ANHUI GUJING DISTILLERY COMPANY LIMITED
INTERIM REPORT 2026
August 2026
Interim Report 2026
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), as well as the directors and senior
management, of Anhui Gujing Distillery Company Limited (hereinafter referred to as
the “Company”) hereby guarantees the factuality, accuracy and completeness of the
contents of this Report and its summary, and shall be jointly and severally liable for
any misrepresentations, misleading statements or material omissions therein.
Liang Jinhui, the legal representative, and Zhu Jiafeng, the Deputy Chief Accountant
and Board Secretary, hereby guarantee that the financial statements carried in this
Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this
Report and its summary.
The forward-looking statements in this Report, including those concerning future
plans, do not constitute substantive commitments by the Company to investors.
Investors and other relevant parties should be fully aware of the associated risks and
understand the differences between plans, forecasts and commitments. Investors are
advised to exercise caution with respect to investment risks.
The Company has provided a detailed description of the risk factors that may
adversely affect the implementation of its future development strategies and the
achievement of its business objectives, together with the proposed countermeasures,
in “X Risks Facing the Company and Countermeasures” under “Part III
Management Discussion and Analysis” of this Report. Investors are advised to pay
close attention to the relevant information.
The Company has no dividend plan, either in the form of cash or stock, and does not
increase the share capital by converting the reserve fund.
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Interim Report 2026
Table of Contents
Part I Important Notes, Table of Contents and Definitions 2
Part II Corporate Information and Key Financial Information 6
Part III Management Discussion and Analysis 9
Part IV Corporate Governance, and Environmental and Social Responsibility 25
Part V Significant Events 27
Part VI Share Changes and Shareholder Information 31
Part VII Bonds 36
Part VIII Financial Statements 37
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Interim Report 2026
Documents Available for Reference
(I) Financial statements signed and sealed by the Company’s legal representative, as
well as Deputy Chief Accountant and Board Secretary;
(II) All originals of the Company’s documents and announcements that have been
publicly disclosed in the Reporting Period on the media designated by the China
Securities Regulatory Commission (CSRC); and
(III) The interim report disclosed in other securities markets.
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Interim Report 2026
Definitions
Term Definition
The “Company”, “Gu Jing” or “we” Anhui Gujing Distillery Co., Ltd.
Gujing Group Anhui Gujing Group Co., Ltd.
Gujing Sales Bozhou Gujing Sales Co., Ltd.
Yellow Crane Tower Distillery Yellow Crane Tower Distillery Co., Ltd.
Mingguang Distillery Anhui Mingguang Distillery Co., Ltd.
Longrui Glass Anhui Longrui Glass Co., Ltd.
Intelligent Park Baijiu Production Intelligent Transformation Project
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Interim Report 2026
Part II Corporate Information and Key Financial Information
I Corporate Information
Gujing Distillery, Gujing
Stock name Stock code 000596, 200596
Distillery-B
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 安徽古井贡酒股份有限公司
Abbr. (if any) 古井
Company name in English (if any) ANHUI GUJING DISTILLERY COMPANY LIMITED
Abbr. (if any) GU JING
Legal representative Liang Jinhui
II Contact Information
Board Secretary Securities Representative
Name Zhu Jiafeng Mei Jia
Gujing Town, Bozhou City, Anhui Gujing Town, Bozhou City, Anhui
Address
Province, P.R.China Province, P.R.China
Tel. (0558) 5712231 (0558) 5710057
Fax (0558) 5710099 (0558) 5710099
Email address gjzqb@gujing.com.cn gjzqb@gujing.com.cn
III Other Information
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address and
email address of the Company in the Reporting Period
□ Applicable ? Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2025 Annual Report.
Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping the Company’s
interim reports in the Reporting Period
□ Applicable ? Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the
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Interim Report 2026
Company’s interim reports and the place for keeping such reports did not change in the Reporting Period. The said information can
be found in the 2025 Annual Report.
Indicate by tick mark whether any change occurred to other information during the Reporting Period
□ Applicable ? Not applicable
IV Key Accounting Data and Financial Indicators
Indicate by tick mark whether there is any retrospectively adjusted or restated datum in the table below
□ Applicable ? Not applicable
H1 2026 H1 2025 Change (%)
Operating revenue (RMB) 10,131,395,927.11 13,879,852,202.75 -27.01%
Net profit attributable to the listed
Company’s shareholders (RMB)
Net profit attributable to the listed
Company’s shareholders before 2,150,029,442.57 3,626,388,994.00 -40.71%
exceptional gains and losses (RMB)
Net cash generated from/used in operating
activities (RMB)
Basic earnings per share (RMB/share) 4.09 6.93 -40.98%
Diluted earnings per share (RMB/share) 4.09 6.93 -40.98%
Weighted average return on equity (%) 8.42% 13.82% -5.40%
June 30, 2026 December 31, 2025 Change (%)
Total assets (RMB) 38,438,419,469.81 38,197,033,001.78 0.63%
Equity attributable to the listed Company’s
shareholders (RMB)
V Accounting Data Differences under Domestic and Overseas Accounting Standards
Chinese Accounting Standards (CAS)
□ Applicable ? Not applicable
No such differences for the Reporting Period.
□ Applicable ? Not applicable
No such differences for the Reporting Period.
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Interim Report 2026
XI Exceptional Gains and Losses
? Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gain or loss on disposal of non-current assets (inclusive of
-3,196,292.95
impairment allowance write-offs)
Government grants recognized in profit or loss (exclusive of those
that are closely related to the Company’s normal business
operations and given in accordance with defined criteria and in 3,811,624.84
compliance with government policies, and have a continuing
impact on the Company’s profit or loss)
Gain or loss on fair-value changes in financial assets and liabilities
held by non-financial enterprises & disposal of financial assets and
liabilities, exclusive of effective portion of hedges that arise in the
Company’s ordinary course of business
Non-operating income and expense other than the above 15,330,854.80
Less: Income tax effects 5,089,326.72
Non-controlling interests effects (net of tax) 1,232,196.25
Total 14,350,485.60 --
Particulars about other items that meet the definition of exceptional gain/loss
□ Applicable ? Not applicable
No such cases for the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No.
□ Applicable ? Not applicable
No such cases for the Reporting Period.
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Interim Report 2026
Part III Management Discussion and Analysis
I Principal Activity of the Company in the Reporting Period
(I) Principal Activity of the Company
The Company primarily produces and markets baijiu. According to the Industry Categorization Guide for Listed Companies (Revised
in 2012) issued by the CSRC, baijiu making belongs to the “liquor, beverage and refined tea making industry” (C15). The
Company’s principal operations remained unchanged in the Reporting Period.
(II) Status of the Industry and Position of the Company in the Industry
In the first half of 2026, the baijiu industry remained in a period of deep adjustment, shifting from accelerated clearing to a
bottoming-out phase. Industry divergence intensified further.
On the demand side, baijiu consumption scenarios continued to be reshaped. Demand for business banquets and gift-giving
contracted significantly, while mass-market consumption scenarios such as everyday personal consumption, gatherings with friends
and relatives, and family banquets accounted for a growing share. Consumer demand became concentrated in the pivotal
RMB100–300 price range, and companies with core flagship products in this price range demonstrated greater resilience. Driven by
the peak Chinese New Year season, personal dining and banquet scenarios gradually recovered, while business scenarios remained at
a low level. Overall demand still fell short of the level recorded in the same period of the previous year.
In terms of the competitive landscape, the high-end baijiu segment was the first to stabilize and rebound. Sub-high-end and regional
baijiu producers generally remained under pressure. Most companies continued to report double-digit declines in operating revenue,
although the declines narrowed sequentially, demonstrating a tiered recovery characterized by earlier stabilization among those that
had adjusted earlier.
Changes in distribution channels and pricing systems became the main theme of the industry in the first half of the year. Leading
baijiu producers generally strengthened shipment controls, and a consensus was reached on prioritizing price over volume. They
proactively controlled shipments, supported prices, and reduced distributor inventories.
Overall, the baijiu industry remained in an adjustment cycle in the first half of 2026, but there were clear signs of marginal
improvement: The core base of high-end demand remained solid, distributor inventories were reduced in an orderly manner, pricing
systems became more market-oriented, and industry concentration increased further. Companies with strong brands, effective control
over distribution channels, and a reasonable presence across price ranges will be the first to emerge from the cycle. In the second half
of the year, the industry is expected to continue experiencing a weak recovery alongside pronounced divergence, with the pace of
demand recovery and progress in inventory reduction remaining the key variables.
China has a long history of baijiu. There are a large number of baijiu production enterprises in the country, but the regional
distribution of baijiu consumers is particularly evident. The baijiu industry is characterized by full competition, with a high degree of
marketization. The market competition is fierce, and the industry adjustments are constantly deepening. In the national market, the
competitive edges of the enterprises come from their brand influence, product style and marketing & operation models. In a single
regional market, the competitive strengths of the enterprises depend on their brand influence in the region, the recognition of the
companies by regional consumers and comprehensive marketing capacity.
As one of China’s traditional top eight liquor brands, the Company is the first listed baijiu company with both A and B stocks. It is
located in Bozhou City, Anhui Province in China, the hometown of historic figures Cao and Hua Tuo, as well as one of the world’s
top 10 liquor-producing areas. No changes have occurred to the main business of the Company in the Reporting Period. As the main
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Interim Report 2026
product of the Company, the Gujing spirit originated as a “JiuYunChun Spirit”, together with its making secrets, being presented as a
hometown specialty by Cao, a famous warlord in China’s history, to Emperor Han Xiandi (name: Liu Xie) in A.D. 196, and was
continually presented to the royal house since then. With crystalline liquid, rich aroma, a fine flavor and a lingering aftertaste, the
Gujing spirit has helped the Company win four national baijiu golden awards, a golden award at the 13th SIAL Paris, the title of
China’s “Geographical Indication Product”, the recognition as a “Key Cultural Relics Site under the State Protection”, the
recognition with a “National Intangible Cultural Heritage Protection Project”, a Quality Award from the Anhui provincial government,
a title of “National Quality Benchmark”, among other honors.
In April 2016, Gujing Distillery signed a strategic cooperation agreement with Huanghelou Liquor Co., Ltd., opening a new era of
cooperation in China's famous liquor industry. Yellow Crane Tower Baijiu is the only famous Chinese liquor in Hubei. Its unique
style is “soft, mellow, elegant and cool, and has a long lingering fragrance”. It won the two China gold medal in baijiu appreciation in
Liquor Culture Expo Park in Wuhan base has been approved as national AAA scenic spot, and Huanghelou forest wine town in
Xianning base has been approved as national AAAA scenic spot.
In January 2021, Gujing Distillery and Mingguang signed a strategic cooperation agreement. The unique mung bean flavor adds to
the famous liquor family of Gu Jing. The Company had five China Well-known Trademarks—“Gu Jing”, “Gujinggong”, “Original
Vintage”, “Yellow Crane Tower”, and “Laomingguang” till then.
The Company is subject to the disclosure requirements for the “food and liquor & wine production industry” in the Guideline No. 3
of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.
Brand operation
Focusing on “brand, quality and morality”, the Company vigorously promotes product development and quality upgrade and gives
full play to the leading role of the brand “Gujinggong Liquor”. It proactively participates in the project of China Central Television
(“CCTV”) titled Promote Chinese Brands to Strengthen China and takes advantage of platforms provided by CCTV, provincial-level
satellite TV channels, the Internet and new media to constantly tell the stories of the brand “Gujinggong Liquor”. Additionally, the
Company uses “liquor as the medium” to display the beauty of Chinese culture and convey the values of “Be Honest, Offer Quality
Liquor, Be Stronger and Be Helpful to the Society” to the world.
The Company has been strengthening the building of access to the end market and creating new marketing forms. It has focused on
the core market exploration and comprehensively launched a range of consumer fostering activities. Through the brand
communication mode that combines online publicity and offline experience, the Company has offered core consumers an opportunity
to watch and experience its liquor-making process and quality. It has organized a series of brand promotion activities, as a result of
which the visibility of the brand “Gujinggong Liquor” has continuously increased.
Main sales model
The Company’s key sales model is dealer model. Under the dealer model, the Company will select one or more dealers for sales of a
product brand (or product sub-brand) according to the market capacity.
Distribution model:
? Applicable □ Not applicable
Unit: RMB
YoY
YoY YoY
change
change in change
in
By Operating revenue Cost of sales Gross profit margin operating in cost
gross
revenue of sales
profit
(%) (%)
margin
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Interim Report 2026
(%)
Channel
Online 658,087,417.84 180,594,321.35 72.56% 14.92% 17.63% -0.63%
Offline 9,473,308,509.27 1,812,258,008.37 80.87% -28.81% -31.35% 0.71%
Total 10,131,395,927.11 1,992,852,329.72 80.33% -27.01% -28.66% 0.46%
YoY
YoY YoY change
change in change in
By Operating revenue Cost of sales Gross profit margin operating in cost gross
revenue of sales profit
(%) (%) margin
(%)
Product series
Original Vintage 7,965,299,212.68 1,192,163,260.93 85.03% -27.32% -26.80% -0.11%
Gujinggong Liquor 1,052,154,074.33 466,067,546.93 55.70% -11.14% -17.94% 3.66%
Yellow Crane Tower and others 979,335,025.25 277,974,790.72 71.62% -34.57% -36.80% 1.00%
Total 9,996,788,312.26 1,936,205,598.58 80.63% -26.71% -26.56% -0.04%
Region Ending number Increase or decrease in quantity during the Reporting Period
North China 1,288 -37
South China 668 12
Central China 2,762 -94
Overseas 22 -6
Total 4,740 -125
The Company’s principal method of settlement with its distributors is on a pay-as-you-go basis, and the method of distribution is
authorized distribution.
Total sales to top five distributors (RMB) 1,461,349,195.37
Total sales to top five distributors as % of total sales of the
Reporting Period (%)
Total sales to related parties among top five distributors as % of
total sales of the Reporting Period (%)
The Company had no accounts receivable from the top five distributors at the end of the Reporting Period.
Proportion of store sales terminal exceeds 10%
□ Applicable ? Not applicable
Online direct sales
? Applicable □ Not applicable
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Interim Report 2026
The major product varieties sold online are Original Vintage Series, and Gujinggong Liquor Series, among others. The main online
sales platforms are Gujing Distillery platform, Tmall, JD.com, and Douyin.
Any over 30% YoY movements in the selling price of main products contributing over 10% of current total operating revenue
□ Applicable ? Not applicable
Model and contents of purchase
Purchase model: The Company primarily adopts the bidding and strategic cooperation models. It also adopts the base planting model
in order to ensure the quality of some raw materials.
Purchase contents
Purchase contents Purchase model Amount (RMB’0,000)
Strategic purchasing 33,055.43
Tendering purchasing 49,908.95
Total 187,463.18
The proportion of raw materials purchased from cooperations or farmers to total purchase amount exceeds 30%
□ Applicable ? Not applicable
Any over 30% YoY movements in prices of main purchased raw materials
□ Applicable ? Not applicable
Main production model
The Company’s existing production model is sales-based production. Specifically, the Logistics Control Center is responsible for
coordinating the implementation of production plans, release of material production plans, and delivery and tracking of products, and
prepares balanced production plans on a quarterly basis according to the product inventory. The logistics distribution system is
coordinated according to the production schedule and inventory with a view to ensuring timely delivery of products.
Commissioned production
□ Applicable ? Not applicable
Breakdown of cost of sales
H1 2026 H1 2025
Change
Item As % of total cost of As % of total cost of
Cost of sales (RMB) Cost of sales (RMB) (%)
sales sales
Direct
materials
Direct labor
cost
Manufacturi
ng expenses
Fuels 54,920,261.12 2.76% 60,477,475.81 2.16% -9.19%
Total 1,936,205,598.58 97.16% 2,636,312,694.81 94.37% -26.56%
Output and inventory
Unit: ton
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Interim Report 2026
YoY changes
YoY changes YoY changes
Main product Output Sales volume inventory of sales
of output of inventory
volume
Original Vintage Series 33,732.27 38,826.65 10,255.85 8.55% -16.66% 10.73%
Gujinggong Liquor Series 18,246.83 19,340.35 1,649.35 9.93% -1.56% -22.80%
Yellow Crane Tower Liquor
Series and other
Category Ending quantity (ton)
Finished liquor 14,768.25
Semi-product 410,854.42
Unit: ton
Main product Designed capacity (annual) Actual capacity (H1) Capacity in progress (annual)
Finished liquor 180,000 61,504 0.00
II Core Competitiveness Analysis
No significant changes occurred to the Company’s core competitiveness in the Reporting Period.
III Analysis of Core Businesses
Overview
Indicate whether it is the same with the contents disclosed under the heading “Principal Activity of the Company in the Reporting
Period” above
? Yes □ No
See contents under the heading “I Principal Activity of the Company in the Reporting Period”.
Year-on-year changes in key financial data
Unit: RMB
H1 2026 H1 2025 Change (%) Main reason for change
Operating revenue 10,131,395,927.11 13,879,852,202.75 -27.01%
Cost of sales 1,992,852,329.72 2,793,535,258.54 -28.66%
Selling expense 3,072,505,534.43 3,511,408,555.96 -12.50%
Administrative expense 631,017,032.54 671,417,776.78 -6.02%
Finance costs -232,980,659.91 -315,707,816.32 26.20%
Mainly due to the
Income tax expense 753,932,840.70 1,286,677,231.21 -41.40%
decrease in total profit.
Net cash generated 1,542,535,137.60 4,154,552,054.60 -62.87% Mainly due to the
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Interim Report 2026
from/used in operating decrease in cash
activities received from the sale
of goods.
Net cash generated
from/used in investing -1,401,723,590.26 -1,218,716,061.05 -15.02%
activities
Net cash generated Mainly due to the
from/used in financing -596,788,401.09 -3,052,443,154.10 80.45% distribution of the 2025
activities dividend in July 2026.
Mainly due to the
Net increase in cash decrease in cash
-455,976,853.75 -116,607,160.55 -291.04%
and cash equivalents received from the sale
of goods.
Material changes to the profit structure or sources of the Company in the Reporting Period
□ Applicable ? Not applicable
No such changes in the Reporting Period.
Breakdown of operating revenue
Unit: RMB
H1 2026 H1 2025
As % of total As % of total
Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 10,131,395,927.11 100% 13,879,852,202.75 100% -27.01%
By operating division
Manufacturing 10,131,395,927.11 100% 13,879,852,202.75 100% -27.01%
By product category
Baijiu 9,996,788,312.26 98.67% 13,639,596,262.27 98.27% -26.71%
Hotel services 33,538,337.39 0.33% 45,775,898.86 0.33% -26.73%
Other 101,069,277.46 1.00% 194,480,041.62 1.40% -48.03%
By operating segment
North China 398,918,435.26 3.94% 809,341,217.22 5.83% -50.71%
Central China 9,125,205,701.57 90.07% 12,297,380,470.09 88.60% -25.80%
South China 603,328,414.66 5.95% 768,186,540.95 5.53% -21.46%
Overseas 3,943,375.62 0.04% 4,943,974.49 0.04% -20.24%
Operating division, product category or operating segment contributing over 10% of operating revenue or operating profit
? Applicable ? Not applicable
Unit: RMB
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Interim Report 2026
YoY change in YoY change in
Gross profit YoY change in
Operating revenue Cost of sales operating revenue gross profit
margin cost of sales (%)
(%) margin (%)
By operating division
Manufacturing 10,131,395,927.11 1,992,852,329.72 80.33% -27.01% -28.66% 0.46%
By product category
Baijiu 9,996,788,312.26 1,936,205,598.58 80.63% -26.71% -26.56% -0.04%
Hotel services 33,538,337.39 14,634,661.89 56.36% -26.73% -39.21% 8.95%
Other 101,069,277.46 42,012,069.25 58.43% -48.03% -68.45% 26.89%
By operating segment
North China 398,918,435.26 118,850,703.25 70.21% -50.71% -43.53% -3.79%
Central China 9,125,205,701.57 1,755,683,018.30 80.76% -25.80% -27.79% 0.53%
South China 603,328,414.66 116,714,281.95 80.65% -21.46% -22.18% 0.17%
Overseas 3,943,375.62 1,604,326.22 59.32% -20.24% -8.07% -5.38%
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period
□ Applicable ? Not applicable
The Company is subject to the disclosure requirements for the “food and liquor & wine production industry” in the Guideline No. 3
of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.
Breakdown of selling expense
Unit: RMB
Item H1 2026 H1 2025 Change (%) Reason
Employment
benefits
Travel fees 126,095,272.65 134,242,942.14 -6.07%
Advertisement
fees
Comprehensive
promotion costs
Service fees 357,789,020.82 391,207,359.74 -8.54%
Others 71,529,457.37 61,030,523.10 17.20%
Total 3,072,505,534.43 3,511,408,555.96 -12.50%
Details about advertisement
No. Main way Amount (RMB’0,000)
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Interim Report 2026
Total 72,937.20
IV Analysis of Non-Core Businesses
□ Applicable ? Not applicable
V Analysis of Assets and Liabilities
Unit: RMB
June 30, 2026 December 31, 2025 Reason for any
Change in
As % of total As % of total significant
Amount Amount percentage (%)
assets assets change
Monetary
assets
Accounts
receivable
Inventories 10,795,173,106.25 28.08% 10,739,794,676.82 28.12% -0.04%
Investment
property
Long-term
equity 14,318,896.10 0.04% 11,574,463.54 0.03% 0.01%
investments
Fixed assets 8,951,160,974.66 23.29% 9,121,969,040.94 23.88% -0.59%
Construction
in progress
Right-of-use
assets
Short-term
borrowings
Contract
liabilities
Long-term
borrowings
Lease
liabilities
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Interim Report 2026
□ Applicable ? Not applicable
? Applicable □ Not applicable
Unit: RMB
Gain/Loss
Cumulative Impairment
on fair-value
fair-value allowance Purchased in Sold in the
Beginning changes in Other
Item changes for the the Reporting Reporting Ending amount
amount the changes
charged to Reporting Period Period
Reporting
equity Period
Period
Financial assets
financial assets
(excluding 0.00 2,753,738.33 0.00 0.00 700,000,000.00 100,058,395.87 602,695,342.46
derivative
financial assets)
other equity 73,526,017.72 0.00 2,847,194.40 0.00 0.00 0.00 76,373,212.12
instruments
Subtotal of
financial assets
Total of the above 73,526,017.72 2,753,738.33 2,847,194.40 0.00 700,000,000.00 100,058,395.87 679,068,554.58
Financial
liabilities
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes ? No
Unit: RMB
Item Ending carrying value Reason for restriction
Amount in pledge for issuing bank acceptance bills and guarantee
Monetary assets 1,263,284,630.19
letters, and other security deposits, etc.
Intangible assets 16,358,197.88 Pledged for loans.
Total 1,279,642,828.07 --
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Interim Report 2026
VI Investments Made
□ Applicable ? Not applicable
□ Applicable ? Not applicable
? Applicable Not applicable
(1) Securities Investments
□ Applicable ? Not applicable
(2) Investments in Derivative Financial Instruments
□ Applicable ? Not applicable
No such cases in the Reporting Period.
? Applicable □ Not applicable
Unit: RMB’0,000
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Interim Report 2026
Proportion
of closing
Actual
Purchased in investment
Relationship Initial Beginning Sold in the Impairment Ending gain/loss in
Connected Type of the amount in
Operator with the investment Starting date Ending date investment Reporting provision (if investment the
transaction derivative Reporting the
Company amount amount Period any) amount Reporting
Period Company’s
Period
ending net
assets
Reverse
Reverse
repurchase December October 7,
Naught No repurchase of 15,793.00 333,649.10 293,926.30 55,515.80 2.14% 197.21
of national 24, 2025 2026
national debt
debt
Total -- -- 15,793.00 333,649.10 293,926.30 55,515.80 2.14% 197.21
Capital source for derivative investment Company’s own funds
Lawsuits involved (if applicable) N/A
Disclosure date of board announcement approving
April 28, 2026
derivative investment (if any)
Disclosure date of shareholders’ meeting announcement
N/A
approving derivative investment (if any)
Analysis of risks and control measures associated with
derivative investments held in the Reporting Period
The Company had controlled the relevant risks strictly according to the Securities Investment Management System.
(including but not limited to market risk, liquidity risk,
credit risk, operational risk, legal risk, etc.)
Changes in market prices or fair value of derivative
investments during the Reporting Period (fair value N/A
analysis should include measurement method and
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Interim Report 2026
related assumptions and parameters)
Significant changes in accounting policies and specific
accounting principles adopted for derivative
N/A
investments in the Reporting Period compared to
previous reporting period
? Applicable ? Not applicable
There was no use of funds raised during the Reporting Period.
VII Sale of Major Assets and Equity Interests
□ Applicable ? Not applicable
No such cases in the Reporting Period.
□ Applicable ? Not applicable
VIII Main Controlled and Joint Stock Companies
? Applicable □ Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profits
Unit: RMB
Company Relationship Main Registered capital Total assets Net assets Operating revenues Operating profit Net profit
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Interim Report 2026
name with the business
Company scope
Wholesale of
baijiu,
building
materials,
feed, raw
materials,
and auxiliary
Bozhou materials;
Gujing Sales Subsidiary tourism 84,864,497.89 7,821,797,542.28 2,220,861,799.27 10,174,145,696.70 434,716,729.17 332,696,364.37
Co., Ltd project
services
(tourism
projects
within the
Gujing
Tourist
Attraction)
Subsidiaries obtained or disposed in the Reporting Period
? Applicable Not applicable
Notes to main controlled and joint stock companies
Not applicable.
~ 21 ~
Interim Report 2026
IX Structured Bodies Controlled by the Company
□ Applicable ? Not applicable
X Risks Facing the Company and Countermeasures
(I) Risks Facing the Company
(II) Operating Measures
The Company will adhere to high-end leadership, and deepen cooperation with mainstream media. It will keep pace with changing
consumer trends, innovate consumption scenarios around lower alcohol content, health, individuality, and youthfulness. On the
product side, the Company will promote “Mild Gu 20” to target the younger customer segment, rely on the “Gujing Shenli Baijiu”
series to establish a presence in the health track, and use the “Han, Tang, Song, Ming” Chinese trendy product line to advance
internationalization. On the channel side, it will build the “Gujing Light Wellness Club” experiential scenario, strengthen instant
retail, and drive the leap from “selling products” to “leading lifestyles.”
The Company will firmly implement the strategy of “national expansion, sub-high-end, Gu 20+, strong foundation”, and coordinate
the baijiu and “baijiu+” businesses. With the core focus of “boosting sell-through, reducing inventory, expanding channels,
stabilizing prices”, the Company will strengthen terminal execution. It will also build a three-dimensional framework of
“consolidating Anhui, leading the Yangtze River Delta, and achieving breakthroughs in border areas and economic, cultural, and
tourism zones”, while simultaneously advancing internationalization and e-commerce deployment, forming a dual-engine drive of
“stable domestic performance and overseas growth”.
The Company will comprehensively optimize product quality, taste, and sensory experience, creating a cost-effective product matrix.
It will improve the dual mechanisms of quality accountability and market information feedback, and strengthen research on quality
and safety risks and support for production technology. It will also use big data to continuously optimize processes, scientifically plan
production capacity, and dynamically optimize production cycles and shifts.
The Company will build a four-in-one collaborative innovation service digital operations and maintenance model integrating
“requirements review, agile development, platform operations and maintenance, and intelligent services”, with “proactive embrace,
deep application, and comprehensive integration” as the strategic orientation for AI. It will promote the deep integration of AI with
business, reconstruct distinctive AI application scenarios suited to the Company’s needs, and comprehensively empower business
development through intelligent transformation.
The Company will improve and fully cover the integrated compliance, internal control, and risk “three-in-one” collaborative
supervision mechanism across all businesses and the entire process, and strengthen supervision, auditing, and disciplinary inspection
efforts in key areas. It will deepen the reform of talent systems and mechanisms, build a scientific and standardized talent
development system, create a strategic talent team of appropriate scale, rational structure, and excellent quality, and ensure the
standardized, transparent, and efficient operation of the enterprise.
Development
The Company will build a safety management system involving all personnel, the entire process, and all aspects, and promote the
~ 22 ~
Interim Report 2026
implementation of safety responsibilities at every level. It will strengthen the food safety risk control system and achieve closed-loop
management throughout the entire process, strengthen industrial host security protection and cybersecurity, strictly uphold the
environmental protection baseline, and promote the iterative upgrading of the development model toward green and low-carbon
development.
The Company will deepen the construction of the Gujing Distillery Original Vintage Culture Research Institute, cultivate younger
consumer groups, and reconstruct drinking culture for the new era. It will jointly develop cultural and creative products, advance
innovation in the expression of the new national trends, innovate dissemination methods such as short videos and livestreaming, and
vividly tell the story of Chinese baijiu.
The year 2026 is Gujing’s “Year of Forging Ahead and Navigating the Cycle”. We must put down deep roots and grow upward,
consolidate our foundation through meticulous efforts, and respond to change with perseverance and determination. Strategically, we
must remain steadfast; in quality, we must pursue excellence without relenting; in the market, we must press ahead vigorously to
capture new ground; and in management, we must replace the old with the new and maintain our vitality. We will navigate the cycle
by forging ahead, build momentum through innovation, remain focused on value, achieve breakthroughs despite adverse conditions,
and secure the Company’s steady and healthy development.
On this new journey, the Company will closely unite around the CPC Central Committee with Comrade Xi Jinping at its core. Under
the leadership of the CPC Bozhou Municipal Committee and the Bozhou Municipal People’s Government, the Company will act
with greater determination, more pragmatic measures, and more innovative thinking to seize opportunities amid industry
transformation and achieve steady and sustained progress, generate greater returns for shareholders, and contribute Gujing’s strength
to the high-quality development of the baijiu industry.
XI Formulation and Implementation of Market Cap Management Systems and Valuation
Enhancement Plans
Whether the Company has formulated a market cap management system
? Yes ? No
Whether the Company has disclosed a valuation enhancement plan
? Yes ? No
The Company held the Tenth Meeting of the Tenth Session of the Board of Directors on April 25, 2025, at which the Proposal on
Formulating a Market Cap Management System of the Company was considered and passed. In order to strengthen market cap
management, further standardize its market cap management behavior, and effectively enhance its investment value and return to
shareholders, the Company formulated the Market Cap Management Policy of Anhui Gujing Distillery Co., Ltd., in accordance with
laws, regulations, and normative documents, such as the Company Law of the People’s Republic of China, the Securities Law of the
People’s Republic of China, the Several Opinions of the State Council on Strengthening Regulation, Preventing Risks and Promoting
the High-Quality Development of the Capital Market, and Guidelines No. 10 for the Regulation of Listed Companies—Market Value
Management, as well as internal provisions such as the Articles of Association. See the Market Cap Management Policy disclosed on
the website of Cninfo by the Company for details.
XII Implementation of the Action Plan for “Dual Enhancement of Quality and Profitability”
Indicate whether the Company has disclosed its Action Plan for “Dual Enhancement of Quality and Profitability”.
? Yes □ No
In order to implement the guiding ideology of “to activate the capital market and boost investor confidence” proposed by the meeting
of the Political Bureau of the CPC Central Committee and “to vigorously improve the quality and investment value of listed
companies, and to take more effective and effective measures to stabilize the market and stabilize confidence” proposed by the
National Standing Committee, combined with the Company’s development strategy, operating conditions and financial conditions, in
~ 23 ~
Interim Report 2026
order to safeguard the interests of all shareholders of the company, To enhance investor confidence and promote the long-term
healthy and sustainable development of the company, the company has formulated a “quality return double improvement” action plan.
For details, see the Announcement on Promoting the Double Improvement of Quality Return “Action Plan” disclosed by the
company on March 7, 2024 (Announcement Number: 2024-001).
In line with the relevant regulations related to profit distribution policies, such as the Company Law and the Articles of Association
and the Company’s actual situation and development needs, and in order to earnestly return to shareholders, the Company’s 2025
profit distribution plan is as follows: Based on the total share capital of 528,600,000 shares, the Company will distribute a cash
dividend of RMB34.00 (including tax) to all shareholders for every 10 shares. The Company proposed to distribute a total cash
dividend of RMB1,797,240,000.00 (including tax). In combination of the interim dividend plan for 2025, the Company’s total
dividend for 2025 accounted for 65.53% of the net profit attributable to the listed Company’s shareholders in the consolidated
statement of this year, representing an increase of 8.04 percentage points from 57.49% in 2024, fully sharing the Company’s
development results with investors. The Company’s 2025 profit distribution plan was approved at its 2025 Annual General Meeting
of Shareholders and implemented in July 2026.
~ 24 ~
Interim Report 2026
Part IV Corporate Governance, and Environmental and Social
Responsibility
I Change of Directors and Senior Management
? Applicable □ Not applicable
Name Position Type Date Reason
Election of a new
Luo Biao Independent director Elected June 26, 2026
Board
Election of a new
Chen Senlin Employee director Elected June 26, 2026
Board
Retired upon expiration Election of a new
Xu Zhihao Independent director June 26, 2026
of term of office Board
Retired upon expiration Election of a new
Ye Changqing Director June 26, 2026
of term of office Board
II Profit Distribution and Increase in the Share Capital by Converting the Reserve Fund
during the Reporting Period
□ Applicable ? Not applicable
III Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable ? Not applicable
No such cases in the Reporting Period.
IV Disclosure of Environmental Information
Indicate whether the listed company and its main subsidiaries are included in the list of enterprises that disclose environmental
information by law
? Yes □ No
Number of enterprises included in the list of enterprises that
disclose environmental information by law
Query index for reports on environmental information disclosure
No. Enterprise
by law
Anhui Gujing Distillery Company Limited Enterprise Environmental Information Legal Disclosure System
(Gujing plant) https://39.145.37.16:8081/zhhb/yfplpub_html/#/home
~ 25 ~
Interim Report 2026
Anhui Gujing Distillery Company Limited Enterprise Environmental Information Legal Disclosure System
(Zhangji plant) https://39.145.37.16:8081/zhhb/yfplpub_html/#/home
Anhui Gujing Distillery Company Limited Enterprise Environmental Information Legal Disclosure System
(Headquarter plant) https://39.145.37.16:8081/zhhb/yfplpub_html/#/home
Enterprise Environmental Information Legal Disclosure System
https://39.145.37.16:8081/zhhb/yfplpub_html/#/home
Enterprise Environmental Information Legal Disclosure System
https://39.145.37.16:8081/zhhb/yfplpub_html/#/home
Yellow Crane Tower Distillery (Xianning) Co., Enterprise Environmental Information Disclosure System
Ltd. http://219.140.164.18:8007/hbyfpl/frontal/index.html#/home/index
Yellow Crane Tower Distillery (Suizhou) Co., Enterprise Environmental Information Disclosure System
Ltd. http://219.140.164.18:8007/hbyfpl/frontal/index.html#/home/index
V Social Responsibility
During the Reporting Period, the Company, in strict accordance with the requirements for high-quality development of listed
companies in the new era, focused on its established strategies, actively responded to the expectations of society, shareholders and
other stakeholders, continuously improved its corporate governance structure, standardized its operations, attached importance to
investor relations, and took the initiative to fulfil its social responsibilities in the areas of protection of the rights and interests of
suppliers, customers and employees, and environmental protection and sustainable development. The Company upholds the core
values of “Be Honest, Offer Quality Liquor, Be Stronger and Be Helpful to the Society”, actively builds and develops strategic
partnerships with suppliers and customers. Also, the Company focuses on communication and coordination with all relevant parties,
jointly builds a platform of trust and cooperation, and effectively fulfills the Company’s social responsibility to suppliers and
customers.
The Company continued to strengthen its quality management system and improve its customer service response mechanisms. While
strictly adhering to its environmental requirements for green production and ensuring that all discharges met the applicable standards,
the Company further advanced the development of green products and the innovative application of energy-saving and
carbon-reduction technologies. The Company remained committed to talent-driven development and building a dynamic workforce.
It effectively protected employees’ lawful rights and interests, strengthened its talent pipeline, and supported employees in pursuing
diverse development paths. It also continued to reinforce workplace safety management and the prevention and control of
occupational health risks, endeavoring to create an open, inclusive, safe, healthy and harmonious working environment in which
employees could progress together.
~ 26 ~
Interim Report 2026
Part V Significant Events
I Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Period
or Ongoing at the Period-End
□ Applicable ? Not applicable
No such cases in the Reporting Period.
II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related
Parties for Non-Operating Purposes
□ Applicable ? Not applicable
No such cases in the Reporting Period.
III Irregularities in the Provision of Guarantees
□ Applicable ? Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited
□ Yes ? No
The interim financial statements have not been audited.
V Explanations Given by the Board of Directors Regarding the Independent Auditor’s
“Modified Opinion” on the Financial Statements of the Reporting Period
□ Applicable ? Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor’s
“Modified Opinion” on the Financial Statements of Last Year
□ Applicable ? Not applicable
VII Insolvency and Reorganization
□ Applicable ? Not applicable
No such cases in the Reporting Period.
~ 27 ~
Interim Report 2026
VIII Legal Matters
Significant lawsuits and arbitrations
□ Applicable ? Not applicable
No such cases in the Reporting Period.
Other legal matters
□ Applicable ? Not applicable
IX Punishments and Rectifications
□ Applicable ? Not applicable
X Credit Quality of the Company as well as its Controlling Shareholder and De Facto
Controller
□ Applicable ? Not applicable
XI Major Related-Party Transactions
□ Applicable ? Not applicable
No such cases in the Reporting Period.
□ Applicable ? Not applicable
No such cases in the Reporting Period.
□ Applicable ? Not applicable
No such cases in the Reporting Period.
□ Applicable ? Not applicable
No such cases in the Reporting Period.
□ Applicable ? Not applicable
The Company did not make deposits in, receive loans or credit from and was not involved in any other finance business with any
related finance company, finance company controlled by the Company or any other related parties.
~ 28 ~
Interim Report 2026
□ Applicable ? Not applicable
No related parties made deposits in, received loans or credit from and were involved in any other finance business with any finance
company controlled by the Company.
□ Applicable ? Not applicable
No such cases in the Reporting Period.
XII Major Contracts and Execution thereof
(1) Entrustment
□ Applicable ? Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable ? Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable ? Not applicable
No such cases in the Reporting Period.
□ Applicable ? Not applicable
No such cases in the Reporting Period.
□ Applicable ? Not applicable
□ Applicable ? Not applicable
No such cases in the Reporting Period.
~ 29 ~
Interim Report 2026
XIII Record of Research Visits, Communications, Interviews and Other Activities during the
Reporting Period
□ Applicable ? Not applicable
During the Reporting Period, the Company did not receive any research visits or conduct any communications, interviews or other
such activities.
XIV Other Significant Events
□ Applicable ? Not applicable
No such cases in the Reporting Period.
XV Significant Events of Subsidiaries
□ Applicable ? Not applicable
~ 30 ~
Interim Report 2026
Part VI Share Changes and Shareholder Information
I Share Changes
Unit: share
Before Increase/Decrease (+/-) After
Percentage New Shares as Shares as Percentage
Shares Other Subtotal Shares
(%) issues dividend dividend (%)
converted converted
I. Restricted shares
from from
reserves
state-owned corporations
domestic investors
Among which: Shares held
by domestic corporations
Shares held by domestic
individuals
investors
Among which: Shares held
by foreign corporations
Shares held by foreign
individuals
II. Non-restricted shares 528,600,000 100.00% 528,600,000 100.00%
foreign shares
shares
III. Total shares 528,600,000 100.00% 528,600,000 100.00%
Reasons for share changes
~ 31 ~
Interim Report 2026
□ Applicable ? Not applicable
Approval of share changes
□ Applicable ? Not applicable
Transfer of share ownership
□ Applicable ? Not applicable
Progress on any share repurchase
□ Applicable ? Not applicable
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable ? Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary
shareholders and other financial indicators of the prior year and the prior accounting period, respectively
□ Applicable ? Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed
□ Applicable ? Not applicable
□ Applicable ? Not applicable
II Issuance and Listing of Securities
□ Applicable ? Not applicable
III Shareholders and Their Shareholdings at the Period-End
Unit: share
Number of preferred shareholders with resumed
Number of ordinary shareholders 57,500 0
voting rights (if any)
Total Shares in pledge,
ordinary Increase/Decrease Restricted Non-restricted marked or frozen
Name of Nature of Shareholding
shares held in the Reporting ordinary ordinary
shareholder shareholder percentage
at the Period shares held shares held Status Shares
period-end
ANHUI GUJING
GROUP State-owned
COMPANY legal person
LIMITED
BANK OF
CHINA-CHINA
MERCHANTS
CHINA
SECURITIES
Other 3.61% 19,057,628 2,303,161 19,057,628 N/A
BAIJIU INDEX
CLASSIFICATION
SECURITIES
INVESTMENT
FUND
CHINA Foreign
INTERNATIONAL legal person
~ 32 ~
Interim Report 2026
CAPITAL
CORPORATION
HONG KONG
SECURITIES
LTD.
HONG KONG
SECURITIES 6,205,385 N/A
Foreign
CLEARING 1.17% 6,205,385 1,291,280
legal person
COMPANY
LIMITED
GREENWOODS
Foreign
CHINA ALPHA 1.14% 6,049,760 6,049,760 N/A
legal person
MASTER FUND
UBS (LUX)
EQUITY FUND -
Foreign
CHINA 1.11% 5,874,345 -649,000 5,874,345 N/A
legal person
OPPORTUNITY
(USD)
CHINA
CONSTRUCTION
BANK
CORPORATION -
PENGHUA
LOFEXCHANGE
Other 1.03% 5,461,851 -147,609 5,461,851 N/A
TRADED
OPEN-ENDED
INDEX
SECURITIES
INVESTMENT
FUND
AGRICULTURAL
BANK OF CHINA
- E FUND
CONSUMPTION
Other 1.02% 5,411,046 -1,117,647 5,411,046 N/A
SECTOR STOCK
SECURITIES
INVESTMENT
FUND
INDUSTRIAL
AND
COMMERCIAL
BANK OF CHINA
LIMITED -
INVESCO GREAT
WALL Other 0.98% 5,180,000 -220,000 5,180,000 N/A
EMERGING
GROWTH
HYBRID
SECURITIES
INVESTMENT
FUND
CHINA
MERCHANTS
Foreign
SECURITIES 0.86% 4,547,714 1,572,026 4,547,714 N/A
legal person
(HK) CO.,
LIMITED
Strategic investor
or general legal
person becoming a
N/A
top-10 shareholder
due to rights issue
(if any)
Related or Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group Company
~ 33 ~
Interim Report 2026
acting-in-concert Limited—is not a related party of other shareholders; nor are they parties acting in concert as defined in the
parties among the Administrative Measures on Information Disclosure of Changes in Shareholding of Listed Companies. As for
shareholders above the other shareholders, the Company does not know whether they are related parties or whether they belong to
parties acting in concert as defined in the Administrative Measures on Information Disclosure of Changes in
Shareholding of Listed Companies.
Explain if any of
the shareholders
above was involved
in entrusting/being
N/A
entrusted with
voting rights or
waiving voting
rights
Special account for share
repurchases (if any) among the N/A
top 10 shareholders
Shareholding by top 10 non-restricted shareholders (excluding refinancing shares lending and lock-up shares of senior management)
Shares by type
Name of shareholder Non-restricted shares held at the period-end
Type Shares
ANHUI GUJING GROUP RMB-denominated ordinary
COMPANY LIMITED share
BANK OF CHINA-CHINA
MERCHANTS CHINA
SECURITIES BAIJIU INDEX RMB-denominated
CLASSIFICATION ordinary share
SECURITIES INVESTMENT
FUND
CHINA INTERNATIONAL
CAPITAL CORPORATION Domestically listed foreign
HONG KONG share
SECURITIES LTD.
HONG KONG SECURITIES
RMB-denominated ordinary
CLEARING COMPANY 6,205,385 6,205,385
share
LIMITED
GREENWOODS CHINA Domestically listed foreign
ALPHA MASTER FUND share
UBS (LUX) EQUITY FUND - Domestically listed foreign
CHINA OPPORTUNITY (USD) share
CHINA CONSTRUCTION
BANK CORPORATION -
PENGHUA LOFEXCHANGE RMB-denominated ordinary
TRADED OPEN-ENDED share
INDEX SECURITIES
INVESTMENT FUND
AGRICULTURAL BANK OF
CHINA —E FUND
RMB-denominated ordinary
CONSUMPTION SECTOR 5,411,046 5,411,046
share
STOCK SECURITIES
INVESTMENT FUND
INDUSTRIAL AND
COMMERCIAL BANK OF
CHINA LIMITED - INVESCO
RMB-denominated ordinary
GREAT WALL EMERGING 5,180,000 5,180,000
share
GROWTH HYBRID
SECURITIES INVESTMENT
FUND
CHINA MERCHANTS
Domestically listed foreign
SECURITIES (HK) CO., 4,547,714 4,547,714
share
LIMITED
~ 34 ~
Interim Report 2026
Among the shareholders above, the Company’s controlling shareholder—Anhui Gujing Group
Related or acting-in-concert
Company Limited—is not a related party of other shareholders; nor are they parties acting in
parties among top 10
concert as defined in the Administrative Measures on Information Disclosure of Changes in
unrestricted shareholders, as
Shareholding of Listed Companies. As for the other shareholders, the Company does not know
well as between top 10
whether they are related parties or whether they belong to parties acting in concert as defined in the
unrestricted shareholders and top
Administrative Measures on Information Disclosure of Changes in Shareholding of Listed
Companies.
Top 10 ordinary shareholders
involved in securities margin N/A
trading (if any)
? Applicable ? Not applicable
Changes in top 10 shareholders and top 10 unrestricted shareholders due to refinancing shares lending/return compared with the prior
period
? Applicable ? Not applicable
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the
Company conducted any promissory repo during the Reporting Period
□ Yes ? No
No such cases in the Reporting Period.
IV Change in Shareholdings of Directors and Senior Management
□ Applicable ? Not applicable
No changes occurred to the shareholdings of the directors and senior management in the Reporting Period. See the 2025 Annual
Report for more details.
V Change of the Controlling Shareholder or the De Facto Controller
Where the Company has previously disclosed that its de facto controller was planning a change in control that has not yet been
completed, please provide an update on its progress
□ Applicable ? Not applicable
Change of the controlling shareholder in the Reporting Period.
□ Applicable ? Not applicable
No such cases in the Reporting Period.
Change of the de facto controller in the Reporting Period
□ Applicable ? Not applicable
No such cases in the Reporting Period.
VI Information on Preference Shares
□ Applicable ? Not applicable
No preference shares in the Reporting Period.
~ 35 ~
Interim Report 2026
Part VII Bonds
□ Applicable ? Not applicable
~ 36 ~
Interim Report 2026
Part VIII Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor
□ Yes ? No
These interim financial statements have not been audited by an independent auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
Prepared by Anhui Gujing Distillery Company Limited
June 30, 2026
Unit: RMB
Item June 30, 2026 January 1, 2026
Current assets:
Monetary assets 13,301,559,595.01 14,187,463,729.81
Settlement reserve
Loans to other banks and financial
institutions
Held-for-trading financial assets 602,695,342.46 0.00
Derivative financial assets
Notes receivable
Accounts receivable 39,606,536.91 53,996,692.68
Receivables financing 1,127,971,458.45 895,658,760.56
Prepayments 160,819,979.90 115,292,227.12
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 53,893,174.72 45,651,277.81
Including: Interest receivable
Dividends receivable
Financial assets purchased under
resale agreements
~ 37 ~
Interim Report 2026
Inventories 10,795,173,106.25 10,739,794,676.82
Including: Data resource
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 709,195,293.93 392,926,614.98
Total current assets 26,790,914,487.63 26,430,783,979.78
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 14,318,896.10 11,574,463.54
Investments in other equity instruments 76,373,212.12 73,526,017.72
Other non-current financial assets
Investment property 15,143,626.21 16,036,411.82
Fixed assets 8,951,160,974.66 9,121,969,040.94
Construction in progress 158,710,163.85 160,290,473.75
Productive living assets
Oil and gas assets
Right-of-use assets 82,568,459.19 92,161,801.76
Intangible assets 1,115,874,448.27 1,133,507,983.04
Including: Data resource
Development costs
Including: Data resource
Goodwill 246,753,998.67 246,753,998.67
Long-term prepaid expense 404,943,550.38 417,315,747.85
Deferred income tax assets 580,369,453.46 487,647,921.96
Other non-current assets 1,288,199.27 5,465,160.95
Total non-current assets 11,647,504,982.18 11,766,249,022.00
Total assets 38,438,419,469.81 38,197,033,001.78
Current liabilities:
Short-term borrowings 129,105,400.43 184,830,263.45
Borrowings from the central bank
Loans from other banks and financial
institutions
Held-for-trading financial liabilities
~ 38 ~
Interim Report 2026
Derivative financial liabilities
Notes payable 924,418,345.49 1,472,240,813.01
Accounts payable 1,926,566,202.22 2,302,888,169.15
Advances from customers
Contract liabilities 833,610,499.57 1,519,882,489.70
Financial assets sold under repurchase
agreements
Customer deposits and deposits from
other banks and financial institutions
Payables for acting trading of
securities
Payables for underwriting of securities
Employee benefits payable 1,058,992,999.03 1,276,935,454.81
Taxes and levies payable 828,690,378.09 605,968,561.52
Other payables 4,918,070,602.92 2,816,680,849.01
Including: Interest payable
Dividends payable 1,797,240,000.00 0.00
Fees and commissions payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 976,076,077.37 1,043,957,560.69
Total current liabilities 11,689,887,818.81 11,284,638,044.15
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 234,479,589.94 260,199,589.94
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 63,585,545.09 76,138,828.43
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 155,316,559.89 162,588,721.38
Deferred income tax liabilities 303,469,069.11 309,468,453.80
Other non-current liabilities
Total non-current liabilities 756,850,764.03 808,395,593.55
~ 39 ~
Interim Report 2026
Total liabilities 12,446,738,582.84 12,093,033,637.70
Owners’ equity:
Share capital 528,600,000.00 528,600,000.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserves 6,229,111,206.22 6,229,111,206.22
Less: Treasury stock
Other comprehensive income 8,186,576.25 6,080,513.09
Specific reserve
Surplus reserves 269,402,260.27 269,402,260.27
General reserve
Retained earnings 17,855,562,890.95 18,017,022,962.78
Total equity attributable to owners of the
Company as the parent
Non-controlling interests 1,100,817,953.28 1,053,782,421.72
Total owners’ equity 25,991,680,886.97 26,103,999,364.08
Total liabilities and owners’ equity 38,438,419,469.81 38,197,033,001.78
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
Unit: RMB
Item June 30, 2026 January 1, 2026
Current assets:
Monetary assets 8,903,011,335.75 7,979,883,062.94
Held-for-trading financial assets 401,536,986.30 0.00
Derivative financial assets
Notes receivable
Accounts receivable
Accounts receivable financing 1,190,509,246.30 632,125,262.72
Prepayments 93,324,222.69 4,065,495.42
Other receivables 497,204,844.52 464,796,849.41
Including: Interest receivable
Dividends receivable
Inventories 8,332,055,269.64 8,366,144,014.46
Including: Data resource
Contract assets
~ 40 ~
Interim Report 2026
Assets held for sale
Current portion of non-current assets
Other current assets 600,154,677.98 248,702,382.76
Total current assets 20,017,796,583.18 17,695,717,067.71
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1,702,884,489.97 1,700,140,064.98
Investments in other equity
instruments
Other non-current financial assets
Investment property 10,200,238.63 10,645,751.19
Fixed assets 6,909,256,912.26 7,185,826,793.21
Construction in progress 47,019,319.64 44,553,565.47
Productive living assets
Oil and gas assets
Right-of-use assets 74,729,568.76 83,282,060.85
Intangible assets 487,112,624.96 497,663,089.70
Including: Data resource
Development costs
Including: Data resource
Goodwill
Long-term prepaid expense 343,588,417.14 351,903,723.39
Deferred income tax assets
Other non-current assets
Total non-current assets 9,574,791,571.36 9,874,015,048.79
Total assets 29,592,588,154.54 27,569,732,116.50
Current liabilities:
Short-term borrowings
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1,213,160,490.51 1,621,073,084.29
Advances from customers
Contract liabilities 2,612,574,658.01 1,578,437,253.01
Employee benefits payable 342,773,413.33 482,418,372.32
~ 41 ~
Interim Report 2026
Taxes payable 534,902,190.93 423,719,386.37
Other payables 2,854,999,873.18 901,711,126.03
Including: Interest payable
Dividends payable 1,797,240,000.00 0.00
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities 341,536,624.25 214,184,954.21
Total current liabilities 7,915,189,110.14 5,237,067,040.17
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 58,468,354.08 69,519,331.58
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 96,372,726.96 102,101,500.46
Deferred income tax liabilities 80,024,619.27 84,088,864.24
Other non-current liabilities
Total non-current liabilities 234,865,700.31 255,709,696.28
Total liabilities 8,150,054,810.45 5,492,776,736.45
Owners’ equity:
Share capital 528,600,000.00 528,600,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 6,176,504,182.20 6,176,504,182.20
Less: Treasury stock
Other comprehensive income -612,861.76 -1,758,632.61
Specific reserve
Surplus reserves 264,300,000.00 264,300,000.00
Retained earnings 14,473,742,023.65 15,109,309,830.46
Total owners’ equity 21,442,533,344.09 22,076,955,380.05
Total liabilities and owners’ equity 29,592,588,154.54 27,569,732,116.50
~ 42 ~
Interim Report 2026
Unit: RMB
Item H1 2026 H1 2025
Including: Operating revenue 10,131,395,927.11 13,879,852,202.75
Interest income
Insurance premium income
Handling charge and
commission income
Including: Cost of sales 1,992,852,329.72 2,793,535,258.54
Interest expense
Handling charge and
commission expense
Surrenders
Net insurance claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
expense
Taxes and surcharges 1,693,426,159.08 2,175,977,722.16
Selling expense 3,072,505,534.43 3,511,408,555.96
Administrative expense 631,017,032.54 671,417,776.78
R&D expense 34,920,057.51 40,317,747.37
Finance costs -232,980,659.91 -315,707,816.32
Including: Interest
expense
Interest
income
Add: Other income 20,019,519.36 50,136,522.40
Return on investment (“-” for loss) -11,084,485.12 -17,291,463.64
Including: Share of profit or loss
of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Exchange gain (“-” for loss)
~ 43 ~
Interim Report 2026
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
for loss)
Credit impairment loss (“-” for
-271,998.21 579,017.02
loss)
Asset impairment loss (“-” for
loss)
Asset disposal income (“-” for
loss)
Add: Non-operating income 16,975,362.58 28,399,359.59
Less: Non-operating expense 5,045,678.27 2,028,341.63
Less: Income tax expense 753,932,840.70 1,286,677,231.21
operations (“-” for net loss)
operations (“-” for net loss)
shareholders of the Company as the 2,164,379,928.17 3,661,585,785.94
parent (“-” for net loss)
non-controlling interests (“-” for net loss)
tax
Attributable to owners of the
Company as the parent
reclassified to profit or loss
remeasurements on defined benefit
schemes
income that will not be reclassified to
profit or loss under the equity method
investments in other equity instruments
~ 44 ~
Interim Report 2026
arising from changes in own credit risk
profit or loss
income that will be reclassified to profit
or loss under the equity method
investments in other debt obligations
income arising from the reclassification 824,825.69 14,172,018.85
of financial assets
allowance for investments in other debt
obligations
hedges
translation of foreign
currency-denominated financial
statements
Attributable to non-controlling
interests
Attributable to owners of the
Company as the parent
Attributable to non-controlling
interests
Legal representative: Liang Jinhui The Company’s chief accountant: Zhu Jiafeng
Head of the Company’s financial department: Zhu Jiafeng
Unit: RMB
Item H1 2026 H1 2025
Less: Cost of sales 2,339,649,340.49 2,663,998,964.46
Taxes and surcharges 1,455,953,620.21 1,987,809,121.67
~ 45 ~
Interim Report 2026
Selling expense 162,089,744.85 19,234,473.34
Administrative expense 405,618,220.87 409,334,828.58
R&D expense 14,176,456.49 14,651,229.03
Finance costs -125,555,308.03 -67,812,658.15
Including: Interest expense 1,654,068.09 2,009,637.65
Interest income 126,741,175.36 72,175,217.81
Add: Other income 8,326,033.26 9,816,414.10
Return on investment (“-” for
loss)
Including: Share of profit or loss
of joint ventures and associates
Income from the derecognition
of financial assets at amortized cost (“-”
for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
for loss)
Credit impairment loss (“-” for
loss)
Asset impairment loss (“-” for
loss)
Asset disposal income (“-” for
loss)
Add: Non-operating income 13,171,437.78 20,905,592.33
Less: Non-operating expense 3,073,767.55 1,210,216.12
Less: Income tax expense 565,444,290.50 743,483,778.48
operations (“-” for net loss)
operations (“-” for net loss)
tax
to profit or loss
remeasurements on defined benefit
~ 46 ~
Interim Report 2026
schemes
that will not be reclassified to profit or
loss under the equity method
investments in other equity instruments
arising from changes in own credit risk
profit or loss
that will be reclassified to profit or loss
under the equity method
investments in other debt obligations
arising from the reclassification of 1,145,770.85 5,085,975.46
financial assets
for investments in other debt obligations
translation of foreign
currency-denominated financial
statements
Unit: RMB
Item H1 2026 H1 2025
Proceeds from sale of commodities
and rendering of services
Net increase in customer deposits and
interbank deposits
Net increase in borrowings from the
~ 47 ~
Interim Report 2026
central bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Interest, handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Net proceeds from acting trading of
securities
Tax rebates 49,390,492.88 2,632,282.72
Cash generated from other operating
activities
Subtotal of cash generated from
operating activities
Payments for commodities and
services
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Net increase in interbank loans granted
Interest, handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 2,190,375,219.88 2,196,285,230.62
Taxes paid 3,751,294,928.05 5,170,737,863.61
Cash used in other operating activities 1,396,026,317.27 2,065,770,527.44
Subtotal of cash used in operating
activities
Net cash generated from/used in
operating activities
Proceeds from disinvestment 3,039,263,000.00 1,335,393,000.00
~ 48 ~
Interim Report 2026
Return on investment 2,836,598.17 2,302,680.87
Net proceeds from the disposal of
fixed assets, intangible assets and other 253,136.00 3,558.00
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 407,585,324.43 943,666,299.92
long-lived assets
Payments for investments 4,036,491,000.00 1,612,749,000.00
Net increase in pledged loans granted
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
activities
Net cash generated from/used in
-1,401,723,590.26 -1,218,716,061.05
investing activities
Capital contributions received 18,000,000.00
Including: Capital contributions by
non-controlling interests to subsidiaries
Borrowings raised 99,300,000.00 230,200,000.00
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
Repayment of borrowings 147,350,000.00 86,690,000.00
Interest and dividends paid 534,483,701.83 3,202,120,302.70
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing activities 14,254,699.26 11,832,851.40
Subtotal of cash used in financing
activities
Net cash generated from/used in
-596,788,401.09 -3,052,443,154.10
financing activities
changes on cash and cash equivalents
~ 49 ~
Interim Report 2026
equivalents
Add: Cash and cash equivalents,
beginning of the period
period
Unit: RMB
Item H1 2026 H1 2025
Proceeds from sale of commodities
and rendering of services
Tax rebates 9,277,774.00 0.00
Cash generated from other operating
activities
Subtotal of cash generated from
operating activities
Payments for commodities and
services
Cash paid to and for employees 829,279,783.91 721,681,300.58
Taxes paid 2,665,018,578.34 3,424,241,358.45
Cash used in other operating activities 602,776,425.87 7,025,981,610.03
Subtotal of cash used in operating
activities
Net cash generated from/used in
operating activities
Proceeds from disinvestment 2,080,237,000.00 543,296,000.00
Return on investment 26,742,139.07 62,106,882.46
Net proceeds from the disposal of
fixed assets, intangible assets and other 201,900.00 571,340.27
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
activities
Subtotal of cash generated from
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 327,587,248.63 857,181,157.31
long-lived assets
~ 50 ~
Interim Report 2026
Payments for investments 2,890,472,000.00 752,609,000.00
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing activities
Subtotal of cash used in investing
activities
Net cash generated from/used in
-1,110,878,209.56 -1,003,815,934.58
investing activities
Capital contributions received
Borrowings raised
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
Repayment of borrowings
Interest and dividends paid 528,130,411.45 3,174,991,314.12
Cash used in other financing activities 12,722,539.26 11,832,851.40
Subtotal of cash used in financing
activities
Net cash generated from/used in
-540,852,950.71 -3,186,824,165.52
financing activities
changes on cash and cash equivalents
equivalents
Add: Cash and cash equivalents,
beginning of the period
period
~ 51 ~
Interim Report 2026
Amount in H1 2026
Unit: RMB
H1 2026
Equity attributable to owners of the Company as the parent
Item Other equity instruments Non-controlling Total owners’
Less: Other
Specific Surplus General interests equity
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained earnings Other Subtotal
Other reserve reserves reserve
shares bonds stock income
end of the prior year
Add: Adjustment for
change in accounting
policy
Adjustment for
correction of
previous error
Other adjustments
beginning of the year
in the period (“-” for 2,106,063.16 -161,460,071.83 -159,354,008.67 47,035,531.56 -112,318,477.11
decrease)
comprehensive 2,106,063.16 2,164,379,928.17 2,166,485,991.33 47,035,531.56 2,213,521,522.89
income
and reduced by
owners
increased by
owners1. Ordinary
share increase by
owners
increased by holders
of other equity
instruments
~ 52 ~
Interim Report 2026
payments included in
owners’ equity
to surplus reserves
to general reserve
to owners (or -2,325,840,000.00 -2,325,840,000.00 -2,325,840,000.00
shareholders)
owners’ equity
capital (or share
capital) from capital
reserves
capital (or share
capital) from surplus
reserves
surplus reserves
defined benefit
schemes transferred
to retained earnings
comprehensive
income transferred to
retained earnings
period
period
end of the period
~ 53 ~
Interim Report 2026
Amount in H1 2025
Unit: RMB
H1 2025
Equity attributable to owners of the Company as the parent
Item Non-controlling Total owners’
Other equity instruments Less: Other
Specific Surplus General interests equity
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained earnings Other Subtotal
Other reserve reserves reserve
shares bonds stock income
the end of the
period of prior
year
Add: Adjustment
for change in
accounting policy
Adjustment for
correction of
previous error
Other
adjustments
the beginning of
the Reporting
Period
Increase/Decrease
in the period (“-”
for decrease)
comprehensive 16,050,514.24 3,661,585,785.94 3,677,636,300.18 117,189,502.09 3,794,825,802.27
income
increased and
reduced by
owners
Ordinary shares
increased by
owners
increased by
holders of other
equity
instruments
Share-based
payments
included in
owners’ equity
~ 54 ~
Interim Report 2026
-3,171,600,000.00 -3,171,600,000.00 -24,246,617.06 -3,195,846,617.06
distribution
Appropriation to
surplus reserves
Appropriation to
general reserve
Appropriation to
-3,171,600,000.00 -3,171,600,000.00 -24,246,617.06 -3,195,846,617.06
owners (or
shareholders)
within owners’
equity
Increase in
capital (or share
capital) from
capital reserves
Increase in
capital (or share
capital) from
surplus reserves
offset by surplus
reserves
Changes in
defined benefit
schemes
transferred to
retained earnings
comprehensive
income
transferred to
retained earnings
reserve
Increase in the
period
in the period
~ 55 ~
Interim Report 2026
the end of the 528,600,000.00 6,229,111,206.22 6,446,394.50 269,402,260.27 18,129,500,218.38 25,163,060,079.37 1,147,705,829.17 26,310,765,908.54
Reporting Period
Amount in H1 2026
H1 2026
Item Other equity instruments Less: Other
Specific Surplus
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained earnings Other Total owners’ equity
Other reserve reserves
shares bonds stock income
the end of the
period of prior
year
Add: Adjustment
for change in
accounting policy
Adjustment for
correction of
previous error
Other
adjustments
the beginning of
the Reporting
Period
Increase/Decrease
in the period (“-”
for decrease)
comprehensive 1,145,770.85 1,690,272,193.19 1,691,417,964.04
income
increased and
reduced by
owners
shares increased
by owners
~ 56 ~
Interim Report 2026
increased by
holders of other
equity
instruments
payments
included in
owners’ equity
-2,325,840,000.00 -2,325,840,000.00
distribution
Appropriation to
surplus reserves
Appropriation to
-2,325,840,000.00 -2,325,840,000.00
owners (or
shareholders)
within owners’
equity
Increase in
capital (or share
capital) from
capital reserves
Increase in
capital (or share
capital) from
surplus reserves
offset by surplus
reserves
Changes in
defined benefit
schemes
transferred to
retained earnings
comprehensive
income
~ 57 ~
Interim Report 2026
transferred to
retained earnings
reserve
Increase in the
period
in the period
the end of the 528,600,000.00 6,176,504,182.20 -612,861.76 264,300,000.00 14,473,742,023.65 21,442,533,344.09
Reporting Period
Amount in H1 2025
Unit: RMB
H1 2025
Item Other equity instruments Less: Other
Specific Surplus
Share capital Preferred Perpetual Capital reserves Treasury comprehensive Retained earnings Other Total owners’ equity
Other reserve reserves
shares bonds stock income
the end of the
period of prior
year
Add: Adjustment
for change in
accounting policy
Adjustment for
correction of
previous error
Other
adjustments
the beginning of
the Reporting
Period
Increase/Decrease
in the period (“-”
for decrease)
~ 58 ~
Interim Report 2026
comprehensive
income
increased and
reduced by
owners
Ordinary shares
increased by
owners
increased by
holders of other
equity
instruments
Share-based
payments
included in
owners’ equity
-3,171,600,000.00 -3,171,600,000.00
distribution
Appropriation to
surplus reserves
Appropriation to
-3,171,600,000.00 -3,171,600,000.00
owners (or
shareholders)
within owners’
equity
Increase in
capital (or share
capital) from
capital reserves
Increase in
capital (or share
capital) from
~ 59 ~
Interim Report 2026
surplus reserves
offset by surplus
reserves
Changes in
defined benefit
schemes
transferred to
retained earnings
comprehensive
income
transferred to
retained earnings
reserve
Increase in the
period
in the period
the end of the 528,600,000.00 6,176,504,182.20 -2,163,266.62 264,300,000.00 13,908,985,206.01 20,876,226,121.59
Reporting Period
~ 60 ~
Interim Report 2026
Anhui Gujing Distillery Company Limited
Notes to Financial Statements for H1 2026
(Currency Unit is RMB Unless Otherwise Stated)
I Basic Information about the Company
The Anhui State-owned Asset Management Bureau approved through WanGuoZiGongZi (1996)
No. 053 the incorporation of Anhui Gujing Distillery Company Limited (the Company and GJ
Distillery) by Anhui Gujing Group Company Limited (GJ Group), as the sole founder, by the
operating assets of Anhui Bozhou Gujing Distillery Factory (GJ Distillery Factory), which is the
core operating unit of GJ Group. The incorporation was further approved by the Anhui People’s
Government through WanZhengMi (1996) 42 on March 5, 1996. The incorporation General
Meeting was held on May 28, 1996 and the incorporation was registered with the Anhui
Administration Bureau for Commerce and Industry on May 30, 1996 with the registered address at
Bozhou, Anhui, the People’s Republic of China (the PRC). At incorporation, the Company’s total
number of shares stood at 155 million with a valuation of RMB377.17 million, which was the fair
value of the operating assets of GJ Distillery Factory upon appraisal.
The Company initiated public offering of 60 million domestic listed shares held by foreign
investors (known as “B share(s)”) in June 1996 and 20 million domestic listed RMB ordinary shares
(known as “A share(s)”) in September 1996. The par value of both the B share and A share is
RMB1.00 per share. The B shares and A shares issued were listed on the Shenzhen Stock
Exchange.
As of the public listing, the Company has 235 million shares in total with the share capital at
RMB235 million. The Company’s at public listing comprised 155 million state-owned shares, 60
million B shares and 20 million A shares. Each of the Company’s shares has a par value at
RMB1.00 per share.
In accordance with the resolution of the General Meeting held on May 29, 2006, the Company
exercised the share reorganization plan in June 2006. Immediately after the implementation of the
share reorganization plan, the Company had in total 235 million shares, comprising 147 million
shares with restriction of disposal (equal to 62.55% of total shares) and 88 million free-floating
shares (equal to 37.45% of total shares).
Upon the Company’s publication of the Notice of Lifting Restriction of Shares on June 27, 2007, the
restriction on disposal on 11.75 million shares was lifted on June 29, 2007. Immediately after the
lifting, the Company had in total 235 million shares, comprising 135.25 million shares with
restriction of disposal (equal to 57.55% of total shares) and 99.75 million free-floating shares (equal
~ 61 ~
Interim Report 2026
to 42.45% of total shares).
Upon the Company’s publication of the Notice of Lifting Restriction of Shares on July 17, 2008, the
restriction on disposal on 11.75 million shares was lifted on July 18, 2008. Immediately after the
lifting, the Company had in total 235 million shares, comprising 123.5 million shares with
restriction of disposal (equal to 52.55% of total shares) and 111.5 million free-floating shares (equal
to 47.45% of total shares).
Upon the Company’s publication of the Notice of Lifting Restriction of Shares on July 24, 2009, the
restriction on disposal on 123.5 million shares was lifted on July 29, 2009. Immediately after the
lifting, the Company had in total 235 million shares, comprising 235 million free-floating shares
(equal to 100% of total shares).
Upon approval by the China Securities Regulatory Commission (CSRC) through ZhengJianXuKe
[2011] 943, the Company issued on July 15, 2011 through private offering of 16.8 million A shares
with the par value at RMB1.00 to designated investors. The shares were issued at RMB75.00 per
share. Gross proceeds from this issuance was RMB1,260 million and the respective net proceeds
after deduction of the cost of issuance (RMB32.5 million) was RMB1,227.5 million. The
subscription for the issuance was verified by Reanda CPAs Co., Ltd. through Reanda YanZi [2011]
No. 1065. Immediately after this private offering, the share capital of the Company increased to
RMB251.8 million.
In accordance with the resolution of the Company’s 2011 General Meeting, a bonus issue of 10
shares for every 10 shares held at December 31, 2011 through utilization of capital reserves was
exercised in 2012. 251.8 bonus shares were issued in total. Immediately after the exercise of the
bonus issue, the Company’s share capital increased to RMB503.6 million.
Upon approval by the CSRC through ZhengJianXuKe [2021] 1422, the Company issued on July 22,
investors. The shares were issued at RMB200.00 per share. Gross proceeds from this issuance was
RMB5,000 million and the respective net proceeds after deduction of the cost of issuance
(RMB45.66 million) was RMB4,954.34 million. The subscription for the issuance was verified by
RSM China CPAs LLP through RSM Yan [2021] No. 518Z0050. Immediately after this private
offering, the share capital of the Company increased to RMB528.6 million.
As of June 30, 2026, total number of the Company’s shares stood at 528.6 million. See Note 5.32
for further details.
The Company’s headquarters is located in Gujing town, Bozhou City, Anhui Province. Legal
representative of the company is Liang Jinhui.
The Company is mainly engaged in the production and sales of baijiu, which belongs to the food
~ 62 ~
Interim Report 2026
manufacturing industry.
These financial statements are approved on August 28, 2026 by the Company’s Board of Directors
for publication.
II Basis of Preparation of the Financial Statements
Based on going concern, according to actually occurred transactions and events, the Company
prepares its financial statements in accordance with the Accounting Standards for Business
Enterprises – Basic standards and concrete accounting standards, Accounting Standards for
Business Enterprises – Application Guidelines, Accounting Standards for Business Enterprises –
Interpretations and other relevant provisions (collectively known as “Accounting Standards for
Business Enterprises, issued by Ministry of Finance of PRC”). In addition, the Company discloses
the relevant financial information in accordance with Rules No.15 for the Information Disclosure
and Reporting of Companies Offering Securities to the Public - General Requirements for Financial
Reporting (2023 Revision) issued by CSRC.
The Company has assessed its ability to continually operate for the next 12 months from the end of
the Reporting Period, and no any matters that may result in doubt on its ability as a going concern
were noted. Therefore, it is reasonable for the Company to prepare financial statements on the going
concern basis.
III Significant Accounting Policies and Accounting Estimates
The Company is subject to the disclosure requirements for the “food and liquor & wine production
industry” in the Guideline No. 3 of the Shenzhen Stock Exchange for Self-regulation of Listed
Companies—Industry-specific Information Disclosure.
Notes to specific accounting policies and accounting estimates: The disclosures below cover the
specific accounting policies and accounting estimates formulated by the Company based on the
characteristics of its actual production and operations.
The Company prepares its financial statements in accordance with the requirements of the
Accounting Standards for Business Enterprises, truly and completely reflecting the Company’s
~ 63 ~
Interim Report 2026
financial position, operating results, changes in shareholders’ equity, cash flows and other related
information.
The accounting year of the Company is from January 1 to December 31 in calendar year.
The normal operating cycle of the Company is one year.
The Company takes Renminbi Yuan (“RMB”) as the functional currency. The Company’s overseas
subsidiaries choose the currency of the primary economic environment in which the subsidiaries
operate as the functional currency.
Item Factor and basis of materiality
Significant write-off of other receivables Amount greater than RMB5 million
Significant individual provision for bad debt of accounts
Amount greater than RMB5 million
receivable
Significant other payables with aging of over one year More than 0.03% of the total assets
Significant accounts payable with aging of over one year More than 0.03% of the total assets
Net profit or net assets account for more than 5% of the
Significant non-wholly owned subsidiaries
corresponding item in the consolidated financial statements
Significant goodwill Individual amount more than RMB50 million
Significant construction in progress Individual amount more than RMB20 million
(1) Business combinations under common control
The assets and liabilities that the Company obtains in a business combination under common
control shall be measured at their carrying amount of the acquired entity at the combination date. If
the accounting policies or accounting periods adopted by the acquired entity before the business
combination differ from those adopted by the acquiring entity, they are aligned on the basis of
materiality. Specifically, the carrying amounts of the acquired entity’s assets and liabilities are
adjusted in accordance with the acquiring entity’s accounting policies and accounting periods. As
for the difference between the carrying amount of the net assets obtained by the acquiring entity and
the carrying amount of the consideration paid by it, the capital reserve (capital premium or share
premium) shall be adjusted. If the capital reserve (capital premium or share premium) is not
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sufficient to absorb the difference, any excess shall be adjusted against retained earnings.
For the accounting treatment of business combination under common control by step acquisitions,
please refer to Note 3.7 (6).
(2) Business combinations not under common control
The assets and liabilities that the Company obtains in a business combination not under common
control shall be measured at their fair value at the acquisition date. If the accounting policies or
accounting periods adopted by the acquired entity before the business combination differ from those
adopted by the acquiring entity, they are aligned on the basis of materiality. Specifically, the
carrying amounts of the acquired entity’s assets and liabilities are adjusted in accordance with the
acquiring entity’s accounting policies and accounting periods. The acquiring entity shall recognize
the positive balance between the combination costs and the fair value of the identifiable net assets it
obtains from the acquired entity as goodwill. The acquiring entity shall, pursuant to the following
provisions, treat the negative balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquired entity:
(i) It shall review the measurement of the fair values of the identifiable assets, liabilities and
contingent liabilities it obtains from the acquired entity as well as the combination costs;
(ii) If, after the review, the combination costs are still less than the fair value of the identifiable net
assets it obtains from the acquired entity, the balance shall be recognized in profit or loss of the
Reporting Period.
For the accounting treatment of business combination under the same control by step acquisitions,
please refer to Note 3.7 (6).
(3) Treatment of business combination related costs
The intermediary costs such as audit, legal services and valuation consulting and other related
management costs that are directly attributable to the business combination shall be charged in
profit or loss in the period in which they are incurred. The costs to issue equity or debt securities for
the consideration of business combination shall be recorded as a part of the value of the respect
equity or debt securities upon initial recognition.
(1) Judgment of control and consolidation decision
Control exists when the Company has power over the investee, exposure, or rights, to variable
returns from its involvement with the investee and the ability to use its power over the investee to
affect the amount of the returns. The definition of control contains there elements: - power over the
investee; exposure, or rights to variable returns from the Company’s involvement with the investee;
and the ability to use its power over the investee to affect the amount of the investor’s returns. The
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Company controls an investee if and only if the Company has all the above three elements.
The scope of consolidated financial statements shall be determined on the basis of control. It not
only includes subsidiaries determined based on voting rights (or similar) or together with other
arrangement, but also structured entities under one or more contractual arrangements.
Subsidiaries are the entities that controlled by the Company (including enterprise, a divisible part of
the investee, and structured entity controlled by the enterprise). A structured entity (sometimes
called a Special Purpose Entity) is an entity that has been designed so that voting or similar rights
are not the dominant factor in deciding who controls the entity.
(2) Special requirement as the parent company is an investment entity
If the parent company is an investment entity, it should measure its investments in particular
subsidiaries as financial assets at fair value through profit or loss instead of consolidating those
subsidiaries in its consolidated and separate financial statements. However, as an exception to this
requirement, if a subsidiary provides investment-related services or activities to the investment
entity, it should be consolidated.
The parent company is defined as investment entity when meets following conditions:
(i) Obtains funds from one or more investors for the purpose of providing those investors with
investment management services;
(ii) Commits to its investors that its business purpose is to invest funds solely for returns from
capital appreciation, investment income or both; and
(iii) Measures and evaluates the performance of substantially all of its investments on a fair value
basis.
If the parent company becomes an investment entity, it shall cease to consolidate its subsidiaries at
the date of the change in status, except for any subsidiary which provides investment-related
services or activities to the investment entity shall be continued to be consolidated. The
deconsolidation of subsidiaries is accounted for as though the investment entity partially disposed
subsidiaries without loss of control.
When the parent company previously classified as an investment entity ceases to be an investment
entity, subsidiary that was previously measured at fair value through profit or loss shall be included
in the scope of consolidated financial statements at the date of the change in status. The fair value of
the subsidiary at the date of change represents the transferred deemed consideration in accordance
with the accounting for business combination not under common control.
(3) Method of preparing the consolidated financial statements
The consolidated financial statements shall be prepared by the Company based on the financial
statements of the Company and its subsidiaries, and using other related information.
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When preparing consolidated financial statements, the Company shall consider the entire group as
an accounting entity, adopt uniform accounting policies and apply the requirements of Accounting
Standard for Business Enterprises related to recognition, measurement and presentation. The
consolidated financial statements shall reflect the overall financial position, operating results and
cash flows of the group.
(i) Like items of assets, liabilities, equity, income, expenses and cash flows of the parent are
combined with those of the subsidiaries.
(ii) The carrying amount of the parent’s investment in each subsidiary is eliminated (off-set) against
the parent’s portion of equity of each subsidiary.
(iii) Eliminate the impact of intragroup transactions between the Company and the subsidiaries or
between subsidiaries, and when intragroup transactions indicate an impairment of related assets, the
losses shall be recognized in full.
(iv) Make adjustments to special transactions from the perspective of the group.
(4) Method of preparation of the consolidated financial statements when subsidiaries are
acquired or disposed in the Reporting Period
(i) Acquisition of subsidiaries or business
A. Subsidiaries or business acquired through business combination under common control
(a) When preparing consolidated statements of financial position, the opening balance of the
consolidated balance sheet shall be adjusted. Related items of comparative financial statements
shall be adjusted as well, deeming that the combined entity has always existed ever since the
ultimate controlling party began to control.
(b) Incomes, expenses and profits of the subsidiary incurred from the beginning of the Reporting
Period to the end of the Reporting Period shall be included into the consolidated statement of profit
or loss. Related items of comparative financial statements shall be adjusted as well, deeming that
the combined entity has always existed ever since the ultimate controlling party began to control.
(c) Cash flows from the beginning of the Reporting Period to the end of the Reporting Period shall
be included into the consolidated statement of cash flows. Related items of comparative financial
statements shall be adjusted as well, deeming that the combined entity has always existed ever since
the ultimate controlling party began to control.
B. Subsidiaries or business acquired through business combination not under common control
(a) When preparing the consolidated statements of financial position, the opening balance of the
consolidated statements of financial position shall not be adjusted.
(b) Incomes, expenses and profits of the subsidiary incurred from the acquisition date to the end of
the Reporting Period shall be included into the consolidated statement of profit or loss.
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(c) Cash flows from the acquisition date to the end of the Reporting Period shall be included into
the consolidated statement of cash flows.
(ii) Disposal of subsidiaries or business
A. When preparing the consolidated statements of financial position, the opening balance of the
consolidated statements of financial position shall not be adjusted.
B. Incomes, expenses and profits incurred from the beginning of the subsidiary to the disposal date
shall be included into the consolidated statement of profit or loss.
C. Cash flows from the beginning of the subsidiary to the disposal date shall be included into the
consolidated statement of cash flows.
(5) Special consideration in consolidation elimination
(i) Long-term equity investment held by the subsidiaries to the Company shall be recognized as
treasury stock of the Company, which is offset with the owner’s equity, represented as “treasury
stock” under “owner’s equity” in the consolidated statement of financial position.
Long-term equity investment held by subsidiaries between each other is accounted for taking
long-term equity investment held by the Company to its subsidiaries as reference. That is, the
long-term equity investment is eliminated (off-set) against the portion of the corresponding
subsidiary’s equity.
(ii) Due to not belonging to paid-in capital (or share capital) and capital reserve, and being different
from retained earnings and undistributed profit, “Specific reserves” and “General risk provision”
shall be recovered based on the proportion attributable to owners of the parent company after
long-term equity investment to the subsidiaries is eliminated with the subsidiaries’ equity.
(iii) If temporary timing difference between the book value of the assets and liabilities in the
consolidated statement of financial position and their tax basis is generated as a result of elimination
of unrealized inter-company transaction profit or loss, deferred tax assets of deferred tax liabilities
shall be recognized, and income tax expense in the consolidated statement of profit or loss shall be
adjusted simultaneously, excluding deferred taxes related to transactions or events directly
recognized in owner’s equity or business combination.
(iv) Unrealized inter-company transactions profit or loss generated from the Company selling assets
to its subsidiaries shall be eliminated against “net profit attributed to the owners of the parent
company” in full. Unrealized inter-company transactions profit or loss generated from the
subsidiaries selling assets to the Company shall be eliminated between “net profit attributed to the
owners of the parent company” and “non-controlling interests” pursuant to the proportion of the
Company in the related subsidiaries. Unrealized inter-company transactions profit or loss generated
from the assets sales between the subsidiaries shall be eliminated between “net profit attributed to
the owners of the parent company” and “non-controlling interests” pursuant to the proportion of the
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Company in the selling subsidiaries.
(v) If loss attributed to the minority shareholders of a subsidiary in current period is more than the
proportion of non-controlling interest in this subsidiary at the beginning of the period,
non-controlling interest is still to be written down.
(6) Accounting for special transactions
(i) Purchasing of non-controlling interests
Where, the Company purchases non-controlling interests of its subsidiary, in the separate financial
statements of the Company, the cost of the long-term equity investment obtained in purchasing
non-controlling interests is measured at the fair value of the consideration paid. In the consolidated
financial statements, difference between the cost of the long-term equity investment newly obtained
in purchasing non-controlling interests and share of the subsidiary’s net assets from the acquisition
date or combination date continuingly calculated pursuant to the newly acquired shareholding
proportion shall be adjusted into capital reserve (capital premium or share premium). If capital
reserve is not enough to be offset, surplus reserve and undistributed profit shall be offset in turn.
(ii) Gaining control over the subsidiary in stages through multiple transactions
A. Business combination under common control in stages through multiple transactions
On the combination date, in the separate financial statement, initial cost of the long-term equity
investment is determined according to the share of carrying amount of the acquiree’s net assets in
the ultimate controlling entity’s consolidated financial statements after combination. The difference
between the initial cost of the long-term equity investment and the carrying amount of the long
-term investment held prior of control plus book value of additional consideration paid at
acquisition date is adjusted into capital reserve (capital premium or share premium). If the capital
reserve is not enough to absorb the difference, any excess shall be adjusted against surplus reserve
and undistributed profit in turn.
In the consolidated financial statements, the assets and liabilities acquired during the combination
should be recognized at their carrying amount in the ultimate controlling entity’s consolidated
financial statements on the combination date unless any adjustment is resulted from the differences
in accounting policies and accounting periods. The difference between the carrying amount of the
investment held prior of control plus book value of additional consideration paid on the acquisition
date and the net assets acquired through the combination is adjusted into capital reserve (capital
premium or share premium). If the capital reserve is not enough to absorb the difference, any excess
shall be adjusted against retained earnings.
If the acquiring entity holds equity investment in the acquired entity prior to the combination date,
related profit or loss, other comprehensive income and other changes in equity which have been
recognized during the period from the later of the date of the Company obtaining original equity
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interest and the date of both the acquirer and the acquiree under common control of the same
ultimate controlling party to the combination date should be offset against the opening balance of
retained earnings or current profit and loss at the comparative financial statements period
respectively.
B. Business combination not under common control in stages through multiple transactions
On the consolidation date, in the separate financial statements, the initial cost of long-term equity
investment is determined according to the carrying amount of the original long-term investment
plus the cost of new investment.
In the consolidated financial statements, the equity interest of the acquired entity held prior to the
acquisition date shall be re-measured at its fair value on the acquisition date. For the financial assets
designated to be measured at fair value through other comprehensive income, among the acquiree’s
equity held prior to the acquisition date, the difference between the fair value and the book value
shall be recognized as retained earnings. The cumulative changes in fair value of the equity, which
is recognized as other comprehensive income, shall be transferred out to retained earnings. For the
financial assets measured at fair value through current profit and loss among the acquiree’s equity
held prior to the acquisition date, or long-term equity investment under the equity method, the
difference between the fair value of the equity interest and its book value is recognized as
investment income of the current period. In case of changes in the acquiree’s equity held prior to the
acquisition date that involves other comprehensive income under the equity method and other
owner’s equity under the equity method excluding net profit and loss, other comprehensive income,
and profit distribution, the relevant other comprehensive income shall go through accounting
treatment on the acquisition date on the same basis as the relevant assets or liabilities directly
treated by investors; changes in the relevant other owner’s equity shall be converted into the
investment income of the current period on the acquisition date.
(iii) Disposal of investment in subsidiaries without a loss of control
For partial disposal of the long-term equity investment in the subsidiaries without a loss of control,
when the Company prepares consolidated financial statements, difference between consideration
received from the disposal and the corresponding share of subsidiary’s net assets cumulatively
calculated from the acquisition date or combination date shall be adjusted into capital reserve
(capital premium or share premium). If the capital reserve is not enough to absorb the difference,
any excess shall be offset against retained earnings.
(iv) Disposal of investment in subsidiaries with a loss of control
A. Disposal through one transaction
If the Company loses control in an investee through partial disposal of the equity investment, when
the consolidated financial statements are prepared, the retained equity interest should be
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re-measured at fair value at the date of loss of control. The difference between i) the fair value of
consideration received from the disposal plus non-controlling interest retained; ii) share of the
former subsidiary’s net assets cumulatively calculated from the acquisition date plus goodwill or
combination date according to the original proportion of equity interest, shall be recognized in
current investment income when control is lost.
Moreover, other comprehensive income related to the equity investment in the former subsidiary
shall go through accounting treatment on the same basis as the direct treatment of relevant assets or
liabilities in the former subsidiary, when control is lost. Other changes in owner’s equity under the
equity method related to the former subsidiary shall be transferred into current profit and loss, when
control is lost.
B. Disposal in stages
In the consolidated financial statements, whether the transactions should be accounted for as “a
single transaction” needs to be decided firstly.
If the disposal in stages should not be classified as “a single transaction”, in the separate financial
statements, for transactions prior of the date of loss of control, carrying amount of each disposal of
long-term equity investment need to be recognized, and the difference between consideration
received and the carrying amount of long-term equity investment corresponding to the equity
interest disposed should be recognized in current investment income; in the consolidated financial
statements, the disposal transaction should be accounted for according to related policy in “Disposal
of long-term equity investment in subsidiaries without a loss of control”.
If the disposal in stages should be classified as “a single transaction”, these transactions should be
accounted for as a single transaction of disposal of subsidiary resulting in loss of control. In the
separate financial statements, for each transaction prior of the date of loss of control, difference
between consideration received and the carrying amount of long-term equity investment
corresponding to the equity interest disposed should be recognized as other comprehensive income
firstly, and transferred to profit or loss as a whole when control is lost; in the consolidated financial
statements, for each transaction prior of the date of loss of control, difference between consideration
received and proportion of the subsidiary’s net assets corresponding to the equity interest disposed
should be recognized in profit or loss as a whole when control is lost.
In considering of the terms and conditions of the transactions as well as their economic impact, the
presence of one or more of the following indicators may lead to account for multiple transactions as
a single transaction:
(a) The transactions are entered into simultaneously or in contemplation of one another.
(b) The transactions form a single transaction designed to achieve an overall commercial effect.
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(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.
(d) One transaction, when considered on its own merits, does not make economic sense, but when
considered together with the other transaction or transactions would be considered
economically justifiable.
(v) Diluting equity share of parent company in its subsidiaries due to additional capital injection by
the subsidiaries’ minority shareholders.
Other shareholders (minority shareholders) of the subsidiaries inject additional capital in the
subsidiaries, which resulted in the dilution of equity interest of parent company in these subsidiaries.
In the consolidated financial statements, difference between share of the corresponding subsidiaries’
net assets calculated based on the parent’s equity interest before and after the capital injection shall
be adjusted into capital reserve (capital premium or share premium). If the capital reserve is not
enough to absorb the difference, any excess shall be adjusted against retained earnings.
A joint arrangement is an arrangement of which two or more parties have joint control. Joint
arrangement of the Company is classified as either a joint operation or a joint venture.
(1) Joint operation
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.
The Company shall recognize the following items in relation to shared interest in a joint operation,
and account for them in accordance with relevant accounting standards of the Accounting Standards
for Business Enterprises:
(i) its assets, including its share of any assets held jointly;
(ii) its liabilities, including its share of any liabilities incurred jointly;
(iii) its revenue from the sale of its share of the output arising from the joint operation;
(iv) its share of the revenue from the sale of the output by the joint operation; and
(v) its expenses, including its share of any expenses incurred jointly.
(2) Joint venture
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the arrangement.
The Company accounts for its investment in the joint venture by applying the equity method of
long-term equity investment.
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Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash
equivalents include short-term (generally within three months of maturity at acquisition), highly
liquid investments that are readily convertible into known amounts of cash and which are subject to
an insignificant risk of changes in value.
Financial instrument is any contract which gives rise to both a financial asset of one entity and a
financial liability or equity instrument of another entity.
(1) Recognition and derecognition of financial instrument
A financial asset or a financial liability should be recognized in the statement of financial position
when, and only when, an entity becomes party to the contractual provisions of the instrument.
A financial asset can only be derecognized when meets one of the following conditions:
(i) The rights to the contractual cash flows from a financial asset expire
(ii) The financial asset has been transferred and meets one of the following derecognition
conditions:
Financial liabilities (or part thereof) are derecognized only when the liability is extinguished—i.e.,
when the obligation specified in the contract is discharged or canceled or expires. An exchange of
the Company (borrower) and lender of debt instruments that carry significantly different terms or a
substantial modification of the terms of an existing liability are both accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability.
Purchase or sale of financial assets in a regular-way shall be recognized and derecognized using
trade date accounting. A regular-way purchase or sale of financial assets is a transaction under a
contract whose terms require delivery of the asset within the time frame established generally by
regulations or convention in the market place concerned. Trade date is the date at which the entity
commits itself to purchase or sell an asset.
(2) Classification and measurement of financial assets
At initial recognition, the Company classified its financial asset based on both the business model
for managing the financial asset and the contractual cash flow characteristics of the financial asset:
financial asset at amortized cost, financial asset at fair value through profit or loss (FVTPL) and
financial asset at fair value through other comprehensive income (FVTOCI). Reclassification of
financial assets is permitted if, and only if, the objective of the entity’s business model for
managing those financial assets changes. In this circumstance, all affected financial assets shall be
reclassified on the first day of the first reporting period after the changes in business model;
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otherwise the financial assets cannot be reclassified after initial recognition.
Financial assets shall be measured at initial recognition at fair value. For financial assets measured
at FVTPL, transaction costs are recognized in current profit or loss. For financial assets not
measured at FVTPL, transaction costs should be included in the initial measurement. Notes
receivable or accounts receivable that arise from sales of goods or rendering of services are initially
measured at the transaction price defined in the accounting standard of revenue where the
transaction does not include a significant financing component.
Subsequent measurement of financial assets will be based on their categories:
(i) Financial asset at amortized cost
The financial asset at amortized cost category of classification applies when both the following
conditions are met: the financial asset is held within the business model whose objective is to hold
financial assets in order to collect contractual cash flows, and the contractual term of the financial
asset gives rise on specified dates to cash flows that are solely payment of principal and interest on
the principal amount outstanding. These financial assets are subsequently measured at amortized
cost by adopting the effective interest rate method. Any gain or loss arising from derecognition
according to the amortization under effective interest rate method or impairment are recognized in
current profit or loss.
(ii) Financial asset at fair value through other comprehensive income (FVTOCI)
The financial asset at FVTOCI category of classification applies when both the following
conditions are met: the financial asset is held within the business model whose objective is achieved
by both collecting contractual cash flows and selling financial assets, and the contractual term of the
financial asset gives rise on specified dates to cash flows that are solely payment of principle and
interest on the principal amount outstanding. All changes in fair value are recognized in other
comprehensive income except for gain or loss arising from impairment or exchange differences,
which should be recognized in current profit or loss. At derecognition, cumulative gain or loss
previously recognized under OCI is reclassified to current profit or loss. However, interest income
calculated based on the effective interest rate is included in current profit or loss.
The Company make an irrevocable decision to designate part of non-trading equity instrument
investments as measured through FVTOCI. All changes in fair value are recognized in other
comprehensive income except for dividend income recognized in current profit or loss. At
derecognition, cumulative gain or loss are reclassified to retained earnings.
(iii) Financial asset at fair value through profit or loss (FVTPL)
Financial asset except for above mentioned financial asset at amortized cost or financial asset at fair
value through other comprehensive income (FVTOCI), should be classified as financial asset at fair
value through profit or loss (FVTPL). These financial assets should be subsequently measured at
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fair value. All the changes in fair value are included in current profit or loss.
(3) Classification and measurement of financial liabilities
The Company classified the financial liabilities as financial liabilities at fair value through profit or
loss (FVTPL), loan commitments at a below-market interest rate and financial guarantee contracts
and financial asset at amortized cost.
Subsequent measurement of financial assets will be based on the classification:
(i) Financial liabilities at fair value through profit or loss (FVTPL)
Held-for-trading financial liabilities (including derivatives that are financial liabilities) and financial
liabilities designated at FVTPL are classified as financial liabilities at FVTP. After initial
recognition, any gain or loss (including interest expense) are recognized in current profit or loss
except for those hedge accounting is applied. For financial liability that is designated as at FVTPL,
changes in the fair value of the financial liability that is attributable to changes in the own credit risk
of the issuer shall be presented in other comprehensive income. At derecognition, cumulative gain
or loss previously recognized under OCI is reclassified to retained earnings.
(ii) Loan commitments and financial guarantee contracts
Loan commitment is a commitment by the Company to provide a loan to customer under specified
contract terms. The provision of impairment losses of loan commitments shall be recognized based
on expected credit losses model.
Financial guarantee contract is a contract that requires the Company to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due
in accordance with the original or modified terms of a debt instrument. Financial guarantee
contracts liability shall be subsequently measured at the higher of: The amount of the loss
allowance recognized according to the impairment principles of financial instruments; and the
amount initially recognized less the cumulative amount of income recognized in accordance with
the revenue principles.
(iii) Financial liabilities at amortized cost
After initial recognition, the Company measured other financial liabilities at amortized cost using
the effective interest method.
Except for special situation, financial liabilities and equity instrument should be classified in
accordance with the following principles:
(i) If the Company has no unconditional right to avoid delivering cash or another financial
instrument to fulfill a contractual obligation, this contractual obligation meet the definition of
financial liabilities. Some financial instruments do not comprise terms and conditions related to
obligations of delivering cash or another financial instrument explicitly, they may include
contractual obligation indirectly through other terms and conditions.
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(ii) If a financial instrument must or may be settled in the Company’s own equity instruments, it
should be considered that the Company’s own equity instruments are alternatives of cash or another
financial instrument, or to entitle the holder of the equity instruments to sharing the remaining rights
over the net assets of the issuer. If the former is the case, the instrument is a liability of the issuer;
otherwise, it is an equity instrument of the issuer. Under some circumstances, it is regulated in the
contract that the financial instrument must or may be settled in the Company’s own equity
instruments, where, amount of contractual rights and obligations are calculated by multiplying the
number of the equity instruments to be available or delivered by its fair value upon settlement. Such
contracts shall be classified as financial liabilities, regardless that the amount of contractual rights
and liabilities is fixed, or fluctuate totally or partially with variables other than market price of the
entity’s own equity instruments (such as interest rate, price of some kind of goods or some kind of
financial instrument).
(4) Derivatives and embedded derivatives
At initial recognition, derivatives shall be measured at fair value at the date of derivative contracts
are signed and subsequently measured at fair value. The derivative with a positive fair value shall be
recognized as an asset, and with a negative fair value shall be recognized as a liability.
Gains or losses arising from the changes in fair value of derivatives shall be recognized directly into
current profit or loss except for the effective portion of cash flow hedges which shall be recognized
in other comprehensive income and reclassified into current profit or loss when the hedged items
affect profit or loss.
An embedded derivative is a component of a hybrid contract with a financial asset as a host, the
Company shall apply the requirements of financial asset classification to the entire hybrid contract.
If a host that is not a financial asset and the hybrid contract is not measured at fair value with
changes in fair value recognized in profit or loss, and the economic characteristics and risks of the
embedded derivative are not closely related to the economic characteristics and risks of the host,
and a separate instrument with the same terms as the embedded derivative would meet the
definition of a derivative, the embedded derivative shall be separated from the hybrid instrument
and accounted for as a separate derivative instrument. If the Company is unable to measure the fair
value of the embedded derivative at the acquisition date or subsequently at the balance sheet date,
the entire hybrid contract is designated as financial assets or financial liabilities at fair value through
profit or loss.
(5) Impairment of financial instrument
The Company shall recognize a loss allowance based on expected credit losses on a financial asset
that is measured at amortized cost, a debt investment at fair value through other comprehensive
income, a contract asset, a lease receivable, a loan commitment and a financial guarantee contract.
(i) Measurement of expected credit losses
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Expected credit losses are the weighted average of credit losses of the financial instruments with the
respective risks of a default occurring as the weights. Credit loss is the difference between all
contractual cash flows that are due to the Company in accordance with the contract and all the cash
flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original
effective interest rate or credit- adjusted effective interest rate for purchased or originated
credit-impaired financial assets.
Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of a financial instrument.
expected credit losses that result from default events on a financial instrument that are possible
within the 12 months after the reporting date (or the expected lifetime, if the expected life of a
financial instrument is less than 12 months).
At each reporting date, the Company classifies financial instruments into three stages and makes
provisions for expected credit losses accordingly. A financial instrument of which the credit risk has
not significantly increased since initial recognition is at stage 1. The Company shall measure the
loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.
A financial instrument with a significant increase in credit risk since initial recognition but is not
considered to be credit-impaired is at stage 2. The Company shall measure the loss allowance for
that financial instrument at an amount equal to the lifetime expected credit losses. A financial
instrument is considered to be credit-impaired as at the end of the Reporting Period is at stage 3.
The Company shall measure the loss allowance for that financial instrument at an amount equal to
the lifetime expected credit losses.
The Company may assume that the credit risk on a financial instrument has not increased
significantly since initial recognition if the financial instrument is determined to have low credit risk
at the reporting date and measure the loss allowance for that financial instrument at an amount equal
to 12-month expected credit losses.
For financial instrument at stage 1, stage 2 and those have low credit risk, the interest revenue shall
be calculated by applying the effective interest rate to the gross carrying amount of a financial asset
(i.e. impairment loss not been deducted). For financial instrument at stage 3, interest revenue shall
be calculated by applying the effective interest rate to the amortized cost after deducting of
impairment loss.
For notes receivable, accounts receivable and accounts receivable financing, no matter it contains a
significant financing component or not, the Company shall measure the loss allowance at an amount
equal to the lifetime expected credit losses.
A. Receivables/Contract assets
For the notes receivable, accounts receivable, other receivables, accounts receivable financing and
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long-term receivables which are demonstrated to be impaired by any objective evidence, or
applicable for individual assessment, the Company shall individually assess for impairment and
recognize the loss allowance for expected credit losses. If the Company determines that no
objective evidence of impairment exists for notes receivable, accounts receivable, other receivables,
accounts receivable financing and long-term receivables, or the expected credit loss of a single
financial asset cannot be assessed at reasonable cost, such notes receivable, accounts receivable,
other receivables, accounts receivable financing and long-term receivables shall be divided into
several groups with similar credit risk characteristics and collectively calculated the expected credit
loss. The determination basis of groups is as following:
Determination basis of notes receivable is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group, the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate, taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.
Determination basis of accounts receivable is as following:
Group 1: Related parties within the scope of consolidation
Group 2: Receivables due from third parties
For each group, the Company calculates expected credit losses through preparing an aging analysis
schedule with the lifetime expected credit losses rate, taking reference to historical experience for
credit losses and considering current condition and expectation for the future economic situation.
Determination basis of other receivables is as following:
Group 1: Related parties within the scope of consolidation
Group 2: Receivables due from third parties
For each group, the Company calculates expected credit losses through default exposure and the
losses and considering current condition and expectation for the future economic situation.
Determination basis of accounts receivable financing is as following:
Group 1: Commercial acceptance bills
Group 2: Bank acceptance bills
For each group, the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate, taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.
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Determination basis of contract assets is as following:
Group 1: Project construction
Group 2: Undue warranty
For each group, the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate, taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.
Determination basis of long-term receivables financing is as following:
Group 1: Project receivables, lease receivables
Group 2: Others
For group 1, the Company calculates expected credit losses through default exposure and the
lifetime expected credit losses rate, taking reference to historical experience for credit losses and
considering current condition and expectation for the future economic situation.
For group 2, the Company calculates expected credit losses through default exposure and the
losses and considering current condition and expectation for the future economic situation.
The Company’s aging calculation method of credit risk characteristic combination based on aging is
as follows:
Aging Accounts receivable provision ratio Other receivables provision ratio
Within 6 months 1% 1%
Over 3 years 100% 100%
B. Debt investment and other debt investment
For debt investment and other debt investment, the Company shall calculate the expected credit loss
through the default exposure and the 12-month or lifetime expected credit loss rate based on the
nature of the investment, counterparty and the type of risk exposure.
(ii) Low credit risk
If the financial instrument has a low risk of default, the borrower has a strong capacity to meet its
contractual cash flow obligations in the near term and adverse changes in economic and business
conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to
fulfill its contractual cash flow obligations.
(iii) Significant increase in credit risk
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The Company shall assess whether the credit risk on a financial instrument has increased
significantly since initial recognition, using the change in the risk of a default occurring over the
expected life of the financial instrument, through the comparison of the risk of a default occurring
on the financial instrument as at the reporting date with the risk of a default occurring on the
financial instrument as at the date of initial recognition.
To make that assessment, the Company shall consider reasonable and supportable information, that
is available without undue cost or effort, and that is indicative of significant increases in credit risk
since initial recognition, including forward-looking information. The information considered by the
Company are as following:
A. Significant changes in internal price indicators of credit risk as a result of a change in credit risk since
inception
B. Existing or forecast adverse change in the business, financial or economic conditions of the borrower that
results in a significant change in the borrower’s ability to meet its debt obligations;
C. An actual or expected significant change in the operating results of the borrower; An actual or expected
significant adverse change in the regulatory, economic, or technological environment of the borrower;
D. Significant changes in the value of the collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements, which are expected to reduce the borrower’s economic incentive to make
scheduled contractual payments or to otherwise influence the probability of a default occurring;
E. Significant change that are expected to reduce the borrower’s economic incentive to make scheduled
contractual payments;
F. Expected changes in the loan documentation including an expected breach of contract that may lead to
covenant waivers or amendments, interest payment holidays, interest rate step-ups, requiring additional
collateral or guarantees, or other changes to the contractual framework of the instrument;
G. Significant changes in the expected performance and behavior of the borrower;
H. Contractual payments are more than 30 days past due.
Depending on the nature of the financial instruments, the Company shall assess whether the credit
risk has increased significantly since initial recognition on an individual financial instrument or a
group of financial instruments. When assessed based on a group of financial instruments, the
Company can group financial instruments on the basis of shared credit risk characteristics, for
example, past due information and credit risk rating.
Generally, the Company shall determine the credit risk on a financial asset has increased
significantly since initial recognition when contractual payments are more than 30 days past due.
The Company can only rebut this presumption if the Company has reasonable and supportable
information that is available without undue cost or effort, that demonstrates that the credit risk has
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not increased significantly since initial recognition even though the contractual payments are more
than 30 days past due.
(iv) Credit-impaired financial asset
The Company shall assess at each reporting date whether the credit impairment has occurred for
financial asset at amortized cost and debt investment at fair value through other comprehensive
income. A financial asset is credit-impaired when one or more events that have a detrimental impact
on the estimated future cash flows of that financial asset have occurred. Evidences that a financial
asset is credit-impaired include observable data about the following events:
Significant financial difficulty of the issuer or the borrower; a breach of contract, such as a default
or past due event; the lender(s) of the borrower, for economic or contractual reasons relating to the
borrower’s financial difficulty, having granted to the borrower a concession(s) that the lender(s)
would not otherwise consider; it is becoming probable that the borrower will enter bankruptcy or
other financial reorganization; the disappearance of an active market for that financial asset because
of financial difficulties; the purchase or origination of a financial asset at a deep discount that
reflects the incurred credit losses.
(v) Presentation of impairment of expected credit loss
In order to reflect the changes of credit risk of financial instrument since initial recognition, the
Company shall at each reporting date remeasure the expected credit loss and recognize in profit or
loss, as an impairment gain or loss, the amount of expected credit losses addition (or reversal). For
financial asset at amortized cost, the loss allowance shall reduce the carrying amount of the
financial asset in the statement of financial position; for debt investment at fair value through other
comprehensive income, the loss allowance shall be recognized in other comprehensive income and
shall not reduce the carrying amount of the financial asset in the statement of financial position.
(vi) Write-off
The Company shall directly reduce the gross carrying amount of a financial asset when the
Company has no reasonable expectations of recovering the contractual cash flow of a financial asset
in its entirety or a portion thereof. Such write-off constitutes a derecognition of the financial asset.
This circumstance usually occurs when the Company determines that the debtor has no assets or
sources of income that could generate sufficient cash flow to repay the write-off amount.
Recovery of financial asset written off shall be recognized in profit or loss as reversal of impairment
loss.
(6) Transfer of financial assets
Transfer of financial assets refers to following two situations:
A. Transfers the contractual rights to receive the cash flows of the financial asset;
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B. Transfers the entire or a part of a financial asset and retains the contractual rights to receive the cash flows of
the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
(i) Derecognition of transferred assets
If the Company transfers substantially all the risks and rewards of ownership of the financial asset,
or neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset but has not retained control of the financial asset, the financial asset shall be derecognized.
Whether the Company has retained control of the transferred asset depends on the transferee’s
ability to sell the asset. If the transferee has the practical ability to sell the asset in its entirety to an
unrelated third party and is able to exercise that ability unilaterally and without needing to impose
additional restrictions on the transfer, the Company has not retained control.
The Company judges whether the transfer of financial asset qualifies for derecognition based on the
substance of the transfer.
If the transfer of financial asset qualifies for derecognition in its entirety, the difference between the
following shall be recognized in profit or loss:
A. The carrying amount of transferred financial asset;
B. The sum of consideration received and the part derecognized of the cumulative changes in fair value
previously recognized in other comprehensive income (The financial assets involved in the transfer are
classified as financial assets at fair value through other comprehensive income in accordance with Article 18
of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial
Instruments).
If the transferred asset is a part of a larger financial asset and the part transferred qualifies for
derecognition, the previous carrying amount of the larger financial asset shall be allocated between
the part that continues to be recognized (For this purpose, a retained servicing asset shall be treated
as a part that continues to be recognized) and the part that is derecognized, based on the relative fair
values of those parts on the date of the transfer. The difference between following two amounts shall
be recognized in profit or loss:
A. The carrying amount (measured at the date of derecognition) allocated to the part derecognized;
B. The sum of the consideration received for the part derecognized and part derecognized of the cumulative
changes in fair value previously recognized in other comprehensive income (The financial assets involved in
the transfer are classified as financial assets at fair value through other comprehensive income in accordance
with Article 18 of the Accounting Standards for Business Enterprises No.22 - Recognition and Measurement
of Financial Instruments).
(ii) Continuing involvement in transferred assets
If the Company neither transfers nor retains substantially all the risks and rewards of ownership of a
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transferred asset, and retains control of the transferred asset, the Company shall continue to
recognize the transferred asset to the extent of its continuing involvement and also recognize an
associated liability.
The extent of the Company’s continuing involvement in the transferred asset is the extent to which
it is exposed to changes in the value of the transferred asset
(iii) Continue to recognize the transferred assets
If the Company retains substantially all the risks and rewards of ownership of the transferred
financial asset, the Company shall continue to recognize the transferred asset in its entirety and the
consideration received shall be recognized as a financial liability.
The financial asset and the associated financial liability shall not be offset. In subsequent
accounting period, the Company shall continuously recognize any income (gain) arising from the
transferred asset and any expense (loss) incurred on the associated liability.
(7) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be presented separately in the statement of financial
position and shall not be offset. When meets the following conditions, financial assets and financial
liabilities shall be offset and the net amount presented in the statement of financial position:
The Company currently has a legally enforceable right to set off the recognized amounts;
The Company intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
In accounting for a transfer of a financial asset that does not qualify for derecognition, the Company
shall not offset the transferred asset and the associated liability.
(8) Determination of fair value of financial instruments
Determination of fair value of financial assets and financial liabilities please refer to Note 3.11.
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date.
The Company determines fair value of the related assets and liabilities based on market value in the
principal market, or in the absence of a principal market, in the most advantageous market price for
the related asset or liability. The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the asset or liability, assuming that
market participants act in their economic best interest.
The principal market is the market in which transactions for an asset or liability take place with the
greatest volume and frequency. The most advantageous market is the market which maximizes the
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value that could be received from selling the asset and minimizes the value which is needed to be
paid in order to transfer a liability, considering the effect of transport costs and transaction costs
both.
If the active market of the financial asset or financial liability exists, the Company shall measure the
fair value using the quoted price in the active market. If the active market of the financial
instrument is not available, the Company shall measure the fair value using valuation techniques.
A fair value measurement of a non-financial asset takes into account a market participant’s ability
to generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
(i) Valuation techniques
The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, including the market approach, the income
approach and the cost approach. The Company shall use valuation techniques consistent with one or
more of those approaches to measure fair value. If multiple valuation techniques are used to
measure fair value, the results shall be evaluated considering the reasonableness of the range of
values indicated by those results. A fair value measurement is the point within that range that is
most representative of fair value in the circumstances.
When using the valuation technique, the Company shall give the priority to relevant observable
inputs. The unobservable inputs can only be used when relevant observable inputs is not available
or practically would not be obtained. Observable inputs refer to the information which is available
from market and reflects the assumptions that market participants would use when pricing the asset
or liability. Unobservable Inputs refer to the information which is not available from market and it
has to be developed using the best information available in the circumstances from the assumptions
that market participants would use when pricing the asset or liability.
(ii) Fair value hierarchy
To Company establishes a fair value hierarchy that categorizes into three levels the inputs to
valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority
to Level 1 inputs and second to the Level 2 inputs and the lowest priority to Level 3 inputs. Level 1
inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date. Level 2 inputs are inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
(1) Classification of inventories
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Inventories are finished goods or products held for sale in the ordinary course of business, in the
process of production for such sale, or in the form of materials or supplies to be consumed in the
production process or in the rendering of services, including raw materials, work in progress,
semi-finished goods, finished goods, goods in stock, turnover material, etc.
(2) Measurement method of cost of inventories sold or used
Inventories are measured at actual cost at recognition. The actual cost of an item of inventories
comprises the purchase cost, cost of processing and other costs. The cost of inventories used or sold
is determined on the weighted average basis.
(3) Inventory system
The perpetual inventory system is adopted. The inventories should be counted at least once a year,
and surplus or losses of inventory stocktaking shall be included in current profit and loss.
(4) Recognition criteria and provision for impairment of inventory
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net
realizable value of the inventories is recognized as provision for impairment of inventory, and
recognized in current profit or loss.
Net realizable value of the inventory should be determined on the basis of reliable evidence
obtained, and factors such as purpose of holding the inventory and impact of post balance sheet
event shall be considered.
(i) In normal operation process, finished goods, products and materials for direct sale, their net
realizable values are determined at estimated selling prices less estimated selling expenses and
relevant taxes and surcharges; for inventories held to execute sales contract or service contract, their
net realizable values are calculated on the basis of contract price. If the quantities of inventories
specified in sales contracts are less than the quantities held by the Company, the net realizable value
of the excess portion of inventories shall be based on general selling prices. Net realizable value of
materials held for sale shall be measured based on market price.
(ii) For materials in stock need to be processed, in the ordinary course of production and business,
net realizable value is determined at the estimated selling price less the estimated costs of
completion, the estimated selling expenses and relevant taxes. If the net realizable value of the
finished products produced by such materials is higher than the cost, the materials shall be
measured at cost; if a decline in the price of materials indicates that the cost of the finished products
exceeds its net realizable value, the materials are measured at net realizable value and differences
shall be recognized at the provision for impairment.
(iii) Provisions for inventory impairment are generally determined on an individual basis. For
inventories with large quantity and low unit price, the provisions for inventory impairment are
determined on group basis.
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(iv) If any factor rendering write-downs of the inventories has been eliminated at the reporting date,
the amounts written down are recovered and reversed to the extent of the inventory impairment,
which has been provided for. The reversal shall be included in profit or loss.
(5) Amortization method of low-value consumables
(i) Low-value consumables: One-off writing off method is adopted.
(ii) Package material: One-off writing off method is adopted.
The Company shall present contract assets or contract liabilities in the statement of financial
position, depending on the relationship between the Company’s satisfying a performance obligation
and the customer’s payment. A contract asset shall be presented if the Company has the right to
consideration in exchange for goods or services that the Company has transferred to a customer
when that right is conditioned on something other than the passage of time. A contract liability shall
be presented if the Company has the obligation to transfer goods or services to a customer for which
the Company has received consideration (or the amount is due) from the customer.
Method of determination and accounting for expected credit loss for contract assets please refer to
Note 3.10.
Contract assets and contract liabilities shall be presented separately in the statement of financial
position. The contract asset and contract liability for the same contract shall be presented on a net
basis. A net balance shall be listed in the item of “Contract assets” or “Other non-current assets”
according to its liquidity; a credit balance shall be listed in the item of “Contract liabilities” or
“Other non-current liabilities” according to its liquidity. Contract assets and contract liabilities for
different contracts cannot be offset.
Contract costs include costs to fulfill a contract and the costs to obtain a contract.
The Company shall recognize an asset from the costs incurred to fulfill a contract only if those costs
meet all of the following criteria:
(i) The costs relate directly to a contract or to an anticipated contract, including: direct labor, direct
materials, manufacturing costs (or similar costs), costs that are explicitly chargeable to the customer
under the contract and other costs that are incurred only because an entity entered into the contract;
(ii) The costs enhance resources of the Company that will be used in satisfying performance
obligations in the future; and
(iii) The costs are expected to be recovered.
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The incremental costs of obtaining a contract shall be recognized as an asset if the Company
expects to recover them.
An asset related to contract costs shall be amortized on a systematic basis that is consistent with the
revenue recognition of the goods or services to which the asset relates. The Company recognizes the
contract acquisition costs as an expense when incurred if the amortization period of the asset that
the Company otherwise would have recognized is one year or less.
The Company shall accrue the provision for impairment, recognize an impairment loss in profit or
loss to the extent that the carrying amount of an asset related to the contract cost exceeds the
difference of below two items, and further consider whether the estimated liability related to the
onerous contract needs to be accrued:
(i) The remaining amount of consideration that the Company expects to receive in exchange for the
goods or services to which the asset relates; less
(ii) The costs that relate directly to providing those goods or services and that have not been
recognized as expenses.
The Company shall recognize in profit or loss a reversal of some or all of an impairment loss
previously recognized when the impairment conditions no longer exist or have improved. The
increased carrying amount of the asset shall not exceed the amount that would have been
determined (net of amortization) if no impairment loss had been recognized previously.
Providing that the costs to fulfill a contract satisfy the requirement to be recognized as an asset, the
Company shall present them in the account “Inventory” if the contract has an original expected
duration of one year (or a normal operating cycle) or less, or in the account “Other non-current
assets” if the contract has an original expected duration of more than one year (or a normal
operating cycle).
Providing that the costs to obtain a contract satisfy the requirement to be recognized as an asset, the
Company shall present them in the account “Other current asset” if the contract has an original
expected duration of one year (or a normal operating cycle) or less, or in the account “Other
non-current assets” if the contract has an original expected duration of more than one year (or a
normal operating cycle).
Long-term equity investments refer to equity investments where an investor has control of, or
significant influence over, an investee, as well as equity investments in joint ventures. Associates of
the Company are those entities over which the Company has significant influence.
(1) Determination basis of joint control or significant influence over the investee
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Joint control is the relevant agreed sharing of control over an arrangement, and the arranged
relevant activity must be decided under unanimous consent of the parties sharing control. In
assessing whether the Company has joint control of an arrangement, the Company shall assess first
whether all the parties, or a group of the parties, control the arrangement. When all the parties, or a
group of the parties, considered collectively, are able to direct the activities of the arrangement, the
parties control the arrangement collectively. Then the Company shall assess whether decisions
about the relevant activities require the unanimous consent of the parties that collectively control
the arrangement. If two or more groups of the parties could control the arrangement collectively, it
shall not be assessed as have joint control of the arrangement. When assessing the joint control, the
protective rights are not considered.
Significant influence is the power to participate in the financial and operating policy decisions of
the investee but is not control or joint control of those policies. In determination of significant
influence over an investee, the Company should consider not only the existing voting rights directly
or indirectly held but also the effect of potential voting rights held by the Company and other
entities that could be currently exercised or converted, including the effect of share warrants, share
options and convertible corporate bonds that issued by the investee and could be converted in
current period.
If the Company holds, directly or indirectly 20% or more but less than 50% of the voting power of
the investee, it is presumed that the Company has significant influence of the investee, unless it can
be clearly demonstrated that in such circumstance, the Company cannot participate in the
decision-making in the production and operating of the investee.
(2) Determination of initial investment cost
(i) Long-term equity investments generated in business combinations
(A) For a business combination involving enterprises under common control, if the Company
makes payment in cash, transfers non-cash assets or bears liabilities as the consideration for the
business combination, the share of carrying amount of the owners’ equity of the acquiree in the
consolidated financial statements of the ultimate controlling party is recognized as the initial cost of
the long-term equity investment on the combination date. The difference between the initial
investment cost and the carrying amount of cash paid, non-cash assets transferred and liabilities
assumed shall be adjusted against the capital reserve; if capital reserve is not enough to be offset,
undistributed profit shall be offset in turn.
(B) For a business combination involving enterprises under common control, if the Company issues
equity securities as the consideration for the business combination, the share of carrying amount of
the owners’ equity of the acquiree in the consolidated financial statements of the ultimate
controlling party is recognized as the initial cost of the long-term equity investment on the
combination date. The total par value of the shares issued is recognized as the share capital. The
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difference between the initial investment cost and the carrying amount of the total par value of the
shares issued shall be adjusted against the capital reserve; if capital reserve is not enough to be
offset, undistributed profit shall be offset in turn.
(C) For business combination not under common control, the assets paid, liabilities incurred or
assumed and the fair value of equity securities issued to obtain the control of the acquiree at the
acquisition date shall be determined as the cost of the business combination and recognized as the
initial cost of the long-term equity investment. The audit, legal, valuation and advisory fees, other
intermediary fees, and other relevant general administrative costs incurred for the business
combination, shall be recognized in profit or loss as incurred.
(ii) Long-term equity investments acquired not through the business combination, the investment
cost shall be determined based on the following requirements:
(A) For long-term equity investments acquired by payments in cash, the initial cost is the actually
paid purchase cost, including the expenses, taxes and other necessary expenditures directly related
to the acquisition of long-term equity investments;
(B) For long-term equity investments acquired through issuance of equity securities, the initial cost
is the fair value of the issued equity securities;
(C) For the long-term equity investments obtained through exchange of non-monetary assets, if the
exchange has commercial substance, and the fair values of assets traded out and traded in can be
measured reliably, the initial cost of long-term equity investment traded in with non-monetary
assets are determined based on the fair values of the assets traded out together with relevant taxes.
Difference between fair value and book value of the assets traded out is recorded in current profit or
loss. If the exchange of non-monetary assets does not meet the above criterion, the book value of
the assets traded out and relevant taxes are recognized as the initial investment cost;
(D) For long-term equity investment acquired through debt restructuring, the initial cost is
determined based on the fair value of the equity obtained and the difference between initial
investment cost and carrying amount of debts shall be recorded in current profit or loss.
(3) Subsequent measurement and recognition of profit or loss
Long-term equity investment to an entity over which the Company has ability of control shall be
accounted for at cost method. Long-term equity investment to a joint venture or an associate shall
be accounted for at equity method.
(i) Cost method
For Long-term equity investment at cost method, cost of the long-term equity investment shall be
adjusted when additional amount is invested or a part of it is withdrawn. The Company recognizes
its share of cash dividends or profits which have been declared to distribute by the investee as
current investment income.
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(ii) Equity method
The general accounting treatment for long-term equity investments accounted for using the equity
method is as follows:
If the initial cost of the investment is in excess of the share of the fair value of the net identifiable
assets in the investee at the date of investment, the difference shall not be adjusted to the initial cost
of long-term equity investment; if the initial cost of the investment is in short of the share of the fair
value of the net identifiable assets in the investee at the date investment, the difference shall be
included in the current profit or loss and the initial cost of the long-term equity investment shall be
adjusted accordingly.
The Company recognizes the share of the investee’s net profits or losses, as well as its share of the
investee’s other comprehensive income, as investment income or losses and other comprehensive
income respectively, and adjusts the carrying amount of the investment accordingly. The carrying
amount of the investment shall be reduced by the share of any profit or cash dividends declared to
distribute by the investee. The investor’s share of the investee’s owners’ equity changes, other than
those arising from the investee’s net profit or loss, other comprehensive income or profit
distribution, shall be recognized in the investor’s equity, and the carrying amount of the long-term
equity investment shall be adjusted accordingly. The Company recognizes its share of the investee’s
net profits or losses after making appropriate adjustments of investee’s net profit based on the fair
values of the investee’s identifiable net assets at the investment date. If the accounting policy and
accounting period adopted by the investee is not in consistency with the Company, the financial
statements of the investee shall be adjusted according to the Company’s accounting policies and
accounting period, based on which, investment income or loss and other comprehensive income,
etc., shall be adjusted. The unrealized profits or losses resulting from inter-company transactions
between the company and its associate or joint venture are eliminated in proportion to the
Company’s equity interest in the investee, based on which investment income or losses shall be
recognized. Any losses resulting from inter-company transactions between the investor and the
investee, which belong to asset impairment, shall be recognized in full.
Where the Company obtains the power of joint control or significant influence, but not control, over
the investee, due to additional investment or other reason, the relevant long-term equity investment
shall be accounted for by using the equity method, initial cost of which shall be the fair value of the
original investment plus the additional investment. Where the original investment is classified as
other equity investment, difference between its fair value and the carrying value, in addition to the
cumulative changes in fair value previously recorded in other comprehensive income, shall be
recognized into retained earnings of the period of using equity method.
If the Company loses the joint control or significant influence of the investee for some reasons such
as disposal of equity investment, the retained interest shall be measured at fair value and the
difference between the carrying amount and the fair value at the date of loss the joint control or
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significant influence shall be recognized in profit or loss. When the Company discontinues the use
of the equity method, the Company shall account for all amounts previously recognized in other
comprehensive income under equity method in relation to that investment on the same basis as
would have been required if the investee had directly disposed of the related assets or liabilities.
(4) Equity investment classified as held for sale
Any retained interest in the equity investment not classified as held for sale, shall be accounted for
using equity method.
When an equity investment in an associate or a joint venture previously classified as held for sale
no longer meets the criteria to be so classified, it shall be accounted for using the equity method
retrospectively as from the date of its classification as held for sale. Financial statements for the
periods since classification as held for sale shall be amended accordingly.
(5) Impairment testing and provision for impairment loss
For investment in subsidiaries, associates or a joint ventures, provision for impairment loss please
refer to Note 3.22.
(1) Classification of investment properties
Investment properties are properties to earn rentals or for capital appreciation or both, including:
(i) Land use right leased out
(ii) Land held for transfer upon appreciation
(iii) Buildings leased out
(2) The measurement model of investment property
The Company adopts the cost model for subsequent measurement of investment properties. For
provision for impairment please refer to Note 3.22.
The Company calculates the depreciation or amortization based on the net amount of investment
property cost less the accumulated impairment and the net residual value using straight-line method.
The estimated useful life and annual depreciation rates which are determined according to the
categories, estimated economic useful lives and estimated net residual rates are listed as followings:
Estimated useful life
Category Residual rates (%) Annual depreciation rates (%)
(year)
Buildings and constructions 10.00-30.00 3.00-5.00 3.17-9.70
Land use right 40.00-50.00 0.00 2.00-2.50
Fixed assets refer to the tangible assets with higher unit price held for the purpose of producing
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commodities, rendering services, renting or business management with useful lives exceeding one
year.
(1) Recognition criteria of fixed assets
Fixed assets will only be recognized at the actual cost paid when obtaining as all the following
criteria are satisfied:
(i) It is probable that the economic benefits relating to the fixed assets will flow into the Company;
(ii) The costs of the fixed assets can be measured reliably.
Subsequent expenditure for fixed assets shall be recorded in cost of fixed assets, if recognition
criteria of fixed assets are satisfied, otherwise the expenditure shall be recorded in current profit or
loss when incurred.
(2) Depreciation methods of fixed assets
The Company begins to depreciate the fixed asset from the next month after it is available for
intended use using the straight-line-method. The estimated useful life and annual depreciation rates
which are determined according to the categories, estimated economic useful lives and estimated
net residual rates of fixed assets are listed as followings:
Estimated useful life Annual depreciation
Category Depreciation method Residual rates (%)
(year) rates (%)
Buildings and
straight-line-method 8.00-35.00 3.00-5.00 2.71-12.13
constructions
Machinery equipment straight-line-method 8.00-10.00 3.00-5.00 9.50-12.13
Transportation vehicles straight-line-method 4.00 3.00 24.25
Administrative and other
straight-line-method 3.00-20.00 3.00 4.85-32.33
devices
For the fixed assets with impairment provided, the impairment provision should be excluded from
the cost when calculating depreciation.
At the end of reporting period, the Company shall review the useful life, estimated net residual
value and depreciation method of the fixed assets. Estimated useful life of the fixed assets shall be
adjusted if it is changed compared to the original estimation.
(1) Classification of construction in progress
(2) Recognition criteria and timing of transfer from construction in progress to fixed assets
The initial book values of the fixed assets are stated at total expenditures incurred before they are
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ready for their intended use, including construction costs, original price of machinery equipment,
other necessary expenses incurred to bring the construction in progress to get ready for its intended
use and borrowing costs of the specific loan for the construction or the proportion of the general
loan used for the constructions incurred before they are ready for their intended use. The
construction in progress shall be transferred to fixed asset when the installation or construction is
ready for the intended use. For construction in progress that has been ready for their intended use
but relevant budgets for the completion of projects have not been completed, the estimated values of
project budgets, prices, or actual costs should be included in the costs of relevant fixed assets, and
depreciation should be provided according to relevant policies of the Company when the fixed
assets are ready for intended use. After the completion of budgets needed for the completion of
projects, the estimated values should be substituted by actual costs, but depreciation already
provided is not adjusted.
The specific criteria and timing of transfer to fixed assets for the Company’s different categories of
construction in progress items:
category The specific criteria and timing of transfer to fixed assets
(1) The main construction project and supporting projects have been substantially completed;
(2) After the construction project meets the predetermined design requirements, it shall be inspected and
accepted by the survey, design, construction, supervision and other units, and inspected and accepted by
Houses and buildings the local construction authorities and other relevant units;
(3) If the construction project has reached the predetermined serviceability state but has not yet
completed the final accounts, it shall be transferred to the fixed assets at the estimated value according
to the actual cost of the project from the date of reaching the predetermined serviceability state.
(1) Relevant equipment and other supporting facilities have been installed;
(2) After debugging, the equipment can maintain normal and stable operation for a period of time, and
Equipment to be installed the production equipment can produce qualified products stably in a period of time;
and debugged (3) The equipment management department shall conduct joint inspection with the asset use department,
safety management Department, emergency Department, environmental Protection Department and
other departments.
At the lease commencement date, a right-of-use asset is measured at cost. The cost of a right-of-use
asset comprise:
(1) The amount of the initial measurement of the lease liability;
(2) Any lease payments made at or before the commencement date, less any lease incentives
received;
(3) Any initial direct costs incurred by the Group; and
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(4) An estimate of costs to be incurred by the Group in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease, unless those costs are incurred to produce
inventories.
A right-of-use asset is subsequently measured at cost. If it is reasonably certain that ownership of
the lease item will transfer to the Group upon expiration of the lease, the leased item is depreciated
over its useful life; if, however, transfer of ownership of the leased item upon expiration of the lease
to the Group cannot be reasonably expected, the leased item is depreciated over the shorter of its
useful life and the lease term. Where a leased item has recorded impairment, its residual value after
deducting the impairment allowance is depreciated in accordance the principle described in this
paragraph.
(1) Recognition criteria and period for capitalization of borrowing costs
The Company shall capitalize the borrowing costs that are directly attributable to the acquisition,
construction or production of qualifying assets when meet the following conditions:
(i) Expenditures for the asset are being incurred;
(ii) Borrowing costs are being incurred, and;
(iii) Acquisition, construction or production activities that are necessary to prepare the assets for
their intended use or sale are in progress.
Other borrowing cost, discounts or premiums on borrowings and exchange differences on foreign
currency borrowings shall be recognized into current profit or loss when incurred.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction
or production of a qualifying asset is interrupted abnormally and the interruption is for a continuous
period of more than 3 months.
Capitalization of such borrowing costs ceases when the qualifying assets being acquired,
constructed or produced become ready for their intended use or sale. The expenditure incurred
subsequently shall be recognized as expenses when incurred.
(2) Capitalization rate and measurement of capitalized amounts of borrowing costs
When funds are borrowed specifically for purchase, construction or manufacturing of assets eligible
for capitalization, the Company shall determine the amount of borrowing costs eligible for
capitalization as the actual borrowing costs incurred on that borrowing during the period less any
interest income on bank deposit or investment income on the temporary investment of those
borrowings.
Where funds allocated for purchase, construction or manufacturing of assets eligible for
capitalization are part of a general borrowing, the eligible amounts are determined by the
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weighted-average of the cumulative capital expenditures in excess of the specific borrowing
multiplied by the general borrowing capitalization rate. The capitalization rate will be the weighted
average of the borrowing costs applicable to the general borrowing.
(1) Measurement method of intangible assets
Intangible assets are recognized at actual cost at acquisition.
(2) The useful life and amortization of intangible assets
(i) The estimated useful lives of the intangible assets with finite useful lives are as follows:
Category Estimated useful life Basis
Land use right 40-50 years Legal life
The service life is determined by reference to the period that can
Patents 10 years
bring economic benefits to the Company
The service life is determined by reference to the period that can
Software 3-5 years
bring economic benefits to the Company
The service life is determined by reference to the period that can
Trademarks 10 years
bring economic benefits to the Company
For intangible assets with finite useful life, the estimated useful life and amortization method are
reviewed annually at the end of each reporting period and adjusted when necessary. No change has
incurred in current year in the estimated useful life and amortization method upon review.
(ii) Assets of which the period to bring economic benefits to the Company are unforeseeable are regarded as
intangible assets with indefinite useful lives. The Company reassesses the useful lives of those assets at every year
end. If the useful lives of those assets are still indefinite, impairment test should be performed on those assets at
the balance sheet date.
(iii) Amortization of the intangible assets
For intangible assets with finite useful lives, their useful lives should be determined upon their acquisition and
systematically amortized on a straight-line basis [units of production method] over the useful life. The
amortization amount shall be recognized into current profit or loss or the relevant asset cost according to the
beneficial items. The amount to be amortized is cost deducting residual value. For intangible assets which has
impaired, the cumulative impairment provision shall be deducted as well. The residual value of an intangible asset
with a finite useful life shall be assumed to be zero unless: there is a commitment by a third party to purchase the
asset at the end of its useful life; or there is an active market for the asset and residual value can be determined by
reference to that market; and it is probable that such a market will exist at the end of the asset’s useful life.
Intangible assets with indefinite useful lives shall not be amortized. The Company reassesses the useful lives of
those assets at every year end. If there is evidence to indicate that the useful lives of those assets become finite,
the useful lives shall be estimated and the intangible assets shall be amortized systematically and reasonably
within the estimated useful lives.
(3) Scope of research and development expenditures
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The Company classifies the expenses directly related to research and development activities as research and
development expenditures, including remuneration of research and development staff, direct material,
depreciation cost and long-term amortized expense, design fee, equipment commissioning fee, intangible assets
amortization cost, outsourcing research and development cost, and other expenses, etc.
(4) Criteria of classifying expenditures on internal research and development projects into
research phase and development phase
(i) Preparation activities related to materials and other relevant aspects undertaken by the Company for the
purpose of further development shall be treated as research phase. Expenditures incurred during the research
phase of internal research and development projects shall be recognized in profit or loss when incurred.
(ii) Development activities after the research phase of the Company shall be treated as development phase.
(5) Criteria for capitalization of qualifying expenditures during the development phase
Expenditures arising from development phase on internal research and development projects shall be recognized
as intangible assets only if all of the following conditions have been met:
A. Technical feasibility of completing the intangible assets so that they will be available for use or sale;
B. Its intention to complete the intangible asset and use or sell it;
C. The method that the intangible assets generate economic benefits, including the Company can demonstrate the
existence of a market for the output of the intangible assets or the intangible assets themselves or, if it is to be used
internally, the usefulness of the intangible assets;
D. The availability of adequate technical, financial and other resources to complete the development and to use or
sell the intangible asset; and
E. Its ability to measure reliably the expenditure attributable to the intangible asset.
Impairment loss of long-term equity investment in subsidiaries, associates and joint ventures, investment
properties, fixed assets, constructions in progress, and intangible assets subsequently measured at cost shall be
determined according to following method:
The Company shall assess at the end of each reporting period whether there is any indication that an asset may be
impaired. If any such indication exists, the Company shall estimate the recoverable amount of the asset and test
for impairment. Irrespective of whether there is any indication of impairment, the Company shall test for
impairment of goodwill acquired in a business combination, intangible assets with an indefinite useful life or
intangible assets not yet available for use annually.
The recoverable amounts of the long-term assets are the higher of their fair values less costs to dispose and the
present values of the estimated future cash flows of the long-term assets. The Company estimate the recoverable
amounts on an individual basis. If it is difficult to estimate the recoverable amount of the individual asset, the
Company estimates the recoverable amount of the groups of assets that the individual asset belongs to.
Identification of a group of asset is based on whether the cash inflows from it are largely independent of the cash
inflows from other assets or groups of assets.
If, and only if, the recoverable amount of an asset or a group of assets is less than its carrying amount, the carrying
amount of the asset shall be reduced to its recoverable amount and the provision for impairment loss shall be
recognized accordingly.
For the purpose of impairment testing, goodwill acquired in a business combination shall, from the acquisition
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date, be allocated to relevant group of assets based on reasonable method; if it is difficult to allocate to relevant
group of assets, good will shall be allocated to relevant combination of asset groups. The relevant group of assets
or combination of asset groups is a group of assets or combination of asset groups that is benefit from the
synergies of the business combination and is not larger than the reporting segment determined by the Company.
When test for impairment, if there is an indication that relevant group of assets or combination of asset groups
may be impaired, impairment testing for group of assets or combination of asset groups excluding goodwill shall
be conducted first, and the recoverable amount shall be then calculated and the impairment loss shall be
recognized accordingly. Then the group of assets or combination of asset groups including goodwill shall be tested
for impairment, by comparing the carrying amount with its recoverable amount. If the recoverable amount is less
than the carrying amount, the Company shall recognize the impairment loss.
The mentioned impairment loss will not be reversed in subsequent accounting period once it had been recognized.
Long-term deferred expenses are various expenses already incurred, which shall be amortized over
current and subsequent periods with the amortization period exceeding one year.
Employee benefits refer to all forms of consideration or compensation given by the Company in
exchange for service rendered by employees or for the termination of employment relationship.
Employee benefits include short-term employee benefits, post-employment benefits, termination
benefits and other long-term employee benefits. Benefits provided to an employee’s spouse,
children, dependents, family members of decreased employees, or other beneficiaries are also
employee benefits.
According to liquidity, employee benefits are presented in the statement of financial position as
“Employee benefits payable” and “Long-term employee benefits payable”.
(1) Short-term employee benefits
(i) Employee basic salary (salary, bonus, allowance, subsidy)
The Company recognizes, in the accounting period in which an employee provides service, actually
occurred short-term employee benefits as a liability, with a corresponding charge to current profit
except for those recognized as capital expenditure based on the requirement of accounting
standards.
(ii) Employee welfare
The Company shall recognize the employee welfare based on actual amount when incurred into
current profit or loss or related capital expenditure. Employee welfare shall be measured at fair
value as it is a non-monetary benefits.
(iii) Social insurance such as medical insurance, work injury insurance and maternity insurance,
housing funds, labor union fund and employee education fund
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Payments made by the Company of social insurance for employees, such as medical insurance,
work injury insurance and maternity insurance, payments of housing funds, and labor union fund
and employee education fund accrued in accordance with relevant requirements, in the accounting
period in which employees provide services, is calculated according to required accrual bases and
accrual ratio in determining the amount of employee benefits and the related liabilities, which shall
be recognized in current profit or loss or the cost of relevant asset.
(iv) Short-term paid absences
The company shall recognize the related employee benefits arising from accumulating paid
absences when the employees render service that increases their entitlement to future paid absences.
The additional payable amounts shall be measured at the expected additional payments as a result of
the unused entitlement that has accumulated. The Company shall recognize relevant employee
benefit of non-accumulating paid absences when the absences actually occurred.
(v) Short-term profit-sharing plan
The Company shall recognize the related employee benefits payable under a profit-sharing plan
when all of the following conditions are satisfied:
A. The Company has a present legal or constructive obligation to make such payments as a result of past events;
and
B. A reliable estimate of the amounts of employee benefits obligation arising from the profit- sharing plan can be
made.
(2) Post-employment benefits
(i) Defined contribution plans
The Company shall recognize, in the accounting period in which an employee provides service, the
contribution payable to a defined contribution plan as a liability, with a corresponding charge to the
current profit or loss or the cost of a relevant asset.
When contributions to a defined contribution plan are not expected to be settled wholly before
twelve months after the end of the annual reporting period in which the employees render the
related service, they shall be discounted using relevant discount rate (market yields at the end of the
Reporting Period on high quality corporate bonds in active market or government bonds with the
currency and term which shall be consistent with the currency and estimated term of the defined
contribution obligations) to measure employee benefits payable.
(ii) Defined benefit plan
A. The present value of defined benefit obligation and current service costs
Based on the expected accumulative welfare unit method, the Company shall make estimates about
demographic variables and financial variables in adopting the unbiased and consistent actuarial
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assumptions and measure defined benefit obligation, and determine the obligation period. The
Company shall discount the obligation arising from defined benefit plan using relevant discount rate
(market yields at the end of the Reporting Period on high quality corporate bonds in active market
or government bonds with the currency and term which shall be consistent with the currency and
estimated term of the defined benefit obligations) in order to determine the present value of the
defined benefit obligation and the current service cost.
B. The net defined benefit liability or asset
The net defined benefit liability (asset) is the deficit or surplus recognized as the present value of
the defined benefit obligation less the fair value of plan assets (if any).
When the Company has a surplus in a defined benefit plan, it shall measure the net defined benefit
asset at the lower of the surplus in the defined benefit plan and the asset ceiling.
C. The amount recognized in the cost of asset or current profit or loss
Service cost comprises current service cost, past service cost and any gain or loss on settlement.
Other service cost shall be recognized in profit or loss unless accounting standards require or allow
the inclusion of current service cost within the cost of assets.
Net interest on the net defined benefit liability (asset) comprising interest income on plan assets,
interest cost on the defined benefit obligation and interest on the effect of the asset ceiling, shall be
included in profit or loss.
D. The amount recognized in other comprehensive income
Changes in the net liability or asset of the defined benefit plan resulting from the remeasurements
including:
(a) Actuarial gains and losses, the changes in the present value of the defined benefit obligation resulting
from experience adjustments or the effects of changes in actuarial assumptions;
(b) Return on plan assets, excluding amounts included in net interest on the net defined benefit liability or
asset;
(c) Any change in the effect of the asset ceiling, excluding amounts included in net interest on the net defined
benefit liability (asset).
Remeasurements of the net defined benefit liability (asset) recognized in other comprehensive
income shall not be reclassified to profit or loss in a subsequent period. However, the Company
may transfer in full the portion originally recognized in other comprehensive income within equity
to undistributed profit, when the original defined benefit terminates.
(3) Termination benefits
The Company providing termination benefits to employees shall recognize an employee benefits
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liability for termination benefits, with a corresponding charge to the profit or loss of the Reporting
Period, at the earlier of the following dates:
(i) When the Company cannot unilaterally withdraw the offer of termination benefits because of an
employment termination plan or a curtailment proposal.
(ii) When the Company recognizes costs or expenses related to a restructuring that involves the
payment of termination benefits.
If the termination benefits are not expected to be settled wholly before twelve months after the end
of the annual reporting period, the Company shall discount the termination benefits using relevant
discount rate (market yields at the end of the Reporting Period on high quality corporate bonds in
active market or government bonds with the currency and term which shall be consistent with the
currency and estimated term of the defined benefit obligations) to measure the employee benefits.
(4) Other long-term employee benefits
(i) Meet the conditions of the defined contribution plan
When other long-term employee benefits provided by the Company to the employees satisfies the
conditions for classifying as a defined contribution plan, all those benefits payable shall be
accounted for as employee benefits payable at their discounted value.
(ii) Meet the conditions of the defined benefit plan
At the end of the Reporting Period, the Company recognized the cost of employee benefit from
other long-term employee benefits as the following components:
A. Service costs;
B. Net interest cost for net liability or asset of other long-term employee benefits
C. Changes resulting from the remeasurements of the net liability or asset of other long-term
employee benefits
In order to simplify the accounting treatment, the net amount of above items shall be recognized in
profit or loss or relevant cost of assets.
At the commencement date, the Group measures the lease liability at the present value of the lease
payments that are not paid at that date. The lease payments comprise:
(1) Fixed payments, or in-substance fixed payments, less any lease incentives receivable;
(2) Variable lease payments that depend on an index or a rate;
(3) The exercise price of a purchase option if the Group is reasonably certain to exercise that option;
(4) Payments of penalties for terminating the lease, if the lease term reflects the Group exercising an
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option to terminate the lease; and
(5) Amounts expected to be payable by the Group under residual value guarantees.
The lease payments shall be discounted using the interest rate implicit in the lease, if that rate can
be readily determined. If that rate cannot be readily determined, the lessee shall use the lessee’s
incremental borrowing rate. The excess of the lease payments over its present value is amortized
over the lease term as interest expenses using the discount rate. A variable lease payment which is
not included in the initial measurement of the lease liability is recognized in profit or loss when
incurred.
(1) Recognition
A provision is recognized for an obligation associated with a contingent event when the following
conditions are satisfied:
(i) The obligation is a present obligation assumed by the entity;
(ii) It is probable that fulfillment of the obligation will result in outflows of economic benefits from
the entity;
(iii) The amount of the obligation can be reliably measured.
(2) Measurement
A provision is initially measured at the best estimate of expenses required for the performance of
relevant present obligations. The Company, when determining the best estimate, has had a
comprehensive consideration of risks with respect to contingencies, uncertainties and the time value
of money. The carrying amount of the provision shall be reviewed at the end of every reporting
period. If conclusive evidences indicate that the carrying amount fails to be the best estimate of the
provision, the carrying amount shall be adjusted based on the updated best estimate.
(1) General principle
Revenue is defined as the gross inflow of economic benefits arising in the course of the ordinary
activities of the Company when those inflows result in the increases in shareholders’ equity, other
than increases relating to contributions from shareholders.
The Company shall recognize revenue when it satisfies a performance obligation in the contract as
the customer obtains control of a good or service. Control of a good or service refers to the ability to
direct the use of, and obtain substantially all of the remaining economic benefits from, the good or
service.
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When the contract has two or more obligation performances, the Company shall allocate the
transaction price to each performance obligation in proportion to a relative stand-alone selling price
at contract inception of the promised good or service underlying each performance obligation in the
contract and recognize revenue based on the transaction price allocated to each performance
obligation.
The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amounts collected on
behalf of third parties. When determining the transaction price of the contract, if the contract
includes a variable consideration, the Company shall determine the best estimate of the variable
consideration based on the expected value or the most likely amount and include in the transaction
price only to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognized will not occur when the uncertainty associated with the variable
consideration is subsequently resolved. If the contract contains a significant financing component,
the Company shall determine the transaction price at an amount that reflects the price that a
customer would have paid for the promised goods or services if the customer had paid cash for
those goods or services when (or as) they transfer to the customer. The difference between the
transaction price and the promised consideration shall be amortized using the effective interest
method within the contract period. The Company need not consider the effects of a significant
financing component if the period between when the Company transfers control of a good or
service to a customer and when the customer pays for that good or service will be one year or less.
The Company satisfies a performance obligation over time, if one of the following criteria is met;
otherwise a performance obligation is satisfied at a point in time:
(i) The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs;
(ii) The Company’s performance creates or enhances an asset (for example, work in progress) that
the customer controls as the asset is created or enhanced;
(iii) The Company’s performance does not create an asset with an alternative use to the Company
and the Company has an enforceable right to payment for performance completed to date.
For each performance obligation satisfied over time, the Company shall recognize revenue over
time by measuring the progress towards complete satisfaction of that performance obligation, unless
those progress cannot be reasonably measured. The Company measures the progress of a
performance obligation for the service rendered using input methods (or output methods). In some
circumstances, the Company cannot be able to reasonably measure the progress of a performance
obligation, but the Company expects to recover the costs incurred in satisfying the performance
obligation. In those circumstances, the Company shall recognize revenue only to the extent of the
costs incurred until such time that it can reasonably measure the progress of the performance
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obligation.
The Company shall recognize revenue at the point in which a customer obtains control of a
promised good or service if a performance obligation is satisfied at a point in time. To determine the
point in time at which a customer obtains control of a promised good or service, the Company shall
consider indicators of the transfer of control, which include, but are not limited to, the followings:
(i) The Company has a present right to payment for the good or service – a customer is presently
obliged to pay for the good or service;
(ii) The Company has transferred legal title of an asset to a customer - the customer has legal title to
the asset;
(iii) The Company has transferred physical possession of an asset to a customer - the customer has
physical possession of the asset;
(iv) The Company has transferred the significant risks and rewards of ownership of the asset to a
customer - the customer has the significant risks and rewards of ownership of the asset;
(v) The customer has accepted the asset.
(vi) Other indication that the customer has obtained control over the asset.
(2) Specific method
Revenue recognition methods of the Company are as follows:
Revenue from sales of goods
According to the contract of sales of goods between the Company and the customer, the Company
satisfies a performance obligation by transferring goods to the customer, which is a performance
obligation satisfied at a point in time.
Revenue from domestic sales of goods can only be recognized when the following conditions are
satisfied: the Company has transferred the promised goods to the customer according to the contract
and the customer has accepted the goods; the payment has been received or the receipt voucher has
been obtained and it is highly probable that the consideration will be received; the significant risks
and rewards of ownership of the asset has been transferred; legal title of the asset has been
transferred.
Revenue from rendering services
The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs, Company satisfies a performance obligation by rendering
of services to the customer, which is a performance obligation satisfied over time. For each
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performance obligation satisfied over time, the Company shall recognize revenue over time by
measuring the progress towards complete satisfaction of that performance obligation.
The customer can’t simultaneously receive and consumes the benefits provided by the Company’s
performance as the Company performs, the Company’s performance does not create an asset with
an alternative use and the Company has no enforceable right to payment for performance completed
to date at all times throughout the duration of the contract, Revenue from rendering of services is a
performance obligation satisfied at a point in time. The company recognizes revenue when the
company completes technical services in accordance with the contractual agreement
Revenue from usage of assets
Revenue from usage of the Group’s assets is recognized if the revenue can be reliably measured and
it is probable that the associated economic benefits will flow to the Group. Revenue from usage of
assets mainly includes the income from the leasing of premises and houses. Revenue measured in
accordance with the method determined by the respective contracts.
(1) Recognition of government grants
A government grant shall not be recognized until there is reasonable assurance that:
(i) The Company will comply with the conditions attaching to them; and
(ii) The grants will be received.
(2) Measurement of government grants
Monetary grants from the government shall be measured at amount received or receivable, and
non-monetary grants from the government shall be measured at their fair value or at a nominal
value of RMB1.00 when reliable fair value is not available.
(3) Accounting for government grants
(i) Government grants related to assets
Government grants pertinent to assets mean the government grants that are obtained by the
Company used for purchase or construction, or forming the long-term assets by other ways.
Government grants pertinent to assets shall be recognized as deferred income, and should be
recognized in profit or loss on a systematic basis over the useful lives of the relevant assets. Grants
measured at their nominal value shall be directly recognized in profit or loss of the period when the
grants are received. When the relevant assets are sold, transferred, written off or damaged before the
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assets are terminated, the remaining deferred income shall be transferred into profit or loss of the
period of disposing relevant assets.
(ii) Government grants related to income
Government grants other than related to assets are classified as government grants related to income.
Government grants related to income are accounted for in accordance with the following principles:
If the government grants related to income are used to compensate the enterprise’s relevant
expenses or losses in future periods, such government grants shall be recognized as deferred income
and included into profit or loss (or write down related expenses) in the same period as the relevant
expenses or losses are recognized;
If the government grants related to income are used to compensate the enterprise’s relevant
expenses or losses incurred, such government grants are directly recognized into current profit or
loss (or write down related expenses).
For government grants comprised of part related to assets as well as part related to income, each
part is accounted for separately; if it is difficult to identify different part, the government grants are
accounted for as government grants related to income as a whole.
Government grants related to daily operation activities are recognized in other income (or write
down related expenses) in accordance with the nature of the activities, and government grants
irrelevant to daily operation activities are recognized in non-operating income.
(iii) Loan interest subsidy
When loan interest subsidy is allocated to the bank, and the bank provides a loan at lower-market
rate of interest to the Company, the loan is recognized at the actual received amount, and the
interest expense is calculated based on the principal of the loan and the lower-market rate of
interest.
When loan interest subsidy is directly allocated to the Company, the subsidy shall be recognized as
offsetting the relevant borrowing cost.
(iv) Repayment of the government grants
Repayment of the government grants shall be recorded by increasing the carrying amount of the
asset if the book value of the asset has been written down, or reducing the balance of relevant
deferred income if deferred income balance exists, any excess will be recognized into current profit
or loss; or directly recognized into current profit or loss for other circumstances.
Temporary differences are differences between the carrying amount of an asset or liability in the
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statement of financial position and its tax base at the balance sheet date. The Company recognize
and measure the effect of taxable temporary differences and deductible temporary differences on
income tax as deferred tax liabilities or deferred tax assets using liability method. Deferred tax
assets and deferred tax liabilities shall not be discounted.
(1) Recognition of deferred tax assets
For deductible temporary differences, deductible losses and tax credits that can be carried forward
to subsequent years, the related income tax effects are calculated at the income tax rate expected to
apply during the reversal period and recognized as deferred income tax assets, but only to the extent
that it is probable that the Company will obtain future taxable income against which the deductible
temporary differences, deductible losses and tax credits can be utilized.
The income tax effects of deductible temporary differences arising from the initial recognition of
assets or liabilities in transactions or events that have both of the following characteristics are not
recognized as deferred tax assets:
A. Is not a business combination; and
B. At the time of the transaction, affects neither accounting profit nor taxable profit (tax loss)
However, the exemption from initial recognition of deferred tax liabilities and deferred tax assets
does not apply to a single transaction that meets both of the above conditions and results in the
initial recognition of assets and liabilities that give rise to deductible temporary differences and
deductible temporary differences in equal amounts. The Company recognizes deferred tax liabilities
and deferred tax assets for deductible temporary differences and deductible temporary differences
arising from the initial recognition of assets and liabilities, respectively, at the time of the
transaction.
The Company shall recognize a deferred tax asset for all deductible temporary differences arising
from investments in subsidiaries, associates and joint ventures, only to the extent that, it is probable
that:
A. The temporary difference will reverse in the foreseeable future; and
B. Taxable profit will be available against which the deductible temporary difference can be
utilized.
At the end of each reporting period, if there is sufficient evidence that it is probable that taxable
profit will be available against which the deductible temporary difference can be utilized, the
Company recognizes a previously unrecognized deferred tax asset.
The carrying amount of a deferred tax asset shall be reviewed at the end of each reporting period.
The Company shall reduce the carrying amount of a deferred tax asset to the extent that it is no
longer probable that sufficient taxable profit will be available to allow the benefit of part or all of
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that deferred tax asset to be utilized. Any such reduction shall be reversed to the extent that it
becomes probable that sufficient taxable profit will be available.
(2) Recognition of deferred tax liabilities
A deferred tax liability shall be recognized for all taxable temporary differences at the tax rate that
are expected to apply to the period when the liability is settled.
(i) No deferred tax liability shall be recognized for taxable temporary differences arising from:
A. The initial recognition of goodwill; or
B. The initial recognition of an asset or liability in a transaction which: is not a business
combination; and at the time of the transaction, affects neither accounting profit nor taxable profit
(tax loss)
(ii) An entity shall recognize a deferred tax liability for all taxable temporary differences associated
with investments in subsidiaries, associates, and joint ventures, except to the extent that both of the
following conditions are satisfied:
A. The Company is able to control the timing of the reversal of the temporary difference; and
B. It is probable that the temporary difference will not reverse in the foreseeable future.
(3) Recognition of deferred tax liabilities or assets involved in special transactions or events
(i) Deferred tax liabilities or assets related to business combination
For the taxable temporary difference or deductible temporary difference arising from a business
combination not under common control, a deferred tax liability or a deferred tax asset shall be
recognized, and simultaneously, goodwill recognized in the business combination shall be adjusted
based on relevant deferred tax expense (income).
(ii) Items directly recognized in equity
Current tax and deferred tax related to items that are recognized directly in equity shall be
recognized in equity. Such items include: other comprehensive income generated from fair value
fluctuation of other debt investments; an adjustment to the opening balance of retained earnings
resulting from either a change in accounting policy that is applied retrospectively or the correction
of a prior period (significant) error; amounts arising on initial recognition of the equity component
of a compound financial instrument that contains both liability and equity component.
(iii) Unused tax losses and unused tax credits
A. Unused tax losses and unused tax credits generated from daily operation of the Company itself
Deductible loss refers to the loss calculated and permitted according to the requirement of tax law
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that can be offset against taxable income in future periods. The criteria for recognizing deferred tax
assets arising from the carryforward of unused tax losses and tax credits are the same as the criteria
for recognizing deferred tax assets arising from deductible temporary differences. The Company
recognizes a deferred tax asset arising from unused tax losses or tax credits only to the extent that
there is convincing other evidence that sufficient taxable profit will be available against which the
unused tax losses or unused tax credits can be utilized by the Company. Income taxes in current
profit or loss shall be deducted as well.
B. Unused tax losses and unused tax credits arising from a business combination
Under a business combination, the acquiree’s deductible temporary differences which do not satisfy
the criteria at the acquisition date for recognition of deferred tax asset shall not be recognized.
Within 12 months after the acquisition date, if new information regarding the facts and
circumstances exists at the acquisition date and the economic benefit of the acquiree’s deductible
temporary differences at the acquisition is expected to be realized, the Company shall recognize
acquired deferred tax benefits and reduce the carrying amount of any goodwill related to this
acquisition. If goodwill is reduced to zero, any remaining deferred tax benefits shall be recognized
in profit or loss. All other acquired deferred tax benefits realized shall be recognized in profit or
loss.
(iv) Temporary difference generated in consolidation elimination
When preparing consolidated financial statements, if temporary difference between carrying value
of the assets and liabilities in the consolidated financial statements and their taxable bases is
generated from elimination of inter-company unrealized profit or loss, deferred tax assets or
deferred tax liabilities shall be recognized in the consolidated financial statements, and income
taxes expense in current profit or loss shall be adjusted as well except for deferred tax related to
transactions or events recognized directly in equity and business combination.
(v) Share-based payment settled by equity
If tax authority permits tax deduction that relates to share-based payment, during the period in
which the expenses are recognized according to the accounting standards, the Company estimates
the tax base in accordance with available information at the end of the accounting period and the
temporary difference arising from it. Deferred tax shall be recognized when criteria of recognition
are satisfied. If the amount of estimated future tax deduction exceeds the amount of the cumulative
expenses related to share-based payment recognized according to the accounting standards, the tax
effect of the excess amount shall be recognized directly in equity.
(vi) Dividends related to financial instruments classified as equity instruments
For financial instruments classified as equity instruments in which the Company is the issuer and
the related dividend expense is deductible for corporate income tax purposes in accordance with the
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relevant provisions of the tax policy, the Company recognizes the income tax effect related to the
dividend at the time of dividend payable recognition. The income tax effect of the dividend is
recognized in the current profit or loss in which the dividend arises from a transaction or event that
previously resulted in profit or loss. The income tax effect of the dividend is recognized in owner’s
equity in which the dividend arises from a transaction or event that previously resulted in profit or
loss.
(4) Basis for deferred income tax assets and deferred income tax liabilities presented on a net
basis
The Company presents deferred tax assets and deferred tax liabilities on a net basis when both of the following
conditions are met:
The Company has a legally enforceable right to settle current income tax assets and current income tax liabilities
on a net basis; and
The deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities that intend, in each future period in
which significant amounts of deferred income tax assets and deferred income tax liabilities are expected to be
reversed, to settle current income tax assets and liabilities on a net basis or to realize the assets and settle the
liabilities simultaneously.
(1) Identifying a lease
At inception of a contract, the Company shall assess whether the contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of one or more
identified assets for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset for a period of time, the Company shall
assess whether, throughout the period of use, the customer has the right to obtain substantially all of
the economic benefits from use of the identified asset and to direct the use of the identified asset.
(2) Identifying a separate lease component
When a contract includes more than one separate lease components, the Company shall separate
components of the contract and account for each lease component separately. The right to use an
underlying asset is a separate lease component if both conditions have been satisfied: (i) the lessee
can benefit from use of the underlying asset either on its own or together with other resources that
are readily available to the lessee; (ii) the underlying asset is neither highly dependent on, nor
highly interrelated with, the other underlying assets in the contract.
(3) The Company as a lessee
At the commencement date, the Company identifies the lease that has a lease term of 12 months or
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less and does not contain a purchase option as a short-term lease. A lease qualifies as a lease of a
low-value asset if the nature of the asset is such that, when new, the asset is typically of low value.
If the Company subleases an asset, or expects to sublease an asset, the head lease does not qualify
as a lease of a low-value asset.
For all the short-term leases or leases for which the underlying asset is of low value, the Company
shall recognize the lease payments associated with those leases as cost of relevant asset or expenses
in current profit or loss on a straight-line basis over the lease term.
Except for the election of simple treatment as short-term lease or lease of a low-value asset as
mentioned above, at the commencement date, the Company shall recognize a right-of-use asset and
a lease liability.
(i) Right-of-use asset
A right-of-use asset is an asset that represents a lessee’s right to use an underlying asset for the lease
term.
At the commencement date, the Company shall initially measure the right-of-use asset at cost. The
cost of the right-of-use asset shall comprise:
the amount of the initial measurement of the lease liability;
any lease payments made at or before the commencement date, less any lease incentives
received;
any initial direct costs incurred by the lessee; and
an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease. The Company recognizes and measures the
cost in accordance with the recognition criteria and measurement method for estimated
liabilities, details please refer to Notes 3.26. Those costs incurred to produce inventories shall
be included in the cost of inventories.
The right-of-use asset shall be depreciated according to the categories using straight‐line method.
If it is reasonably certain that the ownership of the underlying asset shall be transferred to the lessee
by the end of the lease term, the depreciation rate shall be determined based on the classification of
the right-of- use asset and estimated residual value rate from the commencement date to the end of
the useful life of the underlying asset. Otherwise, the depreciation rate shall be determined based on
the classification of the right-of-use asset from the commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term.
The depreciation method, estimated useful life, residual rates and annual depreciation rates which
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are determined according to the categories of right-of-use asset are listed as followings:
Depreciation Estimated useful life Annual depreciation rates
Category Residual rates (%)
method (year) (%)
Straight—line
Buildings and constructions 3.00-10.00 0.00 10.00-33.33
method
Straight—line
Land use rights 5.00 0.00 20.00
method
(ii) Lease liability
At the commencement date, the lease liability shall be measured at the present value of the lease
payments that are not paid at that date. The lease payments included in the measurement of the lease
liability comprise the following 5 items:
fixed payments and in-substance fixed payments, less any lease incentives receivable;
variable lease payments that depend on an index or a rate;
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option;
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising
an option to terminate the lease;
amounts expected to be payable by the lessee under residual value guarantees.
In order to calculate the present value of the lease payments, interest rate implicit in the lease shall
be used as the discount rate. If that rate cannot be readily determined, the Company shall use the
incremental borrowing rate. The difference between the lease payments and its present value shall
be recognized as unrecognized financing charges, calculated bases on the discount rate of the
present value of the lease payments in each period within the lease term and recorded as interest
expense in current profit or loss. Variable lease payments not included in the measurement of lease
liabilities shall be recognized in current profit or loss when incurred.
After the commencement date, the Company shall remeasure the lease liability based on the revised
present value of the lease payments and adjust the carrying amount of the right-of-use asset if there
is a change in the in-substance fixed payments, or change in the amounts expected to be payable
under a residual value guarantee, or change in an index or a rate used to determine lease payments,
or change in the assessment or exercising of an option to purchase the underlying asset, or an option
to extend or terminate the lease.
(4) The Company as a lessor
At the commencement date, the Company shall classify a lease as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset, otherwise it
shall be classified as an operating lease.
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(i) Operating leases
The Company shall recognize lease payments from operating leases as income on a straight-line
basis (or other systematic and reasonable approaches) over the term of the relevant lease and the
initial direct costs incurred in obtaining an operating lease shall be capitalized and recognized as an
expense over the lease term on the same basis as the lease income. The Company shall recognize
the variable lease payments relating to the operating lease but not included in the measurement of
the lease receivables into current profit or loss when incurred.
(ii) Finance leases
At the commencement date, the Company shall recognize the lease receivables at an account equal
to the net investment in the lease (the sum of the present value of the unguaranteed residual values
and the lease payment that are not received at the commencement date discounted at the interest rate
implicit in the lease) and derecognize the asset relating to the finance lease. The Company shall
recognize interest income using the interest rate implicit in the lease over the lease term.
The Company shall recognize the variable lease payments relating to the finance lease but not
included in the measurement of the net investment in the lease into current profit or loss when
incurred.
(5) Lease modifications
(i) A lease modification accounted for as a separate lease
The Company shall account for a modification to a lease as a separate lease, if both: A. The
modification increases the scope of the lease by adding the right to use one or more underlying
assets; B. The consideration for the lease increases by an amount commensurate with the
stand-alone price for the increase in scope.
(ii) A lease modification not accounted for as a separate lease
A. The Company as a lessee
At the effective date of the lease modification, the Company shall redetermine the lease term of the
modified lease and remeasure the lease liability by discounting the revised lease payments using a
revised discount rate. The revised discount rate is determined as the interest rate implicit in the lease
for the remainder of the lease term, if that rate can be readily determined, or the incremental
borrowing rate at the effective date of the modification, if the interest rate implicit in the lease
cannot be readily determined.
The Company shall account for the remeasurement of the lease liability by:
decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination
of the lease for lease modifications that decrease the scope of the lease or shorten the lease term.
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Interim Report 2026
The Company shall recognize in profit or loss any gain or loss relating to the partial or full
termination of the lease.
Making a corresponding adjustment to the carrying amount of the right-of-use asset for all
other lease modifications.
B. The Company as a lessor
The Company shall account for a modification to an operating lease as a new lease from the
effective date of the modification, considering any prepaid or accrued lease payments relating to the
original lease as part of the lease payments for the new lease.
For a modification to a finance lease that is not accounted for as a separate lease, the Company shall
account for the modification as follows:
if the lease would have been classified as an operating lease had the modification been in effect
at the inception date, the Company shall account for the lease modification as a new lease from
the effective date of the modification and measure the carrying amount of the underlying asset
as the net investment in the lease immediately before the effective date of the lease
modification;
if the lease would have been classified as a finance lease had the modification been in effect at
the inception date, the Company shall account for the lease modification according to the
requirements in the modification or renegotiation of the contract.
(6) Sale and leaseback
The Company shall determine whether the transfer of an asset under the sale and leaseback
transaction is a sale of that asset according to the policies in Note 3.27.
The Company as a seller (lessee)
If the transfer of the asset is not a sale, the Company shall continue to recognize the transferred
asset and shall recognize a financial liability equal to the transfer proceeds. It shall account for the
financial liability according to Note 3.10. If the transfer of the asset is a sale, the Company shall
measure the right-of-use asset arising from the leaseback at the proportion of the previous carrying
amount of the asset that relates to the right of use retained by the Company. Accordingly, the
Company shall recognize only the amount of any gain or loss that relates to the rights transferred to
the buyer-lessor.
The Company as a buyer (lessor)
If the transfer of the asset is not a sale, the Company shall not recognize the transferred asset and
shall recognize a financial asset equal to the transfer proceeds. It shall account for the financial asset
according to Note 3.10. If the transfer of the asset is a sale, the Company shall account for the
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purchase of the asset applying applicable Accounting Standards of Business Enterprises, and for the
lease applying the lessor accounting requirements.
(1) Changes in accounting polices
□ Applicable ? Not applicable
(2) Significant changes in accounting estimates
□ Applicable ? Not applicable
(3) Adjustments to financial statement items at the beginning of the year of the first
implementation of the new accounting standards implemented since 2026
□ Applicable ? Not applicable
IV Taxation
Categories of tax Basis of tax assessment Tax rate
Value added in the course of
Value added tax (VAT) sales of goods and rendering of 13%, 9%, 6%
services
Tax by quantity: RMB1.00 per kilogram or liter of distilled wine sold;
Consumption duty Taxable revenue
Tax by revenue: 20% on taxable revenue from sale of distilled wine
Urban maintenance and
Transaction tax payable 7%, 5%
construction tax
Education surcharge Transaction tax payable 3%
Local education Transaction tax payable 2%
surcharge
Corporate income tax Taxable income 25%
(CIT)
The basic income tax rate of the company is 25%, and the actual income tax rate of some subsidiaries is shown in
the following table:
Name of taxpayer Rate of income tax
Anhui Longrui Glass Co., Ltd. 15.00%
Anhui Ruisiweier Technology Co., Ltd. 15.00%
Anhui RunAnXinKe Testing Technology Co.,
Ltd.
Anhui Gujing Health Technology Co., Ltd. 15.00%
Huanggang Junya Trading Co., Ltd. 20.00%
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Interim Report 2026
Wuhan Gulou Juntai Trading Co., Ltd. 20.00%
Wuhan Juntai Trading Co., Ltd. 20.00%
Ezhou Junya Trading Co., Ltd. 20.00%
Bozhou Gujing Hotel Co., Ltd. 20.00%
Anhui Jiuan Mechanical Electrical Equipment 20.00%
Co., Ltd.
Anhui Jiuhao Construction Engineering Co., Ltd. 20.00%
Anhui Gujing Light Wellness Club Supply Chain 20.00%
Management Co., Ltd.
Anhui Gujinggong Liquor Original Vintage
Theme Hotel Management Co., Ltd.
Anhui Guqi Distillery Sales Co., Ltd. 20.00%
(1) According to the relevant provisions of the Measures for the Administration of the Accreditation of High-tech
Enterprises (GuoKeFaHuo [2016] No. 32) and the Guidelines for the Administration of the Certification of
High-tech Enterprises (GuoKeFaHuo [2016] No. 195), the subsidiary Anhui Ruisiweier Technology Co., Ltd. was
identified as one of the second batch of high-tech enterprises in Anhui Province in 2025, therefore was given
High-tech Enterprise Certificate (Certificate Number: GR202534002124) which is valid for 3 years. According to
Enterprise Income Tax Law and other relevant regulations, the company is subject to a national high-tech
enterprise income tax rate at 15% for three years from January 1, 2025 to December 31, 2027.
(2) According to the relevant provisions of the Measures for the Administration of the Accreditation of High-tech
Enterprises (GuoKeFaHuo [2016] No. 32) and the Guidelines for the Administration of the Certification of
High-tech Enterprises (GuoKeFaHuo [2016] No. 195), the subsidiary Anhui Longrui Glass Co., Ltd. was
identified as one of the first batch of high-tech enterprises in Anhui Province in 2025, therefore was given
High-tech Enterprise Certificate (Certificate Number: GR202534000671) which is valid for 3 years. According to
Enterprise Income Tax Law and other relevant regulations, the company is subject to a national high-tech
enterprise income tax rate at 15% for three years from January 1, 2025 to December 31, 2027.
(3) According to the relevant provisions of the Measures for the Administration of the Accreditation of High-tech
Enterprises (GuoKeFaHuo [2016] No. 32) and the Guidelines for the Administration of the Certification of
High-tech Enterprises (GuoKeFaHuo [2016] No. 195), the subsidiary Anhui RunAnXinKe Testing Technology
Co., Ltd. was identified as a high-tech enterprise in 2024, therefore was given High-tech Enterprise Certificate
(Certificate Number: GR202434002657) which is valid for 3 years. According to Enterprise Income Tax Law and
other relevant regulations, the company is subject to a national high-tech enterprise income tax rate at 15% for
three years from January 1, 2024 to December 31, 2026. It is currently in the process of recertification, and until it
passes the recertification, the corporate income tax is temporarily prepaid at a rate of 15%.
(4) According to the relevant provisions of the Measures for the Administration of the Accreditation of High-tech
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Interim Report 2026
Enterprises (GuoKeFaHuo [2016] No. 32) and the Guidelines for the Administration of the Certification of
High-tech Enterprises (GuoKeFaHuo [2016] No. 195), the subsidiary Anhui Gujing Health Technology Co., Ltd.
(“Health Technology”) has been recognized as a batch of high-tech enterprises in Anhui Province in 2024, and
obtained the High-tech Enterprise Certificate (Certificate No.: GR202434002983) which is valid for 3 years.
According to relevant regulations such as the Enterprise Income Tax Law, the Health Technology shall enjoy an
income tax rate of 15% for national high-tech enterprises from January 1, 2024 to December 31, 2026.
(5) According to the relevant provisions of the document Announcement of the Ministry of Finance and the
General Administration of Taxation No. 12 of 2023, from January 1, 2023 to December 31, 2027, the part of the
annual taxable income of small and micro profit enterprises that does not exceed RMB3 million shall be included
in the taxable income at a reduced rate of 25%. Pay corporate income tax at a rate of 20%. Huanggang Junya
Trading Co., Ltd., Wuhan Gulou Juntai Trading Co., Ltd., Wuhan Juntai Trading Co., Ltd., Ezhou Junya Trading
Co., Ltd., Bozhou Gujing Hotel Co., Ltd., Anhui Jiuan Mechanical Electrical Equipment Co., Ltd., Anhui Jiuhao
Construction Engineering Co., Ltd., Anhui Gujing Light Wellness Club Supply Chain Management Co., Ltd.,
Anhui Gujinggong Liquor Original Vintage Theme Hotel Management Co., Ltd., and Anhui Guqi Distillery Sales
Co., Ltd. comply with the relevant provisions of small low-profit enterprise income tax preferential policy.
V Notes to the Consolidated Financial Statements
Item Ending balance Beginning balance
Cash on hand 109,047.09 12,138.91
Cash at bank 13,273,671,086.38 14,151,437,751.62
Other monetary funds 27,779,461.54 36,013,839.28
Total 13,301,559,595.01 14,187,463,729.81
At the end of June 2026, the bank deposits were used to pledge the bank acceptance bill of RMB1.24 billion, and
the other restricted funds in the bank deposits were RMB9.7668 million. The other monetary funds as of the
statement date included margin deposits not eligible for early redemption at RMB13.5178 million. Except for the
pre-mentioned, monetary funds as of the end of June 2026 was not subject to limitation on usage such as pledging
or freezing or risk on recovery.
Liquor manufacturing enterprises shall disclose whether there exists special interest arrangements such as
establishing a joint fund account with related parties
□ Applicable ? Not applicable
Item Ending balance Beginning balance
Financial assets at fair value through profit or 602,695,342.46 0.00
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Interim Report 2026
Item Ending balance Beginning balance
loss
Including: bank financial products 602,695,342.46 0.00
Total 602,695,342.46 0.00
(1) Disclosure by aging
Aging Ending balance Beginning balance
Within 1 year 38,280,564.31 52,330,202.23
Of which: 1-6 months 34,501,835.62 49,936,716.22
Over 3 years 8,515,467.04 8,391,314.57
Subtotal 49,059,679.62 63,412,132.90
Less: Bad debt provision 9,453,142.71 9,415,440.22
Total 39,606,536.91 53,996,692.68
(2) Disclosure by withdrawal method of bad debt provision
(i) Ending balance
Ending balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
Of which: Group 1
Group 2 41,266,895.90 84.12 1,660,358.99 4.02 39,606,536.91
Total 49,059,679.62 100.00 9,453,142.71 19.27 39,606,536.91
(ii) Beginning balance
Beginning balance
Category
Carrying amount Bad debt provision Carrying value
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Interim Report 2026
Withdrawal
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
Of which: Group 1
Group 2 55,619,349.18 87.71 1,622,656.50 2.92 53,996,692.68
Total 63,412,132.90 100.00 9,415,440.22 14.85 53,996,692.68
On June 30, 2026, accounts receivable with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within 1 year 38,280,564.31 533,954.77 1.39
Of which: 1-6 months 34,501,835.62 345,018.35 1.00
Over 3 years 722,683.32 722,683.32 100.00
Total 41,266,895.90 1,660,358.99 4.02
On January 1, 2026, accounts receivable with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within 1 year 52,330,202.23 619,041.46 1.18
Of which: 1-6 months 49,936,716.22 499,367.16 1.00
Over 3 years 598,530.85 598,530.85 100.00
Total 55,619,349.18 1,622,656.50 2.92
(3) Changes of bad debt provision during the Reporting Period
Category Beginning Changes in the Reporting Period Ending balance
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amount Increase from
business
Recovery or Elimination or
Withdrawal combination not
reversal write-off
under the same
control
Accounts receivable with
significant amount but bad
debt provision withdrawn
separately
Accounts receivable with
insignificant amount but bad
debt provision withdrawn
separately
Group 2: Bad debt provision
withdrawn by aging group
Total 9,415,440.22 267,820.92 230,118.43 9,453,142.71
(4) Accounts receivable written off during the Reporting Period
Not applicable.
(5) Top five ending balances by entity
Proportion of the
Provision for bad
Ending balance of balance to the total
Ending balance of Ending balance of debt of accounts
Entity name accounts receivable accounts receivable
accounts receivable contract assets receivable and
and contract assets and contract assets
contract assets
(%)
No. 1 7,792,783.72 7,792,783.72 15.88 7,792,783.72
No. 2 5,144,065.49 5,144,065.49 10.49 119,070.24
No. 3 4,464,996.97 4,464,996.97 9.10 44,649.97
No. 4 2,451,482.79 2,451,482.79 5.00 37,393.36
No. 5 1,994,561.97 1,994,561.97 4.07 19,945.62
Total 21,847,890.94 21,847,890.94 44.54 8,013,842.91
(1) Accounts receivable financing by category
Ending balance Beginning balance
Category Bad debt Bad debt
Carrying amount Carrying value Carrying amount Carrying value
provision provision
Bank acceptance
bills
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Interim Report 2026
Ending balance Beginning balance
Category Bad debt Bad debt
Carrying amount Carrying value Carrying amount Carrying value
provision provision
Total 1,127,971,458.45 1,127,971,458.45 895,658,760.56 895,658,760.56
(2) Pledged notes receivable at June 30, 2026
Not applicable.
(3) Notes receivable which were discounted or endorsed but not due at June 30, 2026
Items Amount of derecognition Amount of unrecognition
Bank acceptance bills 5,361,829,976.21
Commercial acceptance bills
Total 5,361,829,976.21
(4) Accounts receivable financing by loss allowance provision method
Ending balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
Of which: Group 1
Group 2 1,127,971,458.45 100.00 1,127,971,458.45
Total 1,127,971,458.45 100.00 1,127,971,458.45
(Continued)
Beginning balance
Carrying amount Bad debt provision
Category
Withdrawal Carrying value
Amount Proportion (%) Amount
proportion (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by
group
Of which: Group 1
Group 2 895,658,760.56 100.00 895,658,760.56
~ 120 ~
Interim Report 2026
Beginning balance
Category
Carrying amount Bad debt provision Carrying value
Total 895,658,760.56 100.00 895,658,760.56
(5) Movement of impairment allowance
Not applicable.
(6) Notes receivable written off during the Reporting Period
Not applicable.
(1) Disclosure by aging
Ending balance Beginning balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 160,189,436.15 99.61 115,101,663.42 99.83
Over 3 years
Total 160,819,979.90 100.00 115,292,227.12 100.00
(2) Top five ending balances by entity
Proportion of the balance to the
Entity name Ending balance
total prepayment (%)
No. 1 20,838,477.14 12.96
No. 2 9,396,257.38 5.84
No. 3 4,731,560.88 2.94
No. 4 4,269,857.48 2.66
No. 5 1,405,948.45 0.87
Total 40,642,101.33 25.27
(1) Listed by category
Item Ending balance Beginning balance
Interest receivable
Dividend receivable
Other receivables 53,893,174.72 45,651,277.81
~ 121 ~
Interim Report 2026
Item Ending balance Beginning balance
Total 53,893,174.72 45,651,277.81
(2) Other receivables
(i) Disclosure by aging
Aging Ending balance Beginning balance
Within 1 year 52,317,544.94 43,611,222.28
Of which: 1-6 months 48,865,844.58 40,912,955.81
Over 3 years 6,579,726.00 6,690,071.33
Subtotal 62,416,170.53 53,939,977.90
Less: Bad debt provision 8,522,995.81 8,288,700.09
Total 53,893,174.72 45,651,277.81
(ii) Disclosure by nature
Nature Ending balance Beginning balance
Deposit and guarantee 9,538,062.18 8,831,605.18
Platform promotion expenses 2,921,081.14 2,283,469.36
Rent, utilities and gasoline charges 11,487,981.13 14,058,900.80
Other 38,469,046.08 28,766,002.56
Subtotal 62,416,170.53 53,939,977.90
Less: Bad debt provision 8,522,995.81 8,288,700.09
Total 53,893,174.72 45,651,277.81
(iii) Disclosure by withdrawal method of bad debt provision
A. As of June 30, 2026, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 62,416,170.53 8,522,995.81 53,893,174.72
Stage 2
Stage 3
Total 62,416,170.53 8,522,995.81 53,893,174.72
~ 122 ~
Interim Report 2026
A1. As of June 30, 2026, bad debt provision at stage 1:
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately
Bad debt provision withdrawn by group 62,416,170.53 13.66 8,522,995.81 53,893,174.72
Of which: Group 1
Group 2 62,416,170.53 13.66 8,522,995.81 53,893,174.72
Total 62,416,170.53 13.66 8,522,995.81 53,893,174.72
On June 30, 2026, other receivables with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within 1 year 52,317,544.94 661,243.46 1.26
Of which: 1-6 months 48,865,844.58 488,658.44 1.00
Over 3 years 6,579,726.00 6,579,726.00 100.00
Total 62,416,170.53 8,522,995.81 13.66
B. As of January 1, 2026, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 53,939,977.90 8,288,700.09 45,651,277.81
Stage 2
Stage 3
Total 53,939,977.90 8,288,700.09 45,651,277.81
B1. On January 1, 2026, bad debt provision at stage 1:
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn separately
~ 123 ~
Interim Report 2026
Category Carrying amount credit losses rate Bad debt provision Carrying value
(%)
Bad debt provision withdrawn by group 53,939,977.90 15.37 8,288,700.09 45,651,277.81
Of which: Group 1
Group 2 53,939,977.90 15.37 8,288,700.09 45,651,277.81
Total 53,939,977.90 15.37 8,288,700.09 45,651,277.81
On January 1, 2026, other receivables with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within 1 year 43,611,222.28 544,042.88 1.25
Of which: 1-6 months 40,912,955.81 409,129.56 1.00
Over 3 years 6,690,071.33 6,690,071.33 100.00
Total 53,939,977.90 8,288,700.09 15.37
(iv) Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Increase from
Beginning business
Category Recovery or Elimination or Ending balance
balance
Withdrawal combination not
reversal write-off
under the same
control
Bad debt provision
withdrawn separately
Bad debt provision
withdrawn by group
Total 8,288,700.09 513,984.34 0.00 279,688.62 0.00 8,522,995.81
(v) Other receivables actually written off during the Reporting Period
Not applicable.
~ 124 ~
Interim Report 2026
(vi) Top five ending balances by entity
Proportion of the
balance to the total
Entity name Nature Ending balance Aging Bad debt provision
other receivables
(%)
No. 1 Within 6
Other 23,380,219.00 37.46 233,802.19
months
No. 2 Rent, utilities and
gasoline charges
No. 3 Security deposit
and guarantee
No. 4 Security deposit
and guarantee
No. 5 Rent, utilities and
gasoline charges
Total -- 35,636,721.14 -- 57.10 2,285,443.48
(1) Category of inventories
Ending balance
Item
Carrying amount Falling price reserves Carrying value
Raw materials and package
materials
Semi-finished goods and work
in process
Finished goods 664,177,730.62 19,366,416.26 644,811,314.36
Total 10,836,104,035.11 40,930,928.86 10,795,173,106.25
(Continued)
Beginning balance
Item
Carrying amount Falling price reserves Carrying value
Raw materials and package
materials
Semi-finished goods and work 9,347,360,970.25 0.00 9,347,360,970.25
~ 125 ~
Interim Report 2026
in process
Finished goods 992,737,057.36 18,285,411.39 974,451,645.97
Total 10,782,938,531.77 43,143,854.95 10,739,794,676.82
(2) Falling price reserves of inventories
Increase Decrease
Items Beginning balance Increase from Ending balance
Reversal or
Withdrawal business Others
elimination
combination
Raw materials and
package materials
Finished goods 18,285,411.39 1,587,152.57 506,147.70 19,366,416.26
Total 43,143,854.95 1,798,375.62 4,011,301.71 40,930,928.86
Item Ending balance Beginning balance
Pledged treasury bond reverse repurchase 555,158,000.00 157,930,000.00
Interests on negotiable certificate of deposit 70,575,201.28 127,463,099.31
Deductible taxes and tax allowance 83,462,092.65 107,533,515.67
Total 709,195,293.93 392,926,614.98
Changes in the Reporting Period
Profit and loss on Adjustment of
Investees Beginning balance Additional Reduced investments other Changes in
investments investments confirmed according comprehensive other equity
to equity law income
I. Associated enterprises
Beijing Guge Trading
Co., Ltd.
Anhui Xunfei Jiuzhi
Technology Co., Ltd.
Total 11,574,463.54 2,744,432.56
(Continued)
Investees Changes in the Reporting Period Ending balance Balance of
~ 126 ~
Interim Report 2026
impairment
Declaration of cash Withdrawal of
provision
dividends or impairment Other
distribution of profit provision
I. Associated enterprises
Beijing Guge Trading
Co., Ltd.
Anhui Xunfei Jiuzhi
Technology Co., Ltd.
Total 14,318,896.10
Changes during the Reporting Period
Gaines Losses
Beginning recognized in recognized in
Item Additional Decrease in Ending balance
balance other other Others
investment investment
comprehensive comprehensive
income income
Anhui
Mingguang
Rural 73,526,017.72 2,847,194.40 76,373,212.12
Commercial
Bank Co., Ltd.
Total 73,526,017.72 2,847,194.40 76,373,212.12
(Continued)
Amount of other
comprehensive
Dividend Reason for assigning to measure in fair
Accumulative Accumulative income
Item income value and the changes included in other
gains losses transferred to
recognized comprehensive income
retained
earnings
For management holding purposes, it is
Anhui Mingguang
specified as measured at fair value and
Rural Commercial 680,404.90 22,524,514.32
changes in it are included in other
Bank Co., Ltd.
comprehensive income
(1) Investment property adopting cost measurement mode
Items Houses and buildings Land use rights Total
~ 127 ~
Interim Report 2026
Items Houses and buildings Land use rights Total
I. Original carrying value
(1) Transfer from fixed assets
(1) Transfer out to fixed assets 540,614.77 0.00 540,614.77
II. Accumulated depreciation and amortization:
(1) Withdrawal or amortization 557,667.13 31,369.60 589,036.73
(2) Transfer from fixed assets
(1) Transfer out to fixed assets 236,865.89 0.00 236,865.89
III. Impairment provision
IV. Carrying value
(1) Listed by category
Item Ending balance Beginning balance
Fixed assets 8,951,160,974.66 9,121,969,040.94
Disposal of fixed assets
Total 8,951,160,974.66 9,121,969,040.94
(2) Fixed assets
(i) General information of fixed assets
Machinery Transportation Administrative
Items Houses and buildings Total
equipment vehicles and other devices
~ 128 ~
Interim Report 2026
Machinery Transportation Administrative
Items Houses and buildings Total
equipment vehicles and other devices
I. Original carrying
value
Reporting Period
(1) Acquisition 0.00 2,387,790.78 154,394.19 8,683,441.67 11,225,626.64
(2) Transfer from
construction in progress
(3) Transfer from
investment 540,614.77 0.00 0.00 0.00 540,614.77
property
Reporting Period
(1) Disposal or scrap 0.00 16,499,575.29 3,024,758.02 1,845,225.01 21,369,558.32
(2) Other decreases 0.00 46,309,710.68 0.00 0.00 46,309,710.68
II. Accumulated
depreciation
Reporting Period
(1) Withdrawal 144,581,911.95 188,676,807.04 3,430,650.83 61,612,109.75 398,301,479.57
(2) Transfer from
investment property
Reporting Period
(1) Disposal or scrap 0.00 13,413,502.47 2,929,520.25 1,340,454.07 17,683,476.79
(2) Other decreases 0.00 35,498,535.17 0.00 0.00 35,498,535.17
III. Impairment
provision
Reporting Period
(1) Withdrawal
~ 129 ~
Interim Report 2026
Machinery Transportation Administrative
Items Houses and buildings Total
equipment vehicles and other devices
Reporting Period
(1) Disposal or scrap 0.00 109,836.35 0.00 0.00 109,836.35
IV. Carrying value
value
(ii) Fixed assets leasing out under operating leases
Items Carrying value
Buildings and constructions 13,579,688.29
Total 13,579,688.29
(iii) Fixed assets without certificate of title
Items Carrying value Reason
Buildings and constructions 3,631,164,433.42 In process
Total 3,631,164,433.42 --
(iv) At the end of the period, there were no fixed assets with limited use due to mortgage.
(1) Listed by category
Item Ending balance Beginning balance
Construction in progress 158,710,163.85 160,290,473.75
Project materials
Total 158,710,163.85 160,290,473.75
(2) Construction in progress
(i) General information of construction in progress
Ending balance Beginning balance
Item Carrying Depreciation Depreciation
Carrying value Carrying amount Carrying value
amount reserve reserve
Intelligent park project 46,908,470.58 46,908,470.58 49,297,972.30 49,297,972.30
Whisky project 27,203,664.98 27,203,664.98 17,504,569.28 17,504,569.28
Other individual project 84,598,028.29 84,598,028.29 93,487,932.17 93,487,932.17
Total 158,710,163.85 158,710,163.85 160,290,473.75 160,290,473.75
~ 130 ~
Interim Report 2026
(ii) Changes in significant projects of construction in progress
Decrease during
Budget Increase during the Amount transferred to
Project Beginning balance the Reporting Ending balance
(RMB’0,000) Reporting Period fixed asset
Period
Intelligent park project 828,965.74 49,297,972.30 115,486,877.11 112,442,390.38 5,433,988.45 46,908,470.58
Whisky project 15,539.56 17,504,569.28 10,053,516.21 354,420.51 0.00 27,203,664.98
Other individual project 54,851.80 93,487,932.17 112,775,944.61 117,554,647.57 4,111,200.92 84,598,028.29
Total 899,357.10 160,290,473.75 238,316,337.93 230,351,458.46 9,545,189.37 158,710,163.85
(Continued)
Interest
Cumulative Of which: Interest
Proportion of capitalization
amount of capitalized during
Project project input to Schedule (%) during the Source of funds
interest the Reporting
budgets (%) Reporting
capitalization Period
Period (%)
Self-owned
Intelligent Park project 84.94 99.00 0.00 0.00 0.00 fund and raised
fund
Self-owned
Whisky project 60.28 93.00 317,135.84 303,884.77 2.71 fund and
borrowings
Self-owned
Other individual project 37.60 37.60 2,018,480.55 732,619.45 2.70 fund and
borrowings
Total 2,335,616.39 1,036,504.22
Items Buildings and constructions Land use rights Total
I. Original carrying value
Period
Reporting Period
II. Accumulated depreciation
~ 131 ~
Interim Report 2026
Period
Reporting Period
III. Impairment provision
Period
Reporting Period
IV. Carrying value
(1) General information of intangible assets
Patents and
Item Land use rights Software Total
trademark
I. Original carrying value
Period
(1) Acquisition 0.00 334,935.72 0.00 334,935.72
(2) Transfer from construction in
progress
Period
(1) Disposal or cancelation
II. Accumulated amortization:
Period
(1) Withdrawal 12,430,934.50 7,608,951.08 64,580.91 20,104,466.49
~ 132 ~
Interim Report 2026
Patents and
Item Land use rights Software Total
trademark
Period
(1) Disposal or cancelation
III. Impairment provision
Period
(1) Withdrawal
Period
(1) Disposal
IV. Carrying value
(2) Intangible assets used for mortgage or pledge at June 30, 2026
Original carrying Accumulated
Item Impairment provision Carrying value Note
value amortization
Pledged for
Land use rights 17,362,400.00 1,004,202.12 0.00 16,358,197.88
loans
Total 17,362,400.00 1,004,202.12 0.00 16,358,197.88
(1) Original carrying value of goodwill
Increase Decrease
Investees or matters that Formed by
goodwill arising from Beginning balance Ending balance
business Other Disposal Other
combination
Yellow Crane Tower Distillery
Co., Ltd.
Anhui Mingguang Distillery Co.,
Ltd.
Renhuai Maotai Town Zhencang 22,394,707.65 22,394,707.65
~ 133 ~
Interim Report 2026
Increase Decrease
Investees or matters that Formed by
goodwill arising from Beginning balance Ending balance
business Other Disposal Other
combination
Winery Industry Co., Ltd.
Total 561,364,385.01 561,364,385.01
(2) Provision for impairment of goodwill
Investees or matters that Beginning Increase Decrease
Ending balance
goodwill arising from balance Withdrawal Other Disposal Other
Yellow Crane Tower Distillery
Co., Ltd.
Anhui Mingguang Distillery Co.,
Ltd.
Renhuai Maotai Town Zhencang
Winery Industry Co., Ltd.
Total 314,610,386.34 314,610,386.34
Beginning Decrease
Item Increase Ending balance
balance
Amortization Other decrease
Experience center 9,428,228.71 143,790.82 674,972.52 8,897,047.01
Outdoor auxiliary projects 19,084,324.85 0.00 1,448,507.58 17,635,817.27
Pottery jar project 75,094,540.91 4,102,952.22 4,566,479.01 74,631,014.12
Theme hotel project 156,100,186.10 0.00 9,701,351.62 146,398,834.48
Public lines and pipeline
networks of the Intelligent Park 90,109,716.59 5,248,379.86 5,285,555.61 90,072,540.84
project
Other individual project with
insignificant amounts
Total 417,315,747.85 16,942,876.80 29,315,074.27 404,943,550.38
(1) Deferred tax assets before offsetting
Item Ending balance Beginning balance
~ 134 ~
Interim Report 2026
Deductible temporary Deductible temporary
Deferred tax assets Deferred tax assets
differences differences
Asset impairment provision 49,133,101.06 11,466,438.69 51,455,863.50 12,064,909.50
Credit impairment provision 17,976,138.52 4,404,056.14 17,704,140.31 4,354,735.95
Unrealized intergroup profit 71,597,020.45 16,905,195.92 66,184,882.61 16,238,669.35
Deferred income 155,316,559.89 38,264,493.75 162,588,721.38 39,981,747.79
Deductible losses 457,272,998.90 106,706,539.46 477,604,563.77 110,144,230.44
Carry-over of payroll payables
deductible during the next 11,903,932.14 1,785,589.82 19,360,961.32 2,904,144.20
period
Accrued expenses and discount 1,803,304,320.22 449,688,792.70 1,428,151,143.51 355,229,599.23
Change in fair value of
accounts receivable financing
Lease liabilities 80,920,666.12 20,230,166.53 93,721,254.88 23,430,313.72
Differences in the depreciation
periods of fixed assets
Total 2,650,093,612.32 650,110,898.04 2,322,622,824.33 565,597,803.57
(2) Deferred tax liabilities before offsetting
Ending balance Beginning balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Difference in accelerated
depreciation of fixed 532,800,483.08 130,580,295.18 570,927,623.31 140,112,080.23
assets
Assets appreciation
arising from business
combination not under
the same control
Changes in fair value of
trading financial assets
Unrealized intergroup
profit
Changes in fair value of
investments in other 22,524,514.32 5,631,128.59 19,677,319.92 4,919,329.99
equity instruments
Right-of-use assets 82,568,459.19 20,642,114.80 92,161,801.76 23,040,450.44
~ 135 ~
Interim Report 2026
Ending balance Beginning balance
Item Taxable temporary Taxable temporary
Deferred tax liabilities Deferred tax liabilities
differences differences
Total 1,522,113,562.01 373,210,513.69 1,579,468,733.56 387,418,335.41
(3) Net balance of deferred tax liabilities and deferred tax assets after offsetting
Net balance after Net balance after
Offset amount at the Offset amount at the
Item offsetting at the offsetting at the period-
period-end period-begin
period-end begin
Deferred tax assets -69,741,444.58 580,369,453.46 -77,949,881.61 487,647,921.96
Deferred tax liabilities -69,741,444.58 303,469,069.11 -77,949,881.61 309,468,453.80
(4) Details of unrecognized deferred tax assets
Item Ending balance Beginning balance
Deductible losses 13,355,707.71 14,286,361.99
Total 13,355,707.71 14,286,361.99
(5) Deductible losses not recognized as deferred tax assets will expire in the following periods: due in two to three
years at RMB6,725,159.61; due in three to four years at RMB6,630,548.10.
Item Ending balance Beginning balance
Prepayment for construction and machinery 1,288,199.27 5,465,160.95
Total 1,288,199.27 5,465,160.95
Category Ending balance Beginning balance
Credit loan 129,105,400.43 184,830,263.45
Total 129,105,400.43 184,830,263.45
(1) Listed by nature
Category Ending balance Beginning balance
Bank acceptance bills 924,418,345.49 1,472,240,813.01
Commercial acceptance bills
Total 924,418,345.49 1,472,240,813.01
(2) At the end of the Reporting Period, there is no notes payable matured but not yet paid.
(1) Listed by nature
~ 136 ~
Interim Report 2026
Item Ending balance Beginning balance
Payables for materials 679,907,956.99 820,539,496.01
Payments for constructions and equipment 1,044,545,556.12 1,154,367,384.76
Other 202,112,689.11 327,981,288.38
Total 1,926,566,202.22 2,302,888,169.15
(2) Significant accounts payable with aging of over one year
Not applicable.
Item Ending balance Beginning balance
Payment for goods 833,610,499.57 1,519,882,489.70
Total 833,610,499.57 1,519,882,489.70
(1) List of employee benefits payable
Item Beginning balance Increase Decrease Ending balance
I. Short-term employee benefits 1,271,130,114.58 1,759,241,647.32 1,977,538,365.56 1,052,833,396.34
II. Post-employment
benefits-defined contribution plans
III. Termination benefits 0.00 5,329,604.02 5,329,604.02 0.00
IV. Other benefits due within one
year
Total 1,276,935,454.81 1,980,106,600.26 2,198,049,056.04 1,058,992,999.03
(2) List of short-term employee benefits
Item Beginning balance Increase Decrease Ending balance
I. Salaries, bonuses, allowances and
subsidies
II. Employee benefits 0.00 56,885,704.85 56,885,704.85 0.00
III. Social insurance 401,570.56 66,248,638.95 66,201,449.56 448,759.95
Of which: Health insurance 398,434.95 61,415,497.40 61,375,422.84 438,509.51
Injury insurance 3,135.61 4,833,141.55 4,826,026.72 10,250.44
IV. Housing accumulation fund 8,571,095.74 74,503,914.69 76,531,535.86 6,543,474.57
~ 137 ~
Interim Report 2026
Item Beginning balance Increase Decrease Ending balance
V. Labor union funds and employee
education funds
Total 1,271,130,114.58 1,759,241,647.32 1,977,538,365.56 1,052,833,396.34
(3) Defined contribution plans
Item Beginning balance Increase Decrease Ending balance
insurance
insurance
Total 5,805,340.23 215,535,348.92 215,181,086.46 6,159,602.69
(4) Termination benefits
Item Beginning balance Increase Decrease Ending balance
Termination benefits 0.00 5,329,604.02 5,329,604.02 0.00
Total 0.00 5,329,604.02 5,329,604.02 0.00
Item Ending balance Beginning balance
VAT 221,505,683.56 195,978,427.07
Consumption tax 248,231,285.49 286,358,430.39
Enterprise income tax 280,879,613.79 35,880,443.94
Individual income tax 2,800,193.08 10,891,290.58
Urban maintenance and construction tax 25,058,654.58 26,138,067.76
Stamp duty 2,790,750.43 3,028,436.79
Educational surcharge 24,088,583.23 24,980,400.49
Other 23,335,613.93 22,713,064.50
Total 828,690,378.09 605,968,561.52
(1) Listed by category
Item Ending balance Beginning balance
~ 138 ~
Interim Report 2026
Item Ending balance Beginning balance
Interest payable
Dividends payable 1,797,240,000.00 0.00
Other payables 3,120,830,602.92 2,816,680,849.01
Total 4,918,070,602.92 2,816,680,849.01
(2) Other payables
(i) Listed by nature
Item Ending balance Beginning balance
Security deposit and guarantee 1,760,628,005.75 1,902,947,859.54
Warranty 246,930,041.51 196,511,550.86
Personal housing fund paid by company 6,575,266.23 6,563,300.45
Other 1,106,697,289.43 710,658,138.16
Total 3,120,830,602.92 2,816,680,849.01
(ii) Other payables aged over one year as of the statement date are mainly security deposit and warranty not yet
matured.
(3) Dividends payable
Item Ending balance Beginning balance
Dividend of ordinary shares 1,797,240,000.00 0.00
Dividends on preference shares/perpetual
bonds classified as equity instruments
Other 0.00 0.00
Total 1,797,240,000.00 0.00
Item Ending balance Beginning balance
Lease liabilities due within one year 17,335,121.03 17,582,426.45
Long-term borrowings due within one
year
Total 94,357,313.69 61,253,882.81
Item Ending balance Beginning balance
Accrued expenses 867,977,845.33 846,698,519.42
~ 139 ~
Interim Report 2026
Item Ending balance Beginning balance
Pre-mature output VAT 108,098,232.04 197,259,041.27
Total 976,076,077.37 1,043,957,560.69
Item Ending balance Beginning balance
Credit Loan 147,000,000.00 197,600,000.00
Pledged for loans 87,479,589.94 62,599,589.94
Total 234,479,589.94 260,199,589.94
Item Ending balance Beginning balance
Lease payments 90,241,797.15 104,845,973.69
Less: unrecognized financial charges 9,321,131.03 11,124,718.81
Subtotal 80,920,666.12 93,721,254.88
Less: lease liabilities due within one year 17,335,121.03 17,582,426.45
Total 63,585,545.09 76,138,828.43
Item Beginning balance Increase Decrease Ending balance Reason
Government Receiving asset-related
grants grants from government
Total 162,588,721.38 7,272,161.49 155,316,559.89 --
Changes during the Reporting Period (+,-)
Item Beginning balance Bonus Capitalization Ending balance
New issues Others Subtotal
issues of reserves
The sum of
shares
Item Beginning balance Increase Decrease Ending balance
Capital premium (share 6,196,258,070.02 6,196,258,070.02
premium)
Other capital reserves 32,853,136.20 32,853,136.20
Total 6,229,111,206.22 6,229,111,206.22
~ 140 ~
Interim Report 2026
Reporting Period
Less: Less:
Recorded in Recorded in
other other Attributable
Income
comprehensive comprehensive to owners of Attributable to
Beginning before Less: Ending
Item income in income in the non-controlling
balance taxation in Income tax balance
prior period prior period Company as interests after
the Current expense
and transferred and transferred the parent tax
Period
to profit or to retained after tax
loss in the earnings in the
Current Period Current Period
I. Other
comprehensive
income that may not
subsequently be
reclassified to profit
or loss
Of which: Changes
caused by
remeasurements on
defined benefit
schemes
Other
comprehensive
income that will not
be reclassified to
profit or loss under
the equity method
Changes in
fair value of other
equity instrument
investment
Changes in the
fair value arising from
changes in own credit
risk
II. Other
comprehensive
income that may -2,774,280.88 -2,668,875.02 -2,790,572.72 -659,625.03 824,825.69 -43,502.96 -1,949,455.19
subsequently be
reclassified to profit
~ 141 ~
Interim Report 2026
or loss
Of which: Other
comprehensive
income that will be
reclassified to profit
or loss under the
equity method
Changes in the
fair value of
investments in other
debt obligations
Other
comprehensive
income arising from -2,774,280.88 -2,668,875.02 -2,790,572.72 -659,625.03 824,825.69 -43,502.96 -1,949,455.19
the reclassification of
financial assets
Credit
impairment allowance
for investments in
other debt obligations
Reserve for cash flow
hedges
Differences
arising from
translation of foreign
currency-denominated
financial statements
Total of other
comprehensive 6,080,513.09 178,319.38 -2,790,572.72 52,173.57 2,106,063.16 810,655.37 8,186,576.25
income
Item Beginning balance Increase Decrease Ending balance
Statutory surplus reserve 269,402,260.27 269,402,260.27
Total 269,402,260.27 269,402,260.27
Note: In accordance with provisions of Company Law and Articles of Association, the statutory surplus reserve
shall be withdrawn at 10% of net profits by the Company. The accumulated amount of statutory surplus reserve
can no longer be withdrawn when it is more than 50% of the Company’s registered capital.
~ 142 ~
Interim Report 2026
Item Reporting Period Same period of last year
Beginning balance of retained earnings before adjustments 18,017,022,962.78 17,639,514,432.44
Total beginning balance of retained earnings before
adjustment (increase+, decrease-)
Beginning balance of retained earnings after adjustments 18,017,022,962.78 17,639,514,432.44
Add: Net profit attributable to owners of the Company as 2,164,379,928.17 3,549,108,530.34
the parent
Less: withdrawal of statutory surplus reserve
Dividend of ordinary shares payable 2,325,840,000.00 3,171,600,000.00
Ending retained earnings 17,855,562,890.95 18,017,022,962.78
Reporting Period Same period of last year
Item
Operating revenue Costs of sales Operating revenue Costs of sales
Main operations 10,073,146,014.61 1,972,160,645.99 13,817,383,143.06 2,770,679,996.44
Other operations 58,249,912.50 20,691,683.73 62,469,059.69 22,855,262.10
Total 10,131,395,927.11 1,992,852,329.72 13,879,852,202.75 2,793,535,258.54
Information on operating revenue and cost of sales:
Reporting Period Same period of last year
Item
Operating revenue Costs of sales Operating revenue Costs of sales
Commodity type
Baijiu business 9,996,788,312.26 1,936,205,598.58 13,639,596,262.27 2,636,312,694.81
Others 134,607,614.85 56,646,731.14 240,255,940.48 157,222,563.73
Total 10,131,395,927.11 1,992,852,329.72 13,879,852,202.75 2,793,535,258.54
By operating segment
North China 398,918,435.26 118,850,703.25 809,341,217.22 210,468,705.23
Central China 9,125,205,701.57 1,755,683,018.30 12,297,380,470.09 2,431,350,909.32
South China 603,328,414.66 116,714,281.95 768,186,540.95 149,970,516.12
International 3,943,375.62 1,604,326.22 4,943,974.49 1,745,127.87
Total 10,131,395,927.11 1,992,852,329.72 13,879,852,202.75 2,793,535,258.54
By distribution
channel:
Online 658,087,417.84 180,594,321.35 572,650,258.28 153,527,839.86
~ 143 ~
Interim Report 2026
Offline 9,473,308,509.27 1,812,258,008.37 13,307,201,944.47 2,640,007,418.68
Total 10,131,395,927.11 1,992,852,329.72 13,879,852,202.75 2,793,535,258.54
Information on performance obligations: None
Item Reporting Period Same period of last year
Consumption tax 1,337,530,510.62 1,770,534,419.59
Urban maintenance and construction tax and
educational surcharge
Urban land use tax 13,026,452.39 12,841,563.18
Property tax 29,118,114.35 24,753,853.31
Stamp duty 9,642,316.59 12,454,083.98
Other 12,189,290.23 15,618,141.35
Total 1,693,426,159.08 2,175,977,722.16
Item Reporting Period Same period of last year
Employment benefits 588,772,275.16 664,068,763.31
Travel fees 126,095,272.65 134,242,942.14
Advertisement fees 729,372,049.18 715,108,133.20
Comprehensive promotion costs 1,198,947,459.25 1,545,750,834.47
Service fees 357,789,020.82 391,207,359.74
Other 71,529,457.37 61,030,523.10
Total 3,072,505,534.43 3,511,408,555.96
Item Reporting Period Same period of last year
Employee benefits 366,774,873.45 407,158,260.95
Office fees 16,435,664.56 27,761,197.17
Maintenance expenses 16,536,283.64 20,517,221.46
Depreciation 96,383,231.59 72,716,531.29
Amortization 32,122,432.43 27,786,998.85
Pollution discharge 8,966,473.30 11,470,740.16
Travel expenses 6,678,868.53 6,597,066.02
~ 144 ~
Interim Report 2026
Water and electricity charges 5,481,500.53 6,793,423.13
Other 81,637,704.51 90,616,337.75
Total 631,017,032.54 671,417,776.78
Item Reporting Period Same period of last year
Labor cost 26,823,267.57 27,240,880.08
Direct input costs 3,098,417.74 6,665,094.54
Depreciation expense 2,545,000.59 2,111,195.83
Other 2,453,371.61 4,300,576.92
Total 34,920,057.51 40,317,747.37
Item Reporting Period Same period of last year
Interest expenses 7,391,788.69 5,553,600.24
Including: Interest expenses for lease
liabilities
Less: Interest income 240,740,851.52 324,132,039.22
Net interest expenses -233,349,062.83 -318,578,438.98
Net foreign exchange losses -464,436.33 2,337,376.58
Bank charges and others 832,839.25 533,246.08
Total -232,980,659.91 -315,707,816.32
Same period of last
Item Reporting Period Related to assets /income
year
I. Government grants recorded to other income 13,157,837.67 42,305,674.84
Of which: Government grant related to deferred
income
Government grant recorded to current profit
or loss
II. Others related to daily operation activities and
recognized in other income
Total 20,019,519.36 50,136,522.40 --
Item Reporting Period Same period of last year
Investment income from long-term equity
investments under equity method
~ 145 ~
Interim Report 2026
Gains on disposal of long-term equity
investments
Gains on disposal of held-for-trading financial
assets
Gains from other equity instrument investment
income during holding period
Gains from disposal of financial assets at fair
-16,481,406.13 -19,878,125.78
value through other comprehensive income
Others 1,972,083.55 580,950.87
Total -11,084,485.12 -17,291,463.64
Sources Reporting Period Same period of last year
Financial assets at fair value through profit or loss 2,753,738.33 528,360.62
Of which: gains on changes in fair value of derivatives
Total 2,753,738.33 528,360.62
Item Reporting Period Same period of last year
Bad debt of notes receivable
Bad debt of accounts receivable -37,702.49 -530,040.16
Bad debt of other receivables -234,295.72 1,109,057.18
Total -271,998.21 579,017.02
Item Reporting Period Same period of last year
I. Inventory falling price loss 1,330,835.11 954,415.89
II. Impairment loss of fixed assets
III. Impairment loss of intangible assets
IV. Impairment loss of goodwill
Total 1,330,835.11 954,415.89
Item Reporting Period Same period of last year
Gains/Losses from disposal of fixed assets, construction in
progress, productive biological assets and intangible assets not 204,877.54 37,146.67
classified as held for sale
Of which: Fixed assets 204,877.54 37,146.67
~ 146 ~
Interim Report 2026
Item Reporting Period Same period of last year
Total 204,877.54 37,146.67
Recognized in current
Item Reporting Period Same period of last year non-recurring profit or
loss
Gains from damage or scrapping of
non-current asset
Fine and compensation 14,735,402.60 24,891,666.82 14,735,402.60
Sale of scrap 1,832,115.25 2,859,176.80 1,832,115.25
Release of payables 11,171.12 0.00 11,171.12
Others 395,596.75 648,515.97 395,596.75
Total 16,975,362.58 28,399,359.59 16,975,362.58
Recognized in current
Item Reporting Period Same period of last year
non-recurring profit or loss
Loss from damage or scrapping of
non-current assets
Donations 330,086.30 925,000.00 330,086.30
Other 1,313,344.62 405,361.97 1,313,344.62
Total 5,045,678.27 2,028,341.63 5,045,678.27
(1) Details of income tax expenses
Item Reporting Period Same period of last year
Current tax expenses 853,635,748.50 1,371,026,535.77
Deferred tax expenses -99,702,907.80 -84,349,304.56
Total 753,932,840.70 1,286,677,231.21
(2) Reconciliation of accounting profit and income tax expenses
Item Reporting Period
Profit before taxation 2,964,537,645.06
Current income tax expense accounted at applicable tax rate of the
Company as the parent
Influence of applying different tax rates by subsidiaries -9,750,276.91
~ 147 ~
Interim Report 2026
Adjustment for prior period 19,933,148.97
Influence of non-taxable income -856,209.37
Influence of non-deductible costs, expenses and losses 10,727,975.48
Influence of deductible losses of unrecognized deferred income
tax at the beginning of the Reporting Period
Influence of deductible temporary difference or deductible losses
of unrecognized deferred income tax in the Reporting Period
Influence of development expense deduction -7,256,208.73
Tax rate adjustment to the beginning balance of deferred income
tax assets/liabilities
Income tax credits 0.00
Total 753,932,840.70
(1) Other cash received relating to operating activities
Item Reporting Period Same period of last year
Security deposit, guarantee and warranty 86,140,460.36 65,670,284.20
Government grants 5,885,676.18 38,096,549.86
Interest income 240,740,851.52 324,132,039.22
Release of restricted monetary assets 429,927,281.05 290,541,554.58
Other 108,404,615.81 128,389,307.02
Total 871,098,884.92 846,829,734.88
(2) Other cash payments relating to operating activities
Item Reporting Period Same period of last year
Cash paid in sales and distribution expenses and
general and administrative expense
Security deposit, guarantee and warranty 110,894,336.92 65,261,571.87
Time deposits or deposits pledged for the
issuance of notes payable
Others 139,091,389.62 157,249,646.94
Total 1,396,026,317.27 2,065,770,527.44
(3) Other cash payments relating to financing activities
Item Reporting Period Same period of last year
Rental fee 14,254,699.26 11,832,851.40
Total 14,254,699.26 11,832,851.40
~ 148 ~
Interim Report 2026
Changes in liabilities arising from financing activities
Increase in the current period Decrease in the current period
Beginning
Item Changes in Changes in Ending balance
balance Changes in cash Changes in cash
non-cash non-cash
Short-term
Borrowings
Long-term
Borrowings
Lease liabilities 76,138,828.43 0.00 1,803,587.78 0.00 14,356,871.12 63,585,545.09
lease liabilities due
within one year
Long-term
Borrowings due 43,671,456.36 0.00 99,681,544.64 66,330,808.34 0.00 77,022,192.66
within one year
Dividends payable 0.00 0.00 1,797,240,000.00 0.00 0.00 1,797,240,000.00
Total 582,422,564.63 99,300,000.00 1,919,391,167.20 167,273,632.27 115,072,250.41 2,318,767,849.15
(1) Supplementary information to the statement of cash flows
Supplementary information Reporting Period Same period of last year
-- --
flows generated from operating activities:
Net profit 2,210,604,804.36 3,777,540,743.97
Add: Provisions for impairment of assets -1,330,835.11 -954,415.89
Credit impairment provision 271,998.21 -579,017.02
Depreciation of fixed assets, oil and gas
assets and productive biological assets
Depreciation of right-of-use assets 9,190,225.48 8,804,476.73
Amortization of intangible assets 20,104,466.49 19,357,592.50
Amortization of long-term deferred expenses 29,315,074.27 27,157,131.74
Losses from disposal of fixed assets,
intangible assets and other long-term assets -204,877.54 -37,146.67
(gains: negative)
Losses on scrapping of fixed assets (gains:
negative)
Losses on changes in fair value (gains: -2,753,738.33 -528,360.62
~ 149 ~
Interim Report 2026
negative)
Finance costs (gains: negative) 6,927,352.36 5,553,600.24
Investment losses (gains: negative) -5,396,921.01 -2,586,662.14
Decreases in deferred tax assets (increase:
-84,783,287.48 -71,450,956.11
negative)
Increases in deferred tax liabilities (decrease:
-14,919,620.32 -12,898,348.45
negative)
Decreases in inventories (increase: negative) -53,165,503.34 -137,280,948.47
Decreases in operating receivables (increase:
-271,692,191.81 2,598,779,357.38
negative)
Increases in operating payables (decrease:
-1,131,850,776.47 -2,587,848,998.50
negative)
Other*1 429,927,281.05 201,199,743.91
Net cash flows from operating activities 1,542,535,137.60 4,154,552,054.60
activities without involvement of cash
receipts and payments
Conversion of debt into capital
Current portion of convertible corporate
bonds
Fixed assets acquired under finance leases
equivalents:
Ending balance of cash 12,038,274,964.82 15,076,527,533.64
Less: Beginning balance of cash 12,494,251,818.57 15,193,134,694.19
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -455,976,853.75 -116,607,160.55
*1: “Other” mainly refer to the impacts of recovered restricted funds for operating activities of the same period of
last year and the restricted funds for operating activities paid in the current period on net cash flow generated from
operating activities of the Reporting Period.
(2) The components of cash and cash equivalents
Item Reporting Period Same period of last year
I. Cash 12,038,274,964.82 15,076,527,533.64
~ 150 ~
Interim Report 2026
Item Reporting Period Same period of last year
Including: Cash on hand 109,047.09 6,045.93
Bank deposit on demand 12,023,904,318.78 15,044,905,760.69
Other monetary assets on demand 14,261,598.95 31,615,727.02
II. Cash equivalents
Of which: Bond investments maturing within three months
III. Ending balance of cash and cash equivalents 12,038,274,964.82 15,076,527,533.64
Of which: cash and cash equivalents with restriction to use in the
subsidies of the Company as the parent or Group
Item Ending carrying value Reason
Pledged for opening bank acceptance
Cash and cash equivalents 1,263,284,630.19
bills, L/G and other security deposit.
Intangible assets 16,358,197.88 Pledged for loans.
Total 1,279,642,828.07 --
(1) The Company as a lessee
Current gains and losses and cash flows related to leases
Item Reporting Period
Expenses for short-term lease under simplified method 3,831,194.96
Expenses for lease of low value asset (except for short-term lease) under simplified method
Interest expense of lease liabilities 1,787,517.99
Variable lease payments not included in lease liabilities recognized in current profit or loss
Income from subleasing the right-of-use assets
Cash outflows related to leases 21,258,123.84
Profit or loss in sale and leaseback transaction
(2) The Company as a lessor
Operating lease
Item Reporting Period
Lease income 4,943,304.08
Including: income related to variable lease payments not included in lease receivables 4,943,304.08
~ 151 ~
Interim Report 2026
VI Research and Development Expenditures
Item Reporting Period Same period of last year
Labor costs 26,823,267.57 27,240,880.08
Material costs 3,098,417.74 6,665,094.54
Depreciation costs 2,545,000.59 2,111,195.83
Others 2,453,371.61 4,300,576.92
Total 34,920,057.51 40,317,747.37
Including: Expensed R&D expenditures 34,920,057.51 40,317,747.37
Capitalized R&D expenditures
VII Changes in the Scope of Consolidation
Not applicable.
VIII Interests in other Entities
(1) Composition of corporate group
Percentage of equity
Registered Principal
Registered Nature of interests by the Ways of
Name of subsidiary capital place of
address business Company (%) acquisition
(RMB’0,000) business
Direct Indirect
Anhui Commercial Investment
Bozhou Gujing Sales Co., Ltd. 8,486.45 Anhui Bozhou 100.00
Bozhou trade establishment
Anhui Investment
Anhui Longrui Glass Co., Ltd 8,871.03 Anhui Bozhou Manufacture 97.69
Bozhou establishment
Anhui Jiuan Mechanical Electrical Anhui Equipment Investment
Equipment Co., Ltd. Bozhou manufacturing establishment
Anhui Jinyunlai Culture & Media Advertisement Investment
Co., Ltd. marketing establishment
Anhui Ruisiweier Technology Co., Anhui Technical Investment
Ltd. Bozhou research establishment
Shanghai Gujing Jinhao Hotel Business
Management Co., Ltd. 5,400.00 Shanghai Shanghai Hotel operating 100.00 combination under
common control
Bozhou Gujing Hotel Co., Ltd Anhui Business
Bozhou combination under
~ 152 ~
Interim Report 2026
Percentage of equity
Registered Principal
Registered Nature of interests by the Ways of
Name of subsidiary capital place of
address business Company (%) acquisition
(RMB’0,000) business
Direct Indirect
common control
Anhui Yuanqing Environmental Anhui Sewage Investment
Protection Co., Ltd. Bozhou treatment establishment
Anhui Gujing Yunshang Electronic Investment
E-commerce Co., Ltd commerce establishment
Anhui RunAnXinKe Testing Anhui Investment
Technology Co., Ltd. Bozhou establishment
Anhui Jiudao Culture Media Co., Advertisement Investment
Ltd. marketing establishment
Anhui Gujinggong Liquor Original
Anhui Investment
Vintage Theme Hotel Management 1,000.00 Anhui Bozhou Hotel operating 100.00
Bozhou establishment
Co., Ltd.
Anhui Investment
Anhui Guqi Distillery Co., Ltd. 12,000.00 Anhui Bozhou Manufacture 60.00
Bozhou establishment
Anhui Guqi Distillery Sales Co., Anhui Commercial Investment
Ltd. Bozhou trade establishment
Anhui Guge Culture Media Co., Anhui Advertisement Investment
Ltd. Bozhou marketing establishment
Anhui Gujing Suhuai Distillery Anhui Commercial Investment
Sales Co., Ltd. Suzhou trade establishment
Business
Yellow Crane Tower Distillery Co., combination not
under common
Ltd.
control
Business
Yellow Crane Tower Distillery Hubei Hubei combination not
(Xianning) Co., Ltd. Xianning Xianning under common
control
Business
Yellow Crane Tower Distillery Hubei combination not
(Suizhou) Co., Ltd. Suizhou under common
control
Business
Wuhan Tianlong Jindi Technology Commercial combination not
Development Co., Ltd trade under common
control
Xianning Junhe Sales Co., Ltd 1,000.00 Hubei Hubei Commercial 51.00 Business
~ 153 ~
Interim Report 2026
Percentage of equity
Registered Principal
Registered Nature of interests by the Ways of
Name of subsidiary capital place of
address business Company (%) acquisition
(RMB’0,000) business
Direct Indirect
Xianning Xianning trade combination not
under common
control
Commercial Investment
Wuhan Junya Sales Co., Ltd 100.00 Hubei Wuhan Hubei Wuhan 51.00
trade establishment
Suizhou Junhe Commercial Co., Hubei Commercial Investment
Ltd. Suizhou trade establishment
Huanggang Huanggang Commercial Investment
Huanggang Junya Trading Co., Ltd. 2,000.00 51.00
Hubei Hubei trade establishment
Wuhan Gulou Junhe Trading Co., Commercial Investment
Ltd. trade establishment
Wuhan Gulou Juntai Trading Co., Commercial Investment
Ltd. trade establishment
Xiaogan Gulou Tiancheng Trading Hubei Hubei Commercial Investment
Co., Ltd. Xiaogan Xiaogan trade establishment
Commercial Investment
Ezhou Junya Trading Co., Ltd. 2,000.00 Hubei Ezhou Hubei Ezhou 51.00
trade establishment
Commercial Investment
Wuhan Juntai Trading Co., Ltd. 2,000.00 Hubei Wuhan Hubei Wuhan 51.00
trade establishment
Business
Anhui Mingguang Distillery Co., Anhui Anhui combination not
Ltd. Chuzhou Mingguang under common
control
Business
Mingguang Tiancheng Ming Wine Anhui Anhui Commercial combination not
Sales Co., Ltd. Chuzhou Mingguang trade under common
control
Anhui Jiuhao Construction Anhui Investment
Engineering Co., Ltd. Bozhou establishment
Anhui Zhenrui Construction Anhui Investment
Engineering Co., Ltd Bozhou establishment
Business
Renhuai Maotai Town Zhencang Renhuai Renhuai combination not
Winery Industry Co., Ltd. Guizhou Guizhou under common
control
Guizhou Zhencang Winery Industry Renhuai Renhuai Commercial Investment
Sales Co., Ltd. Guizhou Guizhou trade establishment
~ 154 ~
Interim Report 2026
Percentage of equity
Registered Principal
Registered Nature of interests by the Ways of
Name of subsidiary capital place of
address business Company (%) acquisition
(RMB’0,000) business
Direct Indirect
Anhui Gujing Health Technology Business
Co., Ltd. Anhui combination not
Bozhou under common
control
Anhui Gujing Light Wellness Club Business
Supply Chain Management Co., Anhui Commercial combination not
Ltd. Bozhou trade under common
control
(2) Significant non-wholly owned subsidiaries
Not applicable.
(1) Significant joint ventures or associates
The Company had no significant joint venture or associate.
(2) Summarized financial information about insignificant joint ventures and associates
Beginning balance/Same period of
Item Ending balance/Reporting Period
last year
Joint venture:
Total carrying amount of investments
The aggregate amount of below items calculated
based on proportion of equity interests:
—Net profit/(loss)
—Other comprehensive income
—Total comprehensive income
Associate:
Total carrying amount of investments 14,318,896.10 11,574,463.54
The aggregate amount of below items calculated
based on proportion of equity interests:
—Net profit/(loss) 2,744,432.56 194,023.79
—Other comprehensive income
—Total comprehensive income 2,744,432.56 194,023.79
IX Government Grants
~ 155 ~
Interim Report 2026
The ending balance of accounts receivable was RMB0.00.
Reason for not receiving the projected amount of government grants at the projected point in time
□ Applicable ? Not applicable
? Applicable □ Not applicable
Items Amount
Amount
presented Increase in recognized in
recognized in
in the government non-operating Other changes Related to
Beginning other income
statement grants during income during the Ending balance assets or
balance during the
of the Reporting during the Reporting Period income
Reporting
financial Period Reporting
Period
position Period
Deferred Related to
income assets
? Applicable □ Not applicable
Items presented in income statement Reporting Period Same period of last year
Other income 13,157,837.67 42,305,674.84
X Risks Related to Financial Instruments
Risks related to the financial instruments of the Company arise from the recognition of various
financial assets and financial liabilities during its operation, including credit risk, liquidity risk and
market risk.
Management of the Company is responsible for determining risk management objectives and
policies related to financial instruments. Operational management is responsible for the daily risk
management through functional departments (e.g. credit management department of the Company
reviews each credit sale). Internal audit department is responsible for the daily supervision of
implementation of the risk management policies and procedures, and report their findings to the
audit committee in a timely manner.
Overall risk management objective of the Company is to establish risk management policies to
minimize the risks without unduly affecting the competitiveness and resilience of the Company.
Credit risk is the risk of one party of the financial instrument face to a financial loss because the
other party of the financial instrument fails to fulfill its obligation. The credit risk of the Company is
related to cash and equivalent, notes receivable, accounts receivables, other receivables and
long-term receivables. Credit risk of these financial assets is derived from the counterparty’s breach
~ 156 ~
Interim Report 2026
of contract. The maximum risk exposure is equal to the carrying amount of these financial
instruments.
Cash and cash equivalent of the Company has lower credit risk, as they are mainly deposited in
such financial institutions as commercial bank, of which the Company thinks with higher reputation
and financial position. For notes receivable, other receivables and long-term receivables, the
Company establishes related policies to control their credit risk exposure. The Company assesses
credit capability of its customers and determines their credit terms based on their financial position,
possibility of the guarantee from third party, credit record and other factors (such as current market
status, etc.). The Company monitors its customers’ credit record periodically, and for those
customers with poor credit record, the Company will take measures such as written call, shortening
or canceling their credit terms so as to ensure the overall credit risk of the Company is controllable.
(1) Determination of significant increases in credit risk
The Company assesses at each reporting date as to whether the credit risk on financial instruments
has increased significantly since initial recognition. When the Company determines whether the
credit risk has increased significantly since initial recognition, it considers based on reasonable and
supportable information that is available without undue cost or effort, including quantitative and
qualitative analysis of historical information, external credit ratings and forward-looking
information. The Company determines the changes in the risk of a default occurring over the
expected life of the financial instrument through comparing the risk of a default occurring on the
financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition based on individual financial instrument or a group of
financial instruments with the similar credit risk characteristics.
When met one or more of the following quantitative or qualitative criteria, the Company determines
that the credit risk on financial instruments has increased significantly: the quantitative criteria
applied mainly because as at the reporting date, the increase in the probability of default occurring
over the lifetime is more than a certain percentage since the initial recognition; the qualitative
criteria applied if the debtor has adverse changes in business and economic conditions, early
warning list of customer, and etc.
(2) Definition of credit-impaired financial assets
The criteria adopted by the Company for determination of credit impairment are consistent with
internal credit risk management objectives of relevant financial instruments in considering both
quantitative and qualitative indicators.
When the Company assesses whether the debtor has incurred the credit impairment, the main
factors considered are as following: Significant financial difficulty of the issuer or the borrower; a
breach of contract, e.g., default or past-due event; a lender having granted a concession to the
borrower for economic or contractual reasons relating to the borrower’s financial difficulty that the
~ 157 ~
Interim Report 2026
lender would not otherwise consider; the probability that the borrower will enter bankruptcy or
other financial re-organization; the disappearance of an active market for the financial asset because
of financial difficulties of the issuer or the borrower; the purchase or origination of a financial asset
at a deep discount that reflects the incurred credit losses.
(3) The parameter of expected credit loss measurement
The company measures impairment provision for different assets with the expected credit loss of
credit impairment has occurred. The key parameters for expected credit loss measurement include
default probability, default loss rate and default risk exposure. The Company sets up the model of
default probability, default loss rate and default risk exposure in considering the quantitative
analysis of historical statistics (such as counterparties’ ratings, guarantee method and collateral type,
repayment method, etc.) and forward-looking information.
Relevant definitions are as following:
Default probability refers to the probability of the debtor will fail to discharge the repayment
obligation over the next 12 months or the entire remaining lifetime;
Default loss rate refers to the Company’s expectation of the loss degree of default risk exposure.
The default loss rate varies depending on the type of counterparty, recourse method and priority,
and the collateral. The default loss rate is the percentage of the risk exposure loss when default has
occurred and it is calculated over the next 12 months or the entire lifetime;
The default risk exposure refers to the amount that the company should be repaid when default has
occurred in the next 12 months or the entire lifetime. Both the assessment of significant increase in
credit risk of forward-looking information and the calculation of expected credit losses involve
forward-looking information. Through historical data analysis, the Company identifies key
economic indicators that have impact on the credit risk and expected credit losses for each business.
The maximum exposure to credit risk of the Company is the carrying amount of each financial asset
in the statement of financial position. The Company does not provide any other guarantees that may
expose the Company to credit risk.
For the accounts receivable of the Company, the amount of top 5 clients represents 44.54% of the
total; for the other receivables, the amount of the top five entities represents 57.10% of the total.
Liquidity risk is the risk of shortage of funds when fulfilling the obligation of settlement by
delivering cash or other financial assets. The Company is responsible for the capital management of
all of its subsidiaries, including short-term investment of cash surplus and dealing with forecasted
cash demand by raising loans. The Company’s policy is to monitor the demand for short-term and
long-term floating capital and whether the requirement of loan contracts is satisfied so as to ensure
~ 158 ~
Interim Report 2026
to maintain adequate cash and cash equivalents.
As of the end of the Reporting Period, the maturities of the Company’s financial liabilities are as follows:
End balance
Item
Within 1 year 1-2 years 2-3 years Over 3 years
Short-term borrowings 130,009,500.00
Notes payable 924,418,345.49
Accounts payable 1,926,566,202.22
Other payables 4,918,070,602.92
Non-current liabilities due within
Other current liabilities 976,076,077.37
Long-term borrowings 108,163,914.81 59,209,371.23 82,823,772.91
Lease liabilities 21,580,268.58 12,545,662.42 38,234,314.95
Total 8,980,584,558.02 129,744,183.39 71,755,033.65 121,058,087.86
Opening balance
(Continued)Item
Within 1 year 1-2 years 2-3 years Over 3 years
Short-term borrowings 186,934,364.01
Notes payable 1,472,240,813.01
Accounts payable 2,302,888,169.15
Other payables 2,816,680,849.01
Non-current liabilities due within
Other current liabilities 1,043,957,560.69
Long-term borrowings 0.00 99,209,174.77 119,042,949.22 57,269,625.38
Lease liabilities 0.00 21,677,513.09 21,760,268.51 44,507,146.01
Total 7,895,883,073.61 120,886,687.86 140,803,217.73 101,776,771.39
Market risk of financial instruments refers to the risk that the fair value or future cash flow of
financial instruments will fluctuate due to changes in market prices. Market risk mainly includes
foreign exchange risk and interest rate risk.
(1) Foreign currency risk
Foreign currency risk of the Company mainly arise from foreign currency assets and liabilities
denominated in currency other than the Company’s functional currency. The main business of the
Company is located in Chinese Mainland, and the main business is settled in RMB. There is only a
small amount of export business, which has a small proportion of income scale and impact, and has
little exchange rate risk.
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Interim Report 2026
(2) Interest rate risk
Interest risk refers to the risk on the fair value or future cash flows of a financial instrument brought
by the change of market interest rate. Interest risk mainly arises from bank loans. As of June 30,
(3) Other price risk
Investments held for trading were measured at fair value. As such, these investments are subject to
the risk brought by the change of security prices. The Company controls this risk to the acceptable
level by utilizing multiple investment mix.
XI Fair Value Disclosures
The inputs used in the fair value measurement in its entirety are to be classified in the level of the
hierarchy in which the lowest level input that is significant to the measurement is classified.
Level 1: Inputs consist of unadjusted quoted prices in active markets for identical assets or
liabilities.
Level 2: Inputs for the assets or liabilities (other than those included in Level 1) that are either
directly or indirectly observable.
Level 3: Inputs are unobservable inputs for the assets or liabilities.
Fair value on June 30, 2026
Item
Level 1 Level 2 Level 3 Total
I. Recurring fair value measurements
(I) Held-for-trading financial assets 602,695,342.46 602,695,342.46
profit or loss
(1) Debt instruments
(2) Bank financial products 602,695,342.46 602,695,342.46
(II) Financial assets measured at fair
value through other comprehensive 1,204,344,670.57 1,204,344,670.57
income
(1) Accounts receivable financing 1,127,971,458.45 1,127,971,458.45
(2) Investments in other equity
instrument
Total assets measured at fair value on a 1,807,040,013.03 1,807,040,013.03
~ 160 ~
Interim Report 2026
Fair value on June 30, 2026
Item
Level 1 Level 2 Level 3 Total
recurring basis
The fair value of financial instruments traded in an active market is based on quoted market prices
at the reporting date. The fair value of financial instruments not traded in an active market is
determined by using valuation techniques. Specific valuation techniques used to value the above
financial instruments include discounted cash flow and market approach to comparable company
model. Inputs in the valuation technique include risk-free interest rates, benchmark interest rates,
exchange rates, credit spreads, liquidity premiums, and discount for lack of liquidity.
The financial assets and financial liabilities of the Company measured at amortized cost mainly
include: cash and cash equivalents, notes receivable, accounts receivable, other receivables, debt
investments, short-term borrowings, notes payable, accounts payable, other payables, long-term
borrowings maturing within one year, long-term payables, long-term borrowings and bonds
payable.
XII Related Parties and Related Party Transactions
Recognition of related parties: The Company has control or joint control of, or exercise significant
influence over another party; or the Company and another party are controlled or jointly controlled
by the same third party.
Percentage of
Registered Registered capital Voting rights in the
Name of the parent Nature of the business equity interests in
address (RMB) Company (%)
the Company (%)
Anhui Gujing Group Anhui
Commercial trade 1,000,000,000.00 51.34 51.34
Co., Ltd.
Bozhou
The Company’s ultimate controller is the State-owned Asset Management Commission of the People’s
Government of Bozhou, Anhui.
Details of the subsidiaries please refer to Notes 8.1 Interests in other Entities.
(1) General information of significant joint ventures and associates
Details of significant joint ventures and associates please refer to Notes 8.2 Interests in other Entities.
~ 161 ~
Interim Report 2026
Name Relationship with the Company
Controlled by the Company’s controlling shareholder
Anhui Ruijing Shanglv (Group) Co., Ltd. (RJSL Group)
or ultimate controller
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday Inn (RJSL Controlled by the Company’s controlling shareholder
Holiday Inn) or ultimate controller
Controlled by the Company’s controlling shareholder
Bozhou Gujing Huishenglou Catering Co., Ltd.(GJ Huishenglou Catering)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Haochidian Catering Co., Ltd. (Haochidian Catering)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Ruijing Catering Co., Ltd. (Ruijing Catering)
or ultimate controller
Controlled by the Company’s controlling shareholder
Shanghai Beihai Hotel Co., Ltd. (Beihai Hotel)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Gujing Hotel Development Co., Ltd.(GJ Hotel Development)
or ultimate controller
Anhui Huixin Financial Investment Group Co., Ltd.(Huixin Financial Controlled by the Company’s controlling shareholder
Investment) or ultimate controller
Controlled by the Company’s controlling shareholder
Bozhou Anxin Small Loan Co., Ltd. (Anxin Small Loan)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Hengxin Pawnshop Co., Ltd. (Hengxin Pawnshop)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Ruixin Pawnshop Co., Ltd. (Ruixin Pawnshop)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Zhongxin Financial Leasing Co., Ltd.(Zhongxin Financial Leasing)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Youxin Financing Guarantee Co, Ltd. (Youxin Guarantee)
or ultimate controller
Hefei Longxin Corporate Management Advisory Co., Ltd. (Longxin Controlled by the Company’s controlling shareholder
Advisory) or ultimate controller
Anhui Chuangxin Equity Investment Co. Ltd.(Chuangxin Equity Controlled by the Company’s controlling shareholder
Investment) or ultimate controller
~ 162 ~
Interim Report 2026
Controlled by the Company’s controlling shareholder
Anhui Lejiu Jiayuan Travel Management Co., Ltd. (Lejiu Jiayuan)
or ultimate controller
Controlled by the Company’s controlling shareholder
Anhui Shenglong Trading Co., Ltd. (Shenglong Trading)
or ultimate controller
Controlled by the Company’s controlling shareholder
Bozhou Hotel Co., Ltd. (Bozhou Guest House)
or ultimate controller
Controlled by the Company’s controlling shareholder
Dongfang Ruijing Enterprise Investment Co., Ltd.(Dongfang Ruijing)
or ultimate controller
Dazhongyuan Jiugu Cultural Tourism Development Co., Ltd. (Dazhongyuan Controlled by the Company’s controlling shareholder
Jiugu Cultural) or ultimate controller
Anhui Jiuan Engineering Management Consulting Co., Ltd.(Jiuan Controlled by the Company’s controlling shareholder
Consulting) or ultimate controller
(1) Purchases or sales of goods, rendering or receiving of services
Purchases of goods, receiving of services:
Reporting Same period of last
Related parties Nature of the transaction(s)
Period year
Receiving catering and
Bozhou Hotel Co., Ltd. 3,017,279.78 5,433,546.07
accommodation
Receiving catering and
Bozhou Gujing Huishenglou Catering Co., Ltd. 2,131,633.36 3,112,747.15
accommodation
Receiving catering and
Anhui Gujing Hotel Development Co., Ltd. 451,254.01 753,252.12
accommodation
Purchases of materials and
Anhui Gujing Hotel Development Co., Ltd. 3,211.69 107,809.29
acceptance of labor
Anhui Ruijing Shanglv (Group) Co., Ltd. Purchases of materials 225,459.18 161,459.85
Receiving catering and
Anhui Ruijing Shanglv (Group) Co., Ltd. 0.00 2,301.89
accommodation
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Receiving catering and
Gujing Holiday Inn accommodation
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Purchases of materials and
Gujing Holiday Inn acceptance of labor
Anhui Youxin Financing Guarantee Co., Ltd. Receiving services 0.00 18,307.43
Anhui Jiuan Engineering Management Consulting
Advisory and assurance 1,509,230.65 3,126,013.80
Co., Ltd.
Anhui Haochidian Catering Co., Ltd. (Haochidian Receiving services 2,793.17 0.00
~ 163 ~
Interim Report 2026
Reporting Same period of last
Related parties Nature of the transaction(s)
Period year
Catering)
Total -- 7,640,474.40 13,168,097.74
Sales of goods and rendering of services:
Nature of the Reporting Same period of last
Related parties
transaction(s) Period year
Anhui Shenglong Trading Co., Ltd. Sales of baijiu 69,132.73 12,110.60
Provision of
Anhui Shenglong Trading Co., Ltd. catering and 5,672.64 3,706.60
accommodation
Anhui Ruijing Shanglv (Group) Co., Ltd. Sales of baijiu 2,368,407.08 1,371,576.99
Provision of
Anhui Ruijing Shanglv (Group) Co., Ltd. catering and 0.00 2,676.58
accommodation
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday Sales of small
Inn materials
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday
Sales of baijiu 0.00 22,619.47
Inn
Provision of
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday
catering and 794.81 0.00
Inn
accommodation
Anhui Gujing Hotel Development Co., Ltd. Sales of baijiu 1,370,552.20 579,136.29
Provision of
Anhui Gujing Hotel Development Co., Ltd. 57,127.89 65,837.28
utilities
Provision of
Anhui Gujing Hotel Development Co., Ltd. catering and 0.00 138,360.44
accommodation
Provision of
Anhui Gujing Group Co., Ltd. catering and 116,812.27 173,024.72
accommodation
Sales of small
Anhui Gujing Group Co., Ltd. 26,503.87 17,883.82
materials
Sales of small
Bozhou Hotel Co., Ltd. 2,619.50 38,300.92
materials
Bozhou Hotel Co., Ltd. Sales of baijiu 48,769.90 263,502.04
Anhui Huixin Finance Investment Group Co., Ltd Sales of baijiu 2,707.97 3,345.14
Bozhou Gujing Huishenglou Catering Co., Ltd. Sales of baijiu 8,761.06 37,831.86
Provision of
Bozhou Gujing Huishenglou Catering Co., Ltd. 0.00 12,849.06
testing services
~ 164 ~
Interim Report 2026
Nature of the Reporting Same period of last
Related parties
transaction(s) Period year
Bozhou Anxin Micro Finance Co., Ltd. Sales of baijiu 9,398.23 8,123.89
Provision of
Bozhou Anxin Micro Finance Co., Ltd. 0.00 660.38
testing services
Anhui Haochidian Catering Co., Ltd. Sales of baijiu 1,840,725.67 1,374,026.56
Anhui Zhongxin Finance Leasing Co. Ltd. Sales of baijiu 1,274.34 1,274.34
Anhui Hengxin Pawn Co. Ltd. Sales of baijiu 1,592.92 2,230.08
Anhui Jiuan Engineering Management Consulting Co., Ltd. Sales of baijiu 1,592.92 6,530.97
Provision of
Anhui Jiuan Engineering Management Consulting Co., Ltd. catering and 0.00 292.45
accommodation
Shanghai Beihai Restaurant Co., Ltd. Sales of baijiu 0.00 796.46
Sales of small
Shanghai Beihai Restaurant Co., Ltd. 0.00 1,168.14
materials
Anhui Ruixin Pawn Co. Ltd. Sales of baijiu 637.16 1,274.34
Anhui Youxin Financing Guarantee Co., Ltd. Sales of baijiu 1,592.92 1,274.34
Hefei Longxin Business Management Consulting Co., Ltd Sales of baijiu 955.76 955.76
Anhui Gujing Group Co., Ltd. Sales of materials 4,334.77 7,462.84
Anhui Haochidian Catering Co., Ltd. Sales of materials 35,627.41 64,589.41
Anhui Huixin Finance Investment Group Co., Ltd Sales of materials 2,238.94 584.07
Anhui Ruijing Catering Co., Ltd. Sales of materials 16,353.99 0.00
Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing Holiday
Sales of materials 679,626.71 256,589.42
Inn
Anhui Shenglong Trading Co., Ltd. Sales of materials 13,521.42 28,070.80
Bozhou Hotel Co., Ltd. Sales of materials 65,689.97 95,317.83
Bozhou Gujing Huishenglou Catering Co., Ltd. Sales of materials 6,284.11 52,341.97
Anhui Gujing Hotel Development Co., Ltd. Sales of materials 0.00 1,345.11
Anhui Youxin Financing Guarantee Co., Ltd. Sales of materials 0.00 292.03
Bozhou Anxin Micro Finance Co., Ltd. Sales of materials 0.00 8,053.10
Hefei Longxin Business Management Consulting Co., Ltd Sales of materials 0.00 292.03
Anhui Ruijing Shanglv (Group) Co., Ltd. Sales of materials 0.00 17,734.52
Total -- 6,760,636.59 4,689,971.85
(2) Related-party leases
The Company as lessor:
~ 165 ~
Interim Report 2026
Category of leased The lease income confirmed in The lease income confirmed in
Name of lessee
assets the Reporting Period the same period of last year
Anhui Gujing Hotel Development Co., Ltd. Houses and buildings 411,904.76 554,733.32
Total -- 411,904.76 554,733.32
The Company as lessee:
Reporting Period
Expenses for
short-term lease Variable lease
Category of Interest
Name of lessor and lease of low payments not Lease payment for Increase in
leased assets expense of
value asset included in lease current period right-of-use assets
lease liabilities
under simplified liabilities
method
Anhui Gujing Group Houses and
Co., Ltd. buildings
Dazhongyuan Jiugu Houses,
Cultural Tourism buildings, 6,999,238.82 315,744.53
Development Co., Ltd. and land
Total -- 7,740,071.79 369,329.50
(Continued)
The same period of last year
Expenses for
short-term lease Variable lease
Category of Interest Increase in
Name of lessor and lease of low payments not Lease payment for
leased assets expense of right-of-use
value asset included in lease current period
lease liabilities assets
under simplified liabilities
method
Anhui Gujing Group Houses and
Co., Ltd. buildings
Dazhongyuan Jiugu Houses,
Cultural Tourism buildings, 6,999,238.82 419,452.89
Development Co., Ltd. and land
Total -- 7,927,596.23 488,413.27
Item Related party Ending balance Beginning balance
Contract Bozhou Hotel Co., Ltd. 32,714.78 38,236.90
liabilities
Contract Anhui Gujing Group Co., Ltd. 5,383.02 0.00
liabilities
Contract Anhui Gujing Hotel Development Co., Ltd. 304,821.24 0.00
liabilities
~ 166 ~
Interim Report 2026
Item Related party Ending balance Beginning balance
Contract Anhui Ruijing Shanglv (Group) Co., Ltd. 222,991.15 0.00
liabilities
Contract Anhui Ruijing Shanglv (Group) Co., Ltd. Hefei Gujing
liabilities Holiday Inn
Accounts payable Anhui Jiuan Engineering Management Consulting Co., 170,497.10 188,322.34
Ltd.
Accounts payable Anhui Gujing Hotel Development Co., Ltd. 0.00 11,444.00
Accounts payable Anhui Ruijing Shanglv (Group) Co., Ltd. 93,156.75 0.00
Other payables Anhui Ruijing Shanglv (Group) Co., Ltd. 300,000.00 300,000.00
Other payables Anhui Gujing Hotel Development Co., Ltd. 100,000.00 100,000.00
Other payables Anhui Jiuan Engineering Management Consulting Co., 6,000.00 6,000.00
Ltd.
Other payables Bozhou Hotel Co., Ltd. 0.00 10,000.00
XIII Commitments and Contingencies
As at June 30, 2026, the Company has no significant commitments need to be disclosed.
As at June 30, 2026, the Company has no significant contingencies need to be disclosed.
XIV Events after Balance Sheet Date
As at August 28, 2026, the Company had no any other post-balance sheet events that required disclosure.
XV Other Significant Matters
Segment Information
The Company did not determine the operating segment in accordance with the internal organizational structure,
management requirements, and internal reporting system, so there was no need to disclose segment information
report based on the operating segments.
XVI Notes to the Main Items of the Financial Statements of the Parent Company
(1) On June 30, 2026, the Company as the parent has no balance of accounts receivable.
(2) On January 1, 2026, the Company as the parent has no balance of accounts receivable.
(3) There is no change in bad debt provision for the Company as the parent during the Reporting Period.
~ 167 ~
Interim Report 2026
(1) Listed by category
Item Ending balance Beginning balance
Interest receivable
Dividends receivable
Other receivables 497,204,844.52 464,796,849.41
Total 497,204,844.52 464,796,849.41
(2) Other receivables
(i) Disclosure by aging
Aging Ending balance Beginning balance
Within 1 year 116,437,168.05 84,117,630.95
Of which:1-6 months 43,790,000.61 84,019,705.08
Over 3 years 66,693,636.00 1,693,636.00
Subtotal 499,670,068.24 467,342,342.36
Less: Bad debt provision 2,465,223.72 2,545,492.95
Total 497,204,844.52 464,796,849.41
(ii) Disclosure by nature
Nature Ending balance Beginning balance
Related parties within the scope of 492,723,205.73 452,998,407.89
consolidation
Security deposit and guarantee 3,114,597.75 3,047,931.08
Rent, utilities and gasoline charges 1,323,155.23 1,115,067.27
Other 2,509,109.53 10,180,936.12
Subtotal 499,670,068.24 467,342,342.36
Less: Bad debt provision 2,465,223.72 2,545,492.95
Total 497,204,844.52 464,796,849.41
~ 168 ~
Interim Report 2026
(iii) Disclosure by withdrawal method of bad debt provision
A. As of June 30, 2026, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 499,670,068.24 2,465,223.72 497,204,844.52
Stage 2
Stage 3
Total 499,670,068.24 2,465,223.72 497,204,844.52
A1. As of June 30, 2026, bad debt provision at stage 1:
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn
by group-
Of which: Group 1 492,723,205.73 0.00 0.00 492,723,205.73
Group 2 6,946,862.51 35.49 2,465,223.72 4,481,638.79
Total 499,670,068.24 0.49 2,465,223.72 497,204,844.52
On June 30, 2026, other receivables with bad debt provision withdrawn by group 2
Ending balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within 1 year 3,713,962.32 54,783.64 1.48
Of which:1-6 months 3,272,861.93 32,728.62 1.00
Over 3 years 1,693,636.00 1,693,636.00 100.00
Total 6,946,862.51 2,465,223.72 35.49
B. As of January 1, 2026, bad debt provision withdrawn based on three stages model:
Stage Carrying amount Bad debt provision Carrying value
Stage 1 467,342,342.36 2,545,492.95 464,796,849.41
~ 169 ~
Interim Report 2026
Stage Carrying amount Bad debt provision Carrying value
Stage 2
Stage 3
Total 467,342,342.36 2,545,492.95 464,796,849.41
B1. On January 1, 2026, bad debt provision at stage 1:
Category Carrying amount Bad debt provision Carrying value
losses rate (%)
Bad debt provision withdrawn
separately
Bad debt provision withdrawn
by group
Of which: Group 1 452,998,407.89 0.00 0.00 452,998,407.89
Group 2 14,343,934.47 17.75 2,545,492.95 11,798,441.52
Total 467,342,342.36 0.54 2,545,492.95 464,796,849.41
On January 1, 2026, other receivables with bad debt provision withdrawn by group 2
Beginning balance
Aging Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within 1 year 11,119,223.06 115,109.26 1.04
Of which: 1-6 months 11,021,297.19 110,212.97 1.00
Over 3 years 1,693,636.00 1,693,636.00 100.00
Total 14,343,934.47 2,545,492.95 17.75
(iv) Changes of bad debt provision during the Reporting Period
Changes in the Reporting Period
Category Beginning balance Reversal or Elimination or Ending balance
Withdrawal
recovery Write-off
Bad debt provision withdrawn
separately
Bad debt provision withdrawn by 2,545,492.95 80,269.23 2,465,223.72
~ 170 ~
Interim Report 2026
Changes in the Reporting Period
Category Beginning balance Reversal or Elimination or Ending balance
Withdrawal
recovery Write-off
group
Total 2,545,492.95 80,269.23 2,465,223.72
(v) Other receivables actually written off during the Reporting Period
Not applicable.
(vi) On June 30, 2026, top five ending balance by entity
Proportion of
the balance to
Bad debt
Entity Nature Ending balance Aging the total other
provision
receivables
(%)
Current accounts within the
No. 1 420,000,000.00 1-3 years 84.06 0.00
scope of consolidation
Current accounts within the
No. 2 72,206,067.05 7-12 months 14.45 0.00
scope of consolidation
Security deposit and
No. 3 1,303,136.00 Over 3 years 0.26 1,303,136.00
guarantee
Security deposit and
No. 4 1,284,295.08 2-3 years 0.26 642,147.54
guarantee
Rent, utilities and gasoline
No. 5 795,610.94 Within 6 months 0.16 7,956.11
charges
Total -- 495,589,109.07 -- 99.19 1,953,239.65
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment in
subsidiaries
Investment in
associated 8,804,586.54 8,804,586.54 6,060,161.55 6,060,161.55
enterprises
Total 1,702,884,489.97 1,702,884,489.97 1,700,140,064.98 1,700,140,064.98
~ 171 ~
Interim Report 2026
(1) Investments in subsidiaries
Impairment
Decrease
Increase during provision Provision for
Beginning during the
Investees the Reporting Ending balance during the impairment at
balance Reporting
Period Reporting June 30, 2026
Period
Period
Bozhou Gujing Sales Co.,
Ltd.
Anhui Longrui Glass Co.,
Ltd.
Shanghai Gujing Jinhao
Hotel Management Co., 49,906,854.63 49,906,854.63
Ltd.
Bozhou Gujing Hotel Co.,
Ltd.
Anhui Ruisiweier
Technology Co., Ltd.
Anhui Yuanqing
Environmental Protection 16,000,000.00 16,000,000.00
Co., Ltd.
Anhui Gujing Yunshang
E-commerce Co., Ltd.
Yellow Crane Tower
Distillery Co., Ltd.
Anhui Jinyunnlai Cultural
Media Co., Ltd.
Anhui RunanXinke Testing
Technology Co., Ltd.
Anhui Jiuan Mechanical
Electrical Equipment Co., 10,000,000.00 10,000,000.00
Ltd.
Anhui Mingguang
Distillery Co., Ltd.
~ 172 ~
Interim Report 2026
Impairment
Decrease
Increase during provision Provision for
Beginning during the
Investees the Reporting Ending balance during the impairment at
balance Reporting
Period Reporting June 30, 2026
Period
Period
Renhuai Maotai Town
Zhencang Winery Industry 224,723,400.00 224,723,400.00
Co., Ltd.
Anhui Jiuhao Construction
Engineering Co., Ltd.
Anhui Gujing Health
Technology Co., Ltd.
Anhui Gujinggong Liquor
Original Vintage Theme
Hotel Management Co.,
Ltd.
Anhui Guqi Distillery Co.,
Ltd.
Anhui Guge Culture Media
Co., Ltd.
Anhui Jiudao Culture
Media Co., Ltd.
Anhui Gujing Suhuai
Distillery Sales Co., Ltd.
Total 1,694,079,903.43 1,694,079,903.43
(2) Investment in associated enterprises
Increase/Decrease
Adjustment of
Beginning Investment income
Investee Additional Reduced other Changes of
balance
recognized under
investment investment
comprehensive other equity
the equity method
income
I. Joint ventures
Anhui Xunfei Jiuzhi
Technology Co., Ltd.
Total 6,060,161.55 2,744,424.99
(Continued)
Investee Increase/Decrease Ending balance Ending balance of
~ 173 ~
Interim Report 2026
Withdrawal of depreciation
Cash bonus or profits
impairment Other reserve
announced to issue
provision
I. Joint ventures
Anhui Xunfei Jiuzhi Technology
Co., Ltd.
Total 8,804,586.54
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 6,393,484,381.60 2,302,571,548.97 8,060,744,756.47 2,614,476,607.07
Other operations 77,656,954.71 37,077,791.52 84,764,322.29 49,522,357.39
Total 6,471,141,336.31 2,339,649,340.49 8,145,509,078.76 2,663,998,964.46
Information on performance obligations: None.
Item Reporting Period Same period of last year
Investment income from long-term equity investments under cost
method
Investment income from long-term equity investments under equity
method
Gains on disposal of financial assets at fair value through profit or
loss
Gains on disposal of financial assets at fair value through other
-16,115,213.95 -19,878,125.78
comprehensive income
Other investment income 1,628,256.56 233,241.34
Total 13,248,579.70 17,259,846.39
XVII Supplementary Materials
Item Amount Note
Gain or loss on disposal of non-current
-3,196,292.95
assets
Government grants recognized in profit or
loss (exclusive of those that are closely
related to the Company’s normal business 3,811,624.84
operations and given in accordance with
defined criteria and in compliance with
~ 174 ~
Interim Report 2026
government policies, and have a
continuing impact on the Company’s
profit or loss)
Gain or loss on fair-value changes in
financial assets and liabilities held by a
non-financial enterprise, as well as on
disposal of financial assets and liabilities 4,725,821.88
(exclusive of the effective portion of
hedges that is related to the Company’s
normal business operations)
Non-operating income and expense other
than the above
Less: Income tax effects 5,089,326.72
Non-controlling interests effects (net
of tax)
Total 14,350,485.60 --
Others that meets the definition of non-recurring gain/loss:
□Applicable ? Not applicable
No such cases in the Reporting Period.
Explain the reasons if the Company classifies any extraordinary gain/loss item mentioned in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the
Public—Non-recurring Gains and Losses as a recurrent gain/loss item
□Applicable ? Not applicable
Weighted average ROE EPS (RMB/share)
Profit as of Reporting Period
(%) EPS-basic EPS-diluted
Net profit attributable to ordinary shareholders of the
Company
Net profit attributable to ordinary shareholders of the
Company after deduction of non-recurring profit and loss
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International and
Chinese Accounting Standards
□ Applicable ? Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and Chinese
Accounting Standards
□ Applicable ? Not applicable
~ 175 ~
Interim Report 2026
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas Accounting
Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the Foreign Auditing
Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
None
~ 176 ~
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