging relationship.
(1) Classification of transfer method
? Applicable □ Not applicable
Unit: RMB Yuan
Nature of transferred Amount of transferred Basis for determining
Transfer method Derecognition situation
financial assets financial assets derecognition
It has transferred
Notes endorsed,
Receivables financing 1,346,436,608.90 Recognition terminated almost all of its risks
discount
and rewards
Total 1,346,436,608.90
(2) Financial assets with termination of recognition due to transfer
? Applicable □ Not applicable
Unit: RMB Yuan
Amount of financial assets
Transfer method of financial Gains or losses related to
Items with termination of
assets termination recognition
recognition
Receivables financing Endorsement and discount 1,346,436,608.90 -267,359.89
Total 1,346,436,608.90 -267,359.89
(3) Transferred financial assets with continuing involvement
?Applicable ? Not applicable
XIII. Disclosure of fair value
Unit: RMB Yuan
Ending fair value
Items The first level of The second level
The third level of fair
fair value of fair value Total
value measurement
measurement measurement
I. Continuous fair value
-- -- -- --
measurement
(I) Trading financial assets 2,583,641,120.21 2,583,641,120.21
at fair value through profit and 2,583,641,120.21 2,583,641,120.21
loss
(1) Derivative financial assets 29,965,130.86 29,965,130.86
(2) Structured deposits 2,553,675,989.35 2,553,675,989.35
(II) Receivables financing 920,577,788.17 920,577,788.17
Ending fair value
Items The first level of The second level
The third level of fair
fair value of fair value Total
value measurement
measurement measurement
(III) Other equity instrument
investments
Total amount of assets
measured at fair value on a 2,583,641,120.21 943,023,935.72 3,526,665,055.93
continuous basis
(IV) Trading financial
liabilities
Including:derivative financial
liabilities
Total amount of liabilities
measured at fair value on a 1,663,300.90 1,663,300.90
continuous basis
II. Non-recurring Fair Value
-- -- -- --
Measurements
in recurring and non-recurring second-level fair value measurement items
The derivative financial assets measured at second-level fair value held by the Company are forward foreign exchange contracts.
The Company determines their fair value by discounting to present value the difference between the contractual settlement
exchange rate specified in the forward foreign exchange contracts and the market forward exchange quotation at the balance sheet
date, using the expected yield.
in recurring and non-recurring third-level fair value measurement items
(1) The Company's receivables financing measured at fair value using third-level inputs consists of bank acceptance bills, which
have low credit risk and short remaining maturities, and the Company determines their fair value based on their face value.
(2) The other equity instrument investments measured at fair value through third-level held by the Company are equity interests in
non-listed companies. For investments in unlisted equity instruments, the Company comprehensively considers the use of the
market approach, the discounted cash flow method and other methods to estimate fair value. If the operating environment,
operating conditions, and financial condition of the investee Zhejiang Second Pharma Co., Ltd. and Shanghai NewMargin Yongjin
Equity Enterprise (Limited Partnership) have not undergone significant changes, the Company measures the investments at cost as
a reasonable estimate of fair value. The investee, Shanghai NewMargin Yongjin Equity Enterprise (Limited Partnership), is
measured at a reasonable estimate of fair value based on the audited fund report.
XIV. Related parties and related transactions
Proportion of
Shareholding ratio
Parent company parent company's
Registration place Business nature Registered capital of parent company
name voting rights to the
to the Company
Company
NHU Holding Xinchang, Manufacturing
RMB 120,000,000 50.08% 50.08%
Group Co., Ltd. Zhejiang industry
Explanation of the parent company of the Company: The ultimate controller of the enterprise is Hu Baifan.
Details of the Company's subsidiaries are set out in Note 3(1) of Section XVIII of the financial report.
Details of the Company's joint ventures and associates are set out in Note 10 of Section VII of the financial report.
Information about other joint ventures or associates that have related transactions with the Company in the current period, or have
a balance resulting from related transactions with the Company in the previous period is as follows:
Name of joint ventures and associates Relationship with the Company
Ningbo Zhenhai Refining and Chemical NHU Biotechnology
Joint ventures of the Company
Co., Ltd.
Zhejiang Chunhui Environmental Protection Energy Co., Ltd. Associates of the Company
Envalior NHU Engineering Materials (Zhejiang) Co., Ltd. Associates of the Company
Zhejiang Saiya Chemical Materials Co., Ltd. Associates of the Company
CysBio ApS Associates of the Company
Shandong Bin'an Vocational Training School Co., Ltd. Associates of the Company
Anhui Yingna Weixun Technology Co., Ltd. Associates of the Company
Name of other related parties Relationship between other related parties and the Company
Beijing Front Pharma CO., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Zhejiang Asen Pharmaceutical Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Zhejiang Deli Equipment Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Fuyuan Pharmaceutical Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Weifang Hecheng Real Estate Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Qionghai Heyue Property Service Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Qionghai Boao Heyue Hotel Management Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Shaoxing Heyue Property Services Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Zhejiang Jingshi Real Estate Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Shaoxing Yuexiu Education Development Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Shaoxing Jinghe Hotel Management Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Shaoxing Shangyu Hecheng Real Estate Co., Ltd. Under the common control of NHU Holding Group Co., Ltd.
Zhejiang Yuexiu University Under the common control of NHU Holding Group Co., Ltd.
Changbai Mountain Protection and Development Zone Heyue
Under the common control of NHU Holding Group Co., Ltd.
Real Estate Development Co., Ltd.
Heilongjiang Haotian Corn Development Co., Ltd. Minority shareholders of subsidiaries
Beijing Front Pharma CO., Ltd. Cangzhou Branch Branch of Beijing Front Pharma CO., Ltd.
Shaoxing Heyue Property Services Co., Ltd. Shangyu Branch Branch of Shaoxing Heyue Property Services Co., Ltd.
Other remarks:
Customer II holds 25% equity in NHU EUROPE GMBH, a subsidiary controlled by the Company's subsidiary NHU Singapore
Pte. Ltd. As a precaution, the Company discloses the transactions and outstanding balances between Customer II and the
subsidiary NHU EUROPE GMBH in the related party transaction section.
(1) Related transactions for the purchase and sale of goods and the provision and receipt of services
Statement of purchases of goods and acceptance of services(I)
Unit: RMB Yuan
Amount incurred Exceed the Amount incurred
Related transaction Approved
Related parties in the current transaction limit in the previous
content transaction limit
period or not period
Zhejiang Saiya
Chemical Purchasing goods 125,930,371.86 230,000,000.00 No 111,801,148.68
Materials Co., Ltd.
Ningbo Zhenhai
Refining and
Chemical NHU Purchasing goods 337,883,700.13 793,000,000.00 No
Biotechnology
Co., Ltd.
Zhejiang Deli
Equipment Co., Purchasing goods 74,531,732.72 177,000,000.00 No 8,320,553.16
Ltd.
Shaoxing Jinghe Catering and
Hotel Management accommodation 680,858.69 764,004.04
Co., Ltd. services
Shaoxing Heyue
Property
Property Services
management 285,498.80 188,264.15
Co., Ltd. Shangyu
services
Branch
Qionghai Boao
Catering and
Heyue Hotel 3,450,000.00 No
accommodation 16,193.00 2,288.00
Management Co.,
services
Ltd.
Zhejiang Asen
Pharmaceutical Purchasing goods 115,126.59 54,785.84
Co., Ltd.
Fuyuan
Pharmaceutical Purchasing goods 4,500.00
Co., Ltd.
Total 539,447,981.79 1,203,450,000.00 121,131,043.87
Statement of purchases of goods and acceptance of services(II)
Unit: RMB Yuan
Related transaction Amount incurred in the Amount incurred in the
Related parties
content current period previous period
Zhejiang Chunhui Environmental Purchase of steam 57,863,728.41 48,597,383.90
Protection Energy Co., Ltd. Acceptance of services 2,036,000.79 437,189.89
Related transaction Amount incurred in the Amount incurred in the
Related parties
content current period previous period
Heilongjiang Haotian Corn
Purchasing goods 56,008,761.63 20,125,109.65
Development Co., Ltd.
CysBio ApS Consulting service fee 427,405.68
Shandong Bin'an Vocational
Training fees 366,801.88 56,940.57
Training School Co., Ltd.
Total 116,702,698.39 69,216,624.01
Statement of sales of goods/provision of services
Unit: RMB Yuan
Related
Amount incurred in the Amount incurred in the
Related parties transaction
current period previous period
content
Sales of
goods
Hazardous
Envalior NHU Engineering Materials waste 5,676.60 4,961.85
(Zhejiang) Co., Ltd. disposal fee
Water and
electricity 801,907.38 857,110.29
charges
Sales of
Ningbo Zhenhai Refining and Chemical NHU goods
Biotechnology Co., Ltd. Provision
of services
Sales of
Fuyuan Pharmaceutical Co., Ltd. 1,409,292.04 398,230.09
goods
Sales of
Zhejiang Deli Equipment Co., Ltd. 589,492.03
goods
Heilongjiang Haotian Corn Development Co.,
Steam sales 4,425,024.13
Ltd.
Sales of
Zhejiang Second Pharma Co., Ltd. 2,814.16
goods
Beijing Front Pharma CO., Ltd. Testing fee 1,654,867.23 391,509.43
Provision
Beijing Front Pharma CO., Ltd. Cangzhou 75,471.70
of services
Branch
Testing fee 171,698.11
Subtotal 63,899,485.25 79,951,539.21
(2) Related?party lease information
The Company acts as the lessor:
Unit: RMB Yuan
Lease income recognized in Lease income recognized in
Name of lessee Types of leased assets
current period last period
Envalior NHU Engineering
Land use right and buildings 549,803.22 316,724.37
Materials (Zhejiang) Co., Ltd.
Zhejiang Jingshi Real Estate
Land use right and buildings 112,171.26 69,357.80
Co., Ltd.
NHU Holding Group Co.,
Land use right and buildings 13,400.92 13,400.92
Ltd.
Weifang Hecheng Real Estate
Land use right and buildings 5,142.86 5,142.86
Co., Ltd.
The Company acts as the lessee:
Unit: RMB Yuan
Lease expenses for short? term leases and leases of low? value assets
accounted for using the simplified approach (if applicable)
Name of lessor Types of leased assets
Amount incurred in the current Amount incurred in the previous
period period
NHU Holding Group Co., Land use right and
Ltd. buildings
(3) Remuneration of key management personnel
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Remuneration of key management
personnel
(4) Other related?party transactions
During this period, the subsidiary NHU EUROPE GMBH sold goods to Customer II in the amount of RMB 112,830,549.16; the
accounts receivable balance at the end of the period was RMB 56,155,303.71.
(1) Accounts receivable
Unit: RMB Yuan
Project name Related parties Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Envalior NHU
Engineering
Materials 42,708,999.02 2,135,449.95 47,131,641.33 2,356,582.07
(Zhejiang) Co.,
Accounts
Ltd.
receivable
Heilongjiang
Haotian Corn
Development Co.,
Ltd.
Subtotal 43,687,119.02 2,184,355.95 47,131,641.33 2,356,582.07
Ningbo Zhenhai
Refining and
Other receivables Chemical NHU 2,514,698.55 125,734.93
Biotechnology
Co., Ltd.
Zhejiang Chunhui
Environmental
Other receivables 20,000.00 4,000.00 20,000.00 4,000.00
Protection Energy
Co., Ltd.
Subtotal 20,000.00 4,000.00 2,534,698.55 129,734.93
Project name Related parties Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Zhejiang Deli
Other non-current
Equipment Co., 1,377,500.00 67,685,510.00
assets
Ltd.
Subtotal 1,377,500.00 67,685,510.00
(2) Payable items
Unit: RMB Yuan
Project name Related parties Closing book balance Opening balance
Ningbo Zhenhai Refining and Chemical NHU
Biotechnology Co., Ltd.
Zhejiang Chunhui Environmental Protection
Energy Co., Ltd.
Zhejiang Deli Equipment Co., Ltd. 15,219,814.90 10,680,005.30
Accounts payable
CysBio ApS 1,023,018.50
Heilongjiang Haotian Corn Development Co.,
Ltd.
Zhejiang Saiya Chemical Materials Co., Ltd. 82,985,135.06 258,119.47
Zhejiang Second Pharma Co., Ltd. 6,408.00 6,408.00
Subtotal 480,420,599.27 262,401,403.46
Ningbo Zhenhai Refining and Chemical NHU
Contract liabilities 125,660,377.36 223,396,226.42
Biotechnology Co., Ltd.
(tax-inclusive)
Zhejiang Deli Equipment Co., Ltd. 14,700.89
Subtotal 125,675,078.25 223,396,226.42
Zhejiang Deli Equipment Co., Ltd. 3,740.00
Ningbo Zhenhai Refining and Chemical NHU
Other payables Biotechnology Co., Ltd.
Shaoxing Jinghe Hotel Management Co.,
Ltd.Wanyi Branch
Subtotal 110,500.96 5,390.00
Total 606,206,178.48 485,803,019.88
XV. Commitments and Contingencies
Significant commitments existing at the balance sheet date
(1) Forward foreign exchange contracts
According to the ISDA 2002 MASTER AGREEMENT signed with Bank of China (Hong Kong) Limited, the ISDA 2002 MASTER
AGREEMENT signed with DBS Bank (China) Limited, the Global Capital Markets Transactions and related transaction
application forms signed with HSBC Bank (China) Company Limited, Hangzhou Branch, the Zheshang Bank Customer Foreign
Exchange Trading Master Agreement signed with China Zheshang Bank Co., Ltd., Shanghai Branch, and the NAFMII Master
Agreement and supplementary agreement (No. Y161136) signed with Bank of China Limited, Zhejiang Branch, as of June 30,
Weighted average
Forms of foreign exchange
Currency Notional amount Agreed exchange rate range agreed exchange Settlement month
settlement and sale
rate
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
USD 56,535,590.06 6.6980 - 6.7510 6.7325 October 2026
settlement
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
EUR 6,580,900.00 7.7150 - 7.9100 7.8008 October 2026
settlement
Foreign exchange
settlement
Foreign exchange
settlement
Foreign exchange
settlement
(2) Issued letters of guarantee not yet expired
As of June 30, 2026, the various unexpired letters of guarantee issued by the Company and its subsidiaries are as follows:
Letter of Letter of guarantee
Issuing bank Applicant unit Opening conditions
guarantee type amount
Performance
USD 99,614.00 Use of bank credit facilities
Bank of China Limited guarantee
Zhejiang NHU Co., Ltd.
Xinchang Sub-Branch Performance
USD 7,075.00 Use of bank credit facilities
guarantee
China Merchants Bank Shandong NHU Fine Chemical Payment Margin deposit
CNY 1,119,300.00
Limited Weifang Sub- Science and Technology Co., Ltd. guarantee CNY 111,930.00
Letter of Letter of guarantee
Issuing bank Applicant unit Opening conditions
guarantee type amount
Branch
China Merchants Bank
Shandong NHU Fine Chemical Payment Margin deposit
Limited Weifang Sub- CNY 2,379,010.00
Science and Technology Co., Ltd. guarantee CNY 237,901.00
Branch
(3) Issued letters of credit that have not yet expired
As of June 30, 2026, the letters of credit issued by the Company and its subsidiaries that have not yet matured are as follows:
Issuing bank Applicant unit Letter of credit balance Opening conditions
Industrial and Commercial Bank of China Tianjin NHU Materials EUR 2,057,000.00 Use of bank credit facilities
Limited TEDA Sub-Branch Technology Co., Ltd. USD 2,252,000.00 Use of bank credit facilities
JPY 180,000,000.00 Use of bank credit facilities
Bank of China Limited Xinchang Sub- USD 354,320.00 Use of bank credit facilities
The Company
Branch CNY 100,000,000.00 Use of bank credit facilities
CNY 50,000,000.00 Use of bank credit facilities
Zhejiang NHU
Margin deposit
Bank of China Limited Shangyu Sub-Branch Specialty Materials JPY 425,000,000.00
CNY 19,750,000.00
Co., Ltd.
Industrial and Commercial Bank of China
CNY 50,000,000.00 Use of bank credit facilities
Limited Xinchang Sub-Branch
The Company
China Construction Bank Corporation CNY 450,000,000.00 Use of bank credit facilities
Xinchang Sub-branch CNY 50,000,000.00 Use of bank credit facilities
(4) "Bill Pool" business
The Company and its subsidiaries, including Shangyu NHU Bio-Chem Co., Ltd., Zhejiang NHU Pharmaceutical Co., Ltd.,
Zhejiang NHU Specialty Materials Co., Ltd., Shaoxing Yuchen New Materials Co., Ltd., Shandong NHU Pharmaceutical Co.,
Ltd., Shandong NHU Amino-acids Co., Ltd., Heilongjiang NHU Biotechnology Co., Ltd., Shandong NHU Fine Chemical Science
and Technology Co., Ltd., Heilongjiang Xinhao Thermal Power Co., Ltd., Xinchang NHU Vitamins Co., Ltd., Zhejiang VYS
Animal Nutrition and Health Co., Ltd., and NHU Import & Export Company Ltd., have signed and entered into the Bill Pool
Business Cooperation Agreement with China Zheshang Bank Co., Ltd. The Company uses asset pool pledges or bill pool pledges
as collateral and opens a bill pool margin account, paying margin at a certain proportion. The specific amount of the margin has
not been agreed upon. As of June 30, 2026, the balance of the Company's pledged bank acceptance bills was RMB 114,794,927.96,
and RMB 12,939,755.86 was deposited as margin in the bill pool at China Zheshang Bank Co., Ltd.
(5) As of June 30, 2026, there are no other commitments that should be disclosed by the Company.
(1) Even if the Company does not have important contingencies to be disclosed, it shall also state so
There are no important contingencies that the Company needs to disclose.
As of June 30, 2026, there are no other contingencies that should be disclosed by the Company.
XVI. Events after Balance Sheet Day
The Board of Directors of the Company proposes: As of July 31, 2026,using the existing total share capital, after deducting the
shares in the repurchase special account, as the base of 3,073,421,680 shares [Note], distribute to all shareholders a cash dividend
of RMB 2.00 for every 10 shares (tax-inclusive), issue 0 bonus shares (tax-inclusive), and not convert capital reserve into share
capital.
[Note] As of July 31, 2026, the Company’s total share capital is 3,073,421,680 shares, including 4,704,282 shares in the
repurchase-dedicated securities account. According to the “Rules on Share Repurchase of Listed Companies”, shares in the special
account for repurchase of listed companies carry no right of profit distribution and conversion of capital reserve into share capital.
If the Company’s total share capital changes due to the conversion of convertible bonds, share repurchase, exercise of equity
incentives, refinancing, and listing of new shares, etc., before the implementation of the profit distribution proposal, the total
distribution will be adjusted accordingly based on the same distribution ratio.
This proposal is subject to review and approval by the General Meeting of Shareholders.
Pursuant to proposals related to employee stock ownership plan including the Fifth Phase of Employee Stock Ownership Plan
(Draft) of Zhejiang NHU Co., Ltd. and Summary deliberated and approved by the 16th Meeting of the Ninth Session of the Board
of Directors and the 11th Meeting of the Ninth Session of the Board of Supervisors dated December 10, 2025 and the Third
Extraordinary General Meeting of 2025 dated December 26, 2025, the Company agreed to implement the fifth phase of employee
stock ownership plan.
On January 26, 2026, the Company received the Securities Transfer Registration Confirmation issued by the Shenzhen Branch of
China Securities Depository and Clearing Corporation Limited, and the 21,454,310 shares held in the Company's repurchase-
dedicated securities account were transferred on January 23, 2026 via non-trading transfer to the "Zhejiang NHU Co., Ltd. - Fifth
Employee Stock Ownership Plan" dedicated securities account, representing 0.6981% of the Company's share capital, at a transfer
price of RMB 24.19 per share.
As of now, the Company's fifth employee stock ownership plan has completed its purchases. The lock-up period for the shares
obtained under the fifth employee stock ownership plan is 12 months, calculated from the date the Company announces that the
last tranche of the target shares has been registered and transferred to this plan’s name, i.e., January 27, 2026 - January 26, 2027.
The term of the target shares obtained under this shareholding plan is 24 months, calculated from the date the Company announces
that the registration and transfer of the last target share into the name of this plan.
Except for the matters described above, as of the date these financial statements were authorized for issue, the Company had no
other material events after the balance sheet date.
XVII. Other Important Matters
(1) Basis for determining reportable segments and accounting policies
According to the Company's internal organizational structure, management requirements and internal reporting system, the
Company's operating business is divided into two reportable segments. These reporting segments are determined based on the
financial information required for the Company's day-to-day internal management. The Group's management regularly reviews the
operating results of these reportable segments to determine the allocation of resources to them and to assess their performance.
The Company's reportable segments include:
① Pharmaceutical and chemical segment, producing and selling nutritional products and aroma chemicals;
② Other segment, production and sale of new materials, others;
Segment reporting information is disclosed based on the accounting policies and measurement bases adopted by each segment
when reporting to management; these accounting policies and measurement bases are consistent with those used in the preparation
of the financial statements.
(2) Financial information of the reportable segments
Unit: RMB Yuan
Pharmaceutical Inter-segment
Items Others Total
chemicals eliminations
Operating revenue 12,333,751,691.26 1,179,235,190.63 383,686,621.00 13,129,300,260.89
Including: Revenue
arising from contracts 12,333,751,691.26 1,176,248,011.63 383,686,621.00 13,126,313,081.89
with customers
Pharmaceutical Inter-segment
Items Others Total
chemicals eliminations
Operating cost 6,903,638,200.70 803,723,881.11 383,686,621.00 7,323,675,460.81
Total assets 41,956,582,912.40 5,180,695,555.07 452,046,966.71 46,685,231,500.76
Total Liabilities 10,072,385,555.56 2,030,928,967.94 452,046,966.71 11,651,267,556.79
Details of the Company's subsidiaries are set out in Note 14&15 of Section V of the financial report.
XVIII. Notes on Main Items in Financial Statements of the Parent Company
(1) Disclosure by aging
Unit: RMB Yuan
Aging Closing book balance Opening balance
Within 1 year (including 1 year) 1,163,192,878.20 1,149,760,310.62
Total 1,163,192,878.20 1,149,760,310.62
(2) Classification and disclosure by bad debt provision method
Unit: RMB Yuan
Closing balance Opening balance
Book balance Bad-debt provision Book balance Bad-debt provision
Rate Carrying Rate Carrying
Categories
% to of amount % to of amount
Amount Amount Amount Amount
total provi total prov
sion ision
Including:
Accounts
receivable
with
provision
for bad 1,163,192,878.20 100.00% 58,159,643.91 5.00% 1,105,033,234.29 1,149,760,310.62 100.00% 57,488,015.53 5.00% 1,092,272,295.09
debts
reserve
based on
portfolio
Total 1,163,192,878.20 100.00% 58,159,643.91 5.00% 1,105,033,234.29 1,149,760,310.62 100.00% 57,488,015.53 5.00% 1,092,272,295.09
Provision made on a collective basis using age analysis method:
Unit: RMB Yuan
Closing balance
Name
Book balance Bad-debt provision Rate of provision
Within 1 year 1,163,192,878.20 58,159,643.91 5.00%
Total 1,163,192,878.20 58,159,643.91
If the provision for bad debts on accounts receivable is based on the general model of expected credit losses:
□ Applicable ? Not applicable
(3) Provision, recovery or reversal of bad debt reserve in current period
Provision for bad debts of this period:
Unit: RMB Yuan
Changes in amount of the current period
Closing balance
Categories Opening balance Recovery or
Provision Write off Others
reversal
Provision for
bad debts by 57,488,015.53 671,628.38 58,159,643.91
portfolio
Total 57,488,015.53 671,628.38 58,159,643.91
(4) Details of the accounts receivable and contract assets in the top five of the ending balance, grouped by
debtor
Unit: RMB Yuan
Ending balance of
Proportion of total
allowance for bad
Ending balance of balance of accounts
Ending balance of debts on accounts
Company name accounts receivable and receivable and contract
accounts receivable receivable and
contract assets assets at the end of the
impairment provision
period
for contract assets
Customer 1 847,522,350.34 847,522,350.34 72.86% 42,376,117.52
Customer 2 156,123,444.65 156,123,444.65 13.42% 7,806,172.23
Customer 3 31,924,166.84 31,924,166.84 2.74% 1,596,208.34
Customer 4 13,809,000.00 13,809,000.00 1.19% 690,450.00
Customer 5 10,978,000.00 10,978,000.00 0.94% 548,900.00
Total 1,060,356,961.83 1,060,356,961.83 91.15% 53,017,848.09
Unit: RMB Yuan
Items Closing balance Opening balance
Other receivables 227,803,286.35 476,588,831.47
Total 227,803,286.35 476,588,831.47
(1) Other receivables
Unit: RMB Yuan
Nature of payment Closing book balance Opening balance
Interbank borrowings 203,605,250.01 448,209,083.34
Deposits and guarantee deposits 13,282,510.50 13,272,472.50
Refund of tax for export 18,171,029.29 30,199,388.70
Employee petty cash 4,923,784.23 5,958,784.23
Others 2,570,916.08 4,567,180.89
Nature of payment Closing book balance Opening balance
Total 242,553,490.11 502,206,909.66
Unit: RMB Yuan
Aging Closing book balance Opening balance
Within 1 year (including 1 year) 223,913,952.67 483,399,289.58
Over 3 years 13,998,065.85 13,685,553.00
Over 5 years 13,359,992.53 13,359,992.53
Total 242,553,490.11 502,206,909.66
Unit: RMB Yuan
Closing balance Opening balance
Categ Book balance Bad-debt provision Carrying Book balance Bad-debt provision Carrying
ories % to Rate of amount % to Rate of amount
Amount Amount Amount Amount
total provision total provision
Includ
ing:
Provis
ion for
bad
debts 242,553,490.11 100.00% 14,750,203.76 6.08% 227,803,286.35 502,206,909.66 100.00% 25,618,078.19 5.10% 476,588,831.47
by
portfol
io
Includ
ing:
Total 242,553,490.11 100.00% 14,750,203.76 6.08% 227,803,286.35 502,206,909.66 100.00% 25,618,078.19 5.10% 476,588,831.47
Category name for bad debt provisions calculated by combination: Other receivables for which bad debt provisions are calculated
by combination
Unit: RMB Yuan
Closing balance
Categories
Book balance Provision for bad debts Provision proportion
Land deposit receivable
portfolio
Export Refund Receivable
Portfolio
Ages 211,863,698.32 14,443,305.84 6.82%
Within 1 year (inclusive) 205,742,923.38 10,287,146.17 5.00%
Closing balance
Categories
Book balance Provision for bad debts Provision proportion
Over 3 years 1,479,303.35 1,479,303.35 100.00%
Total 242,553,490.11 14,750,203.76
Description for basis of determining the combination:
Provision for bad debts under the general model of expected credit losses:
Unit: RMB Yuan
First stage Second stage Third stage
Expected credit loss for Expected credit loss for
Bad-debt provision Expected credit losses Total
the entire duration (no the entire duration
over the next 12
credit impairment (credit impairment has
months
occurred) occurred)
Balance as at January
The balance as of
January 1, 2026 is in
the current period
-- Transferred to the
-86,360.08 86,360.08
second stage
-- Transferred to the
-582,854.00 582,854.00
third stage
Accrual in the current
-12,406,772.39 -69,246.61 1,608,144.57 -10,867,874.43
period
Balance as at June 30,
Criteria for dividing each stage and the bad-debt reserves calculation and withdrawal proportion
Accounts with an aging period of up to one year are categorized as Stage I; accounts aged between one and two years fall under
Stage II; and accounts exceeding two years in age are designated as Stage III.
Significant changes in the carrying amounts of items with material changes in the allowance for losses during the period
□ Applicable ? Not applicable
Unit: RMB Yuan
Ratio in the total
Nature of the Ending balance of
Company name Closing balance Aging ending balance of
amounts bad debt provision
other receivables
Shandong NHU Fine
Chemical Science
Interbank borrowings 150,099,166.69 Within 1 year 61.88% 7,504,958.33
and Technology Co.,
Ltd.
Shaoxing Nayan
Material Technology Interbank borrowings 40,310,000.00 Within 1 year 16.62% 2,015,500.00
Co., Ltd.
State Administration
Refund of tax for
of Taxation (Export 18,171,029.29 Within 1 year 7.49% 908,551.46
export
tax rebates
Ratio in the total
Nature of the Ending balance of
Company name Closing balance Aging ending balance of
amounts bad debt provision
other receivables
receivable)
Zhejiang NHU
Pharmaceutical Co., Interbank borrowings 13,196,083.32 Within 1 year 5.44% 659,804.17
Ltd.
Shandong Weifang
Binhai Economic and
Technological
Land bond 12,518,762.50 Over 5 year 5.16% 125,187.63
Development Zone
Treasury Centralized
Payment Center
Total 234,295,041.80 96.59% 11,214,001.59
Unit: RMB Yuan
Closing balance Opening balance
Items Depreciatio Depreciation
Book balance Carrying amount Book balance Carrying amount
n reserves reserves
Investmen
ts in
subsidiari
es
Investmen
ts in
associates 930,742,746.46 930,742,746.46 761,549,857.60 761,549,857.60
and joint
ventures
Total 13,825,651,896.58 13,825,651,896.58 12,816,459,007.72 12,816,459,007.72
(1) Investment in subsidiaries
Unit: RMB Yuan
Opening Increase or decrease in the current period
Closing
balance
Provision balance of
Invested Opening balance of Closing balance
Additional Investmen for impairme
entity (Carrying amount) impairm Others (Carrying amount)
investment t decrease impairmen nt
ent
t reserve provision
provision
Xinchang
NHU
Vitamins
Co., Ltd.
Zhejiang
NHU Import
& Export
Co., Ltd.
Zhejiang
VYS Animal
Nutrition
and Health
Opening Increase or decrease in the current period
Closing
balance
Provision balance of
Invested Opening balance of Closing balance
Additional Investmen for impairme
entity (Carrying amount) impairm Others (Carrying amount)
investment t decrease impairmen nt
ent
t reserve provision
provision
Co., Ltd.
Shangyu
NHU Bio-
Chem Co.,
Ltd.
NHU (Hong
Kong)
Trading Co.,
Ltd.
Zhejiang
NHU
Pharmaceuti
cal Co., Ltd.
Zhejiang
NHU
Specialty 554,844,108.53 554,844,108.53
Materials
Co., Ltd.
Shandong
NHU
Amino-acids
Co., Ltd.
Shandong
NHU
Holdings
Co., Ltd.
Heilongjiang
NHU
Biotechnolo
gy Co., Ltd.
Shandong
NHU
Pharmaceuti
cal Co., Ltd.
Shandong
NHU Fine
Chemical
Science and
Technology
Co., Ltd.
NHU
Singapore 55,650,800.00 55,650,800.00
Pte. Ltd.
Tianjin NHU
Materials
Technology
Co., Ltd.
Zhejiang
NHU
Holdings
Co., Ltd.
Opening Increase or decrease in the current period
Closing
balance
Provision balance of
Invested Opening balance of Closing balance
Additional Investmen for impairme
entity (Carrying amount) impairm Others (Carrying amount)
investment t decrease impairmen nt
ent
t reserve provision
provision
Total 12,054,909,150.12 840,000,000.00 12,894,909,150.12
(2) Investment in associates and joint ventures
Unit: RMB Yuan
Opening Increase or decrease in the current period
balance
Addit Invest Recognized Other Declared Provision Closing balance
Opening balance of Other Closing balance
Invested entity ional ment investment gain comprehensi payment of for of impairment
(Carrying amount) impairme changes Others (Carrying amount)
inves decre and loss under ve income cash dividends impairmen provision
nt in equity
tment ase equity method adjustments or profits t reserve
provision
I. Joint ventures
Ningbo Zhenhai
Refining and
Chemical NHU 418,125,357.72 145,667,271.39 1,159,219.93 564,951,849.04
Biotechnology Co.,
Ltd.
Subtotal 418,125,357.72 145,667,271.39 1,159,219.93 564,951,849.04
II. Associates
Zhejiang Chunhui
Environmental
Protection Energy
Co., Ltd.
Anhui Yingna
Weixun Technology 4,597,937.29 -83,657.83 4,514,279.46
Co., Ltd.
Subtotal 343,424,499.88 22,325,736.97 40,660.57 365,790,897.42
Total 761,549,857.60 167,993,008.36 1,199,880.50 930,742,746.46
The recoverable amount is determined based on the net of fair value less disposal costs.
□ Applicable ? Not applicable
The recoverable amount is determined based on the present value of estimated future cash flows.
□ Applicable ? Not applicable
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Revenue Cost Revenue Cost
Main business 2,309,266,771.97 1,770,559,469.33 2,272,445,803.50 1,608,253,690.17
Other business 29,360,785.43 18,552,802.71 16,464,550.41 13,097,558.26
Total 2,338,627,557.40 1,789,112,272.04 2,288,910,353.91 1,621,351,248.43
Including: with customers
Revenue from contracts
Breakdown of the operating revenue and operating cost:
Unit: RMB Yuan
Classification of contracts Operating revenue Operating cost
Business Type
Including:
Nutrition 2,196,329,810.86 1,697,717,504.42
Others 140,778,551.62 90,900,590.18
Classified according to operation regions
Including:
Domestic 1,061,291,875.76 812,515,442.25
Overseas 1,275,816,486.72 976,102,652.35
Classification by timing of goods transfer
Including:
Revenue recognized at a point in time 2,337,108,362.48 1,788,618,094.60
Total 2,337,108,362.48 1,788,618,094.60
Information related to the transaction price allocated to remaining performance obligations:
At the end of the reporting period, the amount of revenue related to contracts that have been signed but whose performance
obligations have not yet been performed or have not yet been fully performed amounted to RMB 456,267,255.54, of which RMB
Unit: RMB Yuan
Amount of the corresponding period
Items Amount of the current period
of the previous year
Employee compensation 84,080,356.43 82,725,549.50
Depreciation expense and amortization of intangible
assets
Outsourcing expenses 8,883,018.87 6,077,358.50
Direct input 15,441,856.00 13,547,258.16
Office expenses and travel expenses 1,049,804.06 1,285,946.17
Others 4,664,254.54 10,163,538.49
Total 124,508,073.92 124,532,788.27
Unit: RMB Yuan
Items Amount incurred in the current period Amount incurred in the previous period
Long-term equity investment income
calculated by cost method
Return on long-term equity investments
measured by the equity method
Interest income from interbank lending 3,230,192.89 16,565,281.42
Dividend income from investment in
other equity instruments during the 5,292,000.00
holding period
Income of financial products and
structural deposits
Investment income from disposal of
trading (held-for-trading) financial -183,294.72
liabilities
Total 1,973,669,970.26 1,793,286,828.79
XIX. Supplementary Information
? Applicable □ Not applicable
Unit: RMB Yuan
Items Amount Remarks
Loss or gain from disposal of non-
-35,306,533.70
current assets
Government grants included in profit or
loss (excluding those closely related to
operating activities of the Company,
satisfying government policies and 37,824,754.25
regulations, enjoyed based on certain
standards, and having a continuing
impact on the Company's profit or loss)
Gains or losses on changes in fair value
of financial assets and financial liabilities
held by non-financial enterprises and
gains or losses arising from disposal of
financial assets and financial liabilities,
excluding those arising from effective
hedging business related to the
Company's normal operating activities
Gains or losses on assets consigned to
the third party for investment or 16,602,412.40
management
Other non-operating revenue or
-8,309,061.39
expenditures
Less: Enterprise income tax affected 20,142,157.25
Non-controlling interest affected 178,556.56
Items Amount Remarks
(after tax)
Total 91,796,890.83 --
Remarks on other profit or loss satisfying the definition of non-recurring profit or loss:
□ Applicable ? Not applicable
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss.
Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria
for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss
□ Applicable ? Not applicable
Earnings per share
Profit during the reporting Weighted average return on
period equity Basic earnings per share Diluted earnings per share
(yuan/share) (yuan/share)
Net profit attributable to
common shareholders of the 11.39% 1.30 1.30
Company
Net profit attributable to
common shareholders of the
Company after deducting 11.12% 1.27 1.27
non-recurring gains and
losses
(1) Differences in net profits and net assets in the financial reports disclosed pursuant to international
accounting standards and Chinese accounting standards at the same time
? Applicable ? Not applicable
(2) Differences in net profits and net assets in the financial reports disclosed pursuant to foreign
accounting standards and Chinese accounting standards at the same time
? Applicable ? Not applicable
(3) Explanation of reasons for differences in accounting data under domestic and foreign accounting
standards; if the data audited by an overseas audit firm is adjusted for differences, the name of the
overseas firm shall be indicated.
? Applicable ? Not applicable
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