Shenzhen Textile (Holdings) Co., Ltd.
March 2026
Section I Important Notes, Table of Contents and Interpretations
The Board of Directors, the directors, and the executives of the Company guarantee that there are no
significant omissions, fictitious or misleading statements carried in the Report and we will accept individual
and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
The Principal LI Gang, the Chief Finance Officer LIU Yu and the Chief Accountant (accounting supervisor)
LI Zhenyu declare that they will ensure the authenticity, accuracy and completeness of the financial report
in this annual report.
All directors attended the board meeting at which this report was considered.
Forward-looking statements such as future development plans involved in this report do not constitute a
substantial commitment by the Company to investors. Investors and related persons should maintain
sufficient risk awareness and understand the differences between plans, forecasts and commitments.
Investors are requested to pay attention to investment risks.
The Company is exposed to macroeconomic risks, market risks, raw materials risks and intensified
competition risks. Investors are advised to pay attention to investment risks. For details, please refer to "XI.
Outlook for the Company's Future Development (III) Possible Risks" in "Section III Management
Discussion and Analysis" of this report.
The Board has approved a final dividend plan as follows: based on the total share capital of 506,521,849
shares, a cash dividend of RMB0.48 (tax inclusive) per 10 shares is to be distributed to the shareholders,
with no bonus issue from either profit or capital reserves.
This report is prepared in Chinese and English respectively. In case of any ambiguity between the Chinese
and foreign versions, the Chinese version shall prevail.
Table of Contents
List of Reference Documents
I. Accounting statements bearing the signatures and seals of the legal representative, Finance Director and Chief
Accountant of the Company;
II. The original audit report bearing the seal of the accounting firm and the signature and seal of the certified
public accountant;
III. The original of all the Company's documents and the original of the announcement that have been publicly
disclosed by the Company on the website designated by the China Securities Regulatory Commission during the
reporting period.
The above-mentioned documents are kept in the office of the Board of Directors for reference.
Interpretations
Item of interpretations Refers to Interpretations
Company/ the Company /
Refers to Shenzhen Textile (Holdings) Co., Ltd.
Shenzhen Textile
Articles of Association of Shenzhen Textile (Holdings) Co.,
Articles of Association Refers to
Ltd.
The State-owned Assets Supervision and Administration
Actual owner / Shenzhen SASAC Refers to Commission of the People’s Government of Shenzhen
Municipal
Controlling shareholder /
Refers to Shenzhen Investment Holdings Co., Ltd.
Shenzhen Investment Holdings
Shenchao Technology Refers to Shenzhen Shenchao Technology Investment Co., Ltd.
SAPO Photoelectric Refers to Shenzhen SAPO Photoelectric Co., Ltd.
MCENTURY Refers to Shenzhen Meibainian Garment Co., Ltd.
Hengmei Optoelectronics Refers to Hengmei Optoelectronics Co., Ltd.
Line 4 Refers to Polarizer for TFT-LCD Phase I Line 4 Project
Line 5 Refers to Polarizer for TFT-LCD Phase I Line 5 Project
Line 6 Refers to Polarizer for TFT-LCD Phase II Line 6 Project
Line 7 Refers to Polarizer industry project for ultra-large-size TV
Line 8 Refers to
Construction）
China Securities Regulatory
Refers to China Securities Regulatory Commission
Commission
This report Refers to 2025 Annual Report
Section II Company Profile and Major Financial Indicators
I. Information about the Company
Shenzhen Textile A, Shenzhen
Stock name Stock code 000045、200045
Textile B
Stock name before the change
None
(if any)
Stock exchange where the
Shenzhen Stock Exchange
Company's stocks are listed
Chinese name Shenzhen Textile (Holdings) Co., Ltd.
Abbreviation in Chinese Shenzhen Textile
Foreign name of the Company
SHENZHEN TEXTILE(HOLDINGS)CO.,LTD
(if any)
Abbreviation of the Company's
STHC
foreign name (if any)
Legal representative Li Gang
Room A1203, Tower A, China State-owned Capital Venture Building, No. 2 Hengsheng Street,
Registered address
Nanshan Street, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen
Postal code of registered
address
Fang Building, No. 3 Huaqiang North Road, Futian District, Shenzhen" to "708M, Building 8,
Qianhai Excellence Financial Center (Phase I), No. 5033 Menghai Avenue, Nanshan Sub-district,
Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen";
Building 8, Qianhai Excellence Financial Center (Phase I), No. 5033 Menghai Avenue, Nanshan
Sub-district, Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen" to "A1203, Tower A,
Historical changes of the China Venture Capital Fund Tower, No. 2 Hengsheng Street, Nanshan Sub-district, Qianhai
Company's registered address Shenzhen-Hong Kong Cooperation Zone, Shenzhen".
it deliberated and approved the change of the Company's registered address from “A1203, Tower
A, China Venture Capital Fund Tower, No. 2 Hengsheng Street, Nanshan Sub-district, Qianhai
Shenzhen-Hong Kong Cooperation Zone, Shenzhen” to “A3604,, Tower A, China Venture Capital
Fund Tower, No. 2 Hengsheng Street, Nanshan Sub-district, Qianhai Shenzhen-Hong Kong
Cooperation Zone, Shenzhen”. The proposal is still subject to deliberation at the general meeting of
shareholders.
Office address Floor 6, Block A, Shen Fang Building, No. 3 Huaqiang North Road, Futian District, Shenzhen
Postal code of business address 518031
Company's website http://www.chinasthc.com
E-mail szfzjt@chinasthc.com
II. Contact person and contact information
Secretary of the Board of Directors Securities affairs representative
Name Huang Min LI Zhenyu
Floor 6, Block A, Shen Fang Building, No. 3 Huaqiang Floor 6, Block A, Shen Fang Building, No. 3
Contact address
North Road, Futian District, Shenzhen Huaqiang North Road, Futian District, Shenzhen
Tel. 0755-83776043 0755-83776043
Fax 0755-83776139 0755-83776139
E-mail huangm@chinasthc.com lizy@chinasthc.com
III. Information disclosure and storage location
Stock exchange websites where companies disclose annual
Shenzhen Stock Exchange (http://www.szse.cn/)
reports
Name and website of the media where the Company discloses its Securities Times, China Securities Journal, Shanghai Securities
annual report News, Securities Daily, and Cninfo (http://www.cninfo.com.cn)
Storage location of annual reports Office of the Board of Directors
IV. Registration changes
Unified social credit code 91440300192173749Y
In July 2012, with the approval of Shenzhen Administration for
Market Regulation, the Company's business scope was changed
to: production and processing of textiles, knitwear, clothing,
decorative fabrics, belts, trademark belts, and handicrafts
(excluding restricted items); department stores, textile industry
special equipment, textile equipment and accessories,
instruments, standard parts, textile raw materials, dyes, electronic
products, chemical products, mechanical and electrical
equipment, textile products, office supplies and domestic trade
(excluding exclusive, special control and monopolized goods);
import and export business. In December 2018, with the approval
Changes in primary business since the listing of the Company (if
of Shenzhen Administration for Market Regulation, the
any)
Company's business scope was changed to: production and
operation of polarizer and other optical film products; hotel,
property leasing and management; production and processing of
textiles, knits, clothing, decorative fabrics, belts, trademark belts,
and handicrafts (excluding restricted items); department stores,
textile industry special equipment, textile equipment and
accessories, instruments, standard parts, textile raw materials,
dyes, electronic products, chemical products, mechanical and
electrical equipment, textile products, office supplies and
domestic trade (excluding exclusive, special control and
monopolized goods); import and export business.
In October 2004, according to the Decision on the Establishment
of Shenzhen Investment Holdings Co., Ltd. issued by the
Shenzhen State-owned Assets Supervision and Administration
Commission of the Shenzhen Municipal People's Government
(SGZW (2004) No. 223), the controlling shareholder of the
Previous changes of controlling shareholder (if any)
Company, Shenzhen Investment & Management Company, was
merged and reorganized together with Shenzhen Construction
Holdings Company and Shenzhen Commerce and Trade
Holdings Company to form Shenzhen Investment Holdings Co.,
Ltd.
V. Other relevant information
Accounting firm engaged by the Company
Name Deloitte Touche Tohmatsu Certified Public Accountants (LLP)
Office address Floor 30, No. 222, Yan'an East Road, Huangpu District, Shanghai
Signing accountants HUANG Tianyi, CHEN Junheng
Sponsor engaged by the Company to perform continuous supervision during the reporting period
□ Applicable Not applicable
Financial consultant engaged by the Company to perform continuous supervision during the reporting period
□ Applicable Not applicable
VI. Main accounting data and financial indicators
Whether the Company needs to retroactively adjust or restate the accounting data of previous years
Yes No
this year
compared with
last year
Operating revenue (RMB) 3,241,380,430.62 3,335,283,008.68 -2.82% 3,079,678,375.45
Net profit attributable to the shareholders
of the listed company (RMB)
Net profit attributable to shareholders of
listed companies after deducting non- 63,434,024.61 77,028,485.76 -17.65% 62,328,667.73
recurring profit or loss (RMB)
Net cash flows from operating activities
(RMB)
Basic earnings per share (RMB/share) 0.14 0.18 -22.22% 0.16
Diluted earnings per share (RMB/share) 0.14 0.18 -22.22% 0.16
Weighted average rate of return on net
assets
Increase/decrease
at the end of this
As at the end of
As at the end of 2025 year compared As at the end of 2023
with the end of
last year
Total assets (RMB) 5,418,295,716.77 5,232,150,397.33 3.56% 5,649,822,363.44
Net assets attributable to shareholders of
the listed company (RMB)
The net profit of the Company in the last three fiscal years before and after deducting non-recurring profit or loss
is negative, and the audit report of the latest year shows that the going-concern ability of the Company is uncertain
Yes No
The lowest of the Company's audited total profit, net profit, and net profit attributable to the listed company’s
shareholders after exceptional gains and losses during the reporting period was negative.
Yes No
VII.Differences between accounting data under domestic and foreign accounting standards
international accounting standards and the Chinese accounting standards
□ Applicable Not applicable
During the reporting period of the Company, there was no difference in net profits and net assets in financial
reports disclosed in accordance with international accounting standards and Chinese accounting standards
international accounting standards and Chinese accounting standards
□ Applicable Not applicable
During the reporting period of the Company, there was no difference in net profits and net assets in financial
reports disclosed in accordance with the international accounting standards and Chinese accounting standards
VIII. Main financial indicators by quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 777,932,127.47 822,549,498.84 864,584,512.93 776,314,291.38
Net profit attributable to
shareholders of the listed 20,864,282.75 14,370,482.77 24,210,475.56 8,973,421.94
company
Net profit attributable to 14,037,064.80 11,151,938.67 22,426,921.26 15,818,099.88
shareholders of listed
companies after
deducting non-recurring
profit or loss
Net cash flows from
operating activities
Whether the above financial indicators or their aggregate are significantly different from the financial indicators
related to the Company's disclosed quarterly and semi-annual reports
Yes No
IX. Non-recurring profit or loss items and amounts
Applicable Not applicable
Unit: RMB
Item Amount in 2025 Amount in 2024 Amount in 2023 Notes
Profit or loss on disposal of non-
Mainly gains from the
current assets (including write-off of 1,137,242.81 833,613.28 1.72
disposal of fixed assets.
provision for asset impairment)
Government subsidies included in the
current profit or loss (except for those
that are closely related to the
Company's normal business operations,
Mainly government
comply with national policies and 6,426,316.96 10,454,530.12 19,927,836.02
subsidies.
regulations, are enjoyed according to
determined standards, and have a
sustained impact on the Company's
profit or loss)
Profit or loss from changes in fair
Mainly gains and losses
value of financial assets and liabilities
from changes in fair
held by non-financial enterprises and
value arising from the
profit or loss from the disposal of
-11,769,635.37 -5,319,496.55 2,151,780.82 company's holding of
financial assets and financial liabilities,
trading financial assets
except for effective hedging operations
and derivative financial
related to the Company's normal
liabilities.
business operations
Reversal of provision for impairment
of accounts receivable subject to 4,371,571.58 13,927,792.63 15,031,480.15
separate impairment test
Mainly refers to the
transfer of long-
Non-operating revenue and expenses
other than the above-mentioned items
payable to non-operating
income.
Less: income tax effects 906,584.80 2,998,978.10 3,478,333.83
Affected amount of minority interests
-243,998.88 5,661,882.11 9,937,259.91
(after tax)
Total 4,984,638.41 12,342,648.48 16,939,582.72 --
Specific circumstances of other profit or loss items that meet the definition of non-recurring profit or loss:
□ Applicable Not applicable
The Company had no specific profit or loss items that meet the definition of non-recurring profit or loss.
Notes on the definition of the non-recurring profit or loss items listed in the "Interpretive Announcement No. 1 on
Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss" as recurring
profit or loss items
□ Applicable Not applicable
The Company had no circumstances of definition of the non-recurring profit or loss items listed in the
"Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to the Public -
Non-recurring Profit or Loss" as recurring profit or loss items.
Section III Management's Discussion and Analysis
I. Main business engaged in by the Company during the reporting period
(I) Main business of the Company
The Company's main business is a high-tech industry focusing on the R&D, production and sales of polarizers for
OLED and LCD display, and the operation and management of its own properties.
During the reporting period, there was no significant change in the Company's primary business. First, the
Company actively adjusted its product structure, implemented a product differentiation strategy, and increased the
sales proportion of high-value-added products. It has the sales volume of ultra-large-size (85" and above)
polarizers surged significantly; second, the Company made every effort to overcome quality problems, improve
customer satisfaction, reduce product return losses and management costs, and at the same time, played a sales-
driven role to promote sales by production, and the production and sales volume repeatedly hit a record high; third,
the Company strengthened lean management, effectively reduced the raw material losses, and saved the
production costs; fourth, the Company strengthened the innovation-led drive, focused on key technology
breakthroughs, promoted the development and industrialization of cutting-edge products, and successfully
achieved the development and first delivery of VA-type high-transmittance and high-polarization 2.0 polarizers;
fifth, the Company initiated the investment and construction of the Line 8 project to break through the production
capacity bottleneck for mid-to-high-end products; sixth, the Company actively promoted the elimination of
enterprises with "non-main business assets non-dominant business assets, inefficient assets and ineffective assets",
improved the mechanism for survival of the fittest enterprises, guided the concentration of resources to the core
business, and enhanced the efficiency of resource utilization; seventh, the Company strengthened supervision and
management, focused on work safety, improved the institutional system, formulated emergency disposal plans,
enhanced safety training and education, carried out safety risk identification, hidden danger investigation and
rectification, consolidated the weak links, and prevented accidents; eighth, continuously improved the quality of
property management service, improve tenant satisfaction, strived to maintain the Company's property rental rate
at a high level, and ensured the stability of the Company's property leasing management business income.
(II) Main products of the Company and their uses
Currently, the Company has 7 mass-production polarizer production lines, and its products cover OLED and LCD
polarizers. These products are mainly applied to products such as TVs, laptops, monitors, vehicles, industrial
controls, instruments and meters, smartphones, and wearable devices. By continuously strengthening the
expansion of sales channels and the construction of its own brand, the Company has become a qualified supplier
for mainstream panel enterprises such as CSOT, BOE, LGD, Xianyang Caihong, HKC, Tianma Microelectronics
and Sharp.
The main product types and applications of the Company's polarizer production lines are as follows:
Actual production
Production lines Address Product width Main product type
capacity
Line 4 Pingshan 1490mm 10 million square meters TFT/OLED
Line 5 Pingshan 650mm 2 million square meters TFT/OLED
Line 6 Pingshan 1490mm 16 million square meters TFT/OLED
Line 7 Pingshan 2500mm 32 million square meters TFT/OLED
(III) Business model of the Company
The polarizer industry is gradually shifting from the traditional business model of R&D, production and sales to a
customer-centric, joint R&D and comprehensive service business model. By understanding customer needs, the
Company jointly develops and carries out high-standard production management, manufactures high-quality
products, uses advanced polarizer roll-on equipment to cooperate with downstream panel manufacturers'
production lines, optimizes production and logistics links, reduces production and transportation costs, creates
value for customers, and achieves win-win cooperation.
(IV) Market position of the Company's products
The Company is one of the main domestic enterprises in the R&D, production, and sales of polarizers. It began its
polarizer business in 1995 and achieved the first mass production of polarizers in China in 1998, becoming a
pioneer in China's polarizer industry. The Company has mastered core technologies for the R&D and production
of TN/STN-LCD, TFT-LCD, and OLED polarizers. It is one of the few domestic polarizer manufacturers with the
capability to produce a full range of polarizer products in large, medium, and small sizes. The Company was the
first to achieve mass production of polarizers for OLED TVs and OLED mobile phones, filling a gap in the
domestic market.
The Company's Line 7 is one of the few 2500mm ultra wide polarizing film production lines in the world, which
can meet the needs of higher generation panel production lines such as the 8.5/8.6/10.5/11 generation globally.
Especially matching the production line 10.5/11 generation of panel has the best economic production efficiency,
and has industry-leading advantages in the technical level and production capacity of ultra large and large-sized
polarizers.
(V) Competitive advantages and disadvantages
See "III. Core Competitiveness Analysis" in this section for details.
See "(III) Possible risks of XI. Outlook for the Company's future development" in this chapter for details.
(VI) Main performance drivers
See "III. Core Competitiveness Analysis" in this section for details.
II. Industry Overview for the Reporting Period
The polarizer is also called polarized light sheet, which can control the polarization direction of a specific beam.
When the natural light passes through the polarizer, the light with the vibration direction perpendicular to the
polarizer transmission axis will be absorbed, and only the polarized light with the vibration direction parallel to
the polarizer transmission axis will be transmitted. The downstream applications of polarizers are mainly in the
panel industry. According to different panel types, polarizer are mainly classified into TN type, STN type, TFT
type and OLED type. Currently, the global polarizer market is dominated by TFT-LCD polarizers. Each LCD
panel requires two polarizers.
The high-quality development of the polarizer industry has a profound impact on the entire display industry. As
one of the three core raw materials of the display panel, the demand for polarizer is directly affected by the
fluctuation of the display panel market. In recent years, with the accelerated transfer of the global display panel
industry to China, China's polarizer industry has ushered in a stage of rapid development. The production capacity
and process technology level of domestic polarizer manufacturers have continuously jumped. China's polarizer
industry has significantly improved its position and influence in the global market. Chinese mainland has become
the world's largest polarizer production base.
The Company is one of the main polarizer R&D, production and sales enterprises in China. It is the pioneer of
China's polarizer industry. Now it has developed into a leading enterprise in China's polarizer industry, and has
become an important supplier of mainstream panel enterprises in the world. In 2025, influenced by multiple
factors such as the complex and volatile global economy and geopolitics, the transition of the national "trade-in"
policy, and rising prices of raw materials like storage devices driven by the AI wave, the global display panel and
terminal market demand still experiences a certain degree of fluctuation while continuing its slow recovery. In the
future, with the capacity expansion and industry consolidation in the polarizer industry, it is necessary to be more
vigilant about risks such as changes in the competitive landscape, rising raw material costs, and the security of
raw material supply.
III. Analysis of core competitiveness
(I) Technical advantages. SAPO Photoelectric is one of the earliest national high-tech enterprises in China to enter
the field of display polarizer research, development and production. It has 30 years of polarizer industry operation
experience, and its products cover mainstream display applications such as TN type, STN type, TFT type, OLED,
etc. It has a complete set of proprietary technology and independent intellectual property rights for polarizers that
can meet customer needs, and has the production capacity of a full range of polarizers in large, medium and small
sizes. SAPO Photoelectric has three innovation platforms, including "Guangdong Provincial Engineering
Research Center", "ShenzhenPolarization Material and Technology Engineering Laboratory" and "Shenzhen
Enterprise Technology Center". The platforms focus on the R&D and industrialization of the core production
technologies of polarizers for OLED and LCD. As of the end of the reporting period, SAPO Photoelectric has
been granted 117 patents, including: 22 domestic invention patents, 91 domestic utility model patents and 4
overseas utility model patents. Four national standards and two industry standards were independently drafted and
formulated by SAPO Photoelectric and approved for implementation. In addition, it participated in the drafting
and formulation of 1 industry standard, which has been approved for implementation. Further, it participated in
the drafting and formulation of 3 group standards, which have been approved for implementation.
(II) Talent advantages. As a pioneer and leading enterprise in China's polarizer industry, the company has always
regarded talent strategy as the core pillar of high-quality development, comprehensively promoting the
construction of its talent team based on its main business, and laying a solid foundation for technological
innovation, capacity expansion, and market development. The company adheres to an independent innovation
strategy, building an efficient R&D management system based on professional innovation platforms. It brings
together a professional team with years of industry experience and an international perspective, including
composite talents in core technology R&D and high-end production management, providing key talent support for
the development of the domestic polarizer industry. First, it builds a core technical team and establishes a dual-
channel promotion system for both technical and management tracks. Through models like specialized training
and industry-university-research collaboration, it continuously promotes the R&D and mass production of high-
end polarizer products, maintaining an industry-leading technology commercialization rate. Second, it improves
the construction of its key talent pipeline. Through diverse channels such as market-oriented recruitment and
internal competition, it precisely supplements talent in key areas like high-end manufacturing and R&D
management, injecting momentum into capacity expansion and high-end customer development. Third, we will
deepen talent exchange and empowerment. In 2025, we will continue to carry out two-way exchanges of cadres,
hold special training to cover core backbones, enhance the performance capabilities and collaboration efficiency
of cadres and employees, and further stimulate the vitality of the team. Fourth, we will improve the incentive and
constraint mechanism. Adhering to the principle of "strategy-driven and performance-based," we will optimize the
compensation and assessment system, and allocate the incentive resources toward core R&D and management
personnel, to maintain the stability of our core talent team and fully mobilize the employees' enthusiasm for
innovation and creation.
(III) Market advantages. The Company has a good domestic and international customer base. Compared with
advanced foreign competing manufacturerss, the greatest advantage lies in having localized supporting
capabilities close to the panel market and strong support from national industrial policies. In terms of market
demand, with the successive mass production of high-generation TFT-LCD panel production lines such as
domestic 10.5-generation and 11-generation lines, as well as the accelerated development of larger-sized panels
and terminal products, the demand for polarizers, especially ultra-large-size polarizers, in the domestic market has
shown a steady growth trend. The Company possesses one of the few 2,500mm ultra-wide polarizer production
lines in the world, maintaining an industry-leading advantage in both technology and production capacity for
ultra-large and large-size polarizers, which enables the Company to better align with the market demand for the
ultra-large-size polarizers. With the continuous breakthrough of cutting-edge technology, the demand for high-end
polarizer products such as OLED and vehicle-mounted polarizer is growing rapidly, and is becoming a blue ocean
market for polarizer companies to compete. The Company has achieved mass production breakthroughs in OLED
TVs and mobile phones, and has accumulated rich technical experience in the production of high-quality
automotive polarizers, which will put it in a favorable position in market competition. In terms of market
development, the Company focuses on customer needs, continuously optimizes the production process and
product structure, improves quality control, organically combines production and sales, establishes a rapid
response mechanism, gives full play to the advantages of localization, effectively provides point-to-point
professional services, and promotes the verification of various models around the overall strategic deployment to
form a stable supply chain and continuously improve market share.
(IV) Quality advantages. The Company always adheres to the quality policy of "meeting customer needs, pursuing
excellent quality; implementing green manufacturing and persisting on continuous improvement", pays attention
to product quality control, and the product quality is comparable to international standards. The Company strictly
controls product performance indicators, standardizes incoming inspection standards, and takes quality
improvement and consumption reduction as the starting point to achieve simultaneous improvement of output and
quality; introduces modern management system, and passes ISO9001 quality management system, ISO14001
environmental management system, ISO450001 occupational health and safety management system, QCO80000
hazardous substance management system and ISO50001 energy management system certification; the products
meet the environment protection requirements of RoHS directive, and realize the standardized management of the
whole process from raw materials supply, manufacturing, marketing to customer service, so as to ensure the
stability of product quality.
(V) Management advantages. The Company has been deeply involved in the polarizer industry for 30 years,
accumulated rich production and management experience, and establishes a leading domestic management
process control system, quality management system, and stable raw material supply channels. The Company has
carried out in-depth and comprehensive benchmarking work, organized management personnel to learn advanced
experience from customers and peers, vigorously promoted standardized and refined management, and learned
from the management experience of domestic and overseas polarizer enterprises to optimize the organizational
structure, reduce the management levels, and continuously improve the Company's management efficiency; the
Company continues to optimize the management systems and incentive mechanisms to improve the decision-
making efficiency and the market response speed, and refine the R&D reward system. In addition, it achieves a
deeper integration of corporate value and employee value, effectively stimulating new business vitality; the
Company steadily promotes strategic transformation, optimizes resource allocation, and orderly phases out "non-
core businesses and inefficient assets" to promote the concentration of resources in the main business; the
Company continues to improve the level of production management, increase the production speed, stabilize the
product yield rate, and steadily enhance the efficiency of production lines, so that the production technical
indicators reach a higher level in the industry; the Company has strengthened quality management, leading to a
significant reduction in customer complaints and return rates, earning multiple quality improvement awards from
multiple key customers; through the approach of listing tasks based on project initiation, the Company has
effectively improved efficiency and quality, resulting in noticeable reductions in material costs and an increase in
product yield rates.
(VI) Policy advantages. Polarizer industry is an important part of the new display industry chain. The continuous
development of the Company's polarizer business has improved the overall supply capacity of domestic polarizer,
greatly reduced the dependence of domestic panel enterprises on imported polarizer, maintained the safety of the
country's new display industry, played a positive role in enhancing the overall competitiveness of China's new
display industry chain, and boosted the coordinated development of the whole industrial chain of "20+8" ultra-
high-definition video display industry cluster in Shenzhen. SAPO Photoelectric, the polarizer business carrier, has
been continuously recognized by national high-tech enterprises, and the polarizer project has been supported by
national, provincial and municipal policies and funds for many times, enjoying the preferential policy of duty-free
import of main raw materials.
IV. Analysis of primary business
In 2025, the Company focused on its main business of polarizer and ensure its steady and sound development by
optimizing the product structure, improving product quality, enhancing operational efficiency, promoting the
development and mass production of cutting-edge products, and strengthening on-site technical management. Due
to the intensified competition in the polarizer market and the limitations of the Company's production line
equipment and process capabilities, insufficient order was acquired for the high-end OLED polarizer, resulting in
an overall trend of "increased volume and decreased price" in polarizer sales. Affected by the above, the
Company's operating revenue in 2025 was RMB 3241 million, a year-on-year decrease of 2.82%; the total profit
was RMB 108 million, a year-on-year decrease of 29.08%; the net profit attributable to the parent company was
RMB 68 million, a year-on-year decrease of 23.44%.
The key work reviewed by the Company in 2025 as follows:
(I) Deeply cultivate the operation and management of main business, and drive high-quality development with
differentiation strategy
First, the Company actively adjusted its product structure, implemented a product differentiation strategy, and
increased the sales proportion of high-value-added products. It has the sales volume of MNT and OLED mobile
polarizers surged significantly. Second, the Company continued to promote lean management, strictly controlled
the manufacturing costs, reduced material losses, and improved the customer satisfaction. Third, the Company
continued to strengthen innovation leadership, promoted the development and mass production of cutting-edge
products, focused on key technological breakthroughs, and successfully achieved mass production of circular
polarizing eye-care MNT products; fourth, the Company strengthened on-site technical management, and the first
pass yield of RTS large-size products was further improved.
(II) Consolidate the technological innovation ecosystem and empower the domestic substitution for breakthrough
of key technologies
The Company actively coordinated the upstream and downstream enterprises in the industry chain, accelerated the
research and development of key technologies such as low color deviation circular polarizer for fixed curvature
AMOLED and key technologies for vehicle display polarizer. At the end of 2025, the R&D project on the key
technology of low color deviation circular polarizers for fixed-curvature AMOLED successfully passed the
acceptance.
In 2025, the Company completed 15 new patent applications, including 7 invention patents and 8 utility model
patents; obtained 8 authorized patents, including 1 invention patents and 7 utility model patents.
(III) Scientifically invest in and constructed the Line 8 project to address the production capacity bottleneck for
high-end products
To address the capacity bottleneck faced by SAPO Photoelectric, the Company, after careful research, decided to
invest in the construction of Line 8 project (Announcement on the Investment and Construction of the 1.49m-wide
Polarizer Production Line Project (Line 8)) (No. 2025-39) by a Subsidiary, on CNINFO
(http://www.cninfo.com.cn). Currently, the project has obtained the land use right, and ALL construction works
are progressing in an orderly manner.
(IV) Maintain the stable development of the leasing business, and improve tenant satisfaction with high-quality
service
In 2025, the leasing market situation was grim, the vacancy rate continued to rise, and rents generally declined.
The property management enterprises affiliated to the Company continuously improved their management, and
their operation and development have made steady progress. First, judged the market trend and the customer
demand, and scientifically and reasonably formulated the annual property leasing plan based on the actual
situation of the property enterprise; second, strengthened the operation management, designed flexible lease terms
and flexible payment methods, and ensured the refined implementation of the lease plan; third, continuously
improved the quality of property management service, timely responded to the needs of tenants, facilitated the
upgrade of hardware and software facilities, and continuously enhanced tenant satisfaction. The Company's
property leasing and management business achieved steady development throughout the year, contributing stable
cash flows to the Company.
(V) Focus on the main business to optimize the asset structure and promote the concentration of resources in core
businesses
The Company steadily promoted strategic transformation, optimized resource allocation and promoted high-
quality development of the main businesses. First, we promoted the gradual withdrawal of the textile business and
completed the disposal of textile equipment, inventory, and environmental protection equipment of Meibainian
Company; second, the work for liquidation of "non-core businesses and non-performing assets" was performed in
order, and the participating enterprises Yehui International Co., Ltd. has substantially completed the liquidation
procedures; third, the idle assets was revitalized to improve the utilization efficiency of vacant properties.
(VI) Build a firm concept of work safety, and comprehensively strengthen work safety management
The Company firmly established the concept of safety development, adhered to the safety red line and bottom line
thinking, comprehensively consolidated the safety foundation, improved the safety management level, and created
a good safety environment for production and operation. First, improved the safety management system,
optimized the safety management system, established and improved the work safety responsibility system,
compacted the responsibilities at all levels, and ensured that all safety measures are implemented in place; second,
strengthened safety education and training, carried out in-depth safety and skill training for all employees through
diversified forms, and effectively improved employees' safety awareness and operation ability; third, improved the
emergency response capabilities, organized and carried out multi-level and multi-scenario emergency drills, and
strengthened employees' emergency disposal capabilities; fourth, deepened the risk prevention and control as well
as the investigation and rectification of hidden dangers, comprehensively carried out safety risk identification and
hidden danger rectification, addressed management weaknesses, and ensured the safe and stable production and
operation.
(VII) Improve the quality of Party building and empower the enterprise to achieve steady and long-term
development.
The Company unswervingly strengthened party building, continuously deepened the Party's innovative theoretical
armament, steadily carried out Party discipline learning and education and the construction of party conduct and
clean government, promoted the Party building research, and gave full play to the vanguard and exemplary role of
grassroots party organizations as fighting bastions and party members and cadres; the Company adhered to the
focus on party building around the center and overall service, focused on straightening out the relationship
between diversified shareholders of important subsidiary, and formed a joint force for the Company's
development; it created differentiated competitive advantages under the drive of party building-led innovation; the
Company empowered team building with party building, forged a loyal and responsible cadre team, and led the
Company's high-quality development through high-quality party building.
(1) Composition of operating revenue
Unit: RMB
Percentage of Percentage of change
Amount Amount
operating revenue operating revenue
Total operating
revenue
By industry
Manufacturing 3,128,860,439.70 96.53% 3,222,007,352.76 96.60% -2.89%
Property leasing 112,519,990.92 3.47% 113,275,655.92 3.40% -0.67%
By product
Polarizer sales
business
Property leasing and
other business
By region
Domestic 2,872,009,807.36 88.60% 3,173,216,270.08 95.14% -9.49%
Overseas 369,370,623.26 11.40% 162,066,738.60 4.86% 127.91%
(2) Industry, product, region and sales model accounting for more than 10% of the company's operating
revenue or operating profit
Applicable Not applicable
Unit: RMB
YoY change in
Gross YoY change in YoY change in
Operating revenue Operating costs operating
margin operating costs gross margin
revenue
By industry
Manufacturing 3,128,860,439.70 2,729,660,758.14 12.76% -2.89% -1.48% -1.25%
Property leasing 112,519,990.92 26,706,918.67 76.26% -0.67% 5.83% -1.46%
By product
Polarizer sales
business
Property leasing
and other business
By region
Domestic 2,872,009,807.36 2,466,628,288.72 14.11% -9.49% -7.59% -1.78%
Overseas 369,370,623.26 289,739,388.09 21.56% 127.91% 128.56% -0.22%
Under the circumstances that the calculation method of the Company's main business data is adjusted during the
reporting period, the Company's main business data for the latest period is adjusted according to the calculation
method at the end of the reporting period
□ Applicable Not applicable
(3) Whether the company's physical sales revenue is greater than the revenue of labor services
Yes No
Industry
Item Unit 2025 Year 2024 YoY change
classification
Ten thousand square
Sales volume 4,605.41 4,511.36 2.08%
meters
Ten thousand square
Polarizer Production volume 4,616.17 4,519.80 2.13%
meters
Ten thousand square
Inventory 124.42 113.66 9.47%
meters
Reasons for the YoY change of more than 30% in relevant data
□ Applicable Not applicable
(4) Performance of major sales contracts and major procurement contracts signed by the Company as of
the reporting period
□ Applicable Not applicable
(5) Composition of operating costs
Industry and product classification
Unit: RMB
Industry Proportion Proportion in
Item YoY change
classification Amount in operating Amount operating
costs costs
Polarizer and
Manufacturing 2,729,660,758.14 99.03% 2,770,623,790.28 99.10% -1.48%
textile
Property Property leasing
leasing and others
Unit: RMB
Product Proportion in Proportion in
Item YoY change
classification Amount operating Amount operating
costs costs
Polarizer sales Direct
business materials
Polarizer sales
Direct labor 61,663,390.54 2.30% 56,860,547.47 2.09% 8.45%
business
Polarizer sales
Power cost 71,665,337.14 2.67% 69,419,996.74 2.55% 3.23%
business
Polarizer sales Manufacturin
business g expenses
Notes
None
(6) Whether there was any change in the consolidation scope during the reporting period
Yes No
The Company's subsidiary, Shenzhen Huaqiang Hotel Co., Ltd, completed its liquidation and distribution in 2024
and is no longer included in the scope of consolidation this year.
(7) Information about significant changes or adjustments in the Company's business, products or services
during the reporting period
□ Applicable Not applicable
(8) Main sales customers and suppliers
Main sales customers of the Company
Total sales amount of top five customers (RMB) 2,193,175,973.53
Ratio of top 5 customers' sales to total annual sales 67.66%
Ratio of related-party sales among top 5 customers to total annual
sales
Information on the Company's top 5 customers
Ratio in total annual sales
No. Customer name Sales amount (RMB)
amount
Total -- 2,193,175,973.53 67.66%
Other information of main customers
□ Applicable Not applicable
Main suppliers of the Company
Total purchase amount of top five suppliers (RMB) 1,116,969,269.53
Ratio of total purchase amount of the top five suppliers in the
total annual purchase amount
Ratio of related-party purchases among top 5 suppliers to total
annual purchases
Information on the Company's top 5 suppliers
Ratio in the annual purchase
No. Supplier name Purchase amount (RMB)
amount
Total -- 1,103,648,796.96 39.76%
Other information of main suppliers
□ Applicable Not applicable
During the reporting period, the Company's trading business revenue accounted for more than 10% of its
operating revenue
□ Applicable Not applicable
Unit: RMB
Mainly due to the significant
Selling and distribution
expenses
the reporting period.
G&A expenses 128,612,089.80 134,347,821.58 -4.27%
Financial expenses 13,239,709.08 12,121,156.05 9.23%
R&D expenses 103,974,839.00 103,811,822.91 0.16%
Applicable Not applicable
Expected impact on the
Name of main R&D Project
Purpose of the project Objectives to be achieved company's future
project progress
development
Reduce the power
Development of high To develop the polarizer
consumption of displays
optical products for products for HTR 2.0 TV Achieve mass production of
Completed and enhance the market
advanced generation of applications in VA HTR2.0 VA-TV products.
competitiveness of
VA TV display mode.
products.
Reduce the power
Development of high To develop the polarizer
consumption of displays
optical products for products for HTR 2.0 TV Achieve mass production of
Completed and enhance the market
advanced generation of applications in IPS HTR2.0 IPS-TV products.
competitiveness of
IPS TV display mode.
products.
Improve the supply
To complete the process capacity of ultra-wide
Development of ultra- development, achieve mass MNT products. Improve
To develop 2300mm-
wide HCR1.0 PET MNT Completed production capability, and pass the cutting utilization
width MNT products.
product customer verification, and realize rate of products to
mass production. reduce costs and increase
efficiency.
Iterate and upgrade the
Upgrade and iterate the
products in terms of
Development of high- MNT products to further
Complete the process research and display quality and
contrast HCR2.0 MNT improve their Completed
development. power consumption to
products transmittance while
enhance the market
enhancing their contrast.
competitiveness.
Complete the Achieve mass production
Development of development of 4# 30μm Complete the verification of S- of 30μm PVA on line #4,
Completed
diversified IT products PVA products and POL and AGLR35 MNT products. and improve the product
achieve mass production. cutting utilization.
Reduce the power
Development of
Develop the high- consumption of displays
AMOLED high- Successfully verify the high-
transmittance OLED Completed and enhance the market
definition brilliant transmittance products.
polarizers. competitiveness of
display products
products.
For thin mobile phone
products, enhance the
Development of IPS Improve the display Complete the optical improvement core competitiveness of
products for center-hole optics of LCD mobile Completed of 1330mm-wide thin IPS mobile product by optimizing its
mobile phones phone products. phone products. optical performance and
reducing the power
consumption of display.
Apply the ESG environmentally
Overcome the challenges
Develop the core friendly materials, and
in the PFAS-free
materials for polarizers simultaneously solve the PFAS
Development of ESG material system, take the
that meet the new EU issues in the main raw materials of
environment-friendly Completed lead in completing the
environmental protection polarizers, PET protective film and
materials transition to mass
regulations regarding pressure-sensitive adhesive,
production, and seize the
PFAS. complying with the EU PFAS
market opportunities.
regulations.
Expected impact on the
Name of main R&D Project
Purpose of the project Objectives to be achieved company's future
project progress
development
Complete mass Have all product performance pass
Development of OLED production verification the verification of the client, and Conducive to exploring
Completed
TV BBO products of OLED TV HTO complete the in-house mass the OLED TV market.
products. production verification.
R&D personnel of the Company
Number of R&D personnel 161 174 -7.47%
Proportion of R&D personnel 11.47% 12.53% -1.06%
R&D investment
Amount of R&D investment
(RMB)
Ratio of R&D investment to
operating revenue (%)
Amount of capitalized R&D
investment (RMB)
Ratio of capitalized R&D
investment to R&D investment
Reasons and impact of major changes in the composition of the Company's R&D personnel
□ Applicable Not applicable
Reasons for the significant change in the proportion of total R&D investment to operating revenue compared with
the previous year
□ Applicable Not applicable
Reasons for the significant change in the capitalization rate of R&D investment and its rationality explanation
□ Applicable Not applicable
Unit: RMB
Item 2025 Year 2024 YoY change
Sub-total of cash inflows from operating
activities
Sub-total of cash outflows from
operating activities
Net cash flows from operating activities 347,793,597.26 231,264,525.09 50.39%
Sub-total of cash inflows from investing
activities
Sub-total of cash outflows from
investing activities
Net cash flows from the investing
-232,525,711.79 75,201,416.37 -409.20%
activities
Sub-total of cash inflows from financing
activities
Sub-total of cash outflows from
financing activities
Net cash flows from financing activities 45,673,305.70 -466,358,420.51 109.79%
Net increase in cash and cash
equivalents
Description of main influencing factors of significant YoY changes in relevant data
Applicable Not applicable
Net cash flow generated by operating activities increased by 50.39% year-on-year, mainly due to a decrease in
cash flow for purchasing goods during the reporting period.
Net cash flow generated by investment activities decreased by 409.20% year-on-year, mainly due to the increase
in cash outflow for purchasing fixed assets during the reporting period.
The subtotal of cash inflows generated by fund-raising activities increased by 100.00% year-on-year, mainly due
to new loans during the reporting period;
The subtotal of cash outflows generated by fund-raising activities decreased by 79.40% year-on-year, mainly due
to the decrease in repayment of loan principal during the reporting period;
The net cash flow generated by fund-raising activities increased by 109.79% year-on-year, mainly due to the new
loans during the reporting period
The net increase in cash and cash equivalents increased by 192.37% year-on-year, mainly due to the decrease in
cash flow for purchasing goods during the reporting period.
Explanation of the reasons for the significant difference between the net cash flow generated from the operating
activities of the Company and the net profit of the current year during the reporting period
□ Applicable Not applicable
V. Analysis of non-primary business
Applicable Not applicable
Unit: RMB
Whether it is
Amount Ratio of total profit Formation reasons
sustainable
Mainly due to the income obtained by
the Company' from purchasing the
wealth management products, the gains
Investment income -1,198,003.94 -1.10% Sustainable
from settled forward foreign exchange
contracts, and the losses of participating
enterprises during the reporting period.
It is mainly due to the income and fair
value changes obtained by the
Gains/losses on Company from purchasing financial
-936,994.72 -0.86% Not
changes in fair value products and the unexpired part of
forward foreign exchange contracts
during the reporting period.
It was mainly due to the provision for
inventory depreciation made by the
Asset impairment -138,340,722.92 -127.60% Company in accordance with the Sustainable
accounting policies during the reporting
period.
Mainly due to the cleanup and transfer
Non-operating of the Company's long-term payables to
revenue non-operating income during the
reporting period.
Mainly due to the company's
Non-operating
expenses
the reporting period.
It is mainly due to the government
subsidies received by and the
Other income 40,845,334.53 37.67% preferential policy of additional value- Sustainable
added tax deduction enjoyed by the
Company during the reporting period.
Mainly due to the reverse for credit
Credit loss 8,447,592.80 7.79% impairment as per accounting policies Sustainable
during the reporting period.
VI. Analysis of assets and liabilities
Unit: RMB
As at the end of 2025 Early 2025 Explanation of
Increase/decrease
Ratio of total significant
Amount Ratio of total assets Amount in percentage
assets changes
Monetary
funds
Accounts
receivable
Contract
assets
Inventories 884,642,355.51 16.33% 789,756,700.88 15.09% 1.24%
Investment
properties
Long-term
equity 107,583,586.91 1.99% 114,828,026.04 2.19% -0.20%
investments
Mainly due to
Fixed assets 1,657,314,603.81 30.59% 1,873,552,843.91 35.81% -5.22%
depreciation.
Mainly due to
Construction the investment in
in progress the construction
of Line 8 project.
Right-of-use
assets
Short-term
borrowings
Contract
liabilities
Long-term
borrowings
Lease
liabilities
Financial
assets held 736,341,286.18 13.59% 731,419,904.42 13.98% -0.39%
for trading
Accounts
payable
Other
payables
High proportion of overseas assets
□ Applicable Not applicable
Applicable Not applicable
Unit: RMB
Profit or loss
Cumulative Impairment
from changes Amount
changes in fair provision in Amount sold in Other
Item Beginning balance in fair value in purchased in the Ending balance
value included the current the current period changes
the current current period
in equity period
period
Financial assets
assets held for
trading
(excluding
derivative
financial assets)
financial assets
instrument 165,402,900.00 0.00 -6,141,300.00 0.00 0.00 0.00 0.00 159,261,600.00
investments
Receivables
under Financing
Sub-total of
financial assets
Total of the 1,150,000,000.0 1,147,503,823.71
above
Financial
liabilities
Other changes
None
Whether there were significant changes in the measurement attributes of the Company's major assets during the
reporting period
Yes No
(1) The restricted monetary funds mainly include the funds equivalent to RMB 684,860.26 due to the freezing of
accounts and the bill and L/C guarantee of RMB 536.39.
(2) Restricted notes receivable are notes receivable that have been endorsed by the Company and have not yet
matured on the balance sheet date.
(3) Limited fixed assets and intangible assets are mainly subsidiary SAPO Photoelectric with its part of self
sustaining property to the Bank of Communications Co., Ltd. Shenzhen Branch as the lead of syndicated
application for mortgage loans, and the Company for the mortgage guarantee. See information network
(http://www.cninfo.com.cn) on the Company for Subsidiary Bank Mortgage Guarantee Announcement (2020-19),
and the Announcement of the Progress of the Company for the Subsidiary Guarantee (2020-46).
VII. Analysis of investment status
□ Applicable Not applicable
□ Applicable Not applicable
Applicable Not applicable
Unit: RMB
Reason for
Accumula not
Fixed
Invest Accumulative Estimat tive meeting
assets Input amount in Disclosure Disclosure
ment Industry actual input Source Project ed realized the
Project investm the Reporting date (if index (if
metho involved amount as of the of funds progress revenue revenues schedule
ent or Period any) any)
d period-end s as of the and
not
period-end expected
revenues
Own
Computer,
funds
and
wide cations and Company
Loans Still under
polarizer Self- other October announce
Yes 179,954,389.78 179,954,389.78 from 13.49% 0.00 0.00 constructi
production build electronic 16, 2025 ment No.:
financia on
line project equipment 2025-39
l
(Line 8) manufacturin
instituti
g
ons
Total -- -- -- 179,954,389.78 179,954,389.78 -- -- 0.00 0.00 -- -- --
(1) Securities investment
□ Applicable Not applicable
The Company had no securities investment during the reporting period.
(2) Derivative investment
Applicable Not applicable
Applicable Not applicable
Unit: RMB10,000
Proportion of
ending
Profit or loss investment
Cumulative Amount
from Amount sold amount in
Type of Initial changes in purchased
Beginning changes in during the Ending the
derivative investment fair value during the
amount fair value in reporting amount Company's
investment amount included in reporting
the current period net assets at
equity period
period the end of
the reporting
period
Foreign
exchange 0 9,246.6 -336.22 0 50,594.29 48,641.64 11,199.25 3.00%
contract
Total 0 9,246.6 -336.22 0 50,594.29 48,641.64 11,199.25 3.00%
Accounting policies for hedging activities The Company recognizes and measures in accordance with the Accounting Standards for
during the reporting period, specific Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments
accounting principles, and description of and Accounting Standards for Business Enterprises No. 37 - Presentation of Financial
any significant changes compared to the Instruments, accounting for and disclosing the intended foreign exchange derivative
previous reporting period transactions, reflecting related items in the Balance Sheet and income statement.
During the reporting period, the profit and loss of the fair value change of the undelivered
Forward Foreign Exchange Contract was RMB 3.3622 million, and the investment loss of
Explanation of the actual profit and loss the delivered Forward Foreign Exchange Contract was RMB 10.1230 million, with
situation in the reporting period impacts on net profit attributable to parent shareholders were -2.0173 million, -6.0738
million ，respectively.
To effectively control the uncertain impact of foreign exchange rate fluctuations on its
operating performance and enhance financial stability, the company's holding subsidiary,
SAPO Photoelectric, engages in foreign exchange derivative trading for hedging
Explanation of the hedging effectiveness purposes. To effectively control the uncertainties caused by significant foreign exchange
rate fluctuations on corporate performance, and enhance the financial stability, SAPO
Photoelectric (a subsidiary of the Company) has initiated foreign exchange derivatives
trading for hedging purposes.
Sources of funds for derivative
Self-owned funds
investments
The company's foreign exchange hedging operations are conducted under the "risk-
neutral" management philosophy, with the primary objective of mitigating andpreventing
currency risks. The scale of the trading business matches with the actual business, and no
speculative or arbitrage transactions are conducted. However, there are certain risks
associated with foreign exchange hedging, mainly including:
Risk analysis and control measures for significantly from the Company's judgment over the direction of exchange rate
derivative positions during the reporting fluctuation, hedging losses may occur;
period, including but not limited to
market risk, liquidity risk, credit risk,
hedging, risks may arise from inadequate internal controls;
operational risk, and legal risk, etc.
default in foreign exchange hedging business;
result in the inability to execute contracts normally, causing losses to the Company.
Risk control measures adopted by the Company:
Business Management System" by further refining its hedging framework and operational
guidelines. The Company will establish clear regulations covering foreign exchange
management principles, approval authorities, hedging strategies, internal workflows,
information segregation measures, risk management mechanisms, risk mitigation
procedures, and information disclosure requirements.
deployed dedicated professionals in business operations and risk management to control
the risk of foreign exchange rate, market analysis, and product research. The Company
has also engaged third-party institutions for expert decision-making support. These teams
promptly report any anomalies, implement emergency measures, and adjust business
strategies as needed to minimize foreign exchange losses.
funds, and may hire professional institutions for audit if necessary.
hedging activities, responsible for reviewing and supervising the actual operations, use of
funds, and profit and loss situations, making report to the Audit Committee of the Board
of Directors, urging the Financial Department to handle accounting in a timely manner,
and verifying the accounting treatment.
exchange hedging business with large banks and other financial institutions that have
legal qualifications.
The Company measures and recognizes in accordance with Chapter 7 Determination of
The report on invested derivatives should Fair Value in Accounting Standards for Business Enterprises No. 22 - Recognition and
disclose the market price or fair value Measurement of Financial Instruments:
changes during the reporting period, and
During the reporting period, the fair value change of Forward Foreign Exchange Contract
the analysis on the fair value of
recognized was RMB -3.3622 million, with an impact of RMB -2.0173 million on the net
derivatives should reveal the specific
profit attributable to the parent company.
methods used and the assumptions and
parameters set. The fair value of foreign exchange contracts is determined based on the foreign exchange
product quotes from banks on the Balance Sheet date.
Litigation status (if applicable) Not applicable
Derivative investment approval board
November 29, 2025
announcement date (if any)
Derivative investment approval
shareholders' meeting announcement date December 24, 2025
(if any)
□ Applicable Not applicable
The Company did not engage in derivative investments for speculative purposes during the reporting period.
VIII. Sales of major assets and equities
□ Applicable Not applicable
The Company did not sell major assets during the reporting period.
□ Applicable Not applicable
IX. Analysis of major holding and participating companies
Applicable Not applicable
Major subsidiaries and participating companies with an impact of 10% or more on the Company's net profit
Unit: RMB
Company Compan Main Registered Operating Operating
Total assets Net assets Net profit
name y type business capital revenue profit
Shenzhen
Production
SAPO Subsidia 583,333,333. 4,238,012,75 3,271,253,27 3,137,568,960 67,790,632.2 67,987,199.5
and sales of
Photoelectric ries 00 4.27 3.68 .10 8 3
polarizers
Co., Ltd.
Information on acquisition and disposal of subsidiaries during the reporting period
□ Applicable Not applicable
Notes to main holding and participating companies
The financial data of the subsidiary SAPO Photoelectric in the above table are the data of its consolidated
financial statements. For details of its performance fluctuations and reasons for changes, please refer to "IV
Analysis of primary business" in "Section III Management Discussion and Analysis".
X. Structured entities controlled by the Company
□ Applicable Not applicable
XI. Prospects for the future development of the Company
(i) Industry competition pattern and development trend
The polarizer industry is a highly concentrated industry. At present, there are about 10 major polarizer
manufacturers in the world, mainly located in Chinese mainland, Japan and Taiwan. With the continuous transfer
of production capacity to China and the continuous expansion of production by manufacturers from Chinese
mainland, China has become the world's largest polarizer production base. According to research data from the
industry institutions, the production capacity of polarizers in China mainland accounted for about 65% of the
global total in 2025, and it is expected to further increase to about 75% in 2026. As the competitive advantage of
ultra-wide polarizer production line driven by the rapid growth of demand for large-size display products (65
inches and above) continuously stands out, Chinese mainland continues to maintain its leading position in the
industry.
With the recovery of the global economy, the gradual recovery of the consumer electronics market and the
increasing maturity of various types of display technologies and products in multiple scenarios, the global display
industry has entered a recovery upward channel. As one of the key raw materials upstream of the display panel,
polarizers are expected to fully benefit from the recovery of the industry, and the multi-screen demand driven by
the large-sizing of display products, AI empowerment of IT products, and the electrification and
intellectualization of automobiles, entering a new period of demand growth. According to research data from
industry institutions, the global demand for polarizers is expected to grow from 605 million square meters in 2024
to 685 million square meters in 2028, with a cumulative growth of 13.41% from 2024 to 2028 and a compound
annual growth rate of about 3.20%. Among them, the demand for OLED polarizers is expected to grow from
of 9.11%. The demand for automotive polarizers is expected to grow from about 12 million square meters in 2024
to about 16 million square meters in 2028, with a compound annual growth rate of 7.46%. In the future,
manufacturers with large-size polarizer products, as well as high-end and cutting-edge polarizer technology
reserves and mass production capabilities such as OLED and automotive polarizers will occupy greater
competitive advantages.
(II) Development strategy of the Company
During the 15th Five-Year Plan period, the Company will build on its existing industrial foundation, pursue
development driven by innovation leadership and capital operation, continuously enhance its technological
innovation capability, strengthen quality improvement, cost reduction and efficiency enhancement, further expand,
strengthen and optimize its core polarizer business, accelerate the exploration of extending its layout to advanced
new material sectors such as upstream materials for polarizers, optoelectronic materials and new display materials,
strive to build a high-quality business system featuring "strengthening the foundation and advancing through
expansion", accelerate the upgrading and development of the Company, and build itself into a world-class new
material technology group.
(III) Possible risks
At present, the domestic economy is stable and progressing, and the overall situation is repairing. However, the
international environment is complex and severe, with geopolitical tensions. As one of the upstream
manufacturers in the display product market, the Company cannot rule out the risk that unpredictable
macroeconomic fluctuations may affect the Company's performance.
As polarizer is a core and key material in the new display industry chain, its development is closely dependent on
the iteration of display panel technology and changes in market demand. Currently, China's polarizer industry is in
a critical period of accelerated domestic substitution, and driven by emerging application scenarios such as ultra-
large sizing, OLED flexibility and automotive displays, the demand for technological upgrading is urgent. If the
Company fails to keep up with the technological development trends in a timely manner, resulting in lagging
R&D of new product or application verification not meeting expectations; alternatively, intensified industry
competition could lead to a decline in the price of display panel, thereby transmitting the cost pressure to the
upstream polarizer segment, which may adversely affect the Company's operating performance and market
competitiveness.
There are high barriers to the core production technology of upstream materials of polarizers, which are mostly
monopolized by foreign manufacturers, and the localization rate is not high. At present, the key raw materials
required for the manufacture of polarizers, such as PVA film, TAC film and other optical films, are basically
monopolized by Japanese enterprises. The price of the main optical film materials is affected by the production
capacity of Japanese suppliers, market demand and the exchange rate of Japanese yen, thus affecting the unit cost
of the Company's products.
With the accelerated production of new and expanded production lines by major domestic polarizer manufacturers
in recent years, polarizer production capacity, especially large-size polarizer production capacity, will continue to
grow in the future. If the recovery of downstream consumer markets is weaker than expected, the competition in
the polarizer industry will further intensify.
(IV) Priorities in 2026
In the face of the current macroeconomic environment and industry competition, the Company will focus on
improving the operational efficiency of its polarizer business, strengthening R&D innovation, production control,
and sales synergy to comprehensively enhance its core competitiveness. First, we will strengthen the leadership of
innovation and accelerate the development of new product. Second, we will increase the market promotion of core
products and expand the sales scale. Third, we will enhance the process capability of production lines, optimize
the production processes, and improve the production efficiency and yield. Fourth, we will further reduce the cost
in procurement and increase the procurement volume and proportion of domestic raw materials.
We will fully promote the construction of the SAPO Photoelectric 1.49m-wide polarizer production line (Line 8).
We will strengthen project supervision and risk prevention and control of safety production to lay the foundation
for achieving the expected benefits and strategic goals after the project is put into production.
optimize the business layout
On the one hand, we will continuously optimize the quality of property management services to ensure a stable
cash flow for the Company. On the other hand, we will dynamically optimize the disposal plan for "non-core/non-
competitive businesses and inefficient/non- performing assets" and steadily advance the clearance of non-
core/non-competitive assets. We will actively promote the liquidation of the textile and garment business and the
transfer of small equity in some participating enterprises to effectively optimize asset allocation and improve asset
operation efficiency, to lay a solid foundation for the Company to focus on the main polarizer business and
accelerate the transformation and development.
We will deeply implement the talent-driven strategy, focus on the high-quality development of the main polarizer
business, continuously optimize the structure of the cadre team, and strengthen the capacity building of key talents.
First, we will adhere to the principle of integrity and competence with a focus on application, increase the
introduction of talents in key functions such as high technology and international operations, systematically
cultivate versatile talents, and broaden career development channels for talents. Second, we will deepen the
innovation of incentive mechanisms, benchmark against the advanced management experience in the industry,
improve a flexible and diversified medium- and long-term incentive system, and fully unleash the innovative and
creative potential of talents. Third, we will continuously create a good ecosystem of "recognizing talents,
cherishing talents, loving talents, and using talents", give full play to the professional, intellectual, and resource
advantages of talents, empower the Company's technological breakthroughs, capacity upgrading, and market
expansion with a high-quality talent team, and comprehensively consolidate the Company's core competitiveness.
The Company always adheres to the safe production policy of "safety first, prevention foremost, and
comprehensive governance," firmly establishes the concept of safe development, continuously improves the safety
production responsibility system, and implements the safety responsibilities at all levels to ensure that the
responsibilities are assigned to individuals and effectively implemented; we will further increase investment in
production safety, focus on the investigation and rectification of major safety risks and hidden dangers, and
resolutely prevent and defuse the major safety risks; we will insist on carrying out regular safety education and
training and emergency drills to continuously enhance the work safety awareness, safe operation skills, and
emergency response capabilities of all employees; we will carry out multi-dimensional and all-round special work
safety inspections and daily investigations to promptly discover and absolutely eliminate the safety hazards,
thereby fully ensuring the safe and stable operation of all the Company's businesses.
control
We will continuously optimize and improve the risk control management system, extend the coverage of the
compliance system to our subordinate enterprises, to standardize and normalize the Company's overall compliance
management; we will standardize the compliance management processes, strengthen risk prediction, prevention
and control, effectively reduce the operating risks, and earnestly safeguard the Company's legitimate rights and
interests; we will strengthen compliance education for all employees, and organize special compliance training, to
enhance the compliance awareness and performance capabilities of all employees.
Based on high-quality information disclosure, we will refine and improve the investor relations management, and
convey the Company's strategy and operating results through various forms such as organizing performance
briefings and investor research, to guide long-term value investment. We will timely and reasonably use methods
such as mergers and acquisitions, equity incentives, share repurchases, and cash dividends to boost the confidence
of market investors in the company, enhance the investors' confidence and sense of gain, and continuously
increase the investment value of the listed company.
In strict accordance with the unified deployment and arrangements of the Party Central Committee and superior
Party committees, we will give full play to the leadership role of the Party Committee in "setting the direction,
managing the overall situation, and ensuring the implementation". We will promote the deep integration of party
building with business development, so that the grassroots Party organizations become a solid fortress to promote
the production and operation and unite the employees; make every effort to build a characteristic party building
brand of enterprises, and play a vanguard and exemplary leading role of party members in core key positions such
as production line and scientific research and innovation; pay close attention to the construction of the work style
of the cadre team, promote the improvement and implementation of the Company's system, promote the clarity
and implementation of the corporate strategy, and lay a solid foundation and provide guarantee for the healthy
development of the Company.
XII. Reception, survey, communication, interview and other activities during the reporting
period
Applicable Not applicable
Main contents
Index of basic
Type of discussed and
Reception time Reception place Reception mode Reception object information of
reception object information
the survey
provided
Main topics of For details,
discussion: the please refer to
Value Online Company's the Investor
Online
(https://www.ir- market value Relations
communication
April 15, 2025 online.cn/) Others General investors management, Activity Record
on the network
network divestment of the Form (No. 2025-
platform
interaction textile business, 01) published by
Change of Shenzhen Textile
company name, (Holdings) Co.,
Main contents
Index of basic
Type of discussed and
Reception time Reception place Reception mode Reception object information of
reception object information
the survey
provided
and the main Ltd. on Cninfo
driving factors of (http://www.cnin
the Company's fo.com.cn).
profitability, etc.
Data provided:
none.
For details,
please refer to
Main topics of the Investor
Panorama
discussion: the Relations
"Investor
Online Company's Activity Record
Relations
November 20, communication capital operation Form (No. 2025-
Interactive Others General investors
Platform"
platform of company Shenzhen Textile
(https://ir.p5w.ne
name, etc. Data (Holdings) Co.,
t)
provided: none. Ltd. on Cninfo
(http://www.cnin
fo.com.cn).
XIII. Formulation and implementation of market value management system and valuation
improvement plan
Whether the Company has formulated a market value management system.
Yes No
Whether the Company has disclosed plans for valuation enhancement.
Yes No
XIV. Implementation of the action plan of "double improvement of quality return".
Whether the company has disclosed the announcement of the action plan of "double improvement of quality
return".
Yes No
Section IV Corporate Governance, Environment and Society
I. Basic status of corporate governance
During the reporting period, the Company operated in strict accordance with the requirements of the Securities
Law, the Company Law, the Code of Corporate Governance for Listed Companies, the Guidelines for Self-
Regulation of Companies Listed on Shenzhen Stock Exchange No. 1 - Standardized Operation of Companies
Listed on the Main Board, and other relevant laws, regulations and normative documents, strengthened risk
management and control, and ensured the healthy and stable development of the Company. At present, the
Company's various governance systems are basically sound, its operation is standardized, and its legal person
governance structure is perfect, which meets the requirements of the normative documents on the corporate
governance of listed companies issued by the China Securities Regulatory Commission.
(I) Operation of the general meeting of shareholders
In 2025, the Company held a total of 6 general meetings, which were convened and held in strict accordance with
the provisions and requirements of the Company Law, the Company's Articles of Association and the Rules of
Procedure for the General Meeting, the voting procedures were standardized, and the resolutions were legal and
valid. Companies actively protected the voting rights of minority investors, and general meetings were convened
in the form of live network to adequately assure small investors of their rights to exercise.
(II) Operation of the Board of Directors
In 2025, the Board of Directors of the Company held a total of 13 meetings. The convening, holding and voting
procedures of the Board of Directors were carried out in strict accordance with the provisions of the Articles of
Association and the Rules of Procedures of the Board of Directors of the Company. All directors performed their
duties as directors, lawfully exercised their rights as directors, attended relevant meetings in time, actively
participated in the training organized by the regulatory authorities and the Company, and deeply studied and
mastered the relevant laws and regulations in a conscientious, diligent and honest manner. Independent directors,
in strict accordance with the Company Law and other relevant laws and regulations, as well as the Articles of
Association and the Working System for Independent Directors, performed their duties as independent directors
independently, objectively and prudently. They conducted careful and meticulous deliberation on the major
matters of the Company, and provided constructive opinions and suggestions for the Company's decision-making
with their independent perspective, professional quality, and rich experience, effectively playing the supervisory,
check-and-balance, and professional support role of independent directors. The Board of Directors has established
a strategic planning committee, an audit committee, a remuneration and assessment committee, and a nomination
committee. The special committees perform their relevant duties in strict accordance with the working regulations,
providing scientific and professional reference opinions for the decision-making by the Board of Directors. In
Directors fully took over the functions of the Board of Supervisors, focusing on strengthening the financial,
internal control, and compliance supervision to ensure the effective implementation of supervisory functions and
safeguard the overall interests of the Company.
(III) Operation of the management
The management of the Company performed its duties in strict accordance with the Company Law, the Guidelines
for Self-Regulation of Companies Listed on Shenzhen Stock Exchange No. 1 - Standardized Operation of
Companies Listed on the Main Board, the Articles of Association and the Working Rules of the General Manager.
The Company conducted internal information communication through the weekly general manager's office
meeting, reviewed the performance and gave feedback on budget implementation through quarterly business
analysis meetings to ensure that all kinds of information were transmitted in a timely, accurate and efficient
manner within the Company. The management was fully responsible for the Company's production and operation
management, and strictly implemented all resolutions made by the Board of Directors. The members of the
management had a clear division of labor, defined powers and responsibilities, and efficient collaboration. They
earnestly fulfilled their management and operation duties, fully promoted the realization of the Company's
business objectives, and ensured that the Company's business activities were carried out in a standard, orderly and
efficient manner.
(IV) Information disclosure and transparency
In 2025, the Company continued to improve the quality of information disclosure, enhance the transparency of
information disclosure, strengthen the management of investor relations, and effectively protect the legitimate
rights and interests of all investors. During the reporting period, the Company strictly complied with the Articles
of Association, the Measures for the Administration of Information Disclosure of Listed Companies and other
relevant provisions, abided by the principle of "openness, fairness and impartiality" in information disclosure,
fulfilled its information disclosure obligations in a true, accurate, complete and timely manner, and continuously
improved the specific measures to protect investors' interests. The Company strictly implemented the insider
information confidentiality system, strengthened the confidentiality education, standardized the registration and
filing of insiders, and strictly prevented the leakage of insider information to ensure the equal right of all
shareholders to obtain information; the Company attached great importance to the management of investor
relations, timely answered the questions raised by investors through telephone, e-mail, and especially the
Shenzhen Stock Exchange's investor relations interactive platform, and timely reported the needs, suggestions and
reasonable demands of investors to the management. At the same time, the Company continued to improve the
voting mechanism for small and medium investors. The votes of small and medium investors were counted
separately at the 6 general meetings of the Company in 2025, and the results of the separate counting were
publicly disclosed in the resolution announcement of the general meeting, fully protecting the rights of small and
medium investors.
Whether there is any significant difference between the actual status of corporate governance and the laws,
administrative regulations and the provisions issued by the China Securities Regulatory Commission on the
governance of listed companies
Yes No
There are no significant differences between the actual status of corporate governance and the laws, administrative
regulations and the provisions issued by the China Securities Regulatory Commission on the governance of listed
companies
II. The independence of the Company from the controlling shareholder and actual owner in
terms of assets, personnel, finance, organization and business
During the reporting period, the controlling shareholders of the Company behaved in a standard manner, and did
not directly or indirectly intervene in the Company's decision-making and operating activities beyond the general
meeting. The Company has independent and complete business and independent operation abilities, and can
achieve "five separations" in terms of personnel, finance, assets, institutions and business.
III. Horizontal competitions
□ Applicable Not applicable
IV. Directors and Senior Management
Number
Number Number
of shares Number Reasons
of shares of shares
held at Other of shares for
Employ Ending increased reduced
Beginning the increase/d held at increase
Name Gender Age Position ment date of the in the
date of term beginning ecrease the end of or
status term current current
of the (shares) the period decrease
period period
period (shares) in share
(shares) (shares)
(shares)
Secretary of the
Incumbe September 29,
Li Gang Male 56 Party Committee 0 0 0 0 0
nt 2025
and Chairman
Deputy
Secretary of the
Party
Incumbe February 18,
Ma Jie Male 48 Committee, 0 0 0 0 0
nt 2025
Director and
General
Manager
Deputy
Wei Secretary of the Incumbe February 18,
Male 46 0 0 0 0 0
Junfeng Party Committee nt 2025
and Director
Wang Incumbe October 28,
Male 54 Director 0 0 0 0 0
Chuan nt 2022
Wang Deputy General August 05, January
Male 54 Resigned 0 0 0 0 0
Chuan Manager 2022 21, 2025
Director and Incumbe February 28,
Liu Yu Female 54 0 0 0 0 0
Finance Director nt 2024
Number
Number Number
of shares Number Reasons
of shares of shares
held at Other of shares for
Employ Ending increased reduced
Beginning the increase/d held at increase
Name Gender Age Position ment date of the in the
date of term beginning ecrease the end of or
status term current current
of the (shares) the period decrease
period period
period (shares) in share
(shares) (shares)
(shares)
Incumbe
Meng Fei Male 50 Director July 23, 2023 0 0 0 0 0
nt
Wang Independent Incumbe November 12,
Male 65 0 0 0 0 0
Liming director nt 2025
Yang Independent Incumbe December 25,
Male 58 0 0 0 0 0
Gaoyu director nt 2023
Wang Independent Incumbe January 16,
Male 42 0 0 0 0 0
Kai director nt 2020
Deputy General Incumbe January 24,
Lin Xia Female 50 0 0 0 0 0
Manager nt 2025
Wang Deputy General Incumbe January 24,
Male 36 0 0 0 0 0
Zihan Manager nt 2025
Secretary of the
Huang Incumbe August 21,
Male 38 Board of 0 0 0 0 0
Min nt 2025
Directors
Secretary of the
YIN February 10, Septembe
Male 51 Party Committee Resigned 0 0 0 0 0
Kefei 2021 r 05, 2025
and Chairman
Deputy
Ning Secretary of the December 14, January
Male 50 Resigned 0 0 0 0 0
Maozai Party Committee 2017 22, 2025
and Director
Wu
Independent December 25, Septembe
Guangqu Male 63 Resigned 0 0 0 0 0
director 2023 r 16, 2025
an
Secretary of the
JIANG January 16, August
Female 55 Board of Resigned 0 0 0 0 0
Peng 2015 21, 2025
Directors
Total -- -- -- -- -- -- 0 0 0 0 0 --
Whether there have been departures of any directors, supervisors, or dismissals of senior management personnel
during their terms of office in the reporting period
Yes No
manager of the company on January 21, 2025, and Ning Maozai, the former Deputy Secretary of the Party
Committee and director of the Company, resigned on January 22, 2025. On January 24, 2025, the Company held
the 36th meeting of the 8th Board of Directors, at which the "Proposal on Appointing the Company's General
Manager" and the "Proposal on Appointing the Company's Deputy General Managers" were deliberated and
approved. Upon review by the nomination committee of the 8th Board of Directors, the Board of Directors agreed
to appoint Ma Jie as the Company's general manager and Lin Xia and Wang Zihan as the deputy general managers,
with their terms of office being the same as that of the 8th Board of Directors. Besides, the "Proposal on Adjusting
the Non-independent Directors of the 8th Board of Directors" was deliberated and approved. Upon review by the
nomination committee of the 8th Board of Directors, the Board of Directors agreed to nominate Ma Jie and Wei
Junfeng as candidates of the non-independent directors of the 8th Board of Directors, with their terms of office
being the same as that of the 8th Board of Directors. For details, please refer to the Announcement on Adjusting
Directors and Senior Officers (No. 2025-02) published by the Company on Cninfo (http://www.cninfo.com.cn).
On February 18, 2025, the Company held the first extraordinary general meeting in 2025, at which the "Proposal
on Electing Non-independent Directors of the 8th Board of Directors" was deliberated and approved. Ma Jie and
Wei Junfeng were elected as the non-independent directors of the Company, with their terms of office being the
same as that of the 8th Board of Directors, commencing from the date of approval at the general meeting. For
details, please refer to the Announcement on the Resolution of the First Extraordinary General Meeting in 2025
(No. 2025-06) published by the Company on Cninfo (http://www.cninfo.com.cn).
"Proposal on Nominating Li Gang as a Candidate Director of the 8th Board of Directors" was deliberated and
approved. Based on the recommendation of Shenzhen Investment Holdings Co., Ltd. and upon review and
approval by the nomination committee of the 8th Board of Directors, the Board of Directors agreed to nominate Li
Gang as a candidate director of the 8th Board of Directors. For details, please refer to the "Announcement on
Resolution of the 42nd Meeting of the 8th Board of Directors" (No. 2025-30) on Cninfo
(http://www.cninfo.com.cn). On September 29, 2025, the Company held the second extraordinary general meeting
in 2025, at which the "Proposal on Electing Li Gang as a director of the 8th Board of Directors" was deliberated
and approved. Li Gang was elected as a non-independent director of the Company, with his term of office being
the same as that of the 8th Board of Directors, commencing from the date of approval at the general meeting. For
details, please refer to the Announcement on the Resolution of the Second Extraordinary General Meeting in 2025
(No. 2025-35) published by the Company on Cninfo (http://www.cninfo.com.cn). On September 29, 2025, the
Company held the 44th meeting of the 8th Board of Directors, at which the "Proposal on Electing the Chairman of
the 8th Board of Directors" was deliberated and approved. It was agreed to elect Li Gang as the Chairman of the
please refer to the "Announcement on Resolution of the 44th Meeting of the 8th Board of Directors" (No. 2025-36)
on Cninfo (http://www.cninfo.com.cn).
on Changing the Secretary of the Board of Directors" was deliberated and approved. Due to work adjustment, Ms.
Jiang Peng no longer serves as the Secretary of the Board of Directors; upon nomination by the Chairman and
review by the Nomination Committee of the Board of Directors, it was agreed to appoint Huang Min as the
secretary of the Board of Directors of the Company. For details, please refer to the Company's Announcement on
Changing the Secretary of the Board of Directors (No. 2025-28) on CNINF (http://www.cninfo.com.cn).
an Additional Independent Director to the 8th Board of Directors" was deliberated and approved. Upon review
and approval by the nomination committee of the 8th Board of Directors, the Board of Directors agreed to
nominate Wang Liming as a candidate independent director of the 8th Board of Directors and the Proposal was
submitted for election at the Company's general meeting, with his term of office being the same as that of the 8th
Board of Directors. For details, please refer to the "Announcement on Resolution of the 46th Meeting of the 8th
Board of Directors" (No. 2025-42) on Cninfo (http://www.cninfo.com.cn). On November 12, 2025, the Company
held the third extraordinary general meeting in 2025, at which the "Proposal on Electing Wang Liming as an
independent director of the 8th Board of Directors" was deliberated and approved. Wang Liming was elected as
an independent director of the Company, with his term of office being the same as that of the 8th Board of
Directors, commencing from the date of approval at the general meeting. For details, please refer to the
Announcement on the Resolution of the Fourth Extraordinary General Meeting in 2025 (No. 2025-48) published
by the Company on Cninfo (http://www.cninfo.com.cn).
Changes in directors and senior management of the Company
Applicable Not applicable
Name Position Type Date Reasons
Secretary of the Party
YIN Kefei Committee and Resigned September 05, 2025 Job transfer
Chairman
Deputy Secretary of the
Ning Maozai Party Committee and Resigned January 22, 2025 Job transfer
Director
Wang Chuan Deputy General Manager Resigned January 21, 2025 Job transfer
Wu Guangquan Independent director Resigned September 16, 2025 Personal reasons
Secretary of the Board of
JIANG Peng Resigned August 21, 2025 Job transfer
Directors
Professional background, work experience and main duties in the Company of existing directors and senior
management
(I) Directors
Li Gang, male, born in March 1970, bachelor's degree, member of the Communist Party of China. He has
successively served as a senior business manager of the HR Department and deputy director of the Party and Mass
Work Department of Shenzhen Investment & Management Company; assistant to the General Manager and
Director of the General Office of Shenzhen Dachanwan Port Investment & Development Co., Ltd.; deputy
Secretary of the Party Committee and Secretary of the Discipline Inspection Commission of Shenzhen Tongchan
Industrial Co., Ltd.; deputy General Manager of Shenzhen Shenchao Technology Investment Co., Ltd., and
Director of the Human Resources Department (Financial Supervision Center) of Shenzhen Investment Holdings
Co., Ltd. He is currently the Secretary of the Party Committee and Chairman of Shenzhen Investment Holdings
Science and Technology Innovation Group Co., Ltd., and the Secretary of the Party Committee and Chairman of
the Company.
Ma Jie, male, born in November 1977, master's degree and a member of the Communist Party of China. He
successively served as a section member of Luohu Branch of Shenzhen Public Security Bureau and Personnel
Bureau of Yantian District of Shenzhen; director and Deputy Secretary of the General Office of Shenzhen Luohu
District Committee of the Communist Youth League; deputy Director and Researcher of Shenzhen Luohu District
Environment Protection and Water Affairs Bureau; director of Discipline Inspection and Supervision Office and
Deputy Secretary of Commission for Discipline Inspection of Shenzhen SDG Group Co., Ltd.; secretary of
Commission for Discipline Inspection and Chairman of the Board of Supervisors of Shenzhen Urban Construction
and Development (Group) Co., Ltd. He currently serves as the Deputy Secretary of the Party Committee, Director
and General Manager of the Company.
Wei Junfeng, male, born in November 1979, a master's degree and a member of the Communist Party of China.
He successively served as the secretary of the board of directors and the project manager of the general
department of Shenzhen International Tendering Co., Ltd., the director and senior supervisor of the board office
(during which he was also the risk control director and administrative director of Shenzhen Investment Holdings
Donghai Investment Co., Ltd.), and the senior supervisor and deputy director of the Strategy Research Department
(the Board Office) of Shenzhen Investment Holdings Co., Ltd.. He is currently the Deputy Secretary of the Party
Committee and Director of the Company.
Wang Chuan, male, born in March 1972, master's degree, economist, engineer, and member of the Communist
Party of China. He successively served as the Deputy Director, Director and Assistant Director of the Cooperative
Development Department of Shenzhen National High-tech Industry Innovation Center, the Director, General
Manager and Chairman of Shenzhen Innovation Starting Point Technology Co., Ltd., the Deputy General
Manager of Shenzhen Tong Chan Group Co., Ltd., Director of the Investment Management Department of
Shenzhen Investment Holdings Co., Ltd., member of Party Committee and Deputy General Manager of Shenzhen
SDG Group Co., Ltd., and Chairman of the Company.
Liu Yu, female, born in November 1971, bachelor degree, senior accountant, Chinese certified public accountant,
and member of the Communist Party of China. She successively served as the Finance Director of Shenzhen
WOMAN Magazine, the Deputy General Manager of Shenzhen WOMAN Magazine, and the Director and
Finance Director of Shenzhen Wuzhou Guest House Group Co., Ltd. She is currently a director and Finance
Director of the company.
Meng Fei, male, born in November 1975, bachelor degree, senior accountant. He previously worked at Shenzhen
Tianhong Shopping Mall Co., Ltd. and Shenzhen Press Group, and served as a Senior Manager of Financial
Department of Shenzhen Investment Holdings Co., Ltd. and Deputy Head of the Financial Department
(Settlement Center). He is currently a Director and Chief Financial Officer of Shenzhen-Hong Kong Science and
Technology Innovation Cooperation Zone Development Co., Ltd., a Director of Shenzhen Special Economic Zone
Real Estate & Properties (Group) Co., Ltd., a Supervisor of Shenzhen High-tech Zone Investment and
Development Group Co., Ltd., a Supervisor of Shenzhen Investment Holdings Donghai Investment Co., Ltd., a
Director of SIHC Hong Kong Investment Holdings Limited, and a Director of the Company.
Wang Liming, male, born in October 1960, with a bachelor's degree in law, is a member of the CPC, a senior
political engineer, and an arbitrator of the first, second and third Shenzhen Arbitration Commission. He once
served as Deputy Director of the Research Office of the Political and Legal Affairs Commission of the Gansu
Provincial Committee of CPC; secretary of the Board of Supervisors, Deputy Director of the President's Office,
and member of the Discipline Inspection Commission of Shenzhen Investment Management Company; chairman
of the Board of Directors of Shenzhen Longmai Information Co., Ltd.; deputy General Manager of Shenzhen
International Modern Urban Logistics Port Co., Ltd.. He is currently an independent director of the Company.
Yang Gaoyu, male, born in February 1968, of Chinese nationality, is a member of the CPPCC of Shenzhen. He is
a graduate student of Business Administration at New York Institute of Technology, a Chinese Certified Public
Accountant, a Chinese Certified Tax Agent, a forensic accounting expert, and a member of China Zhi Gong Party.
He once served as an accounting officer of A-Fontane Fabrication Industrial (Shenzhen) Co., Ltd., and the audit
officer, audit manager, partner and chief partner of Shenzhen Changcheng Accountant Office Co., Ltd. He is
currently the director of the Shenzhen branch of Zhongzheng Tiantong Certified Public Accountants (Special
General Partnership), the executive director and general manager of Zhongtian Dexiang Taxation Firm (Shenzhen)
Co., Ltd., the general manager of Shenzhen Baofuqin Enterprise Management Consulting Co., Ltd., and is also a
member of the Legislative Consultation Committee of the CPPCC of Shenzhen, the deputy director of the Social
Service Committee of the Shenzhen Branch of the China Zhi Gong Party, the vice president of the Shenzhen New
Social Stratum Association, a member of the Seventh Council of the China Certified Tax Agents Association, the
executive member of the council and vice president of the Shenzhen Tax Agents Association, the vice president of
the Shenzhen Futian District Accounting Society, the vice president of Shenzhen Zhejiang Chamber of Commerce,
the executive president of the Legal, Taxation and Finance Association of Shenzhen Jiangxi Chamber of
Commerce, the vice president of Hong Kong Fuzhou Friendship Association, supervisor of Alumni Association of
Jiangxi University of Finance and Economics in Shenzhen, a visiting professor of the School of Accountancy of
Jiangxi University of Finance and Economics, an invited professor of the College of Modern Economics &
Management of Jiangxi University of Finance and Economics, a part-time master's supervisor of the Shenzhen
Research Institute of Jiangxi University of Finance and Economics, an entrepreneurship tutor of the Innovation
and Entrepreneurship Center of the Shenzhen Research Institute of Jiangxi University of Finance and Economics,
an off-campus tutor of the School of Economics of Shenzhen University for MPAcc, an independent director of
Shenzhen Leaguer Co., Ltd., an independent director of Shenzhen New Trend International Logis-Tech Co., Ltd.,
and an independent director of the Company.
Wang Kai, male, born in September 1983, Ph.D. of Huazhong University of Science and Technology, member of
the Communist Party of China, professor of the Department of Electronic and Electrical Engineering of Southern
University of Science and Technology, National Excellent Youth, and Outstanding Youth of Guangdong Province.
He serves as a member of the Technical Committee of the Beijing Branch of the Society for Information Display
(SID), a member of the Optical Display Professional Committee of the Chinese Society for Optical Engineering,
and the deputy director of the Key Laboratory of Quantum Dot Advanced Display and Lighting of Guangdong
Provincial General Colleges and Universities. He is also the technical consultant of Shenzhen Planck Innovation
Technology Co., Ltd. and an independent director of the Company.
(II) Senior management
Lin Xia, female, born in October 1975, bachelor's degree, member of the Communist Party of China. He has
served as the business supervisor of the Legal Supervision and Audit Department of Shenzhen Shenhua Group
Co., Ltd., the legal supervisor of the Board Office, the deputy director and director of the Office, and director of
the General Office (Process and Information Center) of Shenzhen Properties & Resources Development (Group)
Ltd., the deputy secretary of the branch committee (full-time rank) and the chairman of the labor union of
Shenzhen Huangcheng Real Estate Co., Ltd.. and the deputy general manager of Shenzhen Municipal People's
Congress Cadre Training Center Co., Ltd. He is currently the deputy general manager of the Company.
Wang Zihan, male, born in April 1989, bachelor's degree, member of the Communist Party of China. He has
successively served as the Deputy Director of the Marketing Department of the Commercial Operation Branch of
Shenzhen SEG Group Co., Ltd., the General Manager of SEG Creative Space of Shenzhen SEG Entrepreneurship
Hub Co., Ltd., and the Deputy General Manager and General Manager of the Operation Management Department
of Shenzhen SEG Group Co., Ltd. General Manager of Shenzhen SEG High-Tech Investment Co., Ltd. He is
currently the deputy general manager of the Company.
Huang Min, male, born in December 1987, with a master's degree, a senior economist, a certified public
accountant, and a member of the Communist Party of China. He has successively served as Senior Business
Manager of the Strategy and Information Department of FIYTA Precision Technology Co., Ltd., Audit Manager
of the Shenzhen Branch of KPMG Huazhen LLP (Special General Partnership), Senior Supervisor of the
Industrial Management Department of Shenzhen Investment Holdings Co., Ltd., and Director of the Finance
Department of the Company. He currently serves as the Secretary of the Board of Directors of the Company.
Situation where the controlling shareholder and actual controller concurrently serve as the chairman and general
manager of the listed company
□ Applicable Not applicable
*.Positions held in shareholders
□ Applicable Not applicable
*.Position in other entities
Applicable Not applicable
Name of the Positions
Name of other Beginning date Ending date of Whether to receive remuneration allowances
appointed held in other
entities of term term in other entities
personnel entities
Shenzhen
Investment
Holdings Science Chairman of
Li Gang January 09, 2017 Yes
and Technology the Board
Innovation Group
Co., Ltd.
Shenzhen High-
tech Zone
November 25, September 25,
Meng Fei Investment and Supervisor No
Development
Group Co., Ltd.
Shenzhen
Investment
Holdings
Meng Fei Supervisor October 17, 2017 No
Donghai
Investment Co.,
Ltd.
Shenzhen Special
Economic Zone
Meng Fei Real Estate & Director May 16, 2024 No
Properties
(Group) Co., Ltd.
Hong Kong
Investment
Holdings Co.,
Meng Fei Ltd. under Director July 18, 2024 No
Shenzhen
Investment
Holdings
Shenzhen
Shenzhen-Hong
Kong Science
and Technology Director and
Meng Fei Innovation Finance April 18, 2025 No
Cooperation Director
Zone
Development
Co., Ltd.
Zhongzheng
Tiantong
Certified Public
Yang Gaoyu Accountants Director October 1, 2013 Yes
(Special General
Partnership)
Shenzhen Branch
Zhongtian Executive
Dexiang Taxation Director and
Yang Gaoyu July 17, 2019 Yes
Firm (Shenzhen) General
Co., Ltd. Manager
Yang Gaoyu Shenzhen Weilan
Binhai Industrial
Director February 5, 2016 No
Investment Co.,
Ltd.
Yang Gaoyu Shanghai
Dasheng Independent
Agricultural Non-
August 23, 2016 Yes
Financial executive
Technology Co., Director
Ltd.
Name of the Positions
Name of other Beginning date Ending date of Whether to receive remuneration allowances
appointed held in other
entities of term term in other entities
personnel entities
Shenzhen
Baofuqin Executive
Enterprise Director and December 20,
Yang Gaoyu No
Management General 2021
Consulting Co., Manager
Ltd.
Shenzhen Independent
Yang Gaoyu July 03, 2025 Yes
Leaguer Co., Ltd. director
Shenzhen New
Trend
Independent
Yang Gaoyu International April 10, 2023 Yes
director
Logis-Tech Co.,
Ltd.
Yang Gaoyu Shenzhen Director
Hangsheng
June 25, 2023 No
Electronics Co.,
Ltd.
Yang Gaoyu Shenzhen Director
Shengzhilian
July 24, 2020 Yes
Industrial Internet
Co., Ltd.
Yang Gaoyu Shenzhen Gan
Fan Dazi
General
Catering May 31, 2018 No
Manager
Management Co.,
Ltd.
Southern
University of Long-term
Wang Kai January 1, 2024 Yes
Science and professor
Technology
Shenzhen Planck
Innovation Technical
Wang Kai August 1, 2024 Yes
Technology Co., Consultant
Ltd.
Explanation
of serving in None
other entities
Punishments imposed in the recent three years by the securities regulator on the incumbent directors and senior
management as well as those who left in the Reporting Period:
□ Applicable Not applicable
Decision-making procedure, determination basis and actual payments of remuneration for directors and senior
management:
During the reporting period, the remuneration of directors and senior management who received remuneration
from the Company was determined in accordance with the Company's Director Remuneration Management
System and the Measures for Operational Performance Assessment and Remuneration Management of Senior
Officers of STHC. the remuneration of independent directors shall be determined according to the resolution of
the general meeting;
Remuneration of directors and senior management during the Reporting Period
Unit: RMB10,000
Total pre-tax Whether get paid
Employment compensation from related
Name Gender Age Position
status received from the parties of the
Company Company
Total pre-tax Whether get paid
Employment compensation from related
Name Gender Age Position
status received from the parties of the
Company Company
Secretary of the Party Committee and
Li Gang Male 56 Incumbent 0 Yes
Chairman
Deputy Secretary of the Party
Ma Jie Male 48 Committee, Director and General Incumbent 72.69 No
Manager
Deputy Secretary of the Party
Wei Junfeng Male 46 Incumbent 65.04 No
Committee and Director
Wang Chuan Male 54 Director Incumbent 0 Yes
Liu Yu Female 54 Director and Finance Director Incumbent 114.72 No
Meng Fei Male 50 Director Incumbent 0 Yes
Wang Liming Male 65 Independent director Incumbent 1.65 No
Yang Gaoyu Male 58 Independent director Incumbent 12 No
Wang Kai Male 42 Independent director Incumbent 12 No
Lin Xia Female 50 Deputy General Manager Incumbent 65.04 No
Wang Zihan Male 36 Deputy General Manager Incumbent 65.04 No
Huang Min Male 38 Secretary of the Board of Directors Incumbent 28.83 No
Secretary of the Party Committee and
YIN Kefei Male 51 Resigned 0 Yes
Chairman
Wu
Male 63 Independent director Resigned 10.35 No
Guangquan
Deputy Secretary of the Party
Ning Maozai Male 50 Resigned 13.45 No
Committee and Director
Wang Chuan Male 54 Deputy General Manager Resigned 9.63 No
JIANG Peng Female 55 Secretary of the Board of Directors Resigned 46.63 No
Total -- -- -- -- 517.07 --
Basis for performance assessment of the actual remuneration for
all directors and senior management at the end of the reporting Remuneration and Assessment System of the Company
period
In 2025, the allowances of independent directors are not subject
Completion of performance assessment for the actual
to performance assessment. The non-independent directors and
remuneration for all directors and senior management at the end
senior management are effectively managed in accordance with
of the reporting period
the Company's relevant remuneration and assessment regulations.
Deferred payment arrangements for the actual remuneration of all
directors and senior management at the end of the reporting Not applicable
period
Withholding and clawback of actual remuneration of all directors
Not applicable
and senior management at the end of the reporting period
Note: For the aforementioned directors and senior executives who receive salaries from the Company, their
remuneration includes the basic salary and part of the performance-based salary paid in the current year, as well as
part of the performance-based salary paid out based on the assessment results of previous years.
Other circumstances
□ Applicable Not applicable
V. Performance of Duty by Directors during the Reporting Period
Attendance of directors at board meetings and general meetings
Number of the Number of the Number of the Number of the Number of Whether to fail Number of
Name of
board meetings board meetings board meetings board meetings absences from to attend the general
director to be attended attended on attended by attended by the Board meeting of the meetings
during this site communicatio proxy meetings Board in attended
reporting n person for two
period consecutive
times
Li Gang 5 5 0 0 0 No 3
Ma Jie 12 8 4 0 0 No 4
Wei Junfeng 12 8 4 0 0 No 5
Wang Chuan 13 6 6 1 0 No 0
Liu Yu 13 9 4 0 0 No 6
Meng Fei 13 7 5 1 0 No 2
Wang Liming 2 1 1 0 0 No 1
Yang Gaoyu 13 3 10 0 0 No 5
Wang Kai 13 2 11 0 0 No 6
YIN Kefei 7 3 3 0 1 No 2
Ning Maozai 0 0 0 0 0 No 0
Wu
Guangquan
Description of the failure to attend the board meetings in person for two consecutive times
Independent director Wu Guangquan submitted his resignation application to the Board of Directors in September
Director (No. 2025-34) on Cninfo (http://www.cninfo.com.cn). On November 12, 2025, the Company held an
extraordinary general meeting, at which Wang Liming was elected as an independent director of the Company,
and then a new independent director has been supplemented.
Whether the directors have raised any objections to relevant matters of the Company?
Yes No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
Whether the relevant suggestions of the directors to the Company have been adopted
Yes No
Director's statement on the adoption or non-adoption of the Company's relevant proposals
During the reporting period, all directors of the Company diligently and responsibly carried out their work in strict
accordance with the relevant provisions of the China Securities Regulatory Commission and Shenzhen Stock
Exchange, as well as the Company's Articles of Association, Rules of Procedures of the Board of Directors and
other systems. They paid close attention to the Company's standardized operation and management, put forward
relevant opinions on the Company's major governance and operation decisions according to the Company's actual
situation, and formed a consensus after full communication and discussion, and they resolutely supervised and
promoted the implementation of the resolutions of the Board of Directors to ensure that the decisions are scientific,
timely and efficient, and may safeguard the legitimate rights and interests of the Company and all shareholders.
VI. Performance of Duty by Specialized Committees under the Board in the Reporting Period
Number of Other Details of
Name of Date of Content of the Important opinions and
Membership meetings performance of objections
committee meeting meeting suggestions put forward
held duties (if any)
Nomination Deliberated on and The Audit Committee
Wu Guangquan, nominated the agreed to nominate Ma
Committee January 24,
Yang Gaoyu, 1 non-independent Jie and Wei Junfeng as None None
of the 2025
Wang Kai directors of the 8th the candidate non-
Board
Board of Directors independent directors,
Number of Other Details of
Name of Date of Content of the Important opinions and
Membership meetings performance of objections
committee meeting meeting suggestions put forward
held duties (if any)
and appointed the nominate Ma Jie as
General Manager General Manager, and
and Deputy Lin Xia and Wang
General Manager Zihan as Deputy
of the Company. General Managers, and
submitted the
nominations to the
Board of Directors for
deliberation.
The Audit Committee
Deliberated on
agreed to nominate
matters relating to
Huang Min as the
Nomination the nomination of
Wu Guangquan, Secretary of the Board
Committee August 20, candidates for
Yang Gaoyu, 1 of Directors and None None
of the 2025 secretary of the
Wang Kai submitted the
Board 8th Board of
nomination to the
Directors of the
Board of Directors for
Company.
deliberation.
The Audit Committee
Deliberated on
agreed to nominate Li
matters relating to
Nomination Gang as a candidate for
Wu Guangquan, the nomination of
Committee September 05, non-independent
Yang Gaoyu, 1 non-independent None None
of the 2025 director and submitted
Wang Kai directors of the 8th
Board the nomination to the
Board of Directors
Board of Directors for
of the Company.
deliberation.
The Audit Committee
Deliberated on agreed to nominate
matters relating to Wang Liming as a
Nomination
the nomination of candidate for
Committee Yang Gaoyu, October 24,
of the Wang Kai 2025
directors of the 8th and submitted the
Board
Board of Directors nomination to the
of the Company. Board of Directors for
deliberation.
The Audit Committee
believes that the 2023
performance
assessment results and
Deliberation on
remuneration of the
matters related to
Company's senior
the 2023
Remunerati management are in
Yang Gaoyu, performance
on compliance with the
Wang Kai, Liu 1 June 27, 2025 assessment results None None
Appraisal provisions of the
Yu and remuneration
Committee Company's Articles of
of the Company's
Association and other
senior
relevant regulations,
management.
and agrees to submit
them to the Board of
Directors for
deliberation.
Deliberation on The Audit Committee
matters related to believes that the
the formulation of formulation of the
the management business performance
Remunerati measures for the assessment and
Yang Gaoyu, business remuneration
on October 24,
Wang Kai, Liu 1 performance management plan for None None
Appraisal 2025
Yu assessment and senior officers of the
Committee
remuneration of company complies with
the Company's the Code of Corporate
senior Governance for Listed
management, as Companies, the
well as the Articles of Association
Number of Other Details of
Name of Date of Content of the Important opinions and
Membership meetings performance of objections
committee meeting meeting suggestions put forward
held duties (if any)
determination of of the Company, and
the 2025 business the Working
performance Regulations of the
assessment Remuneration
indicators for the Assessment Committee
Company's senior of the Board of
management. Directors and other
relevant provisions.
The formulation of the
performance
assessment indicators
for the Company's
senior management will
help promote the
implementation of the
Company's strategic
planning and business
objectives. It is agreed
to formulate the
relevant assessment
indicators and submit
them to the Board of
Directors for
deliberation.
The Audit Committee
believes that the
preparation of the ESG
report demonstrates the
Company's
Yin Kefei, Ma
Deliberated on effectiveness in
Strategic Jie, Wang
matters related to practicing the ESG
Planning Chuan, Wu 1 June 27, 2025 None None
the Company's philosophy and actively
Committee Guangquan,
Wang Kai
economic, and social
responsibilities, and
agrees to submit it to
the Board of Directors
for deliberation.
The Audit Committee
fully affirmed the
internal audit work of
the Audit Department
in 2024. The Audit
The Audit Committee evaluated
Department the effectiveness of the
reported to the Company's internal
Audit Committee control in the fourth
on the summary of quarter of 2024 and
Yang Gaoyu, the 2024 internal believed that the
Audit January 13,
Wu Guangquan, 1 audit work and the Company maintained None None
Committee 2025
Ning Maozai 2025 audit plan, effective internal
and communicated control over financial
on matters related report and non-
to the entry of the financial report in all
annual report material aspects in
auditor. accordance with the
requirements of the
enterprise's internal
control norm system
and relevant
regulations.
Yang Gaoyu,
Audit February 27, Communicating The Audit Committee
Wu Guangquan, 1 on the progress of agreed with the key None None
Committee 2025
Wei Junfeng the 2024 annual audit matters, important
Number of Other Details of
Name of Date of Content of the Important opinions and
Membership meetings performance of objections
committee meeting meeting suggestions put forward
held duties (if any)
report audit and audit matters, and next
putting forward steps mentioned by
the requirements Deloitte, and requested
and suggestions that the relevant
for the follow-up departments of the
work of the annual Company actively
audit. cooperate in providing
information. It also
required Deloitte to
strictly follow the
annual audit plan and
complete the annual
audit work with high
quality.
Deloitte's
accountant
reported to the
The Audit Committee
Audit Committee
deliberated and
on the annual
approved the proposal
Yang Gaoyu, review work in
Audit March 26, of this meeting and
Wu Guangquan, 1 2024; the Audit None None
Committee 2025 agreed to submit it to
Wei Junfeng Committee
the Company's Board
deliberated on
of Directors for
eight proposals,
deliberation.
including the 2024
annual report of
the Company.
The Audit Committee
The Audit
recognized the
Department
implementation of the
reported the
internal audit work in
summary of the
the first quarter of 2025
internal audit work
and requested the Audit
in the first quarter
Department to continue
and the work plan
Yang Gaoyu, to carry out the audit
Audit April 23, for the second
Wu Guangquan, 1 work in accordance None None
Committee 2025 quarter to the
Wei Junfeng with the requirements
Audit Committee,
of the annual internal
and the Audit
audit work plan for the
Committee put
second quarter of 2025;
forward
and deliberated on and
requirements for
adopted the First
the internal audit
Quarterly Report of
related work.
The Audit The Audit Committee
Department recognized the
reported the implementation of the
summary of the 2025 semi-annual
semi-annual internal audit work and
internal audit work requested the Audit
and the work plan Department to continue
Yang Gaoyu,
Audit August 18, for the third to carry out the audit
Wu Guangquan, 1 None None
Committee 2025 quarter to the work in accordance
Wei Junfeng
Audit Committee, with the requirements
and the Audit of the annual internal
Committee put audit work plan for the
forward third quarter of 2025;
requirements for and deliberated on and
the internal audit adopted the Semi-
related work. annual Report of 2025.
The Audit The Audit Committee
Audit Yang Gaoyu, October 23, Department recognized the
Committee Wei Junfeng 2025 reported the implementation of the
summary of the internal audit work in
Number of Other Details of
Name of Date of Content of the Important opinions and
Membership meetings performance of objections
committee meeting meeting suggestions put forward
held duties (if any)
internal audit work third quarter of 2025
in the third quarter and requested the Audit
and the work plan Department to continue
for the fourth to carry out the audit
quarter to the work in accordance
Audit Committee, with the requirements
and the Audit of the annual internal
Committee put audit work plan for the
forward fourth quarter of 2025;
requirements for and deliberated on and
the internal audit adopted the Third
related work. Quarterly Report of
Deliberated on the
Proposal on the
Implementation of
Foreign Exchange
Hedging Business
by Subsidiaries
submitted by the
Finance
The Audit Committee
Department and
agreed to carry out
the attached
Audit Yang Gaoyu, November 27, hedging business to
Committee Wei Junfeng 2025 manage the foreign
Analysis Report
exchange risk
on the
exposure.
Implementation of
Foreign Exchange
Hedging and the
Risk Control Plan
for the
Implementation of
Foreign Exchange
Hedging Business.
VII. Performance of Duty by the Audit Committee
The Audit Committee finds out whether the company has risks during the monitoring activities during the
reporting period
Yes No
The Audit Committee has no objection to the supervision matters during the reporting period.
VIII. Company's employees
Number of employees of the parent company at the end of the
reporting period (person)
Number of in-service employees of major subsidiaries at the end
of the reporting period
Total number of in-service employees at the end of the reporting
period (person)
Total number of employees receiving salaries in the current
period (person)
Number of retired employees whose expenses shall be borne by
the parent company and major subsidiaries
Professional composition
Professional composition category Number of employees of each category (person)
Production personnel 990
Sales personnel 11
Technical personnel 161
Financial personnel 29
Administrative staff 213
Total 1,404
Education level
Education level category Quantity (person)
Master's degree or above 46
Undergraduate 219
Junior college 187
Below junior college 952
Total 1,404
In 2025, the Company carried out employee remuneration management in strict accordance with relevant national
laws and regulations and the Company's remuneration management system to ensure fair and reasonable
employee remuneration, give corresponding rewards and incentives to employees' contributions, promote the
common development of employees and the Company, and reflect more humanistic care of the Company.
The Company adheres to a business-oriented approach, focuses on business needs, comprehensively enhances
employees' business capabilities and overall qualities, carries out in-depth learning and education activities, and
takes multiple measures to build a learning organization. First, we will organize special training on professional
topics such as public opinion and internal risk control, safety management, and judicial interpretations of labor
law to enhance employees' professional capabilities. Second, we will further improve the policies for professional
title subsidies and certification rewards, encouraging employees to engage in self-study and enhancing their
professional capabilities and career qualities. Third, continue to create an atmosphere of "reading again after
returning from a hundred battles" and encourage employees to love reading and read good books; fourth, in
combination with the Company's business development needs and the actual work of each department, organize
key employees to participate in professional training arranged by superior units and professional institutions to
further improve the comprehensive ability, professional skills and professional quality of employees.
□ Applicable Not applicable
IX. Specification of profit distribution and capitalizing of common reserves
Formulation, implementation or adjustment of the profit distribution policy during the reporting period, especially
the cash dividend policy
Applicable Not applicable
On May 19, 2025, the Company held the 2024 annual general meeting to deliberate on and adopt the 2024 annual
profit distribution plan. The Company's 2024 annual profit distribution plan is: based on the distributable profits
of the consolidated statements, and based on the total equity of 506,521,849 shares of the Company as of
December 31, 2024 (including 457,021,849 A shares and 49,500,000 B shares), the Company would distribute
cash dividends of RMB 0.71 (including tax) to all shareholders for every 10 shares, with a total cash dividend of
RMB 35,963,051.28 (including tax) that should be paid, and the cash dividend of RMB 35,963,029.09 (including
tax) that were actually paid, and the remaining undistributed profits would be carried forward to the next year; no
bonus shares would be issued, and no capital reserve would be converted into share capital.
Special instructions for cash dividend policy
Whether it meets the requirements of the Articles of Association
Yes
or the resolution of the general meeting of shareholders:
Whether the dividend standards and proportions are explicit and
Yes
clear:
Whether relevant decision-making procedures and mechanisms
Yes
are complete:
Whether the Independent Directors have fulfilled their duties and Yes
played their due roles:
If the Company does not make cash dividends, it shall disclose
the specific reasons and the next measures to be taken to enhance Not applicable
the returns level of investors:
Whether minority shareholders have the opportunity to fully
express their opinions and demands, and whether their legitimate Yes
rights and interests are fully protected:
Whether the conditions and procedures are compliant and
Not applicable
transparent if the cash dividend policy is adjusted or changed:
The Company is profitable during the reporting period and the profit available for distribution by the parent
company is positive, but no cash dividend distribution plan is proposed
□ Applicable Not applicable
Profit distribution and conversion of capital reserves into share capital during the reporting period
Applicable Not applicable
Bonus shares for every 10 shares (Shares) 0
Cash dividend for every 10 shares (Yuan) (Tax-included) 0.48
A total number of shares as the distribution basis (shares) 506,521,849
Cash dividend amount (Yuan) (Tax-included) 24,313,048.75
Cash dividend amount in other means (such as repurchase of
shares) (yuan)
Total cash dividend (Yuan) (Tax-included) 24,313,048.75
Distributable profit (yuan) 302,520,158.30
Proportion of total cash dividend (including other means) in the
distributable profit
Cash dividends this time
When the company's development stage is in the growth period and there are major capital expenditure arrangements, when the profit
distribution is carried out, the proportion of cash dividends in this profit distribution should be at least 20%.
Detailed explanation of the plan for profit distribution or conversion of capital reserves into share capital
Based on the distributable profits in the consolidated statement, with the total share capital of 506,521,849 shares as of December 31,
dividend of RMB 24,313,048.75 (including tax). No bonus shares will be issued and no capital reserve will be converted into share
capital. Do not bonus shares , the capital reserve will not be converted into share capital.
If there is a change in the total equity of the Company before the implementation of the distribution plan, the distribution will be
made according to the total equity on the equity registration date when the distribution plan is implemented in the future, with the
above distribution ratio unchanged but the total amount of distribution adjusted. The specific amount shall be subject to the actual
distribution.
X. Implementation of the Company's equity incentive plan, employee stock ownership plan
(ESOP) or other employee incentives
□ Applicable Not applicable
During the reporting period, the Company had no equity incentive plan, employee stock ownership plan or other
employee incentive measures and their implementation.
XI. Construction and implementation of internal control system during the reporting period
During the reporting period, the Company has updated and improved the internal control system in a timely
manner in accordance with the provisions of the Basic Standard for Enterprise Internal Control and its supporting
guidelines, and established a set of internal control system that is scientifically designed, concisely applicable and
effectively operated. The Audit Committee, the Risk Control and Compliance Department, and the Audit
Department jointly formed the Company's risk internal control management organization system to supervise and
evaluate the Company's internal control management. Through the operation, analysis and evaluation of the
internal control system, the Company has effectively prevented risks in operation and management and promoted
the realization of internal control objectives.
According to the identification of major deficiencies in the Company's internal control over financial report, there
are no major deficiencies in the internal control over financial report on the base date of the Evaluation Report on
Internal Control. The Company has maintained effective internal control over financial reports in all material
respects in accordance with the requirements of the standardized system of enterprise internal control and relevant
regulations.
According to the identification of major deficiencies in the Company's internal control over financial report, the
Company has not identified any major deficiencies in the internal control over financial report on the base date of
the Evaluation Report on Internal Control.
Yes No
XII. Management and control of the Company's subsidiaries during the reporting period
Problems
Consolidation Consolidation Progress of Follow-up
Company name encountered in Solutions taken
plan progress solution solution plan
consolidation
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Abnormalities in the management and control of subsidiaries
Yes No
XIII. Evaluation Report on Internal Control or Audit Report on Internal Control
Full-text disclosure date of the Evaluation
March 30, 2026
Report on Internal Control
Full-text disclosure index of the Evaluation The Company's 2025 Internal Control Self-Evaluation Report on Cninfo
Report on Internal Control (http://www.cninfo.com.cn).
Ratio of total assets of units included in the
evaluation scope to total assets in the
consolidated financial statements of the
Company
Ratio of operating revenue of units
included in the evaluation scope to the
operating revenue of consolidated financial
statements of the Company
Defect identification criteria
Type Financial report Non-financial report
Under any of the following circumstances,
it shall be deemed that the Company has
major deficiencies in internal control
unrelated to financial reports:
Deficiencies related to financial reports are (1) the operating activities of the Company
divided into minor deficiencies, significant seriously violate national laws and
deficiencies and major deficiencies regulations;
according to their severity. (2) unscientific decision-making
Major deficiencies refer to a combination procedures for "decision-making on major
of one or more control deficiencies, which issues, appointment and removal of
may cause the enterprise to deviate important cadres, arrangement of important
seriously from the control objectives. projects, and use of large sums of money",
Significant deficiencies refer to a resulting in major decision-making errors
Qualitative criteria combination of one or more control and causing major property losses to the
deficiencies, the severity and economic Company;
consequences of which are lower than (3) a large number of key positions or
those of major deficiencies, but which may technical talents are lost;
still cause the enterprise to deviate from (4) failure of control system involving
the control objectives. important business areas of the Company;
Minor deficiencies refer to other internal (5) it has a serious negative impact on the
control deficiencies that do not constitute Company's business, and the Company
major deficiencies or significant cannot eliminate such impact;
deficiencies. (6) the internal control evaluation results
are major deficiencies and have not been
effectively rectified.
Significant deficiencies: refer to a
combination of one or more control
deficiencies, the severity and economic
consequences of which are lower than
those of major deficiencies, but which may
still cause the enterprise to deviate from
the control objectives.
Minor deficiencies: refer to other internal
control deficiencies that do not constitute
major deficiencies or significant
deficiencies.
The misstated amount of the financial
statements falls within the following range:
major deficiencies: misstated amount ≥
amount ≥ 10% of total profit; misstated
amount ≥ 5% of net assets. Significant
deficiencies: 0.5% of the total revenue ≤
misstated amount < 1.5% of the total
Quantitative criteria revenue; 5% of the total profit ≤ misstated Not applicable
amount < 10% of the total profit; 3% of
net assets ≤ misstated amount < 5% of
net assets. Minor deficiencies: 0% of the
total revenue < misstated amount <
profit < misstated amount < 5% of the
total profit; 0% of net assets < misstated
amount < 3% of net assets.
Number of major deficiencies in financial
reports
Number of major deficiencies in non-
financial report
Number of significant deficiencies in
financial report
Number of significant deficiencies in non-
financial report
Applicable Not applicable
Review opinion in the Audit Report on Internal Control
Shenzhen Textile has maintained, in all material respects, effective internal control over financial reports in accordance with the
Basic Standard for Enterprise Internal Control and relevant regulations as of December 31, 2025.
Disclosure of the Audit Report on Internal Control Disclosed
Full-text disclosure date of the Audit Report on Internal Control March 30, 2026
Full-text disclosure index of the Audit Report on Internal Control See Cninfo (http://www.cninfo.com.cn) for details
Opinion type of the Audit Report on Internal Control Standard and unqualified opinion
Whether there are major deficiencies in non-financial reports No
Whether the accounting firm issues an Audit Report on Internal Control with non-standard opinions
Yes No
Whether the Audit Report on Internal Control issued by the accounting firm is consistent with the opinion of the
self-evaluation report of the Board of Directors
Yes No
Whether a non-standard internal control audit opinion was issued during the reporting period or the previous year
Yes No
XIV. Status of rectification of self-examination issues of special actions on governance of listed
companies
During the reporting period, no relevant governance issues of the Company have been found as listed in the Self-
inspection Checklist for Special Governance Activities of Listed Companies.
XV. Disclosure of Environmental Information
Whether the listed company and its main subsidiaries are included in the list of enterprises required to disclose the
environmental information by law
Yes No
Number of enterprises included in the list of enterprises legally disclosing
environmental information
Inquiry index of environmental information
No. Company name
disclosure report according to law
Shenzhen SAPO Photoelectric Co., Public website of Department of Ecology and
Ltd. Environment of Guangdong Province
XVI. Social responsibility
(I) Protection of shareholders' equity
During the reporting period, the Company has operated in compliance with laws and regulations, and further
standardized its operation by continuously improving its governance structure in strict accordance with the
requirements of laws and regulations such as the Company Law, the Securities Law and the Code of Corporate
Governance for Listed Companies. The Company has adhered to taking the deliberative system of the general
meeting of shareholders, the Board of Directors and the independent directors as the core, further improved the
corporate governance structure and various management systems, continuously improved the internal control
system in the process of the Company's operation and management, adopted effective preventive measures against
operational risks, and effectively safeguarded and protected the shareholders' equity, thus laying a solid
foundation for the Company's healthy and sustainable development. The independent directors have paid close
attention to the operation of the Company, put forward many valuable professional suggestions for the daily
operation and key issues of the Company, and played an important role in improving the supervision mechanism
and safeguarding the legitimate rights and interests of the Company and all shareholders. The Company has
strictly performed its information disclosure obligations in accordance with the law, disclosed information that has
a significant impact on investment decisions in a true, accurate, complete, timely and fair manner, adhered to
concise and easy-to-understand disclosure contents, fully reveals risks and facilitates access by all shareholders,
and further sorted out and improved the relevant systems to enhance the quality of information disclosure in
accordance with regulatory requirements.
During the reporting period, the Company has further improved information disclosure and information
transparency, performed its information disclosure obligations in strict accordance with regulatory requirements,
communicated and exchanged information with investors through multiple channels, answered questions raised by
investors in a timely manner, improved information transparency, cooperated with regulatory authorities,
safeguarded the rights and interests of the majority of the investors, especially small and medium-sized investors,
and achieved positive interaction and harmonious development between investors and listed companies.
(II) Protection of employees' legitimate rights and interests
In 2025, the Company has consistently prioritized the protection of employees' legitimate rights and interests,
closely aligning with the labor security requirements and integrating the Company's strategic and operational
development realities with the actual needs of employees. We have systematically focused on several key
dimensions, including welfare benefits, remuneration management, system construction, compliance control, and
long-term rights and interests planning. Through a series of pragmatic actions such as improving the security
system, standardizing the management processes, strengthening the institutional framework, enhancing the
compliance capabilities, and optimizing the service measures, we have comprehensively and multi-dimensionally
safeguarded the legitimate rights and interests of our employees, effectively enhancing their sense of gain,
belonging and security, and building a solid human resources foundation for the Company's stable development.
First, we improved the welfare and security system to provide a solid backing for employees' health and life. The
Company purchased critical illness insurance, accident insurance, and outpatient medical coverage for its
employees. Employees who suffer accidental injuries or illnesses can complete the declaration, claim settlement,
and expense reimbursement procedures, effectively alleviating their worries. Second, we standardized the
remuneration management to protect employees' rights to labor compensation. Employee salaries are paid on time,
ensuring the accuracy of remuneration data, the stable operation of the remuneration system, and safeguarding of
the employees' legal rights to receive reasonable labor compensation. Third, we improved the human resource
management system to protect employees' career development rights. The Company has revised the management
measures for employee rank promotion, smoothed the dual-channel development path of "management +
professional," improved the system for recognizing outstanding employees, standardized the selection criteria and
processes, and revised the entire human resource management process to build a closed-loop control system.
These measures institutionally guarantee the employees' legal rights in career promotion, honor selection, and
position management. Fourth, we organized special compliance training to avoid employment risks and protect
employee rights. The Company organized legal training on labor disputes, risk management, and other related
topics to enhance compliance and risk prevention awareness in human resource management, improve the ability
to identify and control the employment risks, avoid labor disputes from the management side, and protect
employees' legal rights related to labor relations. Fifth, we effectively managed the enterprise annuity to protect
employees' pension rights. After the expiration of the enterprise annuity custody service term, a service provider
was selected through market research and democratic voting by employees. The annuity portfolio has achieved
steady returns, maximizing the enterprise annuity benefits for all employees and effectively safeguarding their
legal rights of old-age pension.
(III) Environmental protection
The Company has always regarded building a modernized "green enterprise" as an important and long-term
responsibility to be undertaken, insisted on creating the whole process of building a green cycle of the industrial
chain, realized a truly green circular economy, improved the quality of the surrounding environment of the
Company, and escorted the Company's production. During the reporting period, the off-site noise, industrial
wastewater and exhaust emissions during the production process of the Company have been monitored by the
environmental protection department and met the standard requirements of relevant laws and regulations, and no
major environmental protection incidents have occurred. The Company has vigorously advocated green office,
carried out various forms of environment protection publicity and education activities, improved employees'
awareness of energy conservation and emission reduction, realized the coordinated development of production
and operation and environment protection, and earnestly fulfilled its social responsibility. During the reporting
period, the Company has actively responded to the national development goal of "carbon peak" and "carbon
neutrality", continuously improved environmental protection facilities, optimized waste gas and wastewater
treatment processes, strictly controlled the Company's waste gas and wastewater discharge, ensured the efficient
and stable operation of waste gas and wastewater treatment facilities to effectively reduce the Company's carbon
emissions, thus contributing to the realization of the national goal of "carbon peak" and "carbon neutrality".
(IV) Protection of consumer rights and interests
The Company has always adhered to the core values of "integrity-based and responsibility first". Being
responsible for customers is the source of enterprise value. It is our unremitting pursuit to strive to provide
customers with professional, personalized and comprehensive products and services. Focusing on customer needs,
continuously innovating customer service, and continuously improving product quality are the driving force for
the Company to achieve good performance and sustainable development, and also an important guarantee for
winning long-term trust of customers. The Company has taken the initiative to pay attention to customer needs,
responded quickly to customer feedback, sincerely thought about the interests of the customers, and promoted the
establishment of long-term partnerships.
XVII. Consolidation and Expansion of the Achievements of Poverty Alleviation and Rural
Revitalization
In 2025, the Company actively fulfilled its corporate social responsibility, actively participated in consumption
assistance work, and completed consumption assistance procurement of RMB 548,900.
Section V Significant Events
I. Fulfillment of commitments
Company and other related parties that have been fulfilled within the reporting period and those that have
not been fulfilled as of the end of the reporting period
Applicable Not applicable
Party making
Reason Type Content Date Term Performance
commitment
Commitments made at the time of
listing and circulation of
restricted shares in the share
reform: 1. if it plans to sell its
shares held through the securities
trading system in the future, and
the reduction in the number of
shares reaches 5% within six
Shenzhen months from the first reduction, it
Commitment Commitments Continuo
Investment will disclose the sales prompt In normal
s on share on share August 4, 2006 usly
Holdings Co., announcement through the performance
reform reduction effective
Ltd. Company within two trading days
before the first reduction; 2.
strictly abide by the relevant
provisions of the Guidance
Opinions of Listed Companies on
Lifting the Transfer of Restricted
Stocks and the relevant business
rules of the Shenzhen Stock
Exchange.
Commitments made at the time of
private offering in 2009:
Shenzhen Investment Holdings
and its wholly-owned
subsidiaries, subsidiaries held or
other companies with actual right
of control will not engage in any
business that are the same or
similar to those currently or in the
future engaged by Shenzhen
Textile, or conduct any other
business or activities that may
directly or indirectly compete
with Shenzhen Textile; if
Shenzhen Investment Holdings
and its wholly-owned
Commitment subsidiaries, subsidiaries held or
Shenzhen Commitments
s made at the other companies with actual right Continuo
Investment on avoiding In normal
time of IPO of control over Shenzhen October 9, 2009 usly
Holdings Co., horizontal performance
or Investment Holdings engage in effective
Ltd. competitions
refinancing horizontal competitions with
Shenzhen Textile or conflict with
the interests of the issuer in the
future in terms of operating
activities, Shenzhen Investment
Holdings will procure the sale of
the equity interests, assets or
business of such companies to
Shenzhen Textile or a third party;
when Shenzhen Investment
Holdings and its wholly-owned
subsidiaries, subsidiaries held or
other companies with actual right
of control and Shenzhen Textile
need to expand their business,
during which there may be
horizontal competitions,
Party making
Reason Type Content Date Term Performance
commitment
Shenzhen Textile has the right of
first refusal.
Commitments made at the time of
private offering in in 2012: 1.
Shenzhen Investment Holdings,
as the controlling shareholder of
Shenzhen Textile, currently has
no production and operating
activities that constitute
horizontal competitions with the
existing business of Shenzhen
Textile and its subsidiaries held;
and its subsidiaries held or other
companies with actual right of
control will not, in the future,
directly or indirectly, or on behalf
of any person, company or unit,
engage in the same or similar
business as Shenzhen Textile and
its subsidiaries held in any region
in the form of holding, equity
participation, joint venture,
cooperation, partnership,
contracting, leasing, etc., and
Commitment
Shenzhen Commitments undertake not to use the position
s made at the Continuo
Investment on avoiding as controlling shareholder to In normal
time of IPO July 14, 2012 usly
Holdings Co., horizontal damage the legitimate rights and performance
or effective
Ltd. competitions interests of Shenzhen Textile and
refinancing
other shareholders, or to seek
additional benefits by using the
position as controlling
shareholder; 3. if Shenzhen
Investment Holdings and its
subsidiaries held or other
companies with actual right of
control engage in horizontal
competitions with Shenzhen
Textile in the future in terms of
operating activities, Shenzhen
Investment Holdings will urge the
relevant companies to avoid
horizontal competitions by
transferring equity, assets or
business, etc.; 4. the above
commitments shall remain valid
and irrevocable during the period
when Shenzhen Investment
Holdings serves as the controlling
shareholder of Shenzhen Textile
or indirectly controls Shenzhen
Textile.
Whether the commitment is fulfilled on time Yes
If the commitments are not fulfilled within the time limit, the specific reasons for the unfinished performance and the Not
next work plan shall be specified applicable
profit forecast period, the Company shall explain that the assets or projects have met the original profit
forecast and the reasons
□ Applicable Not applicable
□ Applicable Not applicable
II. Non-operational occupation of funds by the controlling shareholders and other related
parties of the listed company
□ Applicable Not applicable
During the reporting period, there were no non-operational funds occupied by the controlling shareholders and
other related parties for the listed company.
III. Illegal external guarantees
□ Applicable Not applicable
The Company had no illegal external guarantee during the reporting period.
IV. Explanation of the Board of Directors on the latest "modified report"
□ Applicable Not applicable
V. Explanations Given by the Board of Directors and the Independent Directors (if any)
Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of the
Reporting Period
□ Applicable Not applicable
VI. Explanation of the accounting policies, changes in accounting estimates or corrections of
significant accounting errors compared to the financial report of the previous year
□ Applicable Not applicable
During the reporting period, the Company had no accounting policies, changes in accounting estimates or
corrections of significant accounting errors.
VII. Explanation of changes in the scope of consolidated statements compared to the financial
report of the previous year
Applicable Not applicable
The Company's subsidiary, Shenzhen Huaqiang Hotel Co., Ltd, completed its liquidation and distribution in 2024
and is no longer included in the scope of consolidation this year.
VIII. Appointment and dismissal of the accounting firm
Currently appointed accounting firm
Name of domestic accounting firm Deloitte Touche Tohmatsu Certified Public Accountants (LLP)
Remuneration of domestic accounting firm (RMB10,000) 118
Number of consecutive years of audit services provided by
domestic accounting firm
Name of certified public accountants of the domestic accounting
HUANG Tianyi, CHEN Junheng
firm
Number of consecutive years of audit services provided by
certified public accountants of domestic accounting firm
Name of overseas accounting firm (if any) None
Number of consecutive years of audit services provided by
None
overseas accounting firm (if any)
Name of certified public accountants of overseas accounting firm
None
(if any)
Number of consecutive years of audit services provided by
None
certified public accountants of overseas accounting firm (if any)
Whether to change the accounting firm in the current period
Yes No
Engagement of internal control audit accounting firm, financial adviser or sponsor
Applicable Not applicable
The total audit fee for 2025 is RMB 1.18 million (including tax), of which the financial statements audit fee is
RMB 850,000 (including tax), the internal control audit fee is RMB 230,000 (including tax) and the auditor's
comment fee is RMB 100,000 (including tax).
IX. Delisting after the disclosure of the annual report
□ Applicable Not applicable
X. Matters related to bankruptcy and reorganization
□ Applicable Not applicable
During the reporting period, the Company had no bankruptcy restructuring related matters.
XI. Significant litigation and arbitration
Applicable Not applicable
Results and
Whether Execution of
Amount Proceedings influence of Date of
Basic information of estimated litigation Disclosu
involved of litigation litigation disclosu
litigation (arbitration) liabilities (arbitration) re index
(RMB10,000) (arbitration) (arbitration) re
are formed judgment
trial
During the reporting period,
the Company and its
As of the
subsidiaries were involved in
end of the
a total of 6 other litigation As at the end of the
reporting
and arbitration cases that did The reporting period, the
period,
not meet the disclosure concluded concluded cases
among the
standards for significant cases had no were in the process
aforementio
litigation, mainly involving 8,034.31 No material of execution or
ned 6 cases,
liability disputes for harming adverse completed, with no
shareholder interests, impact on the material adverse
concluded,
contract disputes, and Company. impact on the
and 2 cases
liability disputes for motor Company.
were not
vehicle traffic accidents, with
concluded.
defendant.
XII. Punishment and rectification
□ Applicable Not applicable
There was no punishment or rectification during the reporting period.
XIII. Integrity status of the Company and its controlling shareholders and actual owner
Applicable Not applicable
The Company, its controlling shareholders and actual owners are in good standing in terms of their integrity and
have not failed to perform the effective judgments of the court or failed to pay the larger amount due, etc.
XIV. Major related party transactions
Applicable Not applicable
Prevaili
Pricing Approv
Content Price ng
Related Type of principl Ratio of ed Excee
of of market Date
parties Related related es of Amount of related similar transact ds Settlement Disclos
related related price of
to the relation party related party transactions transact ion appro method of related ure
party party for disclo
transact ship transact party (RMB10,000) ion quota ved party transactions index
transact transac similar sure
ions ions transact amount (RMB1 quota
ions tions transact
ions 0,000)
ions
Xinmei One of Purchas Purchas Fair Announ
Fontana the e of pricing Septe
e of Agree Settlement based Not cement
Holdin director raw with mber
raw d-upon 17,757.38 6.82% 19,300 No on the agreed- applica No.:
g s of the materia referen 13,
materia price upon price ble 2025-
(Hong Compa ls from ce to 2025
ls 32
Kong) ny is a related market
Limited director parties prices
of
SAPO
Photoel
ectric
One of
the
Kunsha
director Purchas Fair
n
s of the e of Purchas pricing Announ
Xinmei Septe
Compa raw e of with Agree Settlement based Not cement
Optical mber
ny is a materia raw referen d-upon 1,832.86 0.70% Yes on the agreed- applica No.:
Techno 13,
director ls from materia ce to price upon price ble 2025-
logy 2025
of related ls market 32
Co.,
SAPO parties prices
Ltd.
Photoel
ectric
Total -- -- 19,590.24 -- 19,300 -- -- -- -- --
Detailed circumstances of large-scale
Not applicable
sales returns
The related transactions conducted by the Company with the above-mentioned related parties in 2025 were in line with
the actual needs of the Company's production, operation and business development. The difference between the actual
occurrence and the estimated amount was mainly affected by factors such as the business development of the Company
and relevant related parties, and fluctuations in market demand. The pricing of related transactions actually entered into
by the Company with related parties in 2025 is fair and will not have a material adverse impact on the Company's daily
Give the actual situation in the operations and performance, and there is no circumstance impairing the interests of the Company and its shareholders.
Reporting Period (if any) where an
Note: Xinmei Fontana Holding (Hong Kong) Limited is a grandson company of Hefei Xinmei Material Technology
estimate had been made for the total
Co., Ltd. (hereinafter referred to as "Hefei Xinmei"), and Kunshan Xinmei Optical Technology Co., Ltd. is a subsidiary
value of continuing related-party
of Hefei Xinmei. In 2025, the approved quota for related transactions proposed by the Company to be conducted with
transactions by type to occur in the
Hefei Xinmei and its subsidiaries was RMB 193,000,000. In accordance with the relevant provisions of the Shenzhen
Reporting Period
Stock Exchange Listing Rules (revised in 2025), although the amount of related transactions between the Company and
Hefei Xinmei and its subsidiaries during the reporting period exceeded the approved transaction quota, it did not exceed
no further review procedures are required.
Reasons for significant deviations
between transaction prices and Not applicable
market reference prices (if applicable)
□ Applicable Not applicable
During the reporting period, the Company had no related party transactions arising from the acquisition or sale of
assets or equity.
□ Applicable Not applicable
During the reporting period, the Company had no related party transactions arising from joint external investment.
□ Applicable Not applicable
During the reporting period, the Company had no related debt transactions.
□ Applicable Not applicable
There was no deposit, loan, credit or other financial business between the Company and the finance companies
with related relationship and their related parties.
□ Applicable Not applicable
There was no deposit, loan, credit or other financial business between the Company's holding finance companies
and its related parties.
Applicable □ Not applicable
On October 31, 2025, the Company held the Third Extraordinary General Meeting of Shareholders for 2025,
which considered and approved the Proposal on Purchase of Equipment by a Subsidiary and Connected
Transaction.
Shengbo Optoelectronics, a subsidiary controlled by the Company, plans to invest in constructing a polarizer
production line (Line 8) with a width of 1.49 meters. To meet the front-end polarizer production requirements of
the Line 8 project, Shengbo Optoelectronics intends to purchase idle brand-new front-end main polarizer
production equipment (stretching machine, coating machine) from Everwide Optoelectronics Co., Ltd.
The transaction is not higher than the assessed net value. For details, please refer to the Announcement on
Purchase of Equipment by a Subsidiary and Connected Transaction (Announcement No. 2025-40) published on
CNINFO (http://www.cninfo.com.cn) on October 16, 2025.
As of the disclosure date of this report, Shengbo Optoelectronics has completed the acceptance of the aforesaid
main equipment and the payment of all funds.
Elevant Queries on the Disclosure Website for Material Connected Transaction Temporary Reports
Temporary Announcement Title Temporary Announcement Temporary Announcement
Disclosure Date Disclosure Website Name
the Proposal on Purchase of October 16, 2025 www.cninfo.com.cn
Equipment by a Subsidiary and
Connected Transaction.
XV. Major contracts and their performance
(1) Custody
□ Applicable Not applicable
During the reporting period, the Company had nothing under custody.
(2) Contracting
□ Applicable Not applicable
During the reporting period, the Company had no contracting.
(3) Leases
□ Applicable Not applicable
During the reporting period, the Company had no leases.
Applicable Not applicable
Unit: RMB10,000
External guarantees of the Company and its subsidiaries (excluding the guarantees to subsidiaries)
Disclosure
date of Whether to
Actual Counter Whether the
Name of guarantee Guarantee Type of Collateral (if Guarantee guarantee
Actual date guarantee guarantee (if performance
guarantor limit related limit guarantee any) period for a related
amount any) is completed
announceme party
nts
Guarantees to subsidiaries by the Company
Disclosure
date of Whether to
Actual Counter Whether the
Name of guarantee Guarantee Type of Collateral (if Guarantee guarantee
Actual date guarantee guarantee (if performance
guarantor limit related limit guarantee any) period for a related
amount any) is completed
announceme party
nts
Shenzhen Joint and From the
March 18, September several effective
SAPO 48,000 10,073.95 No No
liability date of the
Photoelectri 2020 8, 2020
guarantee guarantee
c Co., Ltd.
agreement
to the
expiration
date of the
actual loan
performance
period
Total guarantee limit to be Total actual amount of
approved to subsidiaries guarantee incurred to
during the reporting subsidiaries during the
period (B1) reporting period (B2)
Total approved guarantee Total actual balance of
limit to subsidiaries at the guarantees to subsidiaries
end of the reporting at the end of the reporting
period (B3) period (B4)
Guarantees by subsidiaries to subsidiaries
Disclosure
date of Whether to
Actual Counter Whether the
Name of guarantee Guarantee Type of Collateral (if Guarantee guarantee
Actual date guarantee guarantee (if performance
guarantor limit related limit guarantee any) period for a related
amount any) is completed
announceme party
nts
Total guarantees of the Company (i.e. the total of the top three items)
Total guarantee limit to be Total actual amount of
approved during the guarantee incurred during
reporting period the reporting period
(A1+B1+C1) (A2+B2+C2)
Total approved guarantee Total actual balance of
limit at the end of the guarantees at the end of
reporting period the reporting period
(A3+B3+C3) (A4+B4+C4)
Total outstanding guarantees (i.e., A4+B4+C4) as a
percentage of the Company's net assets
Including:
Balance of guarantees provided for shareholders,
actual owner and their related parties (D)
Balance of debt guarantees provided directly or
indirectly for the guaranteed object whose asset- 0
liability ratio exceeds 70% (E)
Amount of total guarantees exceeding 50% of net
assets (F)
Total amount of the above three guarantees (D+E+F) 0
Explanation of the situation in which the guarantee
liability occurs or there is evidence that it may bear
joint and several repayment liability during the Not applicable
reporting period in respect of unexpired guarantee
contracts (if any)
Explanation of provision of guarantee to external
parties in violation of the prescribed procedures (if Not applicable
any)
Explanation of the specific situation of the guarantee by the adoption of composite method
None
(1) Entrusted wealth management
Applicable Not applicable
Overview of entrusted wealth management during the reporting period
Unit: RMB10,000
Balance of entrusted wealth
Product category Risk characteristics management during the Delinquent uncollected amount
reporting period
Bank wealth management
Medium-low risk 65,242.52 0
products
Publicly offered fund products Low risk 8,391.61 0
Details of high-risk entrusted wealth management where the Company, as a single client, entrusts a financial
institution for asset management, or invests in products with low safety and poor liquidity
Applicable Not applicable
Unit: RMB10,000
Actual
Actual
profit or
Name of Type of recovery Overview of
loss
trustee trustee Risk Investme of profit matter and index
Product amount
institution institution characteri Amount Start date Expiry date nt of or loss of related
type during
(or name (or stics funds during the enquiries (if
the
of trustee) trustee) reporting any)
reporting
period
period
Bank of
Medium- Novembe Debt
Jiangsu Bank Financing 20,000 May 14, 2026 0 0
low risk r 13, 2025 assets
Co., Ltd.
Bank of
Medium- Novembe Debt
Jiangsu Bank Financing 25,000 November 08, 2026 0 0
low risk r 14, 2025 assets
Co., Ltd.
Bank of
Medium- Novembe Debt
Hangzhou Bank Financing 20,000 December 09, 2026 0 0
low risk r 18, 2025 assets
Co., Ltd.
Bank of
Medium- May 16, Debt
Jiangsu Bank Financing 30,000 November 03, 2025 388.83 388.83
low risk 2025 assets
Co., Ltd.
China
CITIC
Bank Medium- May 16, Debt
Bank Financing 20,000 November 12, 2025 260.81 260.81
Corporati low risk 2025 assets
on
Limited
Bank of Financing 25,000 Debt
Medium- Novembe
Hangzhou Bank April 28, 2025 assets 338.10 338.10
low risk r 5, 2024
Co., Ltd.
Bank of Financing 25,000 Debt
Medium- Novembe
Jiangsu Bank May 8, 2025 assets 373.97 373.97
low risk r 7, 2024
Co., Ltd.
Total 165,000 -- -- -- 1,361.71 -- --
(2) Entrusted loans
□ Applicable Not applicable
There were no entrusted loans of the Company during the reporting period.
□ Applicable Not applicable
There were no other major contracts of the Company during the reporting period.
XVI. Use of Raised Funds
□ Applicable Not applicable
The Company had no use of funds raised during the reporting period.
XVII. Notes to Other Major Matters
□ Applicable Not applicable
The Company had no other major matters to be explained during the reporting period.
XVIII. Major Matters of the Company's Subsidiaries
Applicable Not applicable
On October 15, 2025, the Company held the 45th meeting of the 8th Board of Directors, at which the "Proposal on
Investment and Construction of 1.49m-wide Polarizer Production Line Project (Line 8) by a Subsidiary" was
deliberated and approved. It is agreed that the subsidiary, Shenzhen SAPO Photoelectric Co., Ltd., based on the
market demand for polarizers and its own development needs, would use a combination of its own funds and bank
loans, with a planned total investment of approximately RMB 1.334 billion, to build a new plant building and
supporting facilities by purchasing land in Pingshan District, Shenzhen, and to purchase equipment and
instruments to construct a 1.49m-wide LCD and OLED polarizer production line with a designed capacity of
approximately 18 million square meters per year. For details, please refer to the "Announcement on Investment
and Construction of 1.49m-wide Polarizer Production Line Project (Line 8) by a Subsidiary" (No. 2025-39)
published by the Company on Cninfo (http://www.cninfo.com.cn) on October 16, 2025. Currently, the project has
obtained the land use right, and ALL construction works are progressing in an orderly manner.
Section VI. Share Changes and Shareholder Information
I. Changes in shares
Unit: shares
Before the change Increase or decrease in this change (+, -) After the change
Conversion
New Bonu of
Number Ratio shares s provident Others Sub-total Number Ratio
issued issue fund into
shares
I. Shares with restrictive
conditions for sales
state-owned legal 0 0.00% 0 0 0 0 0 0 0.00%
persons
holdings
Including: shares
held by domestic legal 0 0.00% 0 0 0 0 0 0 0.00%
persons
Shares held by
domestic natural persons
shareholding
Including: shares
held by overseas legal 0 0.00% 0 0 0 0 0 0 0.00%
persons
Shares held by
overseas natural persons
II. Shares without
restrictive conditions for 506,428,849 99.98% 0 0 0 93,000 93,000 506,521,849 100.00%
sales
shares
listed domestically
listed overseas
III. Total number of 100.00
shares %
Reasons for changes in shares
Applicable Not applicable
Zhu Meizhu, the former Director and General Manager of the Company, retired on November 29, 2024, and the
on May 31, 2025.
Approval of changes in shares
□ Applicable Not applicable
Transfer of changes in shares
□ Applicable Not applicable
Effect of changes in shares on financial indicators such as basic earnings per share and diluted earnings per share
in the latest year and the latest period, and net assets per share attributable to the Company's ordinary shareholders
□ Applicable Not applicable
Other contents deemed necessary by the Company or required by the securities regulators to be disclosed
□ Applicable Not applicable
Applicable Not applicable
Unit: shares
Increase in Number of
Beginning Ending number
Name of restricted shares restricted shares Reasons for sales Date of lifting
number of of restricted
shareholder in the current lifted in the restriction sales restrictions
restricted shares shares
period current period
The directors and
senior
management
shall not transfer
Zhu Meizhu 93,000 0 93,000 0 May 31, 2025
the shares of the
Company within
half a year after
they leave office.
Total 93,000 0 93,000 0 -- --
II. Issuance and listing of securities
□ Applicable Not applicable
structure of assets and liabilities of the Company
□ Applicable Not applicable
□ Applicable Not applicable
III. Shareholders and actual owner
Unit: shares
Total number
Total number of preferred
of ordinary shareholders Total number of preferred
Total number
shareholders with shareholders whose voting
of ordinary
at the end of restoration of right have been restored at
shareholders
at the end of
month before at the end of month before the disclosure
the reporting
the disclosure the reporting date of the annual report (if
period.
date of the period (if any) (see Note 8)
annual report any) (see
Note 8)
Shareholdings of shareholders holding more than 5% or the top 10 shareholders (excluding shares lent through refinancing)
Number of Number of Pledge, marking or freezing
Number of Changes
shares held shares held
Name of Nature of Sharehol shares held at during the
under without
shareholder shareholder ding ratio the end of the reporting
restricted restrictions Share status Number
reporting period period
conditions on sales
Shenzhen
Investment State-owned Not
Holdings Co., legal person applicable
Ltd.
Shenzhen
State-owned Not
Shenchao 3.18% 16,129,032 0 0 16,129,032 0
legal person applicable
Technology
Investment Co.,
Ltd.
Domestic Not
Sun Huiming 1.60% 8,088,853 0 0 8,088,853 0
natural person applicable
Hong Kong
Securities
Overseas legal Not
Clearing 1.21% 6,142,366 3,634,384 0 6,142,366 0
person applicable
Company Ltd.
(HKSCC)
Domestic Not
Chen Xiaobao 0.89% 4,491,920 911,920 0 4,491,920 0
natural person applicable
Domestic Not
Lin Chuangguang 0.71% 3,619,800 3,619,800 0 3,619,800 0
natural person applicable
Domestic
Su Weipeng 0.71% 3,580,100 100 0 3,580,100 Pledged 3,000,000
natural person
Domestic Not
Li Zengmao 0.61% 3,089,197 11,200 0 3,089,197 0
natural person applicable
Domestic Not
Jin Jun 0.45% 2,267,700 2,267,700 0 2,267,700 0
natural person applicable
Domestic Not
Sun Wenbo 0.41% 2,066,700 66,500 0 2,066,700 0
natural person applicable
Strategic investors or
general legal person
becoming the top 10
None
shareholders due to
placement of new shares (if
any) (see Note 3)
Among the top 10 ordinary shareholders, Shenzhen Investment Holdings Co., Ltd. and Shenzhen
Notes to shareholders' Shenchao Technology Investment Co., Ltd. do not constitute a relationship of persons acting in concert.
related relationship or In addition, the Company does not know whether there is a related relationship between the top 10
persons acting in concert ordinary shareholders, nor does it know whether they are persons acting in concert as stipulated in the
Administrative Measures for the Acquisition of Listed Companies.
Explanation of the above
shareholders' involvement in
entrusting/being entrusted None
voting rights and waiver of
voting rights
Special explanation for the
existence of repurchase
accounts among the top 10 None
shareholders (if any) (see
Note 10)
Shareholdings of the top 10 shareholders without restrictions on sales (excluding shares lent through refinancing and shares locked
by senior management)
Number of shares held without restrictions on Type of shares
Name of shareholder
sales at the end of the reporting period Type of shares Number
RMB ordinary
Shenzhen Investment Holdings Co., Ltd. 234,069,436 234,069,436
shares
Shenzhen Shenchao Technology Investment RMB ordinary
Co., Ltd. shares
Domestically listed
Sun Huiming 8,088,853 8,088,853
foreign shares
Hong Kong Securities Clearing Company RMB ordinary
Ltd. (HKSCC) shares
RMB ordinary
Chen Xiaobao 4,491,920 4,491,920
shares
RMB ordinary
Lin Chuangguang 3,619,800 3,619,800
shares
RMB ordinary
Su Weipeng 3,580,100 3,580,100
shares
RMB ordinary
Li Zengmao 3,089,197 3,089,197
shares
RMB ordinary
Jin Jun 2,267,700 2,267,700
shares
RMB ordinary
Sun Wenbo 2,066,700 2,066,700
shares
Explanation of related
relationship or concerted
Among the top 10 holders of non-restricted tradable shares, Shenzhen Investment Holdings Co., Ltd.
actions among the top 10
and Shenzhen Shenchao Technology Investment Co., Ltd. do not constitute a relationship of persons
shareholders with
acting in concert. In addition, the Company does not know whether there is a related relationship
unrestricted tradable shares,
between the top 10 holders of non-restricted tradable shares and the top 10 shareholders, nor does it
and between the top 10
know whether they are persons acting in concert as stipulated in the Administrative Measures for the
shareholders with
Acquisition of Listed Companies.
unrestricted tradable shares
and the top 10 shareholders
Explanation of the top 10
ordinary shareholders'
participation in margin
None
financing and securities
lending business (if any)
(see Note 4)
Participation of shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10
shareholders of unrestricted tradable shares in refinancing business and lending shares
□ Applicable Not applicable
Changes of the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares compared with the
previous period due to refinancing lending/repayment
□ Applicable Not applicable
Whether the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without restrictive
condition for sales conduct any agreed repurchase transactions during the reporting period
Yes No
The Company's top 10 ordinary shareholders, and top 10 ordinary shareholders without restrictive condition for
sales did not conduct any agreed repurchase transaction during the reporting period.
Nature of controlling shareholders: local state-owned holding
Type of controlling shareholders: legal person
Legal
Name of controlling Date of Organization
representative/person Main business
shareholder establishment code
in charge
General business items are: investment and merger and
acquisition of financial and quasi-financial equity such
as banking, securities, insurance, funds and guarantee;
engage in real estate development and operation
business within the scope of legally obtaining land use
right; carry out investment and services in the field of
strategic emerging industries; invest, operate and
Shenzhen Investment October 13, manage the state-owned equity of wholly-owned,
He Jianfeng 76756642-1
Holdings Co., Ltd. 2004 holding and participating enterprises through
restructuring and integration, capital operation, asset
disposal, etc; other business authorized by the
Municipal State-owned Assets Supervision and
Administration Commission (if the above business
scope needs to be approved according to national
regulations, it can be operated only after approval is
obtained).
SZPRD A (000011) holds 303.14 million shares, with a shareholding ratio of 50.87%; shenzhen Special
Equities of other Economic Zone Real Estate & Properties (000029) holds 55,424.73 million shares, with a shareholding
domestic and overseas ratio of 54.79%;ping An Insurance (601318) holds 962.72 million shares, with a shareholding ratio of
listed companies 5.32%; guosen Securities (002736) holds 3,223.11 million shares, with a shareholding ratio of 31.47%;
controlled and invested guotai Haitong Securities (601211) holds 609.43 million A-shares and 103.37 million H-shares, with a
by the controlling shareholding ratio of 4.04%; telling Telecommunication Holding (000829) holds 195.03 million shares,
shareholder during the with a shareholding ratio of 19.03%; shenzhen International (00152) holds 1,059.08 million shares, with a
reporting period shareholding ratio of 43.95%; leaguer (002243) holds 606.66 million shares, with a shareholding ratio of
(002183) holds 601.67 million shares, with a shareholding ratio of 23.17%; shenzhen Water Planning and
Design Institute (301038) holds 83.66 million shares, with a shareholding ratio of 37.50%; shenzhen Energy
(000027) holds 6.77 million shares, with a shareholding ratio of 0.14%; bank of Communications (601328)
holds 9.52 million shares, with a shareholding ratio of 0.01%; CECEP Tech and Ecology & Environment
(300197) holds 113.98 million share, with a shareholding ratio of 3.66%; china Vanke (02202) holds 77.27
million shares, with a shareholding ratio of 0.66%; shenzhen SEG (000058) holds 696.16mn shares, with a
shareholding ratio of 56.54%; shenzhen SDG Information (000070) holds 325.72 million shares, with a
shareholding ratio of 36.18%; shenzhen Tellus Holding (000025) holds 211.59 million shares, with a
shareholding ratio of 49.09%; shenzhen SDG Service (300917) holds 80.74mn shares, with a shareholding
ratio of 47.78%; microgate Technology (300319) holds 72 million shares, with a shareholding ratio of
shareholding ratio of 5.03%.
Changes in controlling shareholders during the reporting period
□ Applicable Not applicable
There was no change in the controlling shareholder of the Company during the reporting period.
Nature of actual owner: local state-owned assets management agency
Type of actual owner: legal person
Legal
Date of Organization
Name of actual owner representative/person in Main business
establishment code
charge
The State-owned Assets Perform the duties of the contributor
Supervision and Administration on behalf of the state, and supervise
Commission of the People’s Yang Jun July 30, 2004 K3172806-7 and manage state-owned assets
Government of Shenzhen authorized for supervision in
Municipal accordance with the law.
Equity of other domestic and
overseas listed companies Directly holds 40.10% equity in Shenzhen Gas (601139); directly hold 21.93% equity in
controlled by the actual owner Shenzhen Zhenye (000006); directly holds 43.91% equity in Shenzhen Energy (000027).
during the reporting period
Changes in actual owner during the reporting period
□ Applicable Not applicable
There was no change in the actual owner of the Company during the reporting period.
Chart for the property and controlling relationships between the Company and the actual owner
State-owned Assets Supervision and Administration Commission
of Shenzhen Municipal People's Government
Shenzhen Investment Holdings Co., Ltd. Shenzhen Major Industry Investment Group Co., Ltd.
Shenzhen Shenchao Technology Investment
Co., Ltd.
Shenzhen Textile (Holdings) Co., Ltd.
The actual owner controls the Company by way of trust or other asset management methods
□ Applicable Not applicable
the Company and their persons acting in concert accounted for 80% of the number of shares held by them
□ Applicable Not applicable
□ Applicable Not applicable
committed entities
□ Applicable Not applicable
IV. Specific implementation of share repurchase during the reporting period
Implementation progress of share repurchase
□ Applicable Not applicable
Implementation progress of reducing repurchase shares by means of centralized bidding transaction
□ Applicable Not applicable
V. Preferred Shares
□ Applicable Not applicable
During the reporting period, the Company had no preferred shares.
Section VII Bonds
□ Applicable Not applicable
Section VIII Financial Statements
I. Audit report
Type of audit opinion Standard and unqualified opinion
Signing date of the audit report March 26, 2026
Name of audit institution Deloitte Touche Tohmatsu Certified Public Accountants (LLP)
Audit report No. DSB (S) Z (26) No. P04066
Name of certified public accountant HUANG Tianyi, CHEN Junheng
See the attached financial statements and notes for details.
Chairman: Li Gang
Date of approval by the Board of Directors for filing: March 26, 2026
Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Audit Report
For the year ended December 31, 2025
Shenzhen Textile (Holdings) Co., Ltd.
Financial Statements and Audit Report
For the year ended December 31, 2025
Content Page
Audit Report 1-4
Consolidated and parent company's balance sheet 5-7
Consolidated and parent company's income statement 8-9
Consolidated and parent company's statement of cash flows 10-11
Consolidated and parent company's statement of changes in shareholders' equity 12-15
Notes to the financial statements 16-108
Audit Report
DSB (S) Z (26) No. P 04066
(Page 1 of 4)
All shareholders of Shenzhen Textile (Holdings) Co., Ltd.
I. Audit opinions
We have audited the financial statements of Shenzhen Textile (Holdings) Co., Ltd. (hereinafter referred to as the
"Shenzhen Textile"), including the consolidated and parent company's balance sheet as at December 31, 2025, the
consolidated and parent company's income statement, consolidated and parent company's statement of cash flows,
consolidated and parent company's statement of changes in shareholders' equity and related notes to the financial
statements for the year then ended.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with
Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at
December 31, 2025 and its operating results and cash flows for the year then ended.
II. Basis for the audit opinion
We have conducted our audit in accordance with the Chinese Auditing Standards for Certified Public Accountants.
Our responsibilities under these standards are further described in the "Certified Public Accountant's
Responsibilities for the Audit of Financial Statements" section of the audit report. In accordance with the
Independence Standard for Chinese Certified Public Accountants No. 1 - Requirements for Independence in Audit
and Review of Financial Statement and the Code of Ethics for Chinese Certified Public Accountants, we are
independent of Shenzhen Textile and have fulfilled other ethical responsibilities. We have complied with the
independence requirements for audits of public interest entities during the audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Key audit matters
Key audit matters are those matters that, in our professional judgment, are of most significance in our audit of the
financial statements of the current year. These matters are addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. We have identified the following matters as key audit matters to be communicated in the audit report.
As described in the Note (V). 40 to the financial statements, in 2025, the operating revenue of Shenzhen Textile as
presented in the consolidated financial statements was RMB 3,241,380,430.62, of which the revenue from sales of
polarizers was RMB 3,067,530,570.03, accounting for 94.64% of the total revenue. The revenue from sales of
polarizers of Shenzhen Textile is recognized when the customer obtains control of the relevant goods. Due to the
importance of revenue from sales of polarizers to the consolidated financial statements as a whole, and the fact
that the revenue is one of the key performance indicators of Shenzhen Textile, there is an inherent risk that
management may manipulate the revenue recognition, in order to achieve specific goals or expectations.
Therefore, we have identified the recognition of revenue from sales of polarizers as a key audit matter in the audit
of the consolidated financial statements.
-1-
Audit Report - Continued
DSB (S) Z (26) No. P04066
(Page 2 of 4)
III. Key audit matters - Continued
In response to the above key audit matters, the audit procedures we performed mainly include:
• Test and evaluate the effectiveness of the operation of internal control related to the sales business of
polarizer;
• Check the sales contracts signed with major customers, identify the terms and conditions of the contracts
related to the transfer of right of control of the goods, and evaluate whether the accounting policies for
recognition of revenue from sales of polarizers meet the requirements of the Accounting Standards for
Business Enterprises;
• Execute analytical procedures for the revenue from sales of polarizers by production line, product type and
customer respectively, and analyze the rationality of the change in revenue from sales of polarizers in
combination with market selling price and other factors;
• Extract samples to perform detail tests on the revenue from sales of polarizers, check the supporting
documents such as invoices, delivery orders and receipts related to the recognition of revenue from sales of
polarizers, and conduct letter of confirmation on the sales amount of major customers to verify the
authenticity of revenue from sales of polarizers;
• Select samples for sales transactions before and after the balance sheet date, check supporting documents
such as delivery orders, receipts and invoices, and evaluate whether the revenue from sales of polarizers is
recorded in the appropriate accounting period.
-2-
Audit Report - Continued
DSB (S) Z (26) No. P04066
(Page 3 of 4)
IV. Other information
The management of Shenzhen Textile is responsible for other information. Other information includes information
covered in the 2025 Annual Report of Shenzhen Textile, but excludes the financial statements and our audit report.
Our audit opinion on the financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with financial statements or our
knowledge obtained during the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact. We have nothing to report in this regard.
IV. Responsibilities of the management and those charged with governance for financial statements
The management of Shenzhen Textile is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are free
from material misstatements, whether due to frauds or errors.
In preparing the financial statements, the management is responsible for assessing the going-concern ability of
Shenzhen Textile, disclosing matters related to going concern (if applicable) and applying the going concern basis,
unless the management plans to liquidate Shenzhen Textile, terminate its operations or has no other realistic
alternative.
Those charged with governance are responsible for overseeing the financial reporting process of Shenzhen Textile.
VI. Responsibilities of certified public accountants for the audit of financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
We have exercised professional judgment and maintained professional skepticism in performing our audit under
the auditing standards. At the same time, we also implement the following work:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
-3-
Audit Report - Continued
DSB (S) Z (26) No. P04066
(Page 4 of 4)
VI. Responsibilities of certified public accountants for the audit of financial statements - Continued
(2) Understand the internal control related to the audit, so as to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Draw conclusions on the appropriateness of the management's use of the going concern basis. At the same
time, based on the audit evidence obtained, a conclusion is drawn as to whether there is a material uncertainty in
events or circumstances that may give rise to significant doubt about the going-concern ability of Shenzhen
Textile. If we conclude that a material uncertainty exists, we are required to, in our audit report, draw attention of
the users of statements to the related disclosures in the financial statements; if such disclosures are inadequate, we
should modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit
report. However, future events or circumstances may cause Shenzhen Textile to cease to continue as a going
concern.
(5) Evaluate the overall presentation (including disclosures), structure and content of the financial statements, and
whether the financial statements fairly reflect the relevant transactions and matters.
(6) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business
activities within Shenzhen Textile to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding the planned scope and timing of the audit,
significant audit findings and other matters, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and the related safeguards (if applicable).
From the matters communicated with those charged with governance, we have determined which matters are of
most significance to the audit of the financial statements in the current year and thus constitute the key audit
matters. We describe these matters in the audit report unless laws and regulations prohibit public disclosure of
these matters, or in extremely rare circumstances, if it is reasonably expected that the negative consequences of
communicating a matter outweigh the benefits to the public interest in the audit report, we determine not to do so.
Deloitte Touche Tohmatsu Certified Public Accountants LLP Certified Public Accountant of China
(Engagement partner)
Tianyi Huang
Shanghai, China
Certified Public Accountant of China
Junheng Chen
March 26, 2026
-4-
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Balance Sheet
December 31, 2025
Consolidated Balance Sheet
RMB
Balance as at the end Balance as at the end
Notes
of the current year of the previous year
Current assets:
Monetary funds (V). 1 449,964,450.38 340,961,443.82
Financial assets held for trading (V). 2 736,341,286.18 731,419,904.42
Notes receivable (V). 3 85,980,246.52 47,305,221.88
Accounts receivable (V). 4 761,807,949.52 863,731,936.89
Receivables financing (V). 5 22,584,820.72 6,804,603.68
Advances to suppliers (V). 6 29,141,210.57 8,176,724.70
Other receivables (V). 7 4,324,973.02 3,596,543.96
Including: interest receivable - -
Dividends receivable - -
Inventories (V). 8 884,642,355.51 789,756,700.88
Other current assets (V). 9 85,649,096.62 21,461,736.14
Total current assets 3,060,436,389.04 2,813,214,816.37
Non-current assets:
Long-term equity investments (V). 10 107,583,586.91 114,828,026.04
Other equity instrument investments (V). 11 159,261,600.00 165,402,900.00
Investment properties (V). 12 105,730,781.63 115,993,390.19
Fixed assets (V). 13 1,657,314,603.81 1,873,552,843.91
Construction in progress (V). 14 179,954,389.78 5,814,012.03
Right-of-use assets (V). 15 16,894,843.60 15,338,117.86
Intangible assets (V). 16 31,224,598.20 35,207,791.95
Goodwill (V). 17 - -
Long-term deferred expenses (V). 18 7,030,847.01 6,084,115.87
Deferred tax assets (V). 19 55,777,290.89 58,920,511.20
Other non-current assets (V). 20 37,086,785.90 27,793,871.91
Total non-current assets 2,357,859,327.73 2,418,935,580.96
Total assets 5,418,295,716.77 5,232,150,397.33
-5-
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Balance Sheet - Continued
December 31, 2025
Consolidated Balance Sheet - Continued
RMB
Balance as at the end Balance as at the end
Notes
of the current year of the previous year
Current liabilities:
Derivative financial liabilities (V). 22 4,071,800.19 1,278,559.35
Notes payable (V). 23 - 31,095,540.29
Accounts payable (V). 24 344,656,835.89 304,812,580.55
Advances from customers (V). 25 769,227.07 1,051,491.96
Contract liabilities (V). 26 3,132,419.01 490,562.97
Employee compensation payable (V). 27 52,647,315.74 56,685,289.92
Taxes payable (V). 28 5,806,818.55 6,853,730.84
Other payables (V). 29 159,826,234.73 160,296,989.98
Including: interest payable - -
Dividends payable - -
Non-current liabilities maturing within one year (V). 30 65,964,666.28 63,347,555.03
Other current liabilities (V). 31 88,386,795.27 54,072,022.27
Total current liabilities 725,262,112.73 679,984,323.16
Non-current liabilities:
Long-term borrowings (V). 32 261,718,054.81 162,388,870.00
Lease liabilities (V). 33 10,415,997.17 9,496,564.12
Deferred income (V). 34 83,469,949.03 96,349,196.26
Deferred tax liabilities (V). 19 47,064,430.16 48,610,809.66
Total non-current liabilities 402,668,431.17 316,845,440.04
Total liabilities 1,127,930,543.90 996,829,763.20
Shareholders' equity:
Equity (V). 35 506,521,849.00 506,521,849.00
Capital reserve (V). 36 1,961,599,824.63 1,961,599,824.63
Other comprehensive income (V). 37 102,271,832.32 106,877,807.32
Surplus reserves (V). 38 106,805,904.93 104,262,315.64
Undistributed profits (V). 39 302,520,158.30 272,608,113.66
Total equity attributable to shareholders of the parent
company
Minority interests 1,310,645,603.69 1,283,450,723.88
Total shareholders' equity 4,290,365,172.87 4,235,320,634.13
Total liabilities and shareholders' equity 5,418,295,716.77 5,232,150,397.33
The notes are an integral part of the financial statements
_____________________ ______________________ ______________________
Principal Chief Finance Officer Chief Accountant
-6-
Shenzhen Textile (Holdings) Co., Ltd.
Balance Sheet of the Parent Company
December 31, 2025
Balance Sheet of the Parent Company
RMB
Balance as at the end Balance as at the end
Notes
of the current year of the previous year
Current assets:
Monetary funds 24,473,234.70 13,630,974.26
Financial assets held for trading 736,341,286.18 731,419,904.42
Accounts receivable (XVI). 1 8,714,374.34 13,028,987.63
Advances to suppliers 149,618.73 99,904.79
Other receivables (XVI). 2 2,014,545.65 1,534,395.80
Including: interest receivable - -
Dividends receivable - -
Inventories 46,562.05 39,835.05
Total current assets 771,739,621.65 759,754,001.95
Non-current assets:
Long-term equity investments (XVI). 3 2,033,445,567.58 2,040,690,006.71
Other equity instrument investments 146,548,800.00 152,221,200.00
Investment properties 86,463,450.62 94,773,462.23
Fixed assets 1,910,229.22 2,099,585.67
Right-of-use assets 2,498,988.67 -
Intangible assets 48,270.75 83,350.98
Long-term deferred expenses 4,756,358.34 4,448,190.05
Other non-current assets 25,760,086.27 25,860,862.33
Total non-current assets 2,301,431,751.45 2,320,176,657.97
Total assets 3,073,171,373.10 3,079,930,659.92
Current liabilities:
Accounts payable 194,131.97 411,743.57
Advances from customers 540,673.07 540,673.07
Employee compensation payable 19,879,990.77 17,955,509.70
Taxes payable 4,337,326.82 5,619,509.34
Other payables 93,730,387.66 87,029,351.12
Including: interest payable - -
Dividends payable - -
Non-current liabilities maturing within one year 478,582.75 -
Total current liabilities 119,161,093.04 111,556,786.80
Non-current liabilities:
Lease liabilities 2,070,057.60 -
Deferred income - 100,000.00
Deferred tax liabilities 32,534,099.01 34,086,313.51
Total non-current liabilities 34,604,156.61 34,186,313.51
Total liabilities 153,765,249.65 145,743,100.31
Shareholders' equity:
Equity 506,521,849.00 506,521,849.00
Capital reserve 1,577,392,975.96 1,577,392,975.96
Other comprehensive income 93,862,232.32 98,116,532.32
Surplus reserves 106,805,904.93 104,262,315.64
Undistributed profits 634,823,161.24 647,893,886.69
Total shareholders' equity 2,919,406,123.45 2,934,187,559.61
Total liabilities and shareholders' equity 3,073,171,373.10 3,079,930,659.92
The notes are an integral part of the financial statements
-7-
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Income Statement
For the year ended December 31, 2025
Consolidated Income Statement
RMB
Amount for the current Amount for the previous
Notes
year year
I. Operating revenue (V). 40 3,241,380,430.62 3,335,283,008.68
Less: operating costs (V). 40 2,756,367,676.81 2,795,859,934.82
Taxes and surcharges (V). 41 11,543,145.79 10,235,505.65
Selling and distribution expenses (V). 42 34,660,033.74 42,260,603.47
G&A expenses (V). 43 128,612,089.80 134,347,821.58
R&D expenses (V). 44 103,974,839.00 103,811,822.91
Financial expenses (V). 45 13,239,709.08 12,121,156.05
Including: interest expenses 6,944,766.30 17,858,022.73
Interest income 4,941,271.94 7,272,362.76
Plus: other income (V). 46 40,845,334.53 41,484,107.53
Investment income (loss) (V). 47 (1,198,003.94) (165,313.89)
Including: investment income (losses) in associates and joint
(7,010,989.13) (10,701,895.08)
ventures
Gains from derecognition of financial assets measured
- -
at amortized costs
Gains (losses) from changes in fair value (V). 48 (936,994.72) 1,134,503.45
Credit loss gains (V). 49 8,447,592.80 5,100,446.66
Asset impairment gains (losses) (V). 50 (138,340,722.92) (132,423,108.75)
Gains from disposal of assets 1,164,099.59 -
II. Operating profit 102,964,241.74 151,776,799.20
Plus: non-operating revenue (V). 51 6,395,734.45 1,805,086.92
Less: non-operating expenses (V). 52 940,862.88 698,017.71
III. Total profit 108,419,113.31 152,883,868.41
Less: income tax expenses (V). 53 12,805,570.48 9,827,102.03
IV. Net profit 95,613,542.83 143,056,766.38
(I) Classified by operating sustainability:
(II) Classified by ownership:
V. Net of tax of other comprehensive income (V). 37 (4,605,975.00) 13,270,426.51
Net of tax of other comprehensive income attributable to
(4,605,975.00) 13,270,426.51
shareholders of the parent company
(I) Other comprehensive income that cannot be reclassified into
(4,605,975.00) 14,560,500.00
profit or loss
- -
profit or loss under the equity method
(II) Other comprehensive income that will be reclassified into profit
- (1,290,073.49)
or loss
- -
or loss under the equity method
- -
comprehensive income
- (1,290,073.49)
financial statements
Net of tax of other comprehensive income attributable to minority
- -
shareholders
VI. Total comprehensive income 91,007,567.83 156,327,192.89
Total comprehensive income attributable to shareholders of the
parent company
Total comprehensive income attributable to minority shareholders 27,194,879.81 53,685,632.14
VII. Earnings per share
Basic earnings per share (RMB/share) 0.14 0.18
Diluted earnings per share (RMB/share) 0.14 0.18
The notes are an integral part of the financial statements
-8-
Shenzhen Textile (Holdings) Co., Ltd.
Income Statement of the Parent Company
For the year ended December 31, 2025
Income Statement of the Parent Company
RMB
Amount for the current Amount for the
Notes
year previous year
I. Operating revenue (XVI). 4 77,639,760.87 77,167,496.95
Less: operating costs (XVI). 4 11,627,229.49 10,205,157.84
Taxes and surcharges 3,033,498.02 3,069,369.36
Selling and distribution expenses 85,663.09 476,938.50
G&A expenses 46,236,884.06 46,124,842.97
Financial expenses 161,947.16 (1,179,537.25)
Including: interest expenses 527,112.25 422,950.59
Interest income 399,594.68 1,698,292.14
Plus: other income 150,758.85 164,150.75
Investment income (XVI). 5 13,965,225.54 12,077,902.81
Including: investment income (losses) in associates and
(7,010,989.13) (10,701,895.08)
joint ventures
Gains from derecognition of financial assets
- -
measured at amortized costs
Gains from changes in fair value 2,425,205.47 2,413,062.80
Credit impairment gains (losses) 66,651.82 (26,291,403.84)
Asset impairment gains (losses) (564,480.00) (20,243,658.34)
Gains from disposal of assets - -
II. Operating profit (loss) 32,537,900.73 (13,409,220.29)
Plus: non-operating revenue 2,089,299.55 1,124,656.60
Less: non-operating expenses 41,754.58 93,185.54
III. Total profit (loss) 34,585,445.70 (12,377,749.23)
Less: income tax expenses 9,149,552.77 (3,885,606.10)
IV. Net profit (loss) 25,435,892.93 (8,492,143.13)
(I) Net profit (loss) from continuing operations 25,435,892.93 (8,492,143.13)
(II) Net profit from discontinued operations - -
V. Net of tax of other comprehensive income (4,254,300.00) 14,486,701.51
(I) Other comprehensive income that cannot be reclassified
(4,254,300.00) 15,776,775.00
into profit or loss
- -
transferred to profit or loss under the equity method
(4,254,300.00) 15,776,775.00
investments
- -
risk
(II) Other comprehensive income that will be reclassified
- (1,290,073.49)
into profit or loss
- -
to profit or loss under the equity method
- -
in other comprehensive income
- -
investments
- (1,290,073.49)
currency financial statements
VI. Total comprehensive income 21,181,592.93 5,994,558.38
The notes are an integral part of the financial statements
-9-
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Cash Flows
For the year ended December 31, 2025
Consolidated Statement of Cash Flows
RMB
Amount for the current Amount for the
Notes
year previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 3,308,223,415.70 3,390,788,584.83
Refunds of taxes and surcharges received 13,163,610.09 21,049,133.80
Other cash received related to operating activities (V). 54(1) 132,944,006.58 87,008,969.95
Sub-total of cash inflows from operating activities 3,454,331,032.37 3,498,846,688.58
Cash paid for purchase of goods and receipt of services 2,705,656,832.58 2,842,864,632.73
Cash paid to and on behalf of employees 254,545,354.48 238,890,310.33
Cash paid for taxes and surcharges 55,145,150.97 32,071,014.09
Other cash paid related to operating activities (V). 54(1) 91,190,097.08 153,756,206.34
Sub-total of cash outflows from operating activities 3,106,537,435.11 3,267,582,163.49
Net cash flows from operating activities (V). 55(1) 347,793,597.26 231,264,525.09
II. Cash flows from investing activities:
Cash received from recovery of investment - 1,349,489.37
Cash received from investment income 17,323,464.63 11,747,113.36
Net cash received from disposal of fixed assets, intangible
assets, and other long-term assets
Net cash received from disposal of other long-term
assets
Net cash received from disposal of subsidiaries and other -
business units
Other cash received related to investing activities (V). 54(2) 1,149,136,738.42 1,697,000,000.00
Sub-total of cash inflows from investing activities 1,169,834,027.29 1,710,096,583.99
Cash paid to acquire and construct fixed assets, intangible
assets and other long-term assets 238,969,979.73 29,441,167.62
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other business -
units
Other cash paid related to investing activities (V). 54(2) 1,163,389,759.35 1,605,454,000.00
Sub-total of cash outflows from investing activities 1,401,639,235.53 1,634,895,167.62
Net cash flows from the investing activities (231,805,208.24) 75,201,416.37
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Including: cash received by subsidiaries from absorption of -
investments of minority shareholders
Cash received from acquisition of borrowings 141,755,054.19 -
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities 141,755,054.19 -
Cash paid for debt repayments 41,473,530.00 406,216,304.56
Cash paid for distribution of dividends and profits or 42,123,749.16
payment of interests
Including: dividends and profits paid to minority -
shareholders by subsidiaries
Other cash paid related to financing activities (V). 54(3) 12,484,469.33 9,508,462.57
Sub-total of cash outflows from financing activities 96,081,748.49 466,358,420.51
Net cash flows from financing activities 45,673,305.70 (466,358,420.51)
IV. Effect of fluctuation in exchange rate on cash and cash (13,768,475.71)
equivalents
V. Net increase (decrease) in cash and cash equivalents (V). 55(1) 147,172,715.46 (159,335,617.98)
Plus: balance of cash and cash equivalents at the beginning 302,084,839.35
(V). 55(2) 461,420,457.33
of the year
VI. Balance of cash and cash equivalents at the end of the 449,257,554.81
(V). 55(2) 302,084,839.35
year
The notes are an integral part of the financial statements
- 10 -
Shenzhen Textile (Holdings) Co., Ltd.
Statement of Cash Flows of the Parent Company
For the year ended December 31, 2025
Statement of Cash Flows of the Parent Company
RMB
Amount for the current Amount for the
Notes
year previous year
I. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 89,344,780.98 80,553,754.68
Refunds of taxes and surcharges received - -
Other cash received related to operating activities 4,971,695.97 7,902,075.25
Sub-total of cash inflows from operating activities 94,316,476.95 88,455,829.93
Cash paid for purchase of goods and receipt of services 4,419,294.84 2,842,492.81
Cash paid to and on behalf of employees 40,520,746.74 35,045,305.67
Cash paid for taxes and surcharges 17,342,747.66 13,926,380.37
Other cash paid related to operating activities 10,077,755.49 15,727,708.36
Sub-total of cash outflows from operating activities 72,360,544.73 67,541,887.21
Net cash flows from operating activities 21,955,932.22 20,913,942.72
II. Cash flows from investing activities:
Cash received from recovery of investment - 1,554,056.96
Cash received from investment income 16,348,614.11 7,790,814.29
Net cash received from disposal of fixed assets, intangible
assets, and other long-term assets
- -
Net cash received from disposal of other long-term
assets
Net cash received from disposal of subsidiaries and other
- -
business units
Other cash received related to investing activities 1,160,427,138.42 1,373,585,151.73
Sub-total of cash inflows from investing activities 1,176,775,752.53 1,382,930,022.98
Acquisition and construction of fixed assets, intangible
assets and other long-term assets 1,242,473.57 2,993,281.20
Cash paid
Cash paid for investments - -
Net cash paid to acquire subsidiaries and other business
- -
units
Other cash paid related to investing activities 1,150,516,500.00 1,363,000,000.00
Sub-total of cash outflows from investing activities 1,151,758,973.57 1,365,993,281.20
Net cash flows from the investing activities 25,016,778.96 16,936,741.78
III. Cash flows from financing activities:
Cash received from absorption of investments - -
Cash received from acquisition of borrowings - -
Other cash received related to financing activities - -
Sub-total of cash inflows from financing activities - -
Cash paid for debt repayments - -
Cash paid for distribution of dividends and profits or
payment of interests
Other cash paid related to financing activities 159,356.17 -
Sub-total of cash outflows from financing activities 36,128,094.94 33,346,867.31
Net cash flows from financing activities (36,128,094.94) (33,346,867.31)
IV. Effect of fluctuation in exchange rate on cash and cash
(2,355.80) 1,356.80
equivalents
V. Net increase in cash equivalents 10,842,260.44 4,505,173.99
Plus: balance of cash and cash equivalents at the beginning 13,630,974.26
of the year
VI. Balance of cash and cash equivalents at the end of the 24,473,234.70
year
The notes are an integral part of the financial statements
- 11 -
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Changes in Shareholders' Equity
For the year ended December 31, 2025
Consolidated Statement of Changes in Shareholders' Equity
RMB
Amount for the current year
Equity attributable to shareholders of the parent company
Item Total shareholders'
Other comprehensive Minority interests
Equity Capital reserve Surplus reserves Undistributed profits equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,961,599,824.63 106,877,807.32 104,262,315.64 272,608,113.66 1,283,450,723.88 4,235,320,634.13
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Others - - - - - - -
II. Balance at the beginning of the current 506,521,849.00 1,961,599,824.63 106,877,807.32 104,262,315.64 272,608,113.66 1,283,450,723.88 4,235,320,634.13
year
III. Increase/decrease in the current year - - (4,605,975.00) 2,543,589.29 29,912,044.64 27,194,879.81 55,044,538.74
(I) Total comprehensive income - - (4,605,975.00) - 68,418,663.02 27,194,879.81 91,007,567.83
(II) Capital contributed or reduced by - - - - - - -
shareholders
shareholders
included in shareholders' equity
(III) Profit distribution - - - 2,543,589.29 (38,506,618.38) - (35,963,029.09)
(IV) Internal transfer of shareholders' - - - - - - -
equity
capital
capital
into retained earnings
(V) Special reserves - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,961,599,824.63 102,271,832.32 106,805,904.93 302,520,158.3 1,310,645,603.69 4,290,365,172.87
- 12 -
Shenzhen Textile (Holdings) Co., Ltd.
Consolidated Statement of Changes in Shareholders' Equity - Continued
For the year ended December 31, 2025
Consolidated Statement of Changes in Shareholders' Equity - Continued
RMB
Amount for the previous year
Equity attributable to shareholders of the parent company
Item
Other comprehensive Minority interests Total shareholders' equity
Equity Capital reserve Surplus reserves Undistributed profits
income
I. Balance as at the end of the previous year 506,521,849.00 1,961,599,824.63 93,607,380.81 104,262,315.64 216,160,896.14 1,229,765,091.74 4,111,917,357.96
Plus: changes in accounting policies - - - - - - -
Correction of prior period errors - - - - - - -
Others - - - - - - -
II. Balance at the beginning of the current year 506,521,849.00 1,961,599,824.63 93,607,380.81 104,262,315.64 216,160,896.14 1,229,765,091.74 4,111,917,357.96
III. Increase/decrease in the current year - - 13,270,426.51 - 56,447,217.52 53,685,632.14 123,403,276.17
(I) Total comprehensive income - - 13,270,426.51 - 89,371,134.24 53,685,632.14 156,327,192.89
(II) Capital contributed or reduced by
- - - - - - -
shareholders
- - - - - - -
shareholders
- - - - - - -
included in shareholders' equity
(III) Profit distribution - - - - (32,923,916.72) - (32,923,916.72)
(IV) Internal transfer of shareholders'
- - - - - - -
equity
- - - - - - -
share capital
- - - - - - -
share capital
- - - - - - -
income into retained earnings
(V) Special reserves - - - - - - -
(VI) Others - - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,961,599,824.63 106,877,807.32 104,262,315.64 272,608,113.66 1,283,450,723.88 4,235,320,634.13
The notes are an integral part of the financial statements
- 13 -
Shenzhen Textile (Holdings) Co., Ltd.
Statement of Changes in Shareholders' Equity of the Parent Company
For the year ended December 31, 2025
Statement of Changes in Shareholders' Equity of the Parent Company
RMB
Amount for the current year
Item Other comprehensive
Equity Capital reserve Surplus reserves Undistributed profits Total shareholders' equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,577,392,975.96 98,116,532.32 104,262,315.64 647,893,886.69 2,934,187,559.61
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current 506,521,849.00 1,577,392,975.96 98,116,532.32 104,262,315.64 647,893,886.69 2,934,187,559.61
year
III. Increase/decrease in the current year - - (4,254,300.00) 2,543,589.29 (13,070,725.45) (14,781,436.16)
(I) Total comprehensive income - - (4,254,300.00) - 25,435,892.93 21,181,592.93
(II) Capital contributed or reduced by - - - - - -
shareholders
shareholders
included in shareholders' equity
(III) Profit distribution - - - 2,543,589.29 (38,506,618.38) (35,963,029.09)
(IV) Internal transfer of shareholders' - - - - - -
equity
share capital
into share capital
income into retained earnings
(V) Special reserves - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,577,392,975.96 93,862,232.32 106,805,904.93 634,823,161.24 2,919,406,123.45
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
For the year ended December 31, 2025
Statement of Changes in Shareholders' Equity of the Parent Company - Continued
RMB
Item Amount for the previous year
- 14 -
Shenzhen Textile (Holdings) Co., Ltd.
Other comprehensive
Equity Capital reserve Surplus reserves Undistributed profits Total shareholders' equity
income
I. Balance as at the end of the previous year 506,521,849.00 1,577,392,975.96 83,629,830.81 104,262,315.64 689,309,946.54 2,961,116,917.95
Plus: changes in accounting policies - - - - - -
Correction of prior period errors - - - - - -
Others - - - - - -
II. Balance at the beginning of the current
year
III. Increase/decrease in the current year - - 14,486,701.51 - (41,416,059.85) (26,929,358.34)
(I) Total comprehensive income - - 14,486,701.51 - (8,492,143.13) 5,994,558.38
(II) Capital contributed or reduced by
- - - - - -
shareholders
- - - - - -
shareholders
- - - - - -
included in shareholders' equity
(III) Profit distribution - - - - (32,923,916.72) (32,923,916.72)
(IV) Internal transfer of shareholders'
- - - - - -
equity
- - - - - -
share capital
- - - - - -
share capital
- - - - - -
income into retained earnings
(V) Special reserves - - - - - -
(VI) Others - - - - - -
IV. Balance as at the end of the current year 506,521,849.00 1,577,392,975.96 98,116,532.32 104,262,315.64 647,893,886.69 2,934,187,559.61
The notes are an integral part of the financial statements
- 15 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(I) Basic information of the Company
Shenzhen Textile (Holdings) Co., Ltd. (hereinafter referred to as "the Company") is a joint stock limited company
registered in Guangdong Province. The Company was listed on Shenzhen Stock Exchange in August 1994. The
Company has publicly issued RMB ordinary shares (A shares) and domestically listed foreign shares (B shares) to
the domestic and foreign public respectively, and listed for trading.
Headquartered in Shenzhen, Guangdong Province, the Company and its subsidiaries (hereinafter referred to as
"the Group") are principally engaged in the research and development, production and marketing of polarizers for
liquid crystal displays, as well as property management, which are mainly located in the prosperous commercial
area of Shenzhen.
The consolidated and parent company's financial statements of the Company were approved by the Board of
Directors on March 26, 2026.
(II) Basis for the preparation of financial statements
The Group implements the Accounting Standards for Business Enterprises and related provisions issued by the
Ministry of Finance. In addition, the Group also discloses relevant financial information in accordance with the
Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing Securities to the Public
No. 15 - General Provisions on Financial Reports (Revised in 2023).
The Group has evaluated its going-concern ability for 12 months from December 31, 2025 and has not found any
matters or circumstances that cast significant doubt on the going-concern ability. Therefore, the financial
statements have been prepared on the going concern basis.
The accounting of the Group is based on the accrual basis. Except for certain financial instruments measured at
fair value, the financial statements are measured at historical cost. In the event of any asset impairment, a
provision for impairment will be made in accordance with relevant provisions.
Under the historical cost measurement, assets are measured at the amount of cash or cash equivalents paid or the
fair value of the consideration paid at the time of acquisition. Liabilities are measured at the amount of money or
assets actually received for assuming current obligations, or the contract amount of assuming current obligations,
or the amount of cash or cash equivalents expected to be paid to repay liabilities in daily activities.
Fair value is the price received from the sale of an asset or paid for the transfer of a liability by a market
participant in an orderly transaction occurring on the measurement date. Regardless of whether the fair value is
observable or estimated by using valuation techniques, the fair value measured and disclosed in these financial
statements is determined on this basis.
- 16 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(II) Basis for the preparation of financial statements - Continued
For financial assets where the transaction price is taken as the fair value at initial recognition and valuation
techniques involving unobservable input value are used in the subsequent measurement of fair value, the valuation
techniques are corrected during the valuation process to make the initial recognition result determined by the
valuation techniques equal to the transaction price.
The fair value measurement is divided into three levels based on the observability of the input value of the fair
value and the importance of such input value to the fair value measurement as a whole:
• Level 1 input value is the unadjusted quoted price in active markets for identical assets or liabilities that are available
on the measurement date.
• Level 2 input value is the directly or indirectly observable input value of the relevant assets or liabilities except for the
level 1 input value.
• Level 3 input value is the unobservable input value of the relevant assets or liabilities.
(III) Important accounting policies and accounting estimates
The financial statements prepared by the Company meet the requirements of the Accounting Standards for
Business Enterprises, and truly and completely reflect the Company's consolidated and parent company's financial
position as at December 31, 2025, and the consolidated and parent company's operating results, changes in
consolidated and parent company's shareholders' equity and consolidated and parent company's cash flows for the
year then ended.
The Company adopts the Gregorian calendar year for its accounting year, that is, from January 1 to December 31
of each year.
Operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash
equivalents by the enterprise. The operating cycle of the Company is 12 months.
RMB is the currency in the main economic environment in which the Company and its domestic subsidiaries
operate. The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company's
overseas subsidiaries determine RMB as their recording currency based on the currency in the main economic
environment in which they operate. The currency used by the Company in preparing these financial statements is
RMB.
- 17 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Item Importance criteria
Significant accounts receivable with the provision for The individual book balance accounts for more than 0.5% of the total
bad debts made on an individual basis assets
The individual recovery or reversal amount accounts for more than 10%
Recovery or reversal amount of provision for bad debts of the total amount of provision for bad debts recovery or reversal of the
of significant accounts receivable corresponding accounts receivable and the amount exceeds RMB 10
million
Advances to suppliers with aging over 1 year and of
Individual amount accounts for more than 0.5% of total assets
significant amount
The balance of a single construction in progress accounts for over 10% of
Significant construction in progress project the total balance of construction in progress and the amount is more than
RMB 100,000,000.00.
Important accounts payable, advances from
customers,contract liabilities and other payables with Individual amount accounts for more than 0.5% of total assets
aging over 1 year
Other cash received related to significant investing
The amount exceeds RMB 50 million
activities
Other cash paid related to significant investing activities The amount exceeds RMB 50 million
The total assets, total revenue or total profit of the non-wholly-owned
Major non-wholly-owned subsidiaries subsidiary account for more than 10% of the amount of the corresponding
items in the consolidated financial statements of the Group
The book value of the long-term equity investments of the enterprise at
Significant joint ventures or associates the end of the year accounts for more than 5% of the net assets of the
consolidated financial statements of the Group
control
Business combinations are categorized into those under common control and those not under common control.
If, before and after the business combination, all parties involved are ultimately controlled by the same party or
the same group of parties and such control is not temporary, the combination is considered under common control.
The assets and liabilities obtained in the business combination are measured at their book value as recorded in the
consolidated financial statements of the ultimate controller on the combination date. Any difference between the
book value of the net assets acquired by the combining party and the book value of the consideration paid is
adjusted against the share premium in capital reserve. If the equity premium is insufficient, the difference is
adjusted against retained earnings.
All direct expenses incurred for the purpose of the business combination are recognized in current profit or loss as
they occur.
When the entities involved in the combination are not under the ultimate control of the same party or the same
group of parties before and after the combination, it is considered a business combination not under common
control.
The combination cost refers to the fair value of the assets paid, the liabilities incurred or assumed, and the equity
instruments issued by the acquirer to obtain the right of control of the acquiree. Any intermediary fees for business
combination, including but not limited to audit, legal, and valuation consulting services, and other related G&A
expenses incurred by the acquirer are charged to current profit or loss as they arise.
Any identifiable assets, liabilities, and contingent liabilities of the acquiree that meet the recognition criteria and
are obtained by the acquirer in the combination are measured at fair value on the acquisition date.
- 18 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III)Significant accounting policies and accounting estimates - Continued
control - Continued
If the combination cost exceeds the acquiree's fair value share of net identifiable assets obtained, this difference is
recognized as goodwill and initially measured at cost. If the combination cost is less than the acquiree's fair value
share of net identifiable assets obtained, the acquirer shall first reassess the fair values of all identifiable assets,
liabilities, and contingent liabilities of the acquiree, as well as the measurement of the combination cost. After
reassessment, if the combination cost is still less than acquiree's fair value share of net identifiable assets obtained,
the difference is included in current profit or loss.
Goodwill arising from a business combination is presented separately in the consolidated financial statements and
is measured at cost less any accumulated provision for impairment.
Control means that an investor has power over the investee, derives variable returns by participating in the
investee's relevant activities, and can use that power to affect the amount of returns. Whenever changes in relevant
facts and circumstances alter any element of this definition of control, the Group will reassess the situation.
The consolidation scope in the consolidated financial statements is determined on the basis of control.
A subsidiary is consolidated from the date the Group obtains the right of control over it until the date such right is
lost.
For subsidiaries that the Group disposes of, operating results and cash flows prior to the disposal date (the date
when the loss of control occurs) are appropriately included in the consolidated income statement and consolidated
cash flow statement.
For subsidiaries acquired in a business combination not under common control, their operating results and cash
flows from the acquisition date (the date when the right of control is obtained) are appropriately included in the
consolidated income statement and consolidated cash flow statement.
For subsidiaries acquired in a business combination under common control, regardless of the point in time during
the reporting period at which the combination takes place, the subsidiary is deemed to have been under the
Group's consolidation scope from the date it came under the ultimate controller. Its operating results and cash
flows from the earliest beginning date of the reporting period are appropriately included in the consolidated
income statement and consolidated cash flow statement.
The primary accounting policies and reporting periods adopted by the subsidiaries are determined in accordance
with the uniform accounting policies and reporting periods set by the Company.
- 19 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Continued
Any effects on the consolidated financial statements from intercompany transactions between the Company and
its subsidiaries, or among the subsidiaries themselves, are eliminated upon consolidation.
The shares of the subsidiary's ownership interest that are not part of the parent company are shown as minority
interests under the item "minority interests" under the item on shareholders' equity in the consolidated balance
sheet. the share of the subsidiary's net profit or loss attributable to minority interests is presented in the
consolidated income statement under the net profit item as "minority interest income".
If the losses borne by minority shareholders exceed the share of owners' equity they hold at the beginning of the
subsidiary's period, the excess continues to be deducted from the minority interests.
Transactions involving the purchase of a subsidiary's minority interests or the partial disposal of a subsidiary's
equity investments without losing the right of control are accounted for as equity transactions. The book value of
the parent company's owners' equity and the minority interests are adjusted to reflect the changes in their
respective ownership in the subsidiary. Any difference between the adjustment to minority interests and the fair
value of the consideration paid or received is adjusted against the capital reserve. If the capital reserve is
insufficient, the difference is adjusted against retained earnings.
Joint venture arrangements are classified as either joint operations or joint ventures, based on the rights and
obligations of the parties—determined by factors such as the arrangement's structure, legal form, and contractual
terms. A joint operation is a joint arrangement in which the parties have rights to the related assets and obligations
for the related liabilities. A joint operation refers to those joint venture arrangements under which the joint venture
is entitled to relevant assets and be responsible for relevant liabilities. A joint venture is a joint venture
arrangement in which the parties are entitled only to the arrangement's net assets.
The Group accounts for investments in joint ventures using the equity method. For further details, refer to Note
(III), Section 17.3.2, "Long-term equity investments accounted for under the equity method."
Cash refers to cash on hand and deposits readily available for payment. Cash equivalents refer to short-term
(generally maturing within three months from the purchase date), highly liquid investments held by the Group that
are easily convertible into known amounts of cash and subject to an insignificant risk of value changes.
Foreign currency transactions are initially recognized at an exchange rate similar to the spot exchange rate on the
date of the transaction, and the exchange rate similar to the spot rate on the date of the transaction is determined in
a systematic and reasonable manner.
- 20 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
At each balance sheet date, foreign currency monetary items are translated into RMB at the spot rate on that date.
Any exchange differences arising from changes in the spot exchange rate (compared to the rate at initial
recognition or the previous balance sheet date) are recognized in current profit or loss, except for: (1) exchange
differences on foreign-currency-specific borrowings that qualify for capitalization, which are capitalized as part of
the cost of the related asset during the capitalization period; (2) exchange differences on hedging instruments used
to hedge foreign exchange risk, which are accounted for under hedge accounting; (3) foreign exchange differences
arising from changes in the book balance of monetary items classified as measured at fair value through other
comprehensive income, except for amortized costs, are recognized in current profit or loss.
When preparing consolidated financial statements involving foreign operations, if a foreign currency monetary
item essentially constitutes a net investment in a foreign operation, any exchange differences arising from
fluctuation in exchange rate are included under "Exchange differences on translation of foreign currency
statements" in other comprehensive income. Upon disposal of the foreign operation, these differences are
recognized in profit or loss for the disposal period.
Foreign currency non-monetary items measured at historical cost continue to be measured using the spot exchange
rate in recording currency on the transaction date. For foreign currency non-monetary items measured at fair value,
the spot exchange rate on the date the fair value is determined is used for translation. Any difference between the
translated amount in recording currency and the original currency is treated as a fair value change (including
fluctuation in exchange rate) and is recognized in current profit or loss or other comprehensive income, as
appropriate.
To prepare consolidated financial statements, foreign-currency financial statements of overseas operations are
translated into RMB as follows: all assets and liabilities in the balance sheet are translated at the spot exchange
rate on the balance sheet date; shareholders' equity items are translated at the spot exchange rate on the date of
occurrence; all items in the income statement and items reflecting profit distribution are translated using an
exchange rate approximating the spot exchange rate on the transaction date; any difference between the sum of
translated assets and the sum of translated liabilities plus equity items is recognized as other comprehensive
income and included in shareholders' equity.
Foreign currency cash flows and the cash flows of overseas subsidiaries are translated using an exchange rate
approximating the spot exchange rate on the date of the cash flow. The impact of fluctuation in exchange rate on
cash and cash equivalents is presented separately in the statement of cash flows under "Effect of exchange rate
changes on cash and cash equivalents".
The figures for the prior year-end and the actual amounts for the previous year are presented according to the
amounts translated in the previous year's financial statements.
When the Group disposes of its entire owners' equity in a foreign operation or otherwise loses the right of control
over a foreign operation—whether by partially disposing of equity investments or for any other reason—all
differences on translation of foreign currency statements related to that foreign operation and presented under
shareholders' equity (attributable to the parent company) in the balance sheet are transferred in full to profit or loss
for the disposal period.
- 21 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When disposing of part of an equity investments or in other circumstances that reduce the Group's ownership
interest in an overseas operation without losing the right of control over that operation, any differences on
translation of foreign currency statements related to the disposed portion are attributed to minority interests and
are not transferred to profit or loss for the current period. When disposing of a portion of equity in an overseas
operation that is classified as an associate or a joint venture, the differences on translation of foreign currency
statements related to that operation are transferred to profit or loss in the disposal period, in proportion to the
percentage of equity disposed.
The Group recognizes a financial asset or financial liability when it becomes a party to the contractual provisions
of a financial instrument.
For purchases or sales of financial assets in the ordinary course of business, the Group recognizes the assets to be
received and the liabilities to be assumed on the trade date, or derecognizes the assets sold on the trade date.
Financial assets and financial liabilities are measured at fair value upon initial recognition (see Note (II) "Basis of
accounting and valuation principles" for details on determining fair value). For financial assets and liabilities
measured at fair value through profit or loss, transaction costs are recognized directly in profit or loss for the
current period; for other categories of financial assets and liabilities, the relevant transaction costs are included in
the initial recognition amount. When the Group initially recognizes accounts receivable that do not include a
significant financing component, or when the financing component of a contract not exceeding one year is
disregarded under Accounting Standards for Business Enterprises No. 14 - Revenue (hereinafter referred to as
“Revenue Standard”), such receivables are initially measured at the transaction price as defined in the Revenue
Standard.
The effective interest method is the method used to calculate the amortized cost of a financial asset or liability and
to allocate the interest income or interest expenses over the relevant accounting periods.
The effective interest rate is the rate that discounts the estimated future cash flows over the expected life of a
financial asset or liability to the financial asset's book balance or the financial liability's amortized cost. In
determining the effective interest rate, the Group estimates expected cash flows based on all contractual terms of
the financial asset or liability (e.g., early repayment, extension, call options, or other similar options), but does not
factor in expected credit losses.
The amortized cost of a financial asset or liability is the initial recognized amount minus any repaid principal, plus
or minus the accumulated amortization of the difference between the initial recognized amount and the amount at
maturity using the effective interest method, and then minus the accumulated provision for losses (applicable only
to financial assets).
- 22 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
After initial recognition, the Group subsequently measures different categories of financial assets at amortized
cost, at fair value through other comprehensive income, or at fair value through profit or loss.
If the contractual terms of a financial asset stipulate that, on specified dates, cash flows comprise solely payments
of principal and interest on the outstanding principal, and the Group's business model for managing this financial
asset is to collect the contractual cash flows, the Group classifies this financial asset as measured at amortized cost.
Such financial assets mainly include monetary funds, notes receivable, accounts receivable, and other receivables.
If the contractual terms of a financial asset stipulate that, on specified dates, cash flows comprise solely payments
of principal and interest on the outstanding principal, and the Group's business model for managing the financial
asset is both to collect contractual cash flows and to sell the financial asset, then the Group classifies this asset as
measured at fair value through other comprehensive income. Such financial assets with a maturity of more than
one year from the date of acquisition are presented as "Other debt investments," while those maturing within one
year (inclusive) from the balance sheet date are presented under "Non-current assets due within one year."
Accounts receivable and notes receivable classified upon acquisition as measured at fair value through other
comprehensive income are presented under "Receivables financing," and any other items acquired with a maturity
of one year (inclusive) or less are presented under "Other current assets."
At initial recognition, on an individual financial asset basis, the Group may irrevocably designate a non-trading
equity instrument investment, other than any contingent consideration recognized in a business combination not
under common control, as measured at fair value through other comprehensive income. Such financial assets are
presented as "Other equity instrument investments."
If a financial asset meets any of the following conditions, it indicates that the Group holds this asset for trading
purposes:
• The main purpose of acquiring the financial asset is to sell it in the near term.
• Upon initial recognition, the financial asset is part of an identifiable portfolio of financial instruments that is
collectively managed, and there is objective evidence of a recent pattern of short-term profit-taking.
• The financial asset is a derivative, except for derivatives that meet the definition of a financial guarantee
contract or are designated as effective hedging instruments.
Financial assets measured at fair value through profit or loss include those classified as such and those designated
as such:
• Any financial asset that does not meet the classification criteria for measurement at amortized cost or at fair value
through other comprehensive income is classified as measured at fair value through profit or loss.
• At initial recognition, to eliminate or significantly reduce accounting mismatches, the Group may irrevocably
designate a financial asset as measured at fair value through profit or loss.
- 23 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Financial assets measured at fair value through profit or loss are presented under "Financial assets held for
trading." Those due in more than one year from the balance sheet date (or with no fixed maturity) and expected to
be held for more than one year are presented under "Other non-current financial assets."
Financial assets measured at amortized cost are subsequently measured at amortized cost using the effective
interest method, and any gain or loss arising from impairment or derecognition is recognized in profit or loss.
The Group recognizes interest income on financial assets measured at amortized cost using the effective interest
method. For purchased or originated financial assets that are already credit-impaired, the Group determines
interest income from the date of initial recognition based on the asset's amortized cost and a credit-adjusted
effective interest rate. For all other financial assets, the Group calculates interest income by multiplying the book
balance of the asset by the effective interest rate.
For a financial asset classified as measured at fair value through other comprehensive income, any impairment
loss or gain and interest income calculated using the effective interest method are recognized in profit or loss,
while all other fair value changes are recognized in other comprehensive income. The amount recognized in profit
or loss each period is the same as if the asset had been measured at amortized cost throughout its life. When such a
financial asset is derecognized, the cumulative gains or losses previously recognized in other comprehensive
income are transferred from other comprehensive income to profit or loss.
For a non-trading equity instrument investment designated as measured at fair value through other comprehensive
income, fair value changes are recognized in other comprehensive income. When the financial asset is
derecognized, the cumulative gains or losses previously recognized in other comprehensive income are transferred
out of other comprehensive income and into retained earnings. During the period the Group holds this non-trading
equity instrument investment, if the right to receive dividends is established, the related economic benefits are
likely to flow to the Group, and the amount of dividends can be measured reliably, then the Group recognizes
dividend income in profit or loss.
Financial assets measured at fair value through profit or loss are subsequently measured at fair value; gains or
losses arising from fair value changes, as well as any dividend and interest income related to these assets, are
recognized in profit or loss.
- 24 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group recognizes impairment allowances and provision for losses based on expected credit losses for
financial assets measured at amortized cost, financial assets classified as fair value through other comprehensive
income, and lease receivables.
For all notes receivable and accounts receivable arising from transactions governed by the Revenue Standard, as
well as operating lease receivables arising from transactions governed by Accounting Standards for Business
Enterprises No. 21 - Leases, the Group measures the provision for loss at an amount equal to the lifetime expected
credit losses.
For other financial instruments, except for those purchased or originated with credit loss, the Group evaluates
changes in credit risk since initial recognition at each balance sheet date. If the credit risk of such a financial
instrument has significantly increased since initial recognition, the Group measures the provision for loss at an
amount equal to the lifetime expected credit losses; if it has not significantly increased, the Group measures the
provision for loss at an amount equal to the 12-month expected credit losses. Except for financial assets classified
as fair value through other comprehensive income, any increase or reversal of the provision for credit losses is
recognized as an impairment loss or gain in the current period's profit or loss. For financial assets classified as fair
value through other comprehensive income, the Group recognizes the provision for credit losses in other
comprehensive income and records the impairment loss or gain in profit or loss, without reducing the asset's book
value in the balance sheet.
If, in a prior period, the Group measured the provision for loss at an amount equal to the lifetime expected credit
losses (due to a significant increase in credit risk since initial recognition), but at the current balance sheet date
that significant increase in credit risk no longer applies, then the Group measures the provision for loss at an
amount equal to the 12-month expected credit losses. The amount of any resulting reversal is recognized as an
impairment gain in profit or loss.
The Group uses reasonable and supportable forward-looking information to compare the risk of default on a
financial instrument at the balance sheet date with the risk of default at initial recognition, in order to determine
whether the credit risk has significantly increased since initial recognition.
- 25 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the Group assesses whether credit risk has increased significantly, it considers the following factors:
(1) Whether internal price indicators resulting from changes in credit risk have undergone a significant change.
(2) Whether, if an existing financial instrument is effectively originated or issued as a new financial instrument on
the balance sheet date, there is a significant change in the interest rate or other terms of that instrument (e.g., more
stringent contractual terms, increased collateral or guarantees, or a higher yield).
(3) Whether external market indicators of credit risk for the same financial instrument, or similar instruments with
the same expected term, have changed significantly. Such indicators include credit spreads, credit default swap
(CDS) prices for the borrower, the length of time and extent to which a financial asset's fair value is below its
amortized cost, and other market information related to the borrower (e.g., changes in the prices of the borrower's
debt or equity instruments).
(4) Whether the external credit rating of the financial instrument has actually changed or is expected to change
significantly.
(5) Whether there has been a downgrade in the debtor's internal credit rating, either actual or anticipated.
(6) Whether there has been an adverse change in the debtor's business, financial, or economic conditions that is
expected to significantly affect the debtor's ability to meet its debt obligations.
(7) Whether the debtor's operating performance, whether actual or expected, has changed significantly.
(8) Whether the credit risk of other financial instruments issued by the same debtor has increased significantly.
(9) Whether there has been a significantly adverse change in the regulatory, economic, or technological
environment in which the debtor operates.
(10) Whether the value of collateral securing the debt, or the quality of a third-party guarantee or credit
enhancement, has changed significantly. Such changes are expected to reduce the debtor's economic incentive to
repay under the contractual schedule or affect the probability of default.
(11) Whether there has been a significant change in factors that would reduce the borrower's economic incentive
to repay in accordance with the contractual terms.
(12) Whether the loan contract is expected to be modified, including the potential release or amendment of
contractual obligations due to anticipated breaches of contract, granting interest-free periods, raising interest rates,
requiring additional collateral or guarantees, or otherwise modifying the contractual framework of the financial
instrument.
(13) Whether there is a significant change in the debtor's expected performance or repayment behavior.
(14) Whether the Group's credit management approach for the financial instrument has changed.
Regardless of the outcome of the above assessment, if payments under the financial instrument's contract are more
than (or equal to) 30 days past due, it indicates that the financial instrument's credit risk has increased significantly.
On the balance sheet date, if the Group concludes that a financial instrument has only low credit risk, it presumes
the credit risk has not increased significantly since initial recognition. A financial instrument is considered to have
low credit risk if its risk of default is low, the borrower has a strong capacity to meet its contractual cash flow
obligations in the short term, and even over a longer period, adverse changes in economic and operating
conditions would not necessarily reduce the borrower's ability to meet those obligations.
(III) Significant accounting policies and accounting estimates - Continued
- 26 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
When one or more events occur that the Group expects to adversely affect the future cash flows of a financial
asset, that asset is considered credit-impaired. Evidence for a credit-impaired financial asset includes the
following observable information:
(1) The debtor breaches a contract, such as default or delinquency in interest or principal payments.
(2) The debtor breaches the contract, such as default or delay in repayment of interest or principal.
(3) The creditor gives the debtor concessions under economic or contractual considerations relating to the debtor's
financial difficulties that would not have been made under any other circumstances;
(4) The debtor is highly likely to go bankrupt or undertake other financial restructuring.
(5) The issuer's or debtor's financial difficulties lead to the disappearance of an active market for the financial
asset.
(6) A financial asset is purchased or originated at a substantial discount, reflecting the fact that a credit loss has
occurred.
Based on the Group's internal credit risk management, if internal recommendations or externally obtained
information indicates that the debtor of a financial instrument cannot fully repay all creditors, including the Group
(regardless of any guarantee obtained by the Group), the Group considers this a default event.
Regardless of the above assessment, if payments under the financial instrument's contract are more than (or equal
to) 90 days past due, the Group presumes the instrument is in default.
For financial assets and lease receivables, the expected credit loss is the present value of the difference between
the contractual cash flows the Group is entitled to receive and the cash flows the Group actually expects to receive.
When measuring the expected credit losses on financial instruments, the Group's method reflects: an unbiased,
probability-weighted average determined by evaluating a range of possible outcomes; the time value of money;
and reasonable and supportable information about past events, current conditions, and forecasts of future
economic conditions, available without undue cost or effort at the balance sheet date.
If the Group no longer reasonably expects to recover all or part of the contractual cash flows of a financial asset,
the Group writes off the book balance of the financial asset directly. This write-off constitutes derecognition of the
relevant financial asset.
- 27 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
A financial asset is derecognized if one of the following conditions is met: (1) the contractual right to receive cash
flows from the financial asset expires; (2) the financial asset has been transferred and substantially all the risks
and rewards of ownership of the asset have been transferred to the transferee; or (3) the financial asset has been
transferred, and although the Group has neither transferred nor retained substantially all the risks and rewards of
ownership, it has not retained control over the asset.
If the Group has neither transferred nor retained substantially all the risks and rewards of ownership of the
financial asset but retains control of it, the Group continues to recognize the transferred financial asset to the
extent of its continuing involvement, and recognizes a corresponding liability. The Group measures that liability
as follows:
• Where the transferred financial asset is measured at amortized cost, the book value of the related liability
equals the book value of the asset in which the Group continues to be involved minus the amortized cost of
any rights retained by the Group (if the Group retained such rights due to the transfer) and plus the amortized
cost of any obligations assumed by the Group (if the Group assumed such obligations due to the transfer).
Such liabilities are not designated as financial liabilities measured at fair value through profit or loss.
• Where the transferred financial asset is measured at fair value, the book value of the related liability equals
the book value of the asset in which the Group continues to be involved minus the fair value of any rights
retained by the Group (if the Group retained such rights due to the transfer) and plus the fair value of any
obligations assumed by the Group (if the Group assumed such obligations due to the transfer). The fair
values of such rights and obligations are measured on a stand-alone basis.
When the full transfer of a financial asset qualifies for derecognition, the difference between the book value of the
transferred financial asset on the derecognition date and the sum of the consideration received and the
corresponding portion of the cumulative fair value changes previously recognized in other comprehensive income
is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity instrument investment
designated as measured at fair value through other comprehensive income, any cumulative gains or losses
previously recognized in other comprehensive income are transferred out of other comprehensive income and into
retained earnings.
When a partial transfer of a financial asset qualifies for derecognition, the book value of the original asset before
transfer is allocated between the portion being derecognized and the portion that continues to be recognized, based
on the relative fair values of each portion on the transfer date. The difference between (a) the consideration
received for the derecognized portion plus the corresponding portion of the cumulative fair value changes
previously recognized in other comprehensive income and (b) the book value of the derecognized portion on the
derecognition date is recognized in profit or loss. If the transferred asset by the Group is a non-trading equity
instrument investment designated as measured at fair value through other comprehensive income, any cumulative
gains or losses previously recognized in other comprehensive income are transferred out of other comprehensive
income and into retained earnings.
If a full transfer of a financial asset does not satisfy the derecognition criteria, the Group continues to recognize
the entire transferred financial asset and recognizes the consideration received as a liability.
- 28 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Based on the contractual terms and the economic substance of the issued financial instrument rather than merely
its legal form and in conjunction with the definitions of financial liabilities and equity instruments, the Group
classifies the financial instrument (or its components) as either a financial liability or an equity instrument at
initial recognition.
Upon initial recognition, financial liabilities are classified as financial liabilities measured at fair value through
profit or loss or other financial liabilities.
Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading
(including derivatives classified as financial liabilities) and those designated as measured at fair value through
profit or loss. Except for derivative financial liabilities, which are presented separately, financial liabilities
measured at fair value through profit or loss are presented as financial liabilities held for trading.
If a financial liability meets any of the following conditions, it indicates that the Group has assumed this liability
for trading purposes:
• The primary purpose of assuming the financial liability is to repurchase it in the near term.
• Upon initial recognition, the financial liability is part of an identifiable portfolio of financial instruments that
is collectively managed, and there is objective evidence of a recent pattern of short-term profit-taking.
• The financial liability is a derivative, except for derivatives that meet the definition of a financial guarantee
contract or are designated as effective hedging instruments.
At initial recognition, if any of the following conditions are met, the Group may designate a financial liability as
measured at fair value through profit or loss: (1) the designation can eliminate or significantly reduce accounting
mismatches; (2) under the Group's formally documented risk management or investment strategy, portfolios of
financial liabilities or combined portfolios of financial assets and liabilities are managed and evaluated on a fair
value basis, and this is reported internally to key officers; or (3) it is part of an eligible hybrid contract containing
an embedded derivative.
Financial liabilities held for trading are subsequently measured at fair value, with any gains or losses arising from
fair value changes, along with dividends or interest expenses related to these liabilities, recognized in profit or loss.
- 29 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
For a financial liability designated as measured at fair value through profit or loss, the portion of the fair value
change attributable to the Group's own credit risk is recognized in other comprehensive income, while other
changes in fair value are recognized in profit or loss. When the financial liability is derecognized, the accumulated
fair value change attributable to changes in the Group's own credit risk that was previously recorded in other
comprehensive income is transferred to retained earnings. Any dividends or interest expenses related to such
financial liabilities are recognized in profit or loss. If treating the effect of changes in the liability's own credit risk
in this manner creates or enlarges an accounting mismatch in profit or loss, the Group recognizes all gains or
losses on the liability (including those related to changes in its own credit risk) in profit or loss.
Except for financial liabilities arising from the transfer of financial assets that do not meet derecognition criteria,
or where the Group continues to be involved in transferred financial assets, other financial liabilities are classified
as financial liabilities measured at amortized cost. They are subsequently measured at amortized cost, and any
gains or losses from derecognition or amortization are recognized in profit or loss.
If the Group modifies or renegotiates a contract with a counterparty, and it does not result in the derecognition of a
financial liability subsequently measured at amortized cost but leads to changes in the contractual cash flows, the
Group recalculates the book value of the financial liability and recognizes any related gain or loss in profit or loss.
For recalculated book value, the Group shall determine it by discounting the renegotiated or modified contractual
cash flows at the original effective interest rate of the financial liability. For any costs or fees incurred as a result
of modifying or renegotiating the contract, the Group shall adjust the book value of the modified financial liability
and amortize them over the remaining term thereof.
If the present obligation of a financial liability is fully or partially discharged, the liability (or the discharged
portion) is derecognized. If the Group (as borrower) signs an agreement with a lender to replace the original
financial liability with a new one, and the terms of the new liability differ substantially from those of the original
liability, the Group derecognizes the original liability and recognizes the new one.
When a financial liability is fully or partially derecognized, the difference between the book value of the
derecognized portion and the consideration paid (including any non-cash assets transferred or new financial
liabilities assumed) is recognized in profit or loss for the current period.
- 30 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
An equity instrument is a contract that evidences a residual interest in the Group's assets after deducting all
liabilities. The Group treats the issuance (including refinancing), repurchase, sale, or cancellation of its equity
instruments as changes in equity. The Group does not recognize fair value changes in equity instruments.
Transaction costs directly attributable to equity transactions are deducted from equity.
The Group's distributions made to holders of equity instruments are treated as profit distribution, and any issued
stock dividends do not affect the total shareholders' equity.
Derivatives, including forward foreign exchange contracts, are initially measured at fair value on the contract date
and subsequently measured at fair value.
When the Group has a legal right to offset recognized financial assets and liabilities, and that right is currently
enforceable, and the Group intends to settle on a net basis or to realize the asset and settle the liability
simultaneously, the financial assets and liabilities are presented on the balance sheet at the net amount. Otherwise,
financial assets and financial liabilities are presented separately in the balance sheet without offset.
For notes receivable with significantly increased credit risk, such as those past due and not accepted or where
there is clear evidence that the acceptor is likely unable to fulfill its acceptance obligation, the Group evaluates
credit losses on an individual basis. Other notes receivable are evaluated based on their credit risk characteristics
as a group.
Any increase or reversal of the provision for expected credit losses on notes receivable is recognized as a credit
loss or gain in profit or loss.
characteristic combination
Apart from those notes receivable whose credit losses are determined on an individual basis, the Group classifies
the remaining notes receivable into different groups based on shared credit risk characteristics:
Combination category Determination basis
Combination 1 Bank acceptance bills
Combination 2 Commercial acceptance bills
- 31 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group uses an impairment matrix at the group level to determine expected credit losses for accounts
receivable. Any increase or reversal of the provision for expected credit losses of accounts receivable is
recognized as a credit loss or gain in profit or loss.
characteristic combination.
The Group classifies accounts receivable into Combination 1 and Combination 2 based on the credit risk
characteristics of counterparties under different business segments. Combination 1 refers to accounts receivable
arising from the polarizer business revenue, where provisions for credit losses are made based on overdue aging
relative to the credit term. Combination 2 refers to accounts receivable arising from property leasing and other
business revenue, where provisions for credit losses are made based on natural aging.
The Group uses both the natural aging of accounts receivable and the overdue aging relative to the credit term as
credit risk characteristics, applying an impairment matrix to determine expected credit losses. Natural aging is
calculated starting from the date of initial recognition of the accounts receivable, while overdue aging begins once
the natural aging exceeds the credit term granted to the customer. If the terms and conditions of an accounts
receivable are modified but do not lead to derecognition, the aging continues to accumulate.
The Group individually determines credit losses for accounts receivable where there is evidence of a significant
increase in credit risk.
The Group determines credit losses for receivables financing on an individual-asset basis. The Group recognizes
the provision for credit losses for receivables financing in other comprehensive income and records any credit loss
or gain in profit or loss, without reducing the book value presented in the balance sheet.
Based on the credit status of the accepting bank for bank acceptance bills, the Group individually assesses and
determines credit losses for receivables financing.
- 32 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group determines credit losses for other receivables on a group basis. Any increase or reversal of the
provision for expected credit losses on other receivables is recognized as a credit loss or gain in profit or loss.
characteristic combination
The Group divides other receivables into different combinations based on common credit risk characteristics.
Common credit risk characteristics used by the Group include initial recognition date, remaining contract term,
and length of overdue period.
The aging is calculated from the date of initial recognition. If the terms and conditions of other receivables are
modified but do not lead to derecognition, the aging continues to accumulate.
value consumables and packaging materials
The Group's inventories mainly include raw materials, work in progress, finished products, and materials
processed on consignment. Inventories are initially measured at cost, which includes purchase costs, processing
costs, and other expenditures incurred to bring the inventories to their current location and condition.
When inventories are issued, the actual cost is determined using the weighted average method.
The Group uses a perpetual inventory system.
Low-value consumables and packaging materials are amortized using the straight-line method or are written off in
full at once.
- 33 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
On the balance sheet date, inventories are measured at the lower of cost and net realizable value. If net realizable
value is lower than cost, a provision for inventory depreciation is made.
Net realizable value is the estimated selling price of inventories in the ordinary course of business, less the
estimated costs to complete, the estimated selling and distribution expenses, and related taxes. When determining
the net realizable value of inventories, the Group uses conclusive evidence while considering the purpose of
holding the inventories and the impact of events after the balance sheet date.
After the provisions for the inventory depreciation are made, the factors causing any write-down of inventory
value have disappeared, leading to the net realizable values of inventories higher than its book value, the amount
of write-down shall be resumed and be reversed from the original provision for inventory devaluation with the
reversal being included in current profit or loss.
Generally, provisions for inventory depreciation are made on an item-by-item basis.
Control means that an investor has power over the investee, derives variable returns by participating in the
investee's relevant activities, and can use that power to affect the amount of returns. Common control refers to
shared control over an arrangement under relevant agreements, where decisions about the arrangement's relevant
activities require the unanimous consent of the parties sharing the right of control. Significant influence refers to
the power to participate in decisions on an investee's financial and operating policies, but not to control or
commonly control the formation of those policies. When determining whether the investor can exercise control or
significant influence over the investee, the potential voting rights arising from convertible corporate bonds or
exercisable warrants currently held by the investor or other parties are taken into account.
For a long-term equity investment acquired in a business combination under common control, the initial
investment cost is determined on the combination date based on the share of the book value of the acquiree's
owners' equity in the ultimate controller's consolidated financial statements. Any difference between the initial
investment cost of the long-term equity investment and the book value of the cash paid, non-cash assets
transferred, or liabilities assumed is adjusted against capital reserve. If the capital reserve is insufficient, the
difference is adjusted against retained earnings. Where equity securities are issued as consideration for the
combination, on the combination date, the initial investment cost of the long-term equity investment is determined
based on the share of the book value of the acquiree's owners' equity in the ultimate controller's consolidated
financial statements. The total par value of the issued shares is recognized as share capital, and any difference
between the initial investment cost and the total par value of the shares issued is adjusted against capital reserve. If
the capital reserve is insufficient, the difference is adjusted against retained earnings.
- 34 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
For a long-term equity investment acquired in a business combination not under common control, on the
acquisition date the initial investment cost is determined based on the combination cost.
Audit, legal, valuation, consulting, and other related G&A expenses incurred by the acquirer or purchaser for the
business combination are recognized in profit or loss when they occur.
Long-term equity investments obtained through methods other than a business combination are initially measured
at cost. Where an investor gains significant influence or common control but not control over an investee through
additional investment, the cost of the long-term equity investment is the sum of the fair value of the previously
held equity investment (as determined in accordance with Accounting Standards for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments) and the new investment cost.
In the parent company's financial statements, long-term equity investments in subsidiaries are measured using the
cost method. A subsidiary is an investee over which the Group can exercise control.
Under the cost method, long-term equity investments are measured at their initial investment cost. Any additional
investment or capital recovery adjusts the cost of the long-term equity investment. Current investment income is
recognized based on the amount of cash dividends or profits declared and distributed by the investee.
The Group applies the equity method to its investments in associates and joint ventures. An associate is an
investee over which the Group has significant influence, and a joint venture is a joint venture arrangement under
which the Group has rights to the net assets of the arrangement.
Under the equity method, if the initial investment cost of the long-term equity investment exceeds the share of the
fair value of the investee's identifiable net assets at the time of investment, the initial investment cost is not
adjusted. If the initial investment cost is less than the share of the fair value of the investee's identifiable net assets
at the time of investment, the difference is recognized in current profit or loss, and the cost of the long-term equity
investment is adjusted accordingly.
- 35 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the equity method is adopted for accounting, the Group, based on its attributable share of the net profit or
loss and other comprehensive income realized by the investee, respectively recognize the investment income and
other comprehensive income, and simultaneously adjust the book value of the long-term equity investment.
COOEC shall calculate the shares according to profits or cash dividends declared by the investee and
correspondingly reduce the book value of long-term equity investments; as to any change in owners' equity of the
investee other than net profit or loss, other comprehensive income and profit distribution, the Group shall adjust
the book value of the long-term equity investment and include such change in capital reserves. When recoginzing
the attributable share of net profit or loss of the investee, the Group shall, based on the fair value of identifiable
net asset of the investee when it obtains the investment,recognize the net profits of the investee after adjustment. If
accounting policies and accounting periods adopted by the investee are inconsistent with those of the Company,
the financial statements of the investee shall be adjusted according to the accounting policies and accounting
periods of the Company and investment income and other comprehensive income etc. shall be recognized on such
basis. For transactions between the Group and associates and joint ventures, if the invested or sold assets do not
constitute business, the unrealized profit or loss from internal transactions will be offset at the part attributable to
the Group and the investment profit or loss will be recognized on that basis However, the unrealized losses from
internal transactions between the Group and any investee shall not be offset if they belong to the losses from the
impairment of the transferred assets.
When recognizing the net losses occurred in the investee that shall be shared, the reduction value of book value of
long-term equity investments and other long-term equities that constitute net investments in the investee will be
the limit until it becomes zero. In addition, if the Group has the obligation to assume extra-amount losses for the
investee, the estimated liabilities are recognized according to the estimated obligations and included in the current
investment losses. Where the investee realizes net profits in the subsequent period, the Group shall restore the
income shared after making up for unrecognized losses undertaken by such income.
When a long-term equity investment is disposed of, the difference between its book value and the actual proceeds
is recognized in current profit or loss. If a long-term equity investment has been accounted for using the equity
method and the remaining equity after disposal is still accounted for using the equity method, any other
comprehensive income previously recognized under the equity method is treated on the same basis as if the
investee had directly disposed of the related assets or liabilities, and is transferred proportionately. Any other
changes in owners' equity of the investee, other than net profit or loss, other comprehensive income, and profit
distribution, which were previously recognized, are transferred proportionately to the current profit or loss. If a
long-term equity investment is accounted for using the cost method and the remaining equity after disposal
continues to be accounted for using the cost method, any other comprehensive income recognized before the
Group gained control, under either the equity method or the accounting standards for recognizing and measuring
financial instruments, is treated on the same basis as if the investee had directly disposed of the related assets or
liabilities, and is transferred proportionately. Other changes in owners' equity other than net profit or loss, other
comprehensive income and profit distribution in net asset of the investee accounted for and recognized by using
the equity method shall be carried forward to the current profit or loss.
- 36 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Where the Group loses the control over the investee due to the disposal of part of the equity investments, when it
prepares separate financial statements, the remaining equity after disposal that can commonly control or have
significant influence on the investee will be measured under the equity method, and the remaining equity shall be
deemed to have been adjusted under the equity method on acquisition. If the remaining equity after disposal can
not exercise common control or significant influence on the investee, such equity will be changed to be accounted
for according to recognition and measurement standards of financial instruments and the difference between fair
value and book value on the date of loss of the control shall be included in the current profit or loss. For other
comprehensive income recognized by using the equity method or financial instruments recognition and
measurement standards before the Group obtains the control over the investee, accounting treatment shall be made
on the same basis as that for direct disposal of relevant assets or liabilities by the investee when the Group loses
the control over the investee. Other changes in owners' equity other than net profit or loss, other comprehensive
income and profit distribution in net asset of the investee recognized by using the equity methodshall be carried
forward to the current profit or loss when the control over the investee is lost. Where the remaining equities after
disposal are accounted for under the equity method, the other comprehensive income and other owners' equity
shall be carried forward in proportion. If the remaining equity after disposal is changed to be accounted for
according to the recognition and measurement standards of the financial instruments, the other comprehensive
income and other owner's equity shall be fully carried forward.
In case the common control or significant influence over the investee is lost for disposing part of equity
investments, the remaining equity will be changed to be accounted for according to the recognition and
measurement principles of financial instruments. The difference between the fair value and the book value on the
date of the loss of common control or significant influence shall be included in the current profit or loss. Any
other comprehensive income previously recognized under the equity method for the original equity investment is
accounted for on the same basis as if the investee had directly disposed of related assets or liabilities once the
equity method ceases to apply. All other changes in owners' equity recognized due to factors other than net profit
or loss, other comprehensive income, and profit distribution of the investee are transferred in full to current
investment income when the equity method is no longer applied.
Where the Group disposes of equity investments in subsidiaries through multiple transactions and by stages until
loss of control, if the above transactions belong to a package of transactions, accounting treatment shall be made
on the transactions as a transaction to dispose equity investments of subsidiaries and lose the control. The
difference between each disposal cost and the book value of long-term equity investments corresponding to
disposed equities before the loss of control shall be firstly recognized as other comprehensive income and then
transferred into the current profit or loss at the loss of control.
Investment property refers to property held to earn rentals or for capital appreciation, or both, and includes leased
land use rights and leased buildings.
Investment property is initially measured at cost. Subsequent expenses related to the investment property, if the
economic benefits related to the asset are likely to flow in and the cost can be measured reliably, shall be included
in the cost of the investment property. Other subsequent expenses shall be included in the current profit or loss
when incurred.
- 37 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group uses the cost model for subsequent measurement of investment property and provides for depreciation
on a straight-line basis over its service life. The depreciation method, useful life, estimated residual value, and
annual depreciation rates for each category of investment property are as follows:
Depreciation method Depreciation life Annual depreciation
Type Residual value rate (%)
(years) rate (%)
Houses and buildings Straight-line method 10-40 0.00-4.00 2.40-10.00
When an investment property is being disposed of or permanently withdraws from use without any economic
benefits expected from the disposal, the investment property shall be derecognized.
The difference between the disposal proceeds of an investment property (through sale, transfer, retirement, or
damage) and its book value, net of related taxes and fees, is recognized in current profit or loss.
Fixed assets refer to tangible assets held for the purpose of producing goods, providing services, renting or
operating management, with a service life exceeding one fiscal year. Fixed assets will only be recognized when
the economic benefits associated with such assets are likely to flow into the Group and the cost can be measured
reliably. A fixed asset is initially measured at cost.
For the subsequent expenses related to the fixed assets, if the economic benefits related to the fixed assets are
likely to flow in and the cost can be measured reliably, they shall be included in the cost of the fixed assets, and
the book value of the replaced part shall be derecognized, Other subsequent expenses shall be included into the
current profit or loss when incurred.
From the month following the date a fixed asset is in working condition for intended use, the Group depreciates
the asset on a straight-line basis over its service life. The depreciation method, service year, estimated residual
value, and annual depreciation rates for each category of fixed assets are as follows:
Depreciation life Annual depreciation
Type Depreciation method Residual value rate (%)
(years) rate (%)
Buildings and constructions Straight-line method 10-40 0.00-4.00 2.40-10.00
Machinery equipment Straight-line method 10-14 4.00 6.86-9.60
Transportation equipment Straight-line method 8 4.00 12.00
Electronic equipment and others Straight-line method 5 4.00 19.20
Estimated net residual value refers to the amount obtained by the Group from the disposal of the fixed assets at
present after deducting the estimated disposal expenses, assuming that the estimated service life of the fixed asset
has expired and the fixed asset is in the expected state at the end of its service life.
- 38 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the fixed assets are disposed of or it is expected that no economic benefits can be generated through use or
disposal, the fixed assets shall be derecognized. The difference of the revenue from disposal of fixed assets such
as sales, transfer, retirement or damage deducting their book value and related taxes shall be included into the
current profit or loss.
The Group will review service life, estimated net residual value and depreciation methods of the fixed assets at the
end of each year. Changes, if any, shall be handled as changes in accounting estimates.
The construction in progress is measured at actual cost, which includes various project expenditures incurred
during the construction period, capitalized borrowing costs before the project reaches working condition for
intended use, and other related costs. No depreciation is made for construction in progress.
The construction in progress shall be carried forward to the fixed assets after it reaches the working condition for
intended use. The criteria and timing for the conversion of various types of construction in progress into fixed
assets are as follows:
Time point of conversion into
Type Criteria for conversion to fixed assets
fixed assets
The machinery equipment shall be carried forward to the fixed assets when
it has been accepted and the following conditions are met:
Installation of (1) The machinery equipment and its supporting facilities have been Reach working condition for
machinery equipment installed; intended use
(2) After commissioning, the machinery equipment can maintain normal and
stable operation or produce qualified products for a period of time.
The capitalization of the borrowing costs that can be directly attributable to the acquisition, construction or
production of assets that meet the capitalization conditions will start when the asset expenditure has incurred, the
borrowing costs have incurred, and the acquisition, construction or production activities necessary for the asset to
reach the intended usable or salable state have begun; the capitalization shall be ceased when the acquired and
constructed or produced assets eligible for capitalization have reached their working condition for intended use or
sales condition. The remaining borrowing costs are recognized as expenses on occurrence.
For specialized borrowings, the capitalization amount is based on the actual interest expenses incurred in the
current period, after deducting the interest income earned from unused borrowing funds deposited in the bank or
investment income earned from temporary investments; general borrowings shall be determined by multiplying
the weighted average of asset disbursements of the part of accumulated asset disbursements exceeding special
borrowings by the capitalization rate of used general borrowings, and on this basis, the capitalization amount is
determined. The capitalization rate is calculated and recognized as per the weighted average interest rate of
general borrowing.
- 39 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Intangible assets include land use right, software and patent rights, etc.
The intangible assets shall be initially measured at the costs. For intangible assets with limited service life, the
original value shall be evenly amortized by straight-line method within the expected service life from the time
when they are available for use. The intangible assets with uncertain service life shall not be amortized. The
amortization method, service life and residual value rate of various intangible assets are as follows:
Amortization Residual value rate
Type Service life (year) and basis of determination
method (%)
Straight-line
Land use rights 50 (Determine the service life based on the statutory service life) -
method
Straight-line 5 (Determine the service life based on the period expected to bring
Software -
method economic benefits)
Straight-line 15 (Determine the service life based on the period expected to bring
Patent right -
method economic benefits)
At the end of the period, the service life and amortization method of intangible assets with limited service life
shall be reviewed and adjusted if necessary.
The expenditures in research phase will be included in current profit or loss on occurrence.
Expenditures in the development stage will be recognized as intangible assets only when the following conditions
are simultaneously satisfied, and included in current profit or loss if the following conditions are not satisfied:
(1) It is technically feasible to complete the intangible assets so that it can be used or sold;
(2) It has the intention to complete the intangible assets and use or sell them;
(3) The manner in which an intangible asset generates economic benefits includes the ability to prove that there is
a market for the products produced through the use of this intangible asset or a market for the intangible asset
itself. In the case that the intangible asset will be used internally, its usefulness shall be proven.
(4) With the support of sufficient technology, financial resources and other resources, it is able to complete the
development of the intangible assets, and it is able to use or sell the intangible assets;
(5) The expenditures attributable to the intangible assets in the development stage can be measured reliably.
Where the research expenditures and the development expenditures are indistinguishable, the COOEC shall
include research expenditures and development expenditures incurred in current profit or loss. The cost of the
intangible assets formed by internal development activities only includes the total expenditure incurred from the
time when the capitalization conditions are met to the time when the intangible assets reach the intended use. The
expenses recognized in profit or loss before meeting the capitalization conditions during the development for the
same intangible asset will not be adjusted.
The scope of R&D expenditure includes wages, salaries, and welfare expenses of personnel directly engaged in
R&D activities, materials, fuel and power costs directly consumed in R&D activities, and depreciation expenses
of instruments and equipment for R&D activities, etc.
- 40 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
On each balance sheet date, the Group checks whether there is any indication that long-term equity investments,
investment properties measured by the cost model, fixed assets, construction in progress, right-of-use assets and
intangible assets with a definite service life may have impairment. If there are indications of impairment of such
assets, the recoverable amount shall be estimated. Intangible assets with indefinite service life and intangible
assets that have not yet reached a usable state are subject to impairment testing every year regardless of whether
there are indications of impairment.
The recoverable amount of the estimated asset is based on a single asset. If it is difficult to estimate the
recoverable amount of a single asset, the recoverable amount of the asset group shall be determined on the basis of
the asset group to which the asset belongs. The recoverable amount is the higher of the net amount obtained by
deducting the disposal expenses from the fair value of an asset or an asset group and the present value of its
expected future cash flows.
If the recoverable amount of the asset is lower than its book value, the provision for asset impairment shall be
made at the difference and included in the current profit or loss.
The goodwill shall be tested for impairment at least at the end of each year. The impairment test of goodwill shall
be carried out in combination with the asset group or combination of asset groups related to it. That is, from the
acquisition date, the book value of goodwill shall be allocated using a reasonable method to the asset group or
portfolio of asset groups that benefit from the synergies of the business combination. If the recoverable amount of
the asset group or group of asset groups including the allocated goodwill is lower than its book value, the
corresponding impairment losses shall be recognized. Amount of impairment losses shall be firstly used to deduct
the book value of goodwill allocated to the asset group or portfolio of asset groups, and then deduct book value of
other assets according to the proportion of the book values of other assets (except for goodwill) in the asset group
or portfolio of asset groups.
The above losses from assets impairment will not be reversed in subsequent accounting periods once recognized.
Long-term deferred expenses refer to the expenses which have been already incurred but will be borne in the
current period and in the future with an amortization period of over 1 year. Long-term deferred expenses are
amortized evenly over the expected benefit period.
Contract liabilities refer to the obligation of the Group to transfer goods or services to customers for consideration
received or receivable from customers. Contract assets and contract liabilities under the same contract are
presented by their net amounts.
During the accounting period when employees provide services for the Group, the Group recognizes the short-
term compensation actually incurred as liabilities and includes it in the current profit or loss or related asset costs.
The employee welfare expenses incurred by the Group shall be included in the current profit or loss or related
asset costs according to the actual amount incurred. If the employee benefits are non-monetary benefits, they shall
be measured at fair value.
- 41 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
For the medical insurance premiums, work-related injury insurance premiums, maternity insurance premiums and
other social insurance premiums and housing provident funds paid by the Group for employees, as well as the
labor union funds and employee education expenses withdrawn by the Group in accordance with the provisions,
the corresponding employee compensation amount shall be calculated and determined according to the prescribed
accrual basis and accrual ratio during the accounting period when employees provide services for the Group, and
the corresponding liabilities shall be recognized and included in the current profit or loss or related asset costs.
Post-employment benefits are all defined contribution plans.
During the accounting period when employees provide services for the Group, the Group recognizes the amount
payable calculated according to the defined contribution plans as a liability and includes it in the current profit or
loss or related asset costs.
When the Group provides dismissal benefits to employees, the employee compensation liability arising from the
dismissal benefits shall be recognized at the earlier of the following dates and included in the current profit or loss:
when the Group cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor
relationship plan or the layoff proposal; when the Group recognizes the costs or expenses related to the
restructuring involving the payment of dismissal benefits.
When the obligation related to the contingency such as product quality guarantee is a current obligation of the
Group, and the performance of such obligation is likely to result in the outflow of economic benefits, and the
amount of such obligation can be measured reliably, it is recognized as estimated liabilities.
On the balance sheet date, by considering the risks, uncertainty and time value of money and other factors related
to contingency, the estimated liabilities will be measured according to the best estimate of the required
expenditures for performace of relevant present obligation. If the time value of money is significant, the best
estimate shall be determined by the amount discounted by the estimated future cash flows.
When the Group has fulfilled its performance obligations under the contract, that is, when the customer obtains
right of control of the relevant goods or services, the revenue is recognized based on the transaction prices
allocated to the specific performance obligation. Performance obligations refer to the contractual commitments in
which the Group transfers clearly distinguishable goods or services to the customers.
- 42 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Continued
The Group evaluates the contract on the contract commencement date, identifies each individual performance
obligation contained in the contract, and determines whether each individual performance obligation is performed
within a certain period of time or at a certain point in time. If one of the following conditions is met, it is a
performance obligation performed within a certain period of time, and the Group recognizes revenue within a
certain period of time according to the performance progress: (1) the customer obtains and consumes the
economic benefits brought by the Group at the same time as the Group performs the contract; (2) The customer is
able to control the goods under construction in the course of the Group's performance; (3) The goods produced
during the performance of the Group have irreplaceable uses, and the Group has the right to receive payment for
the performance accumulated to date throughout the contract period. Otherwise, the Group recognizes the revenue
at the point when the customer obtains the right of control of the relevant goods or services.
For goods sold to customers, the Group recognizes revenue when the right of control of the goods is transferred,
that is, when the goods are delivered to the designated place of the other party and signed by the other party. For
property service, the Group recognizes revenue in the course of providing property service.
Transaction prices refer to the amount of consideration that the Group is expected to be entitled to receive as a
result of the transfer of goods or services to customers, but does not include the amount received on behalf of third
parties and the amount expected to be returned to customers by the Group. When determining the transaction
prices, the Group considers the impact of variable consideration, significant financing components in the contract,
non-cash consideration, consideration payable to customers and other factors.
If the contract contains two or more performance obligations, the Group shall, on the commencement date of the
contract, allocate the transaction prices to each individual performance obligation according to the relative ratio of
the individual selling price of the goods or services promised by each individual performance obligation. However,
if there is conclusive evidence that the contractual discount or variable consideration is only related to one or more
(but not all) performance obligations in the contract, the Group shall allocate the contractual discount or variable
consideration to the relevant one or more performance obligations. Individual selling price refers to the price at
which the Group sells goods or services to customers separately. If the individual selling price cannot be directly
observed, the Group will comprehensively consider all the information that can be reasonably obtained and
estimate the individual selling price by maximizing the use of observable input value.
For sales with sales return clauses, the Group recognizes revenue at the amount of consideration expected to be
entitled to receive due to the transfer of goods to the customer (i.e., excluding the amount expected to be returned
due to sales return) when the customer obtains the relevant control over goods, and recognizes liabilities at the
amount expected to be returned due to sales return; at the same time, the balance of the book value of the expected
goods to be returned at the time of transfer after deducting the expected cost of recovering the goods (including
the impairment of the value of the returned goods) is recognized as an asset. The net amount after deducting the
cost of the above asset will be transferred as cost based on the book value of the transferred goods.
For sales with quality assurance clauses, if the quality assurance provides a separate service in addition to assuring
the customer that the goods or services sold meet the established standards, the quality assurance constitutes a
single performance obligation. Otherwise, the Group shall conduct accounting treatment for the quality assurance
liability in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.
The Group determines whether it is the principal or the agent when engaging in transactions based on whether it
has the right of control over the goods or services before transferring them to the customer. If the Group can
control the goods or services before transferring them to the customer, the Group is the main responsible person
and recognizes the revenue according to the total consideration received or receivable; otherwise, the Group is an
agent and recognizes revenue based on the expected commissions or service fee it is entitled to receive. This
amount is determined by subtracting the price payable to other related parties from the total consideration received
or receivable.
- 43 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Continued
If the Group receives payment in advance from customers for sales of goods or services, the payment is first
recognized as a liability and then transferred to revenue when the relevant performance obligations are fulfilled.
When the Group's advances from customers do not need to be returned and the customer may waive all or part of
its contractual rights, the Group expects to be entitled to the amount related to the contractual rights waived by the
customer, and recognizes the above amount as revenue in ratio according to the mode of the customer's exercise
of contractual rights; otherwise, the Group will only transfer the relevant balance of the above-mentioned
liabilities to revenue when it is highly unlikely that the customer will request the fulfillment of the remaining
performance obligations.
Government subsidies refer to the monetary assets and non-monetary assets obtained by the Group from the
government for free. Government subsidies are recognized when they can meet the conditions attached to
government subsidies and can be received.
The government subsidies considered as monetary assets are measured at the amount received or receivable.
The subsidies fro production line and equipment in the Group's government subsidies can form long-term assets,
so such government subsidies are asset-related government subsidies.
Government subsidies related to assets are recognized as deferred income and included in the current profit or loss
by stages according to the straight-line method within the service life of the relevant assets.
The industry development support funds and enterprise development support funds in the Group's government
subsidies cannot form long-term assets, so such government subsidies are income-related government subsidies.
Income-related government subsidies used to compensate for relevant costs and losses in subsequent periods are
recognized as deferred income and included in the current profit or loss in the period when the relevant costs or
expenses are recognized; if it is used to compensate the relevant costs and losses incurred, it shall be directly
included in the current profit or loss.
Government subsidies related to the daily activities of the Group are included in other income according to the
essence of economic business. Government subsidies unrelated to the daily activities of the Group are included in
the non-operating revenue.
When the recognized government subsidies need to be returned, if there is relevant deferred income balance, the
book balance of relevant deferred income shall be offset, and the excess shall be included in the current profit or
loss; if there is no relevant deferred income, it shall be directly included in the current profit or loss.
- 44 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Leases refers to a contract in which the lessor transfers the right of use of the asset to the lessee for consideration
within a certain period of time.
At the commencement date of the contract, the Group assesses whether the contract is a lease contract or contains
a lease. Unless the terms and conditions of the contract change, the Group does not reassess whether the contract
is a lease contract or contains a lease.
When a contract contains one or more lease and non-lease parts, the Group will split the individual lease and non-
lease parts and allocate the contract consideration according to the relative ratio of the sum of the individual price
of each lease part and the individual price of the non-lease part.
Except for short-term leases, the Group recognizes the right-of-use assets of the lease on the lease commencement
date. The lease commencement date refers to the starting date when the lessor provides the leased assets for use by
the Group. Right-of-use assets are initially measured at cost. The cost includes:
The initial measurement amount of the lease liabilities;
the lease payments made on or before the lease commencement date, or the relevant amount after deducting
the lease incentive already enjoyed if any;
Initial direct expenses incurred by the Group;
The estimated costs incurred by the Group for dismantling and removing the leased assets, restoring the
premises where the leased assets are located or restoring the leased assets to the state agreed in the lease
clauses.
The Group depreciates right right-of-use assets with reference to the depreciation provisions of Accounting
Standards for Business Enterprises No. 4 — Fixed Assets. If the Group can reasonably determine that the
ownership of leased assets will be obtained at the expiration of the lease term, the right-of-use assets shall be
depreciated within the remaining service life of the leased assets. If it is not reasonably certain that ownership of
leased assets will be obtained at the expiration of the lease term, the depreciation shall be accrued during the
shorter of the lease term and remaining service life leased assets.
The Group determines whether the right-of-use assets are impairment in accordance with the Accounting
Standards for Business Enterprises No. 8 - Asset Impairment and performs accounting treatment on the identified
impairment losses.
Except for short-term leases, the Group makes initial measurement of the lease liabilities on the lease
commencement date according to the present value of the lease payments that have not been paid on that date.
When calculating the present value of lease payments, the Group uses the interest rate implicit in lease as the
discount rate, and if the interest rate implicit in lease cannot be determined, the incremental borrowing rate is used
as the discount rate.
- 45 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Lease payments refer to the payments made by the Group to the lessor in connection with the right to use the
leased assets during the lease term, including:
Fixed payment amount and substantial fixed payment amount. If there is lease incentive, the relevant amount
of lease incentive shall be deducted;
Variable lease payment amount depending on index or ratio;
The exercise price of the option reasonably determined by the Group to be exercised;
The amount to be paid to terminate the lease when the lease term reflects that the Group will exercise the
option;
The amount expected to be paid according to the residual value of the guarantee provided by the Group.
After the lease commencement date, the Group calculates the interest expenses of the lease liabilities for each
period of the lease term at a fixed cyclical interest rate and includes it in the current profit or loss or related asset
costs.
After the lease commencement date, if any of the following circumstances occurs, the Group shall remeasure the
lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has
been reduced to zero, but the lease liabilities still needs to be further reduced, the Group shall include the
difference in the current profit or loss:
If the lease term changes or the evaluation result of the purchase option changes, the Group will re-measure
the lease liabilities according to the present value calculated by the changed lease payment amount and the revised
discount rate;
If the estimated payable amount according to the guarantee residual value or the index or proportion used to
determine the lease payment changes, the Group will re-measure the lease liabilities according to the present value
calculated by the changed lease payment amount and the original discount rate.
the lessee
The Group chooses not to recognize right-of-use assets and lease liabilities for short-term leases of some plants
and some leased warehouses. Short-term lease refers to a lease that lasts for no more than 12 months and includes
no purchase options at the lease commencement date. The Group includes the lease payments of short-term leases
in the current profit or loss or related asset costs according to the straight-line method in each period of the lease
term.
If the lease is modified and the following conditions are met at the same time, the Group will account for the lease
modification as a separate lease:
• The lease modification expands the scope of the lease by adding one or more right of use of the leased assets;
• The increased consideration is equivalent to the individual price of the expanded part adjusted according to
the contract.
- 46 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
If the lease modification is not accounted for as a separate lease, on the effective date of the lease modification,
the Group re-apportions the consideration of the modified contract, re-determines the lease term, and re-measures
the lease liabilities at the present value calculated according to the modified lease payments and the revised
discount rate.
If the lease modification results in a reduction in the scope of the lease or the lease term, the Group shall reduce
the book value of the right-of-use assets accordingly, and include the relevant gains or losses of partial or
complete termination of leases into the current profit or loss. If the lease liabilities are remeasured due to other
lease modification, the Group shall adjust the book value of the right-of-use assets accordingly.
If the contract contains both the lease and non-lease parts, the Group shall allocate the contract consideration
according to the provisions of the revenue standards on the allocation of transaction prices, and the basis of
allocation shall be the separate price of the lease part and the non-lease part.
Leases that substantially transfer substantially all of the risks and rewards associated with the ownership of leased
assets are financing leases Leases other than financing lease are operating leases.
During each period of the lease term, the Group recognizes the lease receipts of operating leases as rental income
by using the straight-line method. The initial direct costs incurred by the Group in connection with operating
leases are capitalized when incurred, amortized on the same basis as rental income recognition during the lease
term, and included in the current profit or loss in installments.
The variable lease receipts related to operating leases acquired by the Group and not included in the lease receipts
are included in the current profit or loss when actually incurred.
If the operating lease is changed, the Group will account for it as a new lease from the effective date of the change,
and the advance or receivable lease receipts related to the lease before the change will be regarded as the receipt
amount of the new lease.
- 47 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
Income tax expenses include current income tax and deferred income tax.
On the balance sheet date, the current income tax liabilities (or assets) formed in the current and prior periods are
measured at the expected income tax payable (or refundable) calculated in accordance with the tax law.
For the difference between the book value of certain assets and liabilities and their tax bases, and the temporary
differences arising from the difference between the book value and tax base of items that are not recognized as
assets and liabilities but whose tax bases can be determined in accordance with the tax law, the balance sheet
liability method is adopted to recognize deferred tax assets and deferred tax liabilities.
In general, the relevant deferred income taxes are recognized for all temporary differences. However, for
deductible temporary differences, the Group recognizes the relevant deferred tax assets to the extent of the taxable
income that is likely to be obtained to offset the deductible temporary differences. In addition, deferred tax assets
or liabilities are not recognized for temporary differences associated with the initial recognition of goodwill and
with the initial recognition of assets or liabilities arising from transactions that are neither business combinations
nor affect accounting profit or taxable income (or deductible losses) and do not result in equal taxable temporary
differences and deductible temporary differences.
For deductible loss and tax credits that can be carried forward to subsequent years, the corresponding deferred tax
assets arising therefrom are recognized to the extent that future taxable income will be probable to be available
against deductible losses and tax credits.
The Group recognizes deferred tax liabilities arising from taxable temporary differences associated with
subsidiaries, associates and investments in joint ventures, unless the Group is able to control the timing of the
reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the
foreseeable future. For deductible temporary differences related to subsidiaries, associates and investments in joint
ventures, the Group recognizes deferred tax assets only if it is probable that the temporary differences will reverse
in the foreseeable future and it is probable that taxable income will be available to offset the deductible temporary
differences in the future.
On the balance sheet date, deferred tax assets and deferred tax liabilities should be measured at the applicable tax
rate during the period of expected recovery of the relevant assets or liquidation of the relevant assets according to
the provisions of tax laws.
Except for the current income tax and deferred income taxes related to transactions and events directly included in
other comprehensive income or shareholders' equity, which are included in other comprehensive income or
shareholders' equity, and the book value of deferred income taxes arising from business combination to adjust
goodwill, the remaining current income tax and deferred income tax expenses or income are included in the
current profit or loss.
On the balance sheet date, the book value of the deferred tax assets shall be reviewed. If it is likely that sufficient
taxable income will not be available in the future to offset the benefits of the deferred tax assets, the book value of
the deferred tax assets shall be written down. When it is likely to earn sufficient taxable income, the written down
amount is reversed.
- 48 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
When the Group has a legal right to settle on a net basis and intends to settle with net amount or acquire assets and
pay off liabilities simultaneously, the Group reports the net amount of current income tax assets and current tax
liabilities after offsetting.
When the Group has the legal right to settle current income tax assets and current income tax liabilities on a net
basis, and the deferred tax assets and deferred tax liabilities are related to the income tax levied by the same tax
collection authority on the same taxpayer or on different taxpayers, but in each important future period of reversal
of deferred tax assets and liabilities, the involved taxpayer intends to settle current income tax assets and liabilities
on a net basis or to obtain assets and settle liabilities at the same time, the deferred tax assets and deferred tax
liabilities of the Group are presented at the net amount after offset.
On December 5, 2025, the Ministry of Finance issued the Interpretation No. 19 of the Accounting Standards for
Business Enterprises, hereinafter referred to as the "Interpretation No.19"). Interpretation No. 19 specifies the
assessment of the cash flow characteristics of financial asset contracts and related disclosures, as well as the
disclosures for equity instruments designated to be measured at fair value with changes recorded in other
comprehensive income, and it will come into effect on January 1, 2026.
Assessment of the contractual cash flow characteristics of financial assets and related disclosure
To assesses whether the contractual cash flows of a financial asset are consistent with a basic lending arrangement,
the entity may need to consider the different components of interest. The assessment of interest should focus on
what the entity is being compensated for, rather than the amount of compensation, although the latter may indicate
that the entity is being compensated for factors other than the basic lending risks and costs. If the contractual cash
flows are linked to variables other than the basic lending risks or costs (such as the value of an equity instrument
or the price of a commodity), or if the contractual cash flows represent a portion of the debtor's revenue or profit,
then the contractual cash flows are inconsistent with the basic lending arrangement. The Group will implement
this provision as of January 1, 2026, and believes that the adoption of the above provisions has no material impact
on the Group's financial statements.
Disclosure of designated equity instruments measured at fair value with changes recognized in other
comprehensive income
Interpretation No. 19 stipulates that an entity shall, at a minimum, disclose by category the fair value of designated
investment in equity instruments measured at fair value through other comprehensive income at the end of the
reporting period, and the changes in their fair value during the reporting period, and may make further disclosure
by item based on the principle of materiality and in conjunction with the entity's actual situation. Among these, the
amount of change related to investments derecognized during the reporting period and the amount of change
related to investments held at the end of the reporting period shall be disclosed separately. The entity shall also
disclose the transfer of cumulative gains or losses included in equity related to investments derecognized during
the reporting period. The Group will implement this provision as of January 1, 2026, and believes that the
adoption of the above provisions has no material impact on the Group's financial statements.
- 49 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(III) Significant accounting policies and accounting estimates - Continued
The Group has no significant changes in accounting estimates during the year.
(IV) Taxes
Tax type Tax basis Tax rate
The output tax for domestic sales is calculated at
Balance of output tax minus deductible input tax; tax
Value-added tax exemption, offset and refund measures are applicable to
according to relevant tax regulations, and the
the sales of export products
export product tax rebate rate is 13%
Urban maintenance and
Turnover tax payable 7%
construction tax
Education surcharge Turnover tax payable 3%
Local education surtax Turnover tax payable 2%
Corporate income tax Taxable income 25%、20%、15%、8.25%
THE RESIDUAL VALUE AFTER DEDUCTING 30%
Property taxes FROM THE ORIGINAL VALUE OF THE PROPERTY 1.2%
AT ONCE
Notes to the taxpayers with different corporate income tax rates:
Name of taxpayer Income tax rate
The Company 25%
Shenzhen Shenfang Property Management Co., Ltd. 20% (Note 1)
Shenzhen Meibainian Garment Co., Ltd. 20% (Note 1)
Shenzhen Lisi Industrial Development Co., Ltd. 20% (Note 1)
Shenzhen Shenfang Sungang Property Management Co., Ltd. 20% (Note 1)
SATO (Hong Kong) Limited 8.25% (Note 2)
Shenzhen SAPO Photoelectric Co., Ltd. (hereinafter referred to as "SAPO
Photoelectric")
Note 1: See Note (IV) and 2(2) for details.
Note 2: according to the Inland Revenue Ordinance of Hong Kong, SATO (Hong Kong) Limited is subject to a
two-tier profits tax system. The first HKD 2 million of taxable profits shall taxed at a rate of 8.25%, and the
profits generated thereafter shall be taxed at a rate of 16.5%.
Note 3: See Note (IV) and 2(1) for details.
(1) In 2025, SAPO Photoelectric, a subsidiary of the Company, was jointly recognized as Industry and
Information Technology Bureau of Shenzhen Municipality, Shenzhen Finance Bureau and Shenzhen Tax Service,
State Taxation Administration, respectively, with a certification period of 3 years, and the certificate numbers of
GR202544204289 respectively. Since SAPO Photoelectric was recognized as a high-tech enterprise, it is eligible
for the tax incentives for high-tech enterprises for three years. After filing with the competent tax bureau, SAPO
Photoelectric has paid corporate income tax at a tax rate of 15%.
- 50 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(IV) Taxes - continued
(2) The Company's subsidiaries, Shenzhen Meibainian Garment Co., Ltd., Shenzhen Lisi Industrial Development
Co., Ltd., Shenzhen Shenfang Sungang Property Management Co., Ltd. and Shenzhen Shenfang Property
Management Co., Ltd. are qualified small low-profit enterprises. According to the Announcement of the Ministry
of Finance and the State Taxation Administration of Taxation on Further Implementing Preferential Policies for
Corporate Income Tax of Small and Micro Enterprises (No. 13, 2022) and the Announcement of the Ministry of
Finance and the State Taxation Administration on Preferential Policies for Corporate Income Tax of Small and
Micro Enterprises and Individual Industrial and Commercial Households (No. 6, 2023), the part of the annual
taxable income not exceeding RMB 3 million will be included in the taxable income after deducting 25%, and
corporate income tax will be paid at a tax rate of 20%.
(3) In accordance with the relevant provisions of the Notice of the State Administration of Taxation of the General
Administration of Customs of Ministry of Finance on Import Tax Policies for Supporting the Development of the
New Display Device Industry (No. 19[2021]Cai Guan Shui), SAPO Photoelectric , a subsidiary of the Company,
meets the relevant conditions and enjoys the policy of exemption from import duties for related products from
January 1, 2021 to December 31, 2030.
(4) According to the Announcement on the Policy of Additional Value-Added Tax Deduction for Advanced
Manufacturing Enterprises (CZBSWZJGG [2023] No.43) issued by the Ministry of Finance and the State
Taxation Administration in September 2023, from January 1, 2023 to December 31, 2027, advanced
manufacturing enterprises are allowed to deduct the value-added tax payable by 5% of the deductible input tax for
the current period. SAPO Photoelectric, a subsidiary of the Company, meets the relevant conditions and enjoyed
the policy of additional deduction of value-added tax (VAT) in 2025.
(V) Notes to financial statements items
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Cash on hand: 15,510.21 4,751.69
RMB 15,451.50 4,691.50
HKD 58.71 60.19
Bank deposits (Note 1): 449,263,543.52 302,111,853.17
RMB 291,041,371.64 245,621,517.80
USD 93,081,165.25 40,462,152.89
JPY 64,400,647.02 15,265,963.38
HKD 740,359.61 762,219.10
Other monetary funds (Note 2): 685,396.65 38,844,838.96
RMB 685,394.45 10,920,461.06
JPY 2.20 27,924,377.90
Total 449,964,450.38 340,961,443.82
Including: total amount deposited abroad - -
- 51 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
Note 1: On December 31, 2025, the bank deposits include interest income from current deposits, agreement
deposit and 7-day notice deposits amounting to RMB 21,498.92 (on December 31, 2024: RMB 31,765.51).
Note 2: On December 31, 2025, the Group's other monetary funds included RMB 684,860.26 (December 31, 2024:
RMB 3,401,500.00) restricted in use due to account freezing, and RMB536.39 (December 31, 2024: RMB
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Financial assets measured at fair value through current profit or
loss
Including: money funds, structured deposits and wealth
management products
(1) Classification of notes receivable
RMB
Balance as at the end of the Balance as at the end of the
Category
current year previous year
Bank acceptance bills 85,980,246.52 47,305,221.88
(2) As at December 31, 2025, the Group has no pledged notes receivable.
(3) As of December 31, 2025, notes receivable endorsed or discounted by the Group and not yet due on the balance
sheet date at the end of the period.
RMB
Amount derecognized at the Amount not derecognized at the
Item
end of the period end of the period
Bank acceptance bills - 53,001,736.07
(4) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Book balance Provision for bad debts Book balance Provision for bad debts
Category
Ratio Provision Book value Provision Book value
Amount Amount Amount Ratio (%) Amount
(%) ratio (%) ratio (%)
Provision for bad debts
accrued on an individual - - - - - - - - - -
basis
Provision for bad debts
made by portfolio
Including: bank
acceptance bills
Total 85,980,246.52 100.00 - 85,980,246.52 47,305,221.88 100.00 - 47,305,221.88
(5) In 2025, the Group has no actual write-off of notes receivable.
- 52 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Disclosure by aging
RMB
Book balance at the end of the Book balance at the end of the
Aging
year previous year
Within 1 year 777,768,360.91 888,265,598.53
Over 3 years 13,513,950.97 13,565,696.79
Total 791,770,983.21 902,199,660.44
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts accrued 38,464,614.51 4.86 18,450,283.68 47.97 20,014,330.83
on an individual basis
Provision for bad debts made 753,306,368.70 95.14 11,512,750.01 741,793,618.69
by portfolio
Including: portfolio 1 743,510,570.70 93.90 11,247,868.50 1.51 732,262,702.20
Combination 2 9,795,798.00 1.24 264,881.51 2.70 9,530,916.49
Total 791,770,983.21 100.00 29,963,033.69 761,807,949.52
RMB
Balance as at the end of the previous year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts accrued
on an individual basis
Provision for bad debts made
by portfolio
Including: portfolio 1 854,782,067.66 94.74 20,338,340.21 2.38 834,443,727.45
Combination 2 11,794,762.87 1.31 259,364.97 2.20 11,535,397.90
Total 902,199,660.44 100.00 38,467,723.55 863,731,936.89
As of December 31, 2025, the Company has no significant accounts receivable with individual provision for bad
debts.
As of December 31, 2025, the credit risk and provision for bad debts of accounts receivable of Portfolio 1 are as
follows:
RMB
Balance as at the end of the current year
Type Expected average loss
Book balance Provision for bad debts Book value
rate (%)
Within the credit period 1.28 711,685,368.76 9,123,382.28 702,561,986.48
More than 90 days overdue 100.00 31,816.23 31,816.23 -
(with impairment)
Total 743,510,570.70 11,247,868.50 732,262,702.20
- 53 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Disclosure by provision method for bad debts - Continued
As of December 31, 2025, the credit risk and provision for bad debts of accounts receivable of Portfolio 2 are as
follows:
RMB
Balance as at the end of the current year
Aging Expected average loss
Book balance Provision for bad debts Book value
rate (%)
Within 1 year 1.55 9,271,692.90 143,294.18 9,128,398.72
Over 3 years 100.00 67,250.00 67,250.00 -
Total 9,795,798.00 264,881.51 9,530,916.49
As of December 31, 2025, provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of the
year
Balance at the beginning of the - - -
year
- Transfer to credit loss incurred - - -
- Reversal of credit loss not - - -
incurred
Withdrawal in the current year 5,012,530.89 - 5,012,530.89
Reversal in the current year (13,392,133.71) (125,087.04) (13,517,220.75)
Charge-off in the current year - - -
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the 16,449,082.72 13,513,950.97 29,963,033.69
current year
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or write- end of the current
year Provision Other changes year
reversal off
Provision for
bad debts
There was no significant amount of provision for bad debts recovered or reversed this year.
(4) There are no accounts receivable actually written off this year.
- 54 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(5) Top 5 accounts receivable in terms of the ending balances by debtors
RMB
Proportion in accounts
Provision for bad debts
Book balance at the end of the receivable
Entity name Balance as at the end of the
year Ratio of balance at the end of
current year
the year (%)
Customer 1 128,443,330.43 16.22 1,653,660.98
Customer 2 100,119,032.87 12.64 1,287,356.61
Customer 3 90,314,120.50 11.41 1,170,120.08
Customer 4 84,819,285.15 10.71 1,127,277.20
Customer 5 73,851,813.87 9.33 949,605.87
Total 477,547,582.82 60.31 6,188,020.74
(1) Presentation of receivables financing by category
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Bank acceptance bills 22,584,820.72 6,804,603.68
The Group believes that the bank acceptance bills it holds are issued by banks with high credit ratings and carry
no significant credit risk; therefore, no provision for bad debts has been made.
As at December 31, 2025, the Group has no pledged receivables financing.
(3) As of December 31, 2025, receivables financing endorsed or discounted by the Group and not yet due on the
balance sheet date at the end of the period
RMB
Amount derecognized at the end Amount not derecognized at the
Item
of the period end of the period
Bank acceptance bills 76,263,471.66 -
(4) In 2025, the Group has no receivables financing with actual write-off.
- 55 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Disclosure of advances to suppliers by aging
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Aging
Amount Ratio (%) Amount Ratio (%)
Within 1 year 28,531,062.77 97.91 7,233,035.70 88.46
Over 3 years 70,145.61 0.24 62,085.80 0.76
Total 29,141,210.57 100.00 8,176,724.70 100.00
As of December 31, 2025, the Group has no advances to suppliers with an aging of more than 1 year and an
important amount.
(2) Top 5 advances to suppliers in terms of the ending balances by prepayment objects
The total amount of the top five prepayments categorized by prepayment objects as of the end of the year was
RMB 24,076,887.09, accounting for 77.27% of the ending balance of advances to suppliers.
(1) Disclosure by aging
RMB
Balance as at the end of Balance as at the end of
Aging
the current year the previous year
Within 1 year 3,292,434.09 2,878,553.22
Over 3 years 18,454,569.46 18,436,540.75
Total 22,366,272.14 21,580,746.02
Less: provision for bad debts 18,041,299.12 17,984,202.06
Book value 4,324,973.02 3,596,543.96
(2) Disclosure by nature of payment
RMB
Book balance at the end of Book balance at the end of
Nature of payment
the year the previous year
Current accounts 15,455,577.41 15,422,685.97
Guarantee and deposits 2,373,756.82 2,523,551.88
Export tax rebate 709,028.48 709,028.48
Petty cash and employee borrowings 293,128.97 296,058.95
Others 3,534,780.46 2,629,420.74
Total 22,366,272.14 21,580,746.02
- 56 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(3) Provision for bad debts
As of December 31, 2025, provision for bad debts is made based on general model of expected credit losses
RMB
Phase I Phase II Phase III
The entire expected The entire expected
Provision for bad debts Expected credit losses Total
credit loss over the credit loss over the
over the next 12
life of the instruments life of the instruments
months
(No credit loss) (With credit loss)
Balance at the beginning of the year 146,991.50 39,206.78 17,798,003.78 17,984,202.06
Balance at the beginning of the year
-Transfer to phase II (23,085.73) 23,085.73 - -
-Transfer to phase III - (7,445.09) 7,445.09 -
-Reversal to phase II - - - -
-Reversal to phase I - - - -
Withdrawal in the current year 22,343.56 36,164.89 2,425.00 60,933.45
Reversal in the current year - (3,836.39) - (3,836.39)
Charge-off in the current year - - - -
Write-off in the current year - -
Other changes - - -
Balance as at the end of the current 146,249.33 87,175.92 17,807,873.87 18,041,299.12
year
As of December 31, 2025, provision for bad debts shall be made according to the credit risk characteristic
combination
RMB
Balance as at the end of the current year
Item Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Provision for bad debts based on credit risk
characteristic combination 80.66 22,366,272.14 18,041,299.12 4,324,973.02
Provision for other receivables
As of December 31, 2025, the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average Provision for bad
Book balance Book value
loss rate (%) debts
Within 1 year 4.44 3,292,434.09 146,249.33 3,146,184.76
Over 3 years 96.50 18,454,569.46 17,807,873.87 646,695.59
Total 22,366,272.14 18,041,299.12 4,324,973.02
- 57 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(4) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at
Type beginning of the Recovery or Resale or write- the end of the
Provision Other changes
year reversal off current year
Provision for bad debts 17,984,202.06 60,933.45 (3,836.39) - - 18,041,299.12
There is no provision for bad debts recovery or reversal of significant amount in the current year.
(5) There are no other receivables actually written off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Proportion of
other receivables Provision for bad
Balance as at the (%) debts
name end of the current Balance as at the Nature of amount Aging Balance as at the
year end of the current end of the current
year year
Customer 1 Intercourse
payment
Customer 2 Intercourse Over 3 years
payment
Customer 3 Intercourse Within 1 year
payment
Customer 4 Intercourse Over 3 years
payment
Customer 5 980,461.06 4.38 Others Over 3 years 980,461.06
Total 16,287,801.03 72.82 15,242,801.03
(1) Classification of inventories
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Provision for Provision for
Item
Book balance inventory Book value Book balance inventory Book value
depreciation depreciation
Raw materials 507,546,211.97 36,085,589.06 471,460,622.91 453,134,126.81 14,875,137.34 438,258,989.47
Products in
progress
Finished
products
Entrusted
processing 6,920,970.30 508,174.16 6,412,796.14 1,710,557.68 496,720.51 1,213,837.17
materials
Total 1,011,973,907.29 127,331,551.78 884,642,355.51 911,706,239.87 121,949,538.99 789,756,700.88
Note: as of December 31, 2025, the book balance of the polarizer inventories was RMB 1,006,015,410.72
(December 31, 2024: RMB 905,482,857.11), with a corresponding provision for inventory depreciation of RMB
(2) Provision for inventory depreciation
RMB
Balance at the Increase in the current year Decrease in the current year Balance as at the
Item beginning of the Reversal or end of the current
year Provision Others Others year
write-off
- 58 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
Raw materials 14,875,137.34 21,310,338.94 - 99,887.22 - 36,085,589.06
Products in 35,879,526.66 - 44,098,641.74 - 58,000,907.47
progress
Finished 81,139,403.67 - 88,760,181.17 - 32,736,881.09
products
Entrusted 11,453.65 - - - 508,174.16
processing 496,720.51
materials
Total 121,949,538.99 138,340,722.92 - 132,958,710.13 - 127,331,551.78
- 59 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Provision for inventory depreciation - Continued
Specific basis for determining the net realizable value of inventories and the reasons for reversal or write-off of
the provision for inventory depreciation during the current year:
Reasons for reversing or
writing off provision for
Item Specific basis for determining net realizable value
inventory depreciation this
year
The net realizable value is determined by the estimated
Raw materials, goods in process and selling price of the relevant finished products minus the Received or sold in the
consigned processing materials estimated cost to be incurred until completion, estimated current year
selling and distribution expenses and relevant taxes.
The net realizable value is determined by the estimated
It is sold or market value is
Finished products selling price of the inventories minus the estimated
recovered in the current year
selling and distribution expenses and related taxes.
(3) As of December 31, 2025, there is no amount in the balance of inventories used for guarantee and no amount
of capitalization of borrowing costs.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Value-added tax to be deducted and input tax to be certified 56,593,276.80 2,100,314.86
Cost of return receivable 29,008,785.23 19,314,386.69
Prepaid income tax 47,034.59 47,034.59
Total 85,649,096.62 21,461,736.14
RMB
Changes in the current year
Other Provision
compr for
Balance at the Investment profit Chang Balance as at the impairment
Additi ehensi
Investees beginning of the or loss recognized es in Cash dividends Provisio end of the current Balance as
onal Reduced ve or profits
year under the equity other n for Others year
invest investment incom equity declared to be at the end
method impairm
ment e paid of the
ent current year
adjust
ment
I. Joint ventures
Shenzhen Guanhua Printing - - (7,280,934.44) - - - - - 104,274,952.84
and Dyeing Co., Ltd.
Sub-total 111,555,887.28 - - (7,280,934.44) - - - - - 104,274,952.84 -
II. Associates
Shenzhen Changlianfa Printing - - 269,945.31 - - (233,450.00) - - 3,308,634.07
and Dyeing Co., Ltd.
Sub-total 3,272,138.76 - - 269,945.31 - - (233,450.00) - - 3,308,634.07 -
Total 114,828,026.04 - - (7,010,989.13) - - (233,450.00) - - 107,583,586.91 -
- 60 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Details of other equity instrument investments
RMB
Changes in the current year
Dividend Accumulative
Gains accrued Loss accrued to Accumulative gains
income losses accrued Reasons designated as
Balance at the to other other Balance as at the recognized in accrued to other to other
comprehensive being measured at fair
Item beginning of Additional Reduced comprehensive comprehensive Others end of the current the current comprehensive
income value through other
the year investment investment income in the income in the year period income comprehensive income
current year current year
- - - (6,680,600.00) - 123,203,400.00 - 120,603,400.00 - The Group plans to
Hualian Development Group Co., Ltd. 129,884,000.00
hold it for a long time
- - 1,278,300.00 - - 20,921,200.00 1,037,735.85 18,361,343.74 - The Group plans to
Shenzhen Dailisi Underwear Co., Ltd. 19,642,900.00
hold it for a long time
- - - (468,900.00) - 12,712,800.00 869,411.17 11,212,800.00 - The Group plans to
Shenzhen Nanfang Textile Co.,Ltd. 13,181,700.00
hold it for a long time
Shenzhen Xinfang Knitting Factory - - - (270,100.00) - 2,424,200.00 198,000.00 1,900,200.00 - The Group plans to
Co., Ltd. hold it for a long time
- - - - - - - - (14,831,681.50) The Group plans to
Jintian Industry (Group) Co., Ltd. -
hold it for a long time
Total 165,402,900.00 - - 1,278,300.00 (7,419,600.00) - 159,261,600.00 2,105,147.02 152,077,743.74 (14,831,681.50)
(2) Description of derecognition in the current year
There is no derecognition of other equity instrument investments this year.
- 61 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Investment properties measured at the cost mode
RMB
Item Houses and buildings
I. Total original book value
(1) Outsourcing -
(2) Transfer of fixed assets -
(1) Disposal 903,094.00
(2) Other transfer-out -
II. Accumulated depreciation and accumulated amortization
(1) Provision or amortization 9,578,063.55
(2) Transfer of fixed assets -
(1) Disposal 218,548.99
(2) Other transfer-out -
III. Provision for impairment
(1) Provision -
(1) Disposal -
IV. Book value
(2) Investment properties without certificate of title
RMB
Reasons for failure to obtain
Item Book value
the certificate of title
Warrants not obtained for
Houses and buildings 10,174,628.79
historical reasons
- 62 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Fixed assets
RMB
Electronic equipment
Buildings and Machinery Transportation
Item and Total
constructions equipment equipment
Others
I. Total original book value
the year
(1) Purchase - 5,699,245.91 1,462,223.02 1,920,350.26 9,081,819.19
(2) Transfer from - 4,971,157.07 307,011.28 - 5,278,168.35
construction in progress
(3) Other changes - - - - -
(1) Disposal or scrapping 1,200,082.66 50,002,603.71 899,097.77 1,561,435.59 53,663,219.73
(2) Other changes - - - - -
year
II. Accumulated depreciation
the year
(1) Provision 23,096,381.84 199,623,463.69 2,160,850.05 3,486,951.33 228,367,646.91
(2) Other changes - - - - -
(1) Disposal or scrapping 402,358.83 45,088,586.69 753,558.59 1,310,319.85 47,554,823.96
(2) Other changes - - - - -
year
III. Provision for impairment
the year
(1) Provision - - - - -
(1) Disposal or scrapping 99,508.16 3,643,617.60 1,102.16 133,587.12 3,877,815.04
year
IV. Book value
year
of the year
(2) Fixed assets without certificate of title
RMB
Reasons for failure to obtain the
Item Book value
certificate of title
Warrants not handled for historical
Houses and buildings 10,438,495.07
reasons
(3) Fixed assets of mortgage and guarantee
As at December 31, 2025, the Group's fixed assets mortgaged for bank borrowings are detailed in Note (V) 21
"Assets with Restricted Ownership or Right of Use".
- 63 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
Construction in progress 179,954,389.78 5,814,012.03
(1) Status of construction in progress
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Net book value Book balance Net book value
impairment impairment
Installation of
machinery 179,954,389.78 - 179,954,389.78 5,814,012.03 - 5,814,012.03
equipment
- 64 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Changes in major projects under construction in the current year
RMB
Including: the
Amount Proportion of the Capitalization
Other Accumulated amount of the
transferred project rate of
Beginning Increase in the decreases in Progress of capitalization capitalized
Project Budget to fixed Ending balance accumulative interest in this Source of funds
balance current year current year construction (%) amount of interests in the
assets in the input in budget year (%)
interest current year
current year (%)
production line project 1,333,600,000.00 - 179,954,389.78 - - 179,954,389.78 13.49 13.49 176,406.29 176,406.29 2.24 funds and
(Line 8) borrowings
- 65 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Buildings and Machinery equipment Total
Item
constructions
I. Total original book value:
(1) Addition 9,977,227.43 1,438,279.28 11,415,506.71
(1) Termination of leases 1,520,405.16 1,249,146.48 2,769,551.64
II. Accumulated depreciation
(1) Provision 9,120,156.88 738,624.09 9,858,780.97
(1) Termination of leases 1,520,405.16 1,249,146.48 2,769,551.64
III. Provision for impairment
(1) Provision - - -
IV. Book value
- 66 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Details of intangible assets
RMB
Item Land use rights Software Patent right Total
I. Total original book value
(1) Purchase - 471,775.41 - 471,775.41
II. Accumulated accumulation
(1) Provision 891,565.32 3,563,403.84 - 4,454,969.16
III. Provision for impairment
IV. Book value
year
As at December 31, 2025, for the intangible assets pledged by the Group due to bank borrowings, please refer to
Note (V), 21 "Assets with restricted ownership or right of use" for details.
(1) Original book value of goodwill
RMB
Name of the investees Balance at the Increase in current Decrease in current Balance as at the end
or matters forming goodwill beginning of the year year year of the current year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen Meibainian Garment Co., Ltd. 2,167,341.21 - - 2,167,341.21
Total 11,782,099.76 - - 11,782,099.76
- 67 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Provision for impairment of goodwill
RMB
Name of the investees Balance at the Balance as at the
Increase in current Decrease in current
beginning of the end of the current
or matters forming goodwill year year
year year
SAPO Photoelectric 9,614,758.55 - - 9,614,758.55
Shenzhen Meibainian Garment Co., Ltd. 2,167,341.21 - - 2,167,341.21
Total 11,782,099.76 - - 11,782,099.76
RMB
Balance at the Amortization Balance as at the
Increase in the
Item beginning of the amount for the Other decreases end of the current
current year
year current year year
Decoration and facility 2,653,265.77 1,706,534.63
renovation costs
(1) Deferred tax assets without offset
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Deductible Deferred tax Deductible Deferred tax
temporary temporary
differences Assets differences Assets
Provision for credit losses 47,068,758.51 8,605,770.45 55,500,808.39 9,874,641.13
Provision for asset impairment 151,835,215.23 22,775,282.28 146,194,722.68 21,929,208.40
Unrealized profits of internal transactions 1,967,734.40 295,160.16 2,056,848.93 308,527.34
Employee compensation payable 4,469,827.00 1,117,456.75 4,173,800.00 1,043,450.00
Deferred income 83,392,067.07 12,508,810.06 95,821,558.58 14,373,233.79
Deductible losses 84,464,489.24 12,669,673.38 96,771,113.52 14,515,667.03
Fair value changes of investments in other 14,831,681.50 3,707,920.38
equity instruments
Lease liabilities 17,683,257.08 2,907,352.60 16,381,050.71 2,457,157.61
Changes in fair value of derivative 3,362,200.19 504,330.03
financial liabilities
Provision 14,370,007.84 2,155,501.18 9,451,090.40 1,417,663.56
Total 423,445,238.06 67,247,257.27 442,461,234.06 69,819,253.14
Based on the Group's profit forecast for the future periods, the Group believes that it is highly probable to obtain
sufficient taxable income to utilize the above-mentioned deductible temporary differences and deductible losses in
the future periods, so the relevant deferred tax assets are recognized.
- 68 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Deferred tax liabilities without offset
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Taxable temporary Deferred tax Taxable temporary Deferred tax
differences Liabilities differences Liabilities
Difference between initial recognition
cost and tax base of long-term equity
investments
Fair value changes of investments in other 152,077,743.74 38,019,435.94
equity instruments
Rent receivable 6,414,441.92 1,603,610.48 8,532,598.56 2,133,149.64
Right-of-use assets 16,894,843.60 2,784,125.41 15,338,117.86 2,300,717.68
Changes in fair value of financial assets 2,425,205.47 606,301.37
- -
held for trading
Total 239,895,928.09 58,534,396.54 244,173,453.52 59,509,551.60
(3) Deferred tax assets or liabilities listed net amount after write-offs
RMB
Ending balance of
Deduction amount Deduction amount of Balance of deferred
deferred tax assets or
of deferred tax deferred tax assets tax assets or
liabilities after write-
Item assets and liabilities and liabilities at the liabilities after
off of the current
at the end of the end of the previous offset at the end of
year
current year year the previous year
Deferred tax assets (11,469,966.38) 55,777,290.89 (10,898,741.94) 58,920,511.20
Deferred tax liabilities (11,469,966.38) 47,064,430.16 (10,898,741.94) 48,610,809.66
(4) Unrecognized deferred tax assets
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Deductible temporary differences 9,402,132.77 15,750,990.01
Deductible losses 325,441,799.20 365,594,502.67
Total 334,843,931.97 381,345,492.68
(5) Deductible losses from unrecognized deferred tax assets will be expired in the following years
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Total 325,441,799.20 365,594,502.67
- 69 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Item Balance as at the end of the current year Balance as at the end of the previous year
Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Advances for projects
and equipment
Investment funds to be
liquidated
Total 37,086,785.90 - 37,086,785.90 27,793,871.91 - 27,793,871.91
- 70 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
At the end of current year At the end of the previous year
Item
Book balance Book value Restricted type Restricted condition Book balance Book value Restricted type Restricted condition
Restricted right Account freezing and Restricted right Account freezing and
Monetary funds 685,396.65 685,396.65 38,844,838.96 38,844,838.96
of use guarantee of use guarantee
Notes receivable 30,291,952.76 30,291,952.76
of use not been derecognized of use been derecognized
Fixed assets 581,895,750.64 448,156,480.33 Mortgage
of use of use
Intangible assets 44,770,083.00 31,200,960.01 Mortgage
of use of use
Total 680,352,966.36 516,221,379.94 695,802,625.36 548,494,232.06
- 71 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Forward foreign exchange contracts 4,071,800.19 1,278,559.35
RMB
Balance as at the end of the Balance as at the end of the
Bill type
current year previous year
Bank acceptance bills - 31,095,540.29
The Group had no notes payable due but unpaid at the end of the year.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Payment for goods 315,492,749.54 282,510,771.35
Service fee 17,809,719.59 15,645,017.04
Payment for outsourcing processing 8,954,077.38 3,489,364.64
Royalties 1,949,556.00 2,006,578.00
Others 450,733.38 1,160,849.52
Total 344,656,835.89 304,812,580.55
As at December 31, 2025, the Group had no significant accounts payable with aging of over 1 year or overdue.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Rent and others 769,227.07 1,051,491.96
As at December 31, 2025, the Group had no significant advances from customers with aging of over 1 year.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Payment for goods 3,132,419.01 490,562.97
As at December 31, 2025, the Group had no significant contract liabilities with aging of more than 1 year.
- 72 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Presentation of employee compensation payable
RMB
Balance at the Increase in current Decrease in current Balance as at the end
Item
beginning of the year year year of the current year
Short-term compensation 53,625,879.32 227,614,006.70 230,183,092.64 51,056,793.38
Post-employment benefits - defined 22,812,522.26 23,512,522.26 -
contribution plans
Dismissal welfare 2,359,410.60 - 768,888.24 1,590,522.36
Total 56,685,289.92 250,426,528.96 254,464,503.14 52,647,315.74
(2) Presentation of short-term compensation
RMB
Balance at the Balance as at the
Increase in current Decrease in current
Item beginning of the end of the current
year year
year year
Salaries, bonuses, allowances and subsidies 51,400,482.93 199,876,062.05 202,797,724.38 48,478,820.60
Employee welfare expenses - 7,519,689.14 7,490,204.64 29,484.50
Social insurance premiums - 5,173,319.35 5,173,319.35 -
Including: medical insurance 3,818,635.71 3,818,635.71 -
premiums
Maternity insurance premiums - 640,272.20 640,272.20 -
Work-related injury insurance 714,411.44 714,411.44 -
premiums
Housing provident fund - 10,180,132.09 10,180,132.09 -
Union funds and employee education 4,864,804.07 4,541,712.18 2,548,488.28
funds
Total 53,625,879.32 227,614,006.70 230,183,092.64 51,056,793.38
(3) Presentation of defined contribution plans
RMB
Balance at the Balance as at the
Increase in current Decrease in current
Item beginning of the end of the current
year year
year year
Basic endowment insurance premiums 700,000.00 19,234,522.69 19,934,522.69 -
Supplementary endowment insurance 2,800,406.18 2,800,406.18 -
premiums
Unemployment insurance premium - 777,593.39 777,593.39 -
Total 700,000.00 22,812,522.26 23,512,522.26 -
The Group participates in the endowment insurance and unemployment insurance plans established by
government agencies in accordance with the regulations. According to the plans, the Group makes contributions to
such plans in accordance with the prescribed standards. Except for the above monthly contributions, the Group
has no further payment obligations. The corresponding expenses are included in the current profit or loss or the
cost of related assets when incurred.
The Group shall pay RMB 19,234,522.69 and RMB 777,593.39 to the endowment insurance and unemployment
insurance plans respectively for the current year (2024: RMB 15,756,686.06 and RMB 691,145.34). As of
December 31, 2025, the Group has fully paid the amount of pension insurance and unemployment insurance plans
payable during the reporting period.
- 73 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of the Balance as at the end of the
Taxation
current year previous year
Corporate income tax 3,763,975.34 4,720,967.29
Individual income tax 670,592.00 751,443.34
Value-added tax 251,065.10 592,143.28
Other taxes 1,121,186.11 789,176.93
Total 5,806,818.55 6,853,730.84
(1) Other payables by nature of payment
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Engineering equipment payment 43,922,031.06 56,213,373.95
Current accounts 46,981,495.00 53,333,604.97
Guarantee and deposits 57,213,864.04 37,775,687.75
Others 11,708,844.63 12,974,323.31
Total 159,826,234.73 160,296,989.98
(2) As at December 31, 2025, the Group had no significant other payables with aging of more than 1 year or
overdue.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Long-term borrowings maturing within one year (Note (V), 32) 48,033,108.58 47,011,978.04
Lease liabilities maturing within one year (Note (V), 33) 7,267,259.91 6,884,486.59
Estimated liabilities due within one year 10,664,297.79 9,451,090.40
Total 65,964,666.28 63,347,555.03
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Endorsed but undue acceptance bills 53,001,736.07 30,291,952.76
Payables for returned goods 31,679,349.15 23,747,757.33
Product quality assurance 3,705,710.05 -
Output tax to be carried forward in the value-added tax - 32,312.18
Total 88,386,795.27 54,072,022.27
- 74 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance as at the end of the Balance as at the end of the
Item Interest rate range
current year previous year
Guaranteed borrowings (Note) 167,899,085.74 209,400,848.04 3.26%-3.31%
Credit borrowings 141,852,077.65 - 2.24%
Total 309,751,163.39 209,400,848.04
Less: long-term borrowings maturing
within one year
Long-term borrowings due after one year 261,718,054.81 162,388,870.00
Note: SAPO Photoelectric, a subsidiary of the Company, obtained the loan by mortgaging the real estate such as
the plant it held, and the Company and Hengmei Optoelectronics Co., Ltd. provided 60% and 40% joint and
several liability guarantee for the loan respectively.
RMB
Balance as at the end of the Balance as at the end of the
Item
current year previous year
Lease liabilities 17,683,257.08 16,381,050.71
Total 17,683,257.08 16,381,050.71
Less: Lease liability maturing within one year 7,267,259.91 6,884,486.59
Lease liabilities due after one year 10,415,997.17 9,496,564.12
The Group's lease liabilities are presented as follows according to the maturity of undiscounted remaining
contractual obligations:
RMB
Within 1 month 1- 3 months 3 - 12 months 1 - 5 years Over 5 years Total
Balance as at the
end of the current 1,049,935.94 2,078,351.34 4,688,581.14 9,705,967.44 1,937,423.13 19,460,258.99
year
Balance as at the
end of the 1,105,714.51 2,425,877.50 3,879,671.64 7,808,943.06 3,098,158.97 18,318,365.68
previous year
RMB
Balance at the Increase in current Decrease in current Balance as at the end
Item Formation causes
beginning of the year year year of the current year
Government 3,940,329.84 16,819,577.07 83,469,949.03 Government
subsidies subsidies received
RMB
Changes in the current year
Balance at the Balance as at the
Item beginning of the Conversion of end of the current
New shares
year Bonus issue provident fund Others Sub-total year
issued
into shares
Total shares 506,521,849.00 - - - - - 506,521,849.00
- 75 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Balance at the Decrease in current Balance as at the end of
Item Increase in current year
beginning of the year year the current year
Equity premium 1,826,482,608.54 - - 1,826,482,608.54
Other capital reserves 135,117,216.09 - - 135,117,216.09
Total 1,961,599,824.63 - - 1,961,599,824.63
RMB
Amount for the current year
Less:
Less: the
retained
amount
income
included in
included in
other Attributabl
Balance at the Amount before other Balance as at the
comprehensiv Attributable to e to
Item beginning of the income tax this comprehensi Less: income tax end of the current
e income in parent company minority
year year ve income in expenses year
prior period after tax shareholder
prior periods
and s after tax
and
transferred to
transferred
current profit
to current
or loss
profit or loss
I. Other comprehensive income that (6,141,300.00) - - (1,535,325.00) (4,605,975.00) - 102,271,832.32
cannot be reclassified into profit or loss
instrument investments
II. Other comprehensive income to be - - - - - - -
reclassified into profit or loss later
Total of other comprehensive income 106,877,807.32 (6,141,300.00) - - (1,535,325.00) (4,605,975.00) - 102,271,832.32
RMB
Balance at the Decrease in current Balance as at the end of
Item Increase in current year
beginning of the year year the current year
Statutory surplus reserve 104,262,315.64 2,543,589.29 - 106,805,904.93
RMB
Item Amount for the current year Amount for the previous year
Undistributed profits at the beginning of the year before
adjustment
Total adjusted undistributed profits at the beginning of
- -
the year
Adjusted undistributed profit at the beginning of the 272,608,113.66
year
Plus: net profit attributable to shareholders of the parent
company in the current year
Less: Withdrawal of statutory surplus reserves 2,543,589.29 -
Distribution of dividends of ordinary shares (Note) 35,963,029.09 32,923,916.72
Undistributed profits at the end of the year 302,520,158.30 272,608,113.66
Note: According to the resolution of the General Meeting of Shareholders on May 19, 2025, the Company
distributed a cash dividend of RMB 0.71 (including tax) for every 10 shares, totally RMB 35,963,029.09
(including tax) based on the share capital of 506,521,849 shares as of December 31, 2024.
- 76 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 3,177,244,941.55 2,708,436,607.17 3,275,150,434.05 2,748,312,498.75
Other business 64,135,489.07 47,931,069.64 60,132,574.63 47,547,436.07
Total 3,241,380,430.62 2,756,367,676.81 3,335,283,008.68 2,795,859,934.82
(2) Primary business by product
RMB
Amount for the current year Amount for the previous year
Product type Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Polarizer sales business 3,067,530,570.03 2,682,406,961.72 3,161,332,478.08 2,720,719,735.99
Property leasing and 109,714,371.52 26,029,645.45
others
Total 3,177,244,941.55 2,708,436,607.17 3,275,150,434.05 2,748,312,498.75
(3) Primary business by region
RMB
Amount for the current year Amount for the previous year
Main business area Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Domestic 2,807,874,318.29 2,418,697,219.08 3,113,083,695.45 2,621,542,725.57
Overseas 369,370,623.26 289,739,388.09 162,066,738.60 126,769,773.18
Total 3,177,244,941.55 2,708,436,607.17 3,275,150,434.05 2,748,312,498.75
(4) Description of performance obligations
The Group's businesses are mainly the production and sales of polarizers. For goods sold to customers, the Group
recognizes revenue when the right of control of the goods is transferred, that is, when the goods are delivered to
the designated place of the other party and signed by the other party. The Group recognizes a receivable when the
goods are delivered to the customer because the delivery of the goods to the customer represents an unconditional
right to receive the contractual consideration, and the maturity of the payment depends only on the passage of time.
When the customer makes a prepayment for goods, the Group recognizes the transaction amount received as a
contract liability and recognizes the revenue when the goods are delivered to the customer.
The Group provides property services to customers, and such services represent performance obligations
performed over a period of time. For property service, the Group recognizes revenue in the course of providing
property service.
(5) Description of allocation to remaining performance obligations
As of December 31, 2025, the amount of contract liabilities corresponding to the performance obligations that the
Group has already signed contracts for but has not yet fulfilled or has not fully fulfilled is RMB 3,132,419.01,
which will be recognized as revenue when the customer obtains the control over goods.
- 77 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Amount for the current Amount for the previous
Item
year year
Property taxes 8,545,385.60 7,240,576.84
Urban maintenance and construction tax 375,243.29 397,643.06
Education surcharge 267,606.86 287,055.45
Other taxes 2,354,910.04 2,310,230.30
Total 11,543,145.79 10,235,505.65
RMB
Amount for the current Amount for the previous
Item
year year
Employee compensation 13,859,259.00 15,245,568.88
Sales service fee 14,066,794.72 19,491,891.54
Business entertainment expenses 1,130,045.94 1,117,751.47
Others 5,603,934.08 6,405,391.58
Total 34,660,033.74 42,260,603.47
RMB
Amount for the current Amount for the previous
Item
year year
Employee compensation 91,924,691.04 90,301,081.26
Depreciation cost 11,209,271.67 10,962,929.91
Professional service fees 5,540,619.77 10,520,874.85
Amortization of intangible assets 4,454,969.16 4,575,688.69
Property leasing and utilities 2,751,267.57 2,441,383.42
Business entertainment expenses 649,200.79 1,193,877.91
Others 12,082,069.80 14,351,985.54
Total 128,612,089.80 134,347,821.58
RMB
Amount for the current Amount for the previous
Item
year year
Employee compensation 17,031,748.89 15,844,594.49
Material consumption 81,524,391.18 83,483,679.76
Depreciation cost 2,056,127.28 3,275,385.23
Others 3,362,571.65 1,208,163.43
Total 103,974,839.00 103,811,822.91
The Group has no development expenses of R&D projects that meet the capitalization requirements.
- 78 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Item Amount for the current year Amount for the previous year
Interest expenses (Note) 7,121,172.59 17,858,022.73
Less: capitalized interest 176,406.29 -
Interest income 4,941,271.94 7,272,362.76
Exchange differences 9,266,532.25 (3,772,940.12)
Service fee and others 1,969,682.47 5,308,436.20
Total 13,239,709.08 12,121,156.05
Note: The interest expenses of the lease liabilities in 2025 is RMB 715,255.07.
RMB
Classification by nature Amount for the current year Amount for the previous year
Transfer-in of deferred income 16,497,827.07 16,401,790.63
Support funds for industry development (Note 1) 5,200,000.00 7,988,744.44
Support funds for enterprise development (Note 2) 124,784.96 989,098.49
Tax incentives 18,484,146.10 16,014,588.22
Others 538,576.40 89,885.75
Total 40,845,334.53 41,484,107.53
Note 1: The support funds of industry development mainly include the subsidy for the green manufacturing pilot
demonstration project of the Industry and Information Technology Bureau of Shenzhen Municipality and the
subsidy for the atmospheric environment quality improvement of the Ecology and Environment Bureau of
Shenzhen Municipality.
Note 2: The support funds of enterprise development mainly include the social security and post subsidies for
employing people lifted out of poverty and the one-time employment expansion subsidy for 2025 from the Human
Resources Bureau of Pingshan District, Shenzhen Municipality.
RMB
Item Amount for the current year Amount for the previous year
Losses on long-term equity investments accounted for under equity
(7,010,989.13) (10,701,895.08)
method
Investment income from disposal of long-term equity investments - 833,613.28
Investment income obtained during holding the financial assets held
for trading
Investment loss from derecognition of derivative financial liabilities (10,832,640.65) (6,454,000.00)
Dividend income from investments in other equity instrument during
the holding period
Total (1,198,003.94) (165,313.89)
- 79 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Amount for the current Amount for the previous
Sources of gains from changes in fair value
year year
Financial assets held for trading 2,425,205.47 2,413,062.80
Derivative financial liabilities (3,362,200.19) (1,278,559.35)
Total (936,994.72) 1,134,503.45
RMB
Amount for the current Amount for the previous
Item
year year
Gains on impairment of accounts receivable (Note (V), 4 (2)) 8,504,689.86 5,093,840.35
Gains on impairment of other receivables (Note (V), 7 (3)) (57,097.06) 6,606.31
Total 8,447,592.80 5,100,446.66
RMB
Amount for the current Amount for the previous
Item
year year
Inventory depreciation loss (138,340,722.92) (123,538,967.06)
Fixed asset impairment loss - (6,863,474.54)
Other asset impairment loss - (2,020,667.15)
Total (138,340,722.92) (132,423,108.75)
RMB
Amount included in the
Amount for the current Amount for the previous current non-recurring
Item
year year
profit or loss
Gains from unclaimed payables 5,108,649.83 1,439,654.31 5,108,649.83
Liquidated damages 1,121,434.64 275,672.99 1,121,434.64
Insurance compensation 20,692.22 24,911.31 20,692.22
Gains from the damage and scrapping of non-
current assets
Others 131,900.37 64,506.89 131,900.37
Total 6,395,734.45 1,805,086.92 6,395,734.45
- 80 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
RMB
Amount included in the
Amount for the current Amount for the previous current non-recurring
Item
year year
profit or loss
Losses on scrapping of non-current assets 39,914.17 51,361.87 39,914.17
Amercement outlay 3,390.66 44,000.00 3,390.66
Compensation expenses 842,646.03 468,146.00 842,646.03
Other losses 54,912.02 134,509.84 54,912.02
Total 940,862.88 698,017.71 940,862.88
(1) List of income tax expenses
RMB
Amount for the current Amount for the previous
Item
year year
Income tax expenses for the current period 9,673,404.67 8,562,225.60
Deferred tax expenses 3,132,165.81 1,264,876.43
Total 12,805,570.48 9,827,102.03
(2) Adjustment process of accounting profits and income tax expenses
RMB
Amount for the current Amount for the previous
Item
year year
Total profits 108,419,113.31 152,883,868.41
Income tax expenses calculated at statutory tax rate 27,104,778.33 38,220,967.10
Influence of different tax rates applicable to subsidiaries (8,786,686.81) (15,431,945.83)
Influence of adjustments to the income tax for the prior years 954,565.40 (27,243.77)
Influence of non-taxable income (1,122,137.29) (3,079,800.79)
Influence of nondeductible costs, expenses and losses 1,777,866.90 5,591,965.60
Utilization of unrecognized deductible losses and deductible temporary
(1,383,582.51) (7,061,678.51)
differences from prior periods and their tax effects
Tax effects of unrecognized deductible losses and deductible temporary
differences
Additional deduction for R&D expenses (12,633,463.47) (12,458,381.02)
Others 4,075.02 (5,122.03)
Income tax expenses 12,805,570.48 9,827,102.03
- 81 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Cash related to operating activities
Other cash received related to operating activities
RMB
Amount for the current Amount for the previous
Item
year year
Guarantee and deposit 95,357,705.42 30,652,489.87
Interest income 4,972,503.26 9,057,486.70
Government subsidies 9,265,114.80 24,242,842.93
Current accounts and others 23,348,683.10 23,056,150.45
Total 132,944,006.58 87,008,969.95
Other cash paid related to operating activities
RMB
Amount for the current Amount for the previous
Item
year year
Guarantee and deposit 39,437,305.24 57,908,823.39
Out-of-pocket expenses 49,378,916.99 68,667,614.18
Current accounts and others 2,373,874.85 27,179,768.77
Total 91,190,097.08 153,756,206.34
(2) Cash related to investing activities
Other cash received related to significant investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Structured deposits and wealth management products 1,000,000,000.00 950,000,000.00
Monetary fund 148,427,138.42 747,000,000.00
Certificates of deposit and others 709,600.00 -
Total 1,149,136,738.42 1,697,000,000.00
Other cash paid related to significant investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Structured deposits and wealth management products 1,150,000,000.00 950,000,000.00
Monetary fund - 649,000,000.00
Forward foreign exchange contracts 13,389,759.35 6,454,000.00
Total 1,163,389,759.35 1,605,454,000.00
- 82 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(2) Cash related to investing activities - continued
Other cash received related to investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Wealth management investment, structured deposits and others 1,149,136,738.42 1,697,000,000.00
Other cash paid related to investing activities
RMB
Amount for the current Amount for the previous
Item
year year
Structured deposits and wealth management products 1,150,000,000.00 950,000,000.00
Monetary fund - 649,000,000.00
Forward foreign exchange contracts 13,389,759.35 6,454,000.00
Total 1,163,389,759.35 1,605,454,000.00
(3) Cash related to financing activities
Other cash paid related to financing activities
RMB
Amount for the current Amount for the previous
Item
year year
Lease payments 12,484,469.33 9,508,462.57
Changes in various liabilities arising from financing activities
RMB
Balance at the Increase in current year Decrease in current year Balance as at the
Item beginning of the Non-cash Non-cash end of the
year Cash changes Cash changes current year
changes changes
Long-term 141,755,054.19 6,373,365.34 47,778,104.18 - 309,751,163.39
borrowings (Note)
Lease liabilities - 12,130,761.78 10,828,555.41 - 17,683,257.08
(Note)
Total 225,781,898.75 141,755,054.19 18,504,127.12 58,606,659.59 - 327,434,420.47
Note: long-term borrowings and lease liabilities include those maturing within one year.
(4) The Group does not present cash flows on a net basis.
(5) The Group has no significant activities that do not involve current cash receipts and payments but affect the
financial position of the enterprise or may affect the cash flows of the enterprise in the future.
- 83 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) Supplementary information to the statement of cash flows
RMB
Amount for the current Amount for the previous
Supplementary information
year year
Net profit 95,613,542.83 143,056,766.38
Plus: provision for assets impairment 138,340,722.92 132,423,108.75
Provision for credit losses (8,447,592.80) (5,100,446.66)
Depreciation of fixed assets and investment properties 237,945,710.46 237,717,328.95
Depreciation of right-of-use assets 9,858,780.97 9,651,343.75
Amortization of intangible assets 4,454,969.16 4,575,688.69
Amortization of long-term deferred expenses 1,706,534.63 2,934,915.74
Losses (gains) from disposal of fixed assets, intangible assets and other long-
(1,164,099.59) -
term assets
Losses (gains) on retirement of non-current assets 26,856.78 51,020.45
Losses from changes in fair value (income) 936,994.72 (1,134,503.45)
Financial expenses (income) 20,713,242.01 17,301,161.66
Investment loss (income) 1,198,003.94 165,313.89
Decrease (increase) in deferred tax assets 3,143,220.31 1,684,854.22
Increase (decrease) in deferred tax liabilities (11,054.50) (419,977.79)
Decrease (increase) in inventories (233,226,377.55) (176,903,495.67)
Decrease (increase) in operating receivables (34,639,831.51) 29,434,877.96
Increase (decrease) in operating payables 111,343,974.48 (164,173,431.78)
Net cash flows from operating activities 347,793,597.26 231,264,525.09
Ending balance of cash and cash equivalents 449,257,554.81 302,084,839.35
Less: beginning balance of cash and cash equivalents 302,084,839.35 461,420,457.33
Net increase (decrease) in cash and cash equivalents 147,172,715.46 (159,335,617.98)
(2) Composition of cash and cash equivalents
RMB
Balance as at the end of Balance as at the end of
Item
the current year the previous year
I. Cash 449,257,554.81 302,084,839.35
Including: cash on hand 15,510.21 4,751.69
Unrestricted bank deposits 449,242,044.60 302,080,087.66
Other unrestricted monetary funds - -
II. Cash equivalents - -
III. Balance of cash and cash equivalents at the end of the year 449,257,554.81 302,084,839.35
(3) As of the end of the year, the Group had no cash and cash equivalents with restricted use that were still
presented as such.
- 84 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(4) Monetary funds other than cash and cash equivalents
RMB
Balance as at the end Balance as at the end of the
Item Reason
of the current year previous year
Not available for payment
Bill and L/C guarantee 536.39 35,443,338.96
at any time
Interest on demand and agreement deposits and Not available for payment
Others 684,860.26 3,401,500.00 Account freezing
Total 706,895.57 38,876,604.47
(1) Foreign currency monetary items
RMB
Foreign currency balance Conversion at the end of
Exchange rate of the current year
Item at the end of the current
conversion
year RMB balance
Monetary funds 158,222,232.79
Including: USD 13,242,824.56 7.0288 93,081,165.25
JPY 1,437,610,760.10 0.0448 64,400,649.22
HKD 819,754.12 0.9032 740,418.32
Accounts receivable 77,112,536.74
Including: USD 10,935,180.15 7.0288 76,861,194.24
HKD 278,280.00 0.9032 251,342.50
Other receivables 495,717.51
Including: USD 70,526.62 7.0288 495,717.51
Accounts payable 178,353,317.24
Including: USD 242,062.43 7.0288 1,701,408.41
JPY 3,943,122,965.00 0.0448 176,651,908.83
Other payables 6,125,444.55
Including: USD 867,786.00 7.0288 6,099,494.24
JPY 15,131.00 0.0448 677.87
HKD 27,981.00 0.9032 25,272.44
(1)As a lessee
The Group leases a number of assets, including houses and buildings, for lease terms of 1 to 10 years. The above
right-of-use assets cannot be used for purposes such as borrowing mortgages, guarantees, etc.
The Group had no variable lease payments that were not included in the measurement of lease liabilities.
- 85 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(V) Notes to financial statements - continued
(1) As a lessee - continued
The short-term lease expenses subject to simplified accounting treatment and recognized in the current profit or
loss in this year amounted to RMB 1,218,112.00 (previous year: RMB 950,508.89).
The total cash outflows related to leases in the current year amounted to RMB 13,702,581.33 (previous year:
RMB 10,458,971.46).
(2) As a lessor
Operating lease as lessor
RMB
Including: revenue related to
Item Lease income variable lease payments not
included in lease receipts
Buildings and constructions 96,149,109.79 -
The operating leases of the Group as the lessor are related to houses and buildings, with lease terms ranging from
The revenue related to operating leases in the current year amounted to RMB 96,149,109.79 (previous year: RMB
amounted to RMB 0 (previous year: RMB 0).
RMB
Undiscounted lease receipts
Item Amount at the end of current Amount at the end of the
year previous year
The first year after the balance sheet date 62,836,298.43 66,825,466.35
The second year after the balance sheet date 42,497,987.11 49,946,457.62
The third year after the balance sheet date 31,889,090.71 31,103,495.38
The fourth year after the balance sheet date 9,303,836.50 8,785,825.58
The fifth year after the balance sheet date 5,911,687.52 6,625,510.75
Subsequent years 4,518,270.00 5,106,929.55
Total undiscounted lease receipts 156,957,170.27 168,393,685.23
- 86 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
（VI）R&D expenditures
(1) Presented by nature of expenses
RMB
Item Amount for the current year Amount for the previous year
Employee compensation 17,031,748.89 15,844,594.49
Material consumption 81,524,391.18 83,483,679.76
Depreciation cost 2,056,127.28 3,275,385.23
Others 3,362,571.65 1,208,163.43
Total 103,974,839.00 103,811,822.91
Including: expensed R&D expenditures 103,974,839.00 103,811,822.91
Capitalized R&D expenditures - -
(2) The Group has no development expenses of R&D projects that meet the capitalization requirements.
(3) The Group has no significant outsourced projects under research.
(VII) Changes in the scope of consolidation
The Company's subsidiary, Shenzhen Huaqiang Hotel Co., Ltd, completed its liquidation and distribution in 2024
and is no longer included in the scope of consolidation this year.
(VIII) Interests in other entities
(1) Structure of the enterprise group
Shareholding ratio Method
Main Registered capital Registration of the Company of
Name of subsidiaries Business nature (%)
premise (RMB) place acquisiti
Direct Indirect on
Shenzhen Lisi Industrial Establish
Shenzhen RMB 2,360,000.00 Shenzhen Property leasing 100.00 -
Development Co., Ltd. ment
Shenzhen Shenfang
Establish
Property Management Shenzhen RMB 1,600,400.00 Shenzhen Property management 100.00 -
ment
Co., Ltd.
Shenzhen Meibainian Production and sales Establish
Shenzhen RMB 13,000,000.00 Shenzhen 100.00 -
Garment Co. Ltd. of textiles ment
Shenzhen Shenfang
Sungang Property Establish
Shenzhen RMB 1,000,000.00 Shenzhen Property management 100.00 -
ment
Management Co., Ltd.
Shenzhen SAPO Production and sales Acquisiti
Shenzhen RMB 583,333,333.00 Shenzhen 60.00 -
Photoelectric Co., Ltd. of polarizers on
SATO (Hong Kong) Establish
Hong Kong HKD 10,000.00 Hong Kong Polarizer sales - 100.00
Limited ment
- 87 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(VIII) Interests in other entities - continued
(2) Significant non-wholly-owned subsidiaries
RMB
Dividends declared to be
Profit or loss attributable Balance of minority
Shareholding ratio by distributed to minority
Name of subsidiaries to minority shareholders interests at the end of the
minority shareholders shareholders in the
in the current year current year
current year
Shenzhen SAPO
Photoelectric Co., 40.00% 27,194,879.81 - 1,310,645,603.69
Ltd.
(3) Key financial information of significant non-wholly-owned subsidiaries
RMB
SAPO Photoelectric
Balance as at the end of Balance as at the end of
Item the current year/ the previous year/
Amount for the current Amount for the previous
year year
Current assets 2,277,246,004.30 2,039,673,042.84
Non-current assets 1,960,766,749.97 1,998,903,130.31
Total assets 4,238,012,754.27 4,038,576,173.15
Current liabilities 613,303,419.14 567,603,106.30
Non-current liabilities 353,456,061.45 267,706,992.70
Total liabilities 966,759,480.59 835,310,099.00
Operating revenue 3,137,568,960.10 3,230,006,072.51
Net profit 67,987,199.53 134,214,080.34
Total comprehensive income 67,987,199.53 134,214,080.34
Cash flows from operating activities 322,248,751.41 205,666,636.23
(VIII) Interests in other entities - continued
Summarized financial information of insignificant joint ventures and associates
RMB
Balance as at the end of Balance as at the end of
the current year/ the previous year/
Item
Amount for the current Amount for the previous
year year
Joint ventures:
Total of investment book value 104,274,952.84 111,555,887.28
Total amounts of the following items calculated at shareholding ratio
- Net profit (loss) (7,280,934.44) (10,814,606.80)
-Other comprehensive income - -
-Total comprehensive income (7,280,934.44) (10,814,606.80)
Associates:
Total of investment book value 3,308,634.07 3,272,138.76
Total amounts of the following items calculated at shareholding ratio
-Net profit 269,945.31 112,711.72
-Other comprehensive income - -
-Total comprehensive income 269,945.31 112,711.72
- 88 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(IX) Government grants
(1) As of December 31, 2025, the Group had no government subsidies recognized at the amount receivable.
(2) Liability items involving government subsidies
RMB
Subsidies Amount Related to
Amount Other
Amount at the increased in the included in assets/
included in changes in Amount at the end
Liabilities beginning of current year non-operating
other income the current of current year Related to
the year revenue in the
in the current year income
current year
year
Deferred 16,497,827.0 Related to
income 7 assets
(3) Government subsidies included in the current profit or loss
RMB
Amount for the previous
Grants Amount for the current year
year
Other income 21,822,612.03 25,379,633.56
(X) Risks associated with financial instruments
THE GROUP'S MAIN FINANCIAL INSTRUMENTS INCLUDE MONETARY FUNDS, FINANCIAL
ASSETS HELD FOR TRADING, NOTES RECEIVABLE, ACCOUNTS RECEIVABLE, RECEIVABLES
FINANCING, OTHER RECEIVABLES, OTHER EQUITY INSTRUMENT INVESTMENTS, SHORT-TERM
BORROWINGS, DERIVATIVE FINANCIAL LIABILITIES, NOTES PAYABLE, ACCOUNTS PAYABLE,
OTHER PAYABLES, OTHER CURRENT LIABILITIES AND LONG-TERM BORROWINGS, ETC. AT THE
END OF THE YEAR, THE FINANCIAL INSTRUMENTS HELD BY THE GROUP ARE AS FOLLOWS, AND
THE DETAILS ARE DESCRIBED IN NOTE (V). RISKS ASSOCIATED WITH THESE FINANCIAL
INSTRUMENTS AND THE RISK MANAGEMENT POLICIES ADOPTED BY THE GROUP TO MITIGATE
THESE RISKS ARE DESCRIBED BELOW. THE GROUP'S MANAGEMENT MANAGES AND MONITORS
THESE EXPOSURES TO ENSURE THAT THE RISKS ARE CONTROLLED WITHIN CERTAIN LIMITS.
- 89 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
RMB
Amount at the end of current Amount at the end of the
Item
year previous year
Financial assets
Measured at fair value through current profit or loss
Financial assets held for trading 736,341,286.18 731,419,904.42
Measured at fair value through other comprehensive income
Receivables financing 22,584,820.72 6,804,603.68
Other equity instrument investments 159,261,600.00 165,402,900.00
Measured at amortized costs
Monetary funds 449,964,450.38 340,961,443.82
Notes receivable 85,980,246.52 47,305,221.88
Accounts receivable 761,807,949.52 863,731,936.89
Other receivables 4,324,973.02 3,596,543.96
Financial liabilities
Measured at fair value through current profit or loss
Derivative financial liabilities 4,071,800.19 1,278,559.35
Measured at amortized costs
Notes payable - 31,095,540.29
Accounts payable 344,656,835.89 304,812,580.55
Other payables 159,826,234.73 160,296,989.98
Other current liabilities 53,001,736.07 30,291,952.76
Long-term borrowings 309,751,163.39 209,400,848.04
THE GROUP USES SENSITIVITY ANALYSIS TECHNIQUES TO ANALYZE THE POSSIBLE IMPACT OF
REASONABLE AND POSSIBLE CHANGES IN RISK VARIABLES ON THE CURRENT PROFIT OR LOSS
AND SHAREHOLDERS' EQUITY. AS ANY RISK VARIABLE SELDOM CHANGES IN ISOLATION, AND
THE CORRELATION BETWEEN THE VARIABLES WILL HAVE A SIGNIFICANT EFFECT ON THE
FINAL AFFECTED AMOUNT OF THE CHANGE OF A RISK VARIABLE, THE FOLLOWING CONTENTS
ARE CARRIED OUT UNDER THE ASSUMPTION THAT THE CHANGE OF EACH VARIABLE IS
INDEPENDENTLY:
THE GROUP'S OBJECTIVE IN RISK MANAGEMENT IS TO ACHIEVE AN APPROPRIATE BALANCE
BETWEEN RISK AND RETURN, MINIMIZE THE NEGATIVE IMPACT OF RISK ON THE GROUP'S
OPERATING PERFORMANCE, AND MAXIMIZE THE INTERESTS OF SHAREHOLDERS AND OTHER
EQUITY INVESTORS. BASED ON THIS RISK MANAGEMENT OBJECTIVE, THE BASIC STRATEGY OF
THE GROUP'S RISK MANAGEMENT IS TO IDENTIFY AND ANALYZE VARIOUS RISKS FACED BY
THE GROUP, ESTABLISH AN APPROPRIATE RISK TOLERANCE BOTTOM LINE AND CONDUCT RISK
MANAGEMENT, AND TIMELY AND RELIABLY SUPERVISE VARIOUS RISKS TO CONTROL RISKS
WITHIN A LIMITED SCOPE.
- 90 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
CURRENT YEAR - CONTINUED
Foreign exchange risk refers to the risk of losses arising from the exchange rate fluctuation. The Group's exposure
to foreign exchange risk is mainly related to the USD, the JPY and the HKD. Except for some of the Group's
import purchases and export sales in Chinese mainland, which were mainly settled in USD, JPY and HKD, the
Group's other major business activities were settled in RMB.
As of December 31, 2025, except for the foreign currency monetary items in Note (V), 56, the assets and
liabilities of the Group were all in RMB. The foreign currency balances of assets and liabilities (converted into
RMB) listed in the table below may expose the Group to foreign exchange risks that could impact its operating
performance.
RMB
Balance as at the end of the current year
Item
Assets Liabilities
USD 170,438,077.00 7,800,902.65
JPY 64,400,649.22 176,652,586.70
HKD 991,760.82 25,272.44
The Group closely monitors the impact of exchange rate changes on the Group's foreign exchange risk and will
take measures to avoid foreign exchange risk according to the actual situation.
Sensitivity analysis of foreign exchange risk
With other variables unchanged, the pre-tax impact of reasonable changes in exchange rates on the current profit
or loss and shareholders' equity is as follows:
RMB
CURRENT YEAR PREVIOUS YEAR
FLUCTUATION IN IMPACT ON IMPACT ON
ITEM IMPACT ON SHAREHOLDERS' IMPACT ON SHAREHOLDERS'
EXCHANGE RATE
PROFIT EQUITY PROFIT EQUITY
ALL
REVALUATION
FOREIGN
AGAINST RMB BY 2,567,586.26 2,567,586.26 (2,401,052.54) (2,401,052.54)
CURRENCI
ES
ALL
DEPRECIATION
FOREIGN
AGAINST RMB BY (2,567,586.26) (2,567,586.26) 2,401,052.54 2,401,052.54
CURRENCI
ES
The Group's risk of changes in cash flows of financial instruments due to changes in interest rates is mainly
related to bank borrowings with floating rates. The Group continues to closely monitor the impact of interest rate
changes on the Group's interest rate risk. The Group's policy is to maintain the floating rate of these borrowings,
and there are currently no interest rate swap arrangements.
- 91 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
CURRENT YEAR - CONTINUED
SENSITIVITY ANALYSIS OF INTEREST RATE RISK:
WITH OTHER VARIABLES UNCHANGED, THE PRE-TAX IMPACT OF REASONABLE CHANGES IN
INTEREST RATES ON THE CURRENT PROFIT OR LOSS AND SHAREHOLDERS' EQUITY IS AS
FOLLOWS:
RMB
CURRENT YEAR PREVIOUS YEAR
FLUCTUATION IMPACT ON IMPACT ON
ITEM IN EXCHANGE IMPACT ON SHAREHOLDERS' IMPACT ON SHAREHOLDERS'
RATE PROFIT EQUITY PROFIT EQUITY
IMPACT IMPACT
FLOATING RATE (3,094,866.74) (3,094,866.74)
UP 1% (2,092,051.50) (2,092,051.50)
BORROWINGS
FLOATING RATE 3,094,866.74 3,094,866.74
DOWN 1% 2,092,051.50 2,092,051.50
BORROWINGS
As of December 31, 2025, the maximum credit risk exposure that may cause financial losses to the Group mainly
comes from the losses of the Group's financial assets due to the failure of the other party to the contract to perform
its obligations, including: monetary funds, financial assets held for trading, notes receivable, accounts receivable,
receivables financing and other receivables. On the balance sheet date, the book value of the Group's financial
assets represents its maximum credit risk exposure.
In order to reduce the credit risk, the Group arranges special personnel to determine the credit line, conduct credit
approval, and implement other monitoring procedures to ensure that necessary measures are taken to recover
overdue debts. In addition, the Group reviews the recovery of financial assets on each balance sheet date to ensure
that adequate provision for credit losses has been made for the relevant financial assets. Therefore, the
management of the Group believes that the credit risk assumed by the Group has been greatly reduced.
The Group's monetary funds are deposited in banks with high credit ratings, so the monetary funds only have low
credit risk.
As of December 31, 2025, the balance of accounts receivable from the top five customers of the Group was RMB
has no other significant credit risk exposure concentrated in a single financial asset or a portfolio of financial
assets with similar characteristics.
When managing liquidity risk, the Group maintains cash and cash equivalents that the management believes are
sufficient and monitors them to meet the Group's operational needs and reduce the impact of fluctuations in cash
flows. The Group's management monitors the use of bank borrowings and ensures compliance with loan
agreements.
- 92 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
CURRENT YEAR - CONTINUED
AS OF DECEMBER 31, 2025, THE UNUSED COMPREHENSIVE BANK CREDIT LINE OF THE GROUP
WAS RMB 113,649.52.
THE GROUP'S FINANCIAL LIABILITIES HELD ARE PRESENTED AS FOLLOWS BASED ON THE
MATURITY OF UNDISCOUNTED REMAINING CONTRACTUAL OBLIGATIONS:
RMB
Item Within 1 year 1 - 5 years Over 5 years Total
Accounts payable 344,656,835.89 - - 344,656,835.89
Other payables 159,826,234.73 - - 159,826,234.73
Other current liabilities 53,001,736.07 - - 53,001,736.07
Long-term borrowings 55,787,469.56 269,158,669.95 - 324,946,139.51
Lease liabilities 7,816,868.42 9,705,967.44 1,937,423.13 19,460,258.99
Derivative financial liabilities 4,071,800.19 - - 4,071,800.19
RMB
Transfer Nature of transferred Amount of Derecognition Judgment basis for derecognition
method financial assets transferred financial
assets
The credit risk level of the acceptance bank of
the bank acceptance bill transferred by
Outstanding bank
Transfer by endorsement is relatively high, and almost all
acceptance bills classified 76,263,471.66 Derecognized
endorsement the risks and rewards of the ownership of the
as receivables financing
corresponding receivables financing have been
transferred
The credit risk level of the acceptance bank of
Outstanding bank the bank acceptance bill transferred by
Transfer by
acceptance bills classified 53,001,736.07 Not derecognized endorsement is not high, and almost all the
endorsement
as notes receivable risks and rewards of the ownership of the
relevant notes receivable are retained
Total 129,265,207.73
RMB
Amount of
Transfer method of Gains or losses related
Item derecognized financial
financial assets to derecognition
assets
Transfer by 76,263,471.66
Receivables financing -
endorsement
- 93 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(X) Risks associated with financial instruments - continued
RMB
Amount of assets arising Amount of liabilities
Asset transfer
Item from continued arising from continued
method
involvement involvement
Transfer by 53,001,736.07 53,001,736.07
Notes receivable
endorsement
(XI) Disclosure of fair value
RMB
Fair value at the end of current year
Measured at the fair Measured at the fair
Item Measured at the fair
value of the 2nd value of the 3rd Total
value of the 1st level
level level
Continuous fair value measurement
(I) Financial assets held for trading - 736,341,286.18 - 736,341,286.18
(II) Receivables financing - - 22,584,820.72 22,584,820.72
(III) Other equity instrument investments - - 159,261,600.00 159,261,600.00
Total assets constantly measured at fair 736,341,286.18 181,846,420.72 918,187,706.90
value
(IV) Derivative financial liabilities - 4,071,800.19 - 4,071,800.19
Total liabilities constantly measured at 4,071,800.19 - 4,071,800.19
fair value
sustainable items measured on the basis of fair value of level 2
RMB
Fair value at the end of
Item current year Valuation techniques Input value
Discounted cash flow
Financial assets held for trading 736,341,286.18 Expected rate of return
method
The contracted delivery
exchange rate under forward
Discounted cash flow
Derivative financial liabilities 4,071,800.19 foreign exchange contracts and
method
the market forward exchange
rate as of the balance sheet date
sustainable items measured on the basis of fair value of level 3
RMB
Fair value at the end of
Item current year Valuation techniques Input value
Discounted cash flow
Receivables financing 22,584,820.72 Discount rate
method
Comparable Public P/B ratio of similar listed
Company Method companies
Comparable earnings
Other equity instrument investments 159,261,600.00 Market price
method
Statement adjustment
Book value
method
- 94 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XI) Disclosure of fair value - continued
Financial assets and liabilities not measured at fair value mainly include: monetary funds, notes receivable,
accounts receivable, other receivables, notes payable, accounts payable, other payables, other current liabilities
and long-term borrowings, etc.
The Group's management believes that the book value of financial assets and financial liabilities measured at
amortized costs in the financial statements is close to the fair value of such assets and liabilities.
(XII) Related parties and related party transactions
Registered Proportion of
Name Registration place Business nature capital Parent company's
voting rights of the
shareholding ratio
(RMB 10,000) parent company in
in the Company (%)
the Company (%)
Equity
Floor 18, Investment investments,
Shenzhen Investment Holdings Building, Shennan
real estate 3,358,600.00 46.21 46.21
Co., Ltd. Road, Futian
District, Shenzhen development,
etc.
Parent company of the Company: the parent company of the Company is a wholly state-owned company approved
and authorized by the Shenzhen Municipal Government, which exercises the functions of the investor in
accordance with the law for the state-owned enterprises within the authorized scope.
During the reporting period, the registered capital of the parent company changed as follows:
RMB 10,000
Balance at the beginning of the Balance as at the end of the
Increase in current year Decrease in current year
year current year
See Note (VIII), 1 for details of the subsidiary.
See Note (V), 10 for details of the Company's joint ventures and associates.
- 95 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII) Related parties and related-party transactions - continued
Name of related party Relationship with the Company
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Shentou Property Development Co., Ltd.
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Seg Longyan Energy Technology Co., Ltd.
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Guoren P&C Insurance Co., Ltd. Shenzhen Branch
Holdings Co., Ltd.
Shenzhen Talent Service Center (Shenzhen Talent Subsidiary of the parent company of the Company, Shenzhen Investment
Market) Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Property Management Co., Ltd.
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Cultural Enterprise Development Co., Ltd.
Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Investment Holdings Development Co., Ltd.
Holdings Co., Ltd.
Shenzhen Investment Holdings Digital Technology Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Leaguer Education Co., Ltd.
Holdings Co., Ltd.
Shenzhen Legal Training Center Co., Ltd. Subsidiary of the parent company of the Company, Shenzhen Investment
Holdings Co., Ltd.
Shenzhen Investment Holdings Sports Event Subsidiary of the parent company of the Company, Shenzhen Investment
Development Co., Ltd. Holdings Co., Ltd.
Shenzhen Silver Lake Convention Center (Hotel) Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Wuzhou Guest House Operation Branch of Shenzhen Subsidiary of the parent company of the Company, Shenzhen Investment
Wuzhou International Hotel Management Group Co., Holdings Co., Ltd.
Ltd.
Jiazhihua Center Cinema of Shenzhen Cultural Subsidiary of the parent company of the Company, Shenzhen Investment
Enterprise Development Co., Ltd. Holdings Co., Ltd.
Shenzhen Penglao Human Resources Management Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. Holdings Co., Ltd.
Shenzhen Talent Recruitment International (Group) Co., Subsidiary of the parent company of the Company, Shenzhen Investment
Ltd. (formerly known as Shenzhen Talent Recruitment Holdings Co., Ltd.
International Co., Ltd.)
Subsidiary of the parent company of the Company, Shenzhen Investment
Shenzhen Guohui Hotel Co., Ltd.
Holdings Co., Ltd.
Xinmei Fontana Holding (Hong Kong) Limited One of the directors of the Company is a director of SAPO Photoelectric
Kunshan Xinmei Optical Technology Co., Ltd. One of the directors of the Company is a director of SAPO Photoelectric
Minority shareholder of the Company's subsidiary SAPO Photoelectric;
Hengmei Optoelectronics Co., Ltd.
one of the directors of the Company is a director of SAPO Photoelectric
A subsidiary of a minority shareholder of SAPO Photoelectric, a
Fuzhou Hengmei Optoelectronics Co., Ltd.
subsidiary of the Company
A subsidiary of a minority shareholder of SAPO Photoelectric, a
Haosheng Hengxin (Wuxi) Materials Co., Ltd.
subsidiary of the Company
Hoardsun Advanced Materials Korea LLC A subsidiary of a minority shareholder of SAPO Photoelectric, a
subsidiary of the Company
Shenzhen Xinfang Knitting Factory Co., Ltd. The Company's participated company
Shenzhen Dailisi Underwear Co., Ltd. The Company's participated company
- 96 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII) Related parties and related-party transactions - continued
(1) Procurement of goods/receipt of labor services
RMB
Content of related party Amount for the current Amount for the
Related party
transactions year previous year
Equipment costs, optical
Hengmei Optoelectronics Co., Ltd. film materials and 179,843,047.65 2,874.60
processing
Xinmei Fontana Holding (Hong Kong) Limited Raw materials 177,573,836.05 -
Kunshan Xinmei Optical Technology Co., Ltd. Raw materials 18,328,566.87 -
Hoardsun Advanced Materials Korea LLC Raw materials 5,388,320.92 -
Fuzhou Hengmei Optoelectronics Co., Ltd. Optical film materials 1,370,344.95 -
Shenzhen Seg Longyan Energy Technology Co., Ltd. Purchase of electricity 1,061,155.37 1,146,803.41
Rental and property
Shenzhen Investment Holdings Development Co., Ltd. 618,425.18 65,786.40
management fees
Guoren P&C Insurance Co., Ltd. Shenzhen Branch Insurance premiums 431,262.04 285,104.25
Shenzhen Talent Service Center (Shenzhen Talent Outsourcing service fee
Market)
Shenzhen Investment Holdings Digital Technology Information construction
Co., Ltd.
Shenzhen Penglao Human Resources Management Labor dispatch fees
Co., Ltd.
Shenzhen Legal Training Center Co., Ltd. Training expenses 61,136.99 34,597.00
Shenzhen Leaguer Education Co., Ltd. Training expenses 27,944.70 20,449.02
Shenzhen Property Management Co., Ltd. Property management fee 25,899.76 47,258.75
Equipment costs,
Shenzhen Cultural Enterprise Development Co., Ltd. 23,416.00 136,298.00
exhibition fees
Shenzhen Talent Recruitment International (Group) Campus recruitment fees
Co., Ltd. (formerly known as Shenzhen Talent 14,342.15 7,000.00
Recruitment International Co., Ltd.)
Shenzhen Silver Lake Convention Center (Hotel) Co., Service fee
Ltd.
Wuzhou Guest House Operation Branch of Shenzhen Service fee
Wuzhou International Hotel Management Group Co., 8,352.00 -
Ltd.
Shenzhen Guanhua Printing and Dyeing Co., Ltd. Interest expenses 3,316.31 9,025.99
Jiazhihua Center Cinema of Shenzhen Cultural Service fee
Enterprise Development Co., Ltd.
Shenzhen Guohui Hotel Co., Ltd. Service fee 1,200.00 -
Shenzhen Investment Holdings Sports Event Marketing expenses
- 80,000.00
Development Co., Ltd.
Shenzhen Property Management Co., Ltd. Property management fee - 47,258.75
Total 385,172,921.07 2,039,449.40
- 97 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII) Related parties and related-party transactions - continued
(2) Sales of goods/ rendering of services
RMB
Content of related party Amount for the current Amount for the
Related party
transactions year previous year
Haosheng Hengxin (Wuxi) Materials Co., Ltd. Processing fees 7,267,737.20 -
Fuzhou Hengmei Optoelectronics Co., Ltd. Processing fees 910,142.37 -
Hengmei Optoelectronics Co., Ltd. Processing fees 577,658.64 -
Shenzhen Xinfang Knitting Factory Co., Ltd. Lease 11,428.57 -
Shenzhen Changlianfa Printing and Dyeing Co., Ltd. Lease 11,428.57 -
Total 8,778,395.35 -
(3) Related party leases
The Group as lessor
RMB
Lease income Lease income
Lessee Type of leased asset recognized in this recognized in previous
period period
Shenzhen Xinfang Knitting Factory Co., Ltd. Houses and buildings 11,428.57 -
Shenzhen Changlianfa Printing and Dyeing Co., Ltd. Houses and buildings 11,428.57 -
Total 22,857.14 -
The Group as lessee
RMB
Amount in the current period
Rental costs for
Variable lease
short-term leases Interest
payments not
Type of and low-value expense on Increase in
Lessor included in the
leased asset asset leases for Paid rents lease right-of-use
measurement of
simplified liabilities assets
lease liabilities (if
processing (if assumed
applicable)
applicable)
Shenzhen Investment -
Houses and
Holdings Development 389,545.30 442,664.03 7,295.94 2,541,344.41
buildings
Co., Ltd.
RMB
Amount in the current period
Rental costs for
Variable lease
short-term leases Interest
payments not
Type of and low-value expense on Increase in
Lessor included in the
leased asset asset leases for Paid rents lease right-of-use
measurement of
simplified liabilities assets
lease liabilities (if
processing (if assumed
applicable)
applicable)
Shenzhen Investment
Houses and
Holdings Development 65,786.40 - 65,786.40 - -
buildings
Co., Ltd.
(4) Loans from and to related parties
RMB
Related party Amount borrowed Start date Maturity date Notes
Borrowed from
Shenzhen Guanhua Printing and Annual interest rate
Dyeing Co., Ltd. 0.15%
- 98 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XII) Related parties and related-party transactions - continued
(5) Remuneration of key management personnel
RMB
Item Amount for the current year Amount for the previous year
Remuneration of key officers 6,322,000.00 6,932,991.00
(1) Receivables
RMB
Balance as at the end of the Balance as at the end of the
current year previous year
Project Related party
Provision for bad Provision for bad
Book balance Book balance
debts debts
Haosheng Hengxin (Wuxi) Materials
Co., Ltd.
Fuzhou Hengmei Optoelectronics
Accounts Co., Ltd.
receivable Hengmei Optoelectronics Co., Ltd. 652,754.27 538,757.54 - -
Shenzhen Shentou Property
Development Co., Ltd.
Total 4,943,014.86 1,431,280.10 6,027.00 602.70
Kunshan Xinmei Optical Technology
Co., Ltd.
Shenzhen Investment Holdings Digital
Advances to 96,500.00 - 96,500.00 -
Technology Co., Ltd.
suppliers
Shenzhen Investment Holdings
Development Co., Ltd.
Total 4,894,944.67 - 96,500.00 -
Shenzhen Dailisi Underwear Co., Ltd. 1,100,000.00 55,000.00 1,100,000.00 55,000.00
Shenzhen Investment Holdings
Other receivables 106,237.44 5,311.87 73,096.00 3,910.64
Development Co., Ltd.
Total 1,206,237.44 60,311.87 1,173,096.00 58,910.64
(2) Payables
RMB
Balance as at the end of the Balance as at the end of the
Project Related party
current year previous year
Xinmei Fontana Holding (Hong Kong) Limited 14,853,562.10 -
Fuzhou Hengmei Optoelectronics Co., Ltd. 1,370,344.95 -
Accounts payable
Hengmei Optoelectronics Co., Ltd. 633,118.20 -
Total 16,857,025.25 -
Shenzhen Guanhua Printing and Dyeing Co., Ltd. 3,806,454.17 3,816,981.88
Shenzhen Changlianfa Printing and Dyeing Co.,
Ltd.
Shenzhen Xinfang Knitting Factory Co., Ltd. 244,789.85 244,789.85
Shenzhen Investment Holdings Digital
Technology Co., Ltd.
Shenzhen Investment Holdings Development
Other payables 18,417.00 29,238.40
Co., Ltd.
Shenzhen Cultural Enterprise Development Co.,
Ltd.
Shenzhen Investment Holdings Sports Event
- 80,000.00
Development Co., Ltd.
Shenzhen Property Management Co., Ltd. - 7,934.52
Total 6,409,336.97 6,497,980.44
- 99 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XIII) Commitments and contingencies
(1) Capital commitments
RMB
Amount at the end of current Amount at the end of previous
Item
year year
Contracted but not recognized in the financial statements
Commitment on construction and purchase of long-lived assets 7,977,917.50 53,374.76
As of December 31, 2025, the Group had no contingencies such as pending litigations and external guarantees to
be discolsed.
(XIV) Events after the balance sheet date
On March 26, 2026, the profit distribution proposal for the year 2025 was approved by the Board of the Company.
It is proposed that the Company distribute cash dividends of RMB 0.48 per ten shares (tax inclusive) to all
shareholders based on the total share capital of 506,521,849 shares as of December 31, 2025, resulting in total
cash dividends of RMB 24,313,048.75 (tax inclusive). The profit distribution plan is subject to the consideration
and approval of the Company's General Meeting.
RMB
Item Amount
Profit or dividend to be distributed 24,313,048.75
Profit or dividend declared to be granted upon deliberation and approval -
- 100 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XV) Other significant matters
(1) Determination basis and accounting policies for reporting segments
According to the internal organizational structure, management requirements and internal reporting system of the
Group, the Group's operating business is divided into two operating segments. The management of the Group
regularly evaluates the operating results of these segments to decide on the allocation of resources to them and
evaluate their performance. On the basis of operating segments, the Group has identified the following two
reporting segments, polarizer business, property leasing business and other business.
Information on segment reporting is disclosed according to the accounting policies and measurement standards
adopted by each segment when reporting to the management, and these measurement bases are consistent with the
accounting and measurement bases when preparing the financial statements.
(2) Financial information of reporting segments
RMB
Current year or end of Property leasing and
Polarizer Offset Total
current year others
Operating revenue:
Revenue from
external transactions
Revenue from
transactions between - 3,578,055.92 (3,578,055.92) -
segments
Total operating
revenue of segments
Operating expenses
(Note)
Operating profit 67,696,577.60 40,317,571.37 (5,049,907.23) 102,964,241.74
Net profit 67,893,144.85 32,905,892.39 (5,185,494.41) 95,613,542.83
Total assets of
segments
Total liabilities of
segments
Previous year or the
Property leasing and
beginning of current Polarizer Offset Total
others
year
Operating revenue:
Revenue from
external transactions
Revenue from
transactions between - 4,239,345.09 (4,239,345.09) -
segments
Total operating
revenue of segments
Operating expenses
(Note)
Operating profit 136,015,568.69 (20,628,307.04) 36,389,537.55 151,776,799.20
Net profit 134,120,025.66 (15,831,104.78) 24,767,845.50 143,056,766.38
Total assets of
segments
- 101 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
Total liabilities of
segments
Note: this item includes operating costs, taxes and surcharges, G&A expenses, R&D expenses, selling and
distribution expenses and financial expenses.
- 102 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XV) Other important matters - Continued
Based on the current operating status of Shenzhen Xieli Automobile Enterprise Co., Ltd. (hereinafter referred to as
"Shenzhen Xieli"), the Company applied to the People's Court of Luohu District, Shenzhen (hereinafter referred to
as the "Court") for compulsory liquidation of Shenzhen Xieli on January 7, 2026. The Court accepted the case on
January 22, 2026, and the case is currently under compulsory liquidation proceedings.
(XVI) Notes to the main items of the parent company's financial statements
(1) Disclosure by aging
RMB
Book balance at the end of the Book balance at the beginning
Aging
year of the year
Within 1 year 8,710,793.24 10,649,986.34
Total 8,829,397.23 13,135,062.34
(2) Disclosure by provision method for bad debts
RMB
Balance as at the end of the current year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts - - -
accrued on an individual - -
basis
Provision for bad debts
made by portfolio
Total 8,829,397.23 100.00 115,022.89 8,714,374.34
- 103 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(2) Disclosure by provision method for bad debts - Continued
RMB
Balance as at the end of the previous year
Book balance Provision for bad debts
Category
Provision ratio Book value
Amount Ratio (%) Amount
(%)
Provision for bad debts - - -
accrued on an individual - -
basis
Provision for bad debts
made by portfolio
Total 13,135,062.34 100.00 106,074.71 13,028,987.63
As of December 31, 2025, accounts receivable with provision for bad debts accrued on a portfolio basis:
RMB
Balance as at the end of the current year
Aging Expected average loss Provision for bad
Book balance Book value
rate (%) debts
Within 1 year 1.32 8,710,793.24 115,022.89 8,595,770.35
Total 8,829,397.23 115,022.89 8,714,374.34
As of December 31, 2025, provision for bad debts is made based on the simplified expected credit losses model
RMB
Whole duration Whole duration
Provision for bad debts Expected credit losses Expected credit losses Total
(No credit loss) (With credit loss)
Balance at the beginning of the year 106,074.71 - 106,074.71
Balance at the beginning of the year - - -
- Transfer to credit loss incurred - - -
- Reversal of credit loss not incurred - - -
Withdrawal in the current year 8,948.18 - 8,948.18
Reversal in the current year - - -
Charge-off in the current year - - -
Write-off in the current year - - -
Other changes - - -
Balance as at the end of the current
year
(3) Provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or write- end of the current
Provision Other changes
year reversal off year
Provision for bad
debts
There was no significant amount of provision for bad debts recovered or reversed this year.
- 104 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(4) There are no accounts receivable actually written off this year.
(5) Top five entities in terms of the ending balance of accounts receivable by debtor
RMB
Balance of provision
Ratio in total
Book balance at the for bad debts as at the
Entity name accounts receivable
end of the year end of the current
(%)
year
Customer A 6,980,341.04 79.06 93,757.57
Customer B 1,227,979.88 13.91 -
Customer C 118,603.99 1.34 -
Customer D 117,394.64 1.33 5,869.73
Customer E 81,272.44 0.92 -
Total 8,525,591.99 96.56 99,627.30
(1) Disclosure by aging
RMB
Balance as at the end of Balance as at the end of
Aging
the current year the previous year
Within 1 year 1,973,476.50 15,129,726.66
Over 3 years 27,509,236.20 25,380,195.11
Total 43,392,112.71 42,987,562.86
Less: provision for bad debts 41,377,567.06 41,453,167.06
Book value 2,014,545.65 1,534,395.80
(2) Disclosure by nature of payment
RMB
Book balance at the end of Book balance at the end of
Nature of payment
the year the previous year
Transactions with related parties within the consolidation scope 26,114,041.10 26,189,641.10
Transactions with external units 15,455,577.41 15,422,435.97
Guarantee and deposits 10,000.00 10,000.00
Others 1,812,494.20 1,365,485.79
Total 43,392,112.71 42,987,562.86
(3) Provision for bad debts
As of December 31, 2025, provision for bad debts was made in accordance with the general model of expected
credit loss.
RMB
Stage 1 Stage 2 Stage 3
Expected credit loss Lifetime expected Lifetime expected
Provision for bad debts Total
for the next 12 credit loss (without credit loss (credit-
months credit impairment) impaired)
Balance at the beginning of the
year
Balance at the beginning of the
current year
-- Transferred to Stage 2 (13,636,400.01) 13,636,400.01 - -
-- Transferred to Stage 3 - (2,204,641.09) 2,204,641.09 -
-- Reclassified to Stage 2 - - - -
-- Reclassified to Stage 1 - - - -
Provision for the year - - - -
- 105 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
Reversed during the year - - (75,600.00) (75,600.00)
Written off during the year - - - -
Written off during the year - - - -
Other changes - - - -
Balance at the end of the year 74,666.33 13,909,400.01 27,393,500.72 41,377,567.06
As of December 31, 2025, provision for bad debts shall be made according to the credit risk characteristic
combination
RMB
Balance as at the end of the current year
Phase Expected average loss Provision for bad
Book balance Book value
rate (%) debts
Provision for bad debts based on
credit risk characteristic combination 95.36 43,392,112.71 41,377,567.06 2,014,545.65
Provision for other receivables
- 106 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(3) Provision for bad debts - continued
As of December 31, 2025, the credit risk and provision for bad debts of other receivables are as follows:
RMB
Balance as at the end of the current year
Aging Expected average loss
Book balance Provision for bad debts Book value
rate (%)
Within 1 year 3.78 1,973,476.50 74,666.33 1,898,810.17
Over 3 years 99.58 27,509,236.20 27,393,500.72 115,735.48
Total 43,392,112.71 41,377,567.06 2,014,545.65
(4) Changes in provision for bad debts
RMB
Balance at the Changes in the current year Balance as at the
Type beginning of the Recovery or Resale or end of the
Provision Other changes
year reversal write-off current year
Provision for bad debts 41,453,167.06 0 (75,600.00) - - 41,377,567.06
(5) There were no other receivables actually written off this year.
(6) Top five entities in terms of ending balance of other receivables by debtors
RMB
Proportion of
other Provision for
Balance as at receivables bad debts
Entity name the end of the Balance as at Nature of amount Aging Balance as at
current year the end of the the end of the
current year current year
ratio (%)
Customer A 26,114,041.10 60.18 Intercourse payment Over1- 3 years 26,114,041.10
Customer B 11,389,044.60 26.25 Intercourse payment Over 3 years 11,389,044.60
Customer C 1,800,000.00 4.15 Intercourse payment Over 3 years 1,800,000.00
Customer D 1,100,000.00 2.54 Intercourse payment Within 1 year 55,000.00
Customer E 1,018,295.37 2.35 Intercourse payment Over 3 years 1,018,295.37
Total 41,421,381.07 95.47 40,376,381.07
RMB
Balance as at the end of the current year Balance as at the end of the previous year
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
subsidiaries
Investments in
joint ventures
Investments in
associates
Total 2,070,836,335.22 37,390,767.64 2,033,445,567.58 2,077,516,294.35 36,826,287.64 2,040,690,006.71
- 107 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(1) Investment in subsidiaries
RMB
Provision for
Provision for
Balance at the Balance as at the end of impairment
Investees Increase in current year Decrease in current year impairment in the
beginning of the year the current year Balance as at the end of
current year
the current year
SAPO Photoelectric 1,910,247,781.94 - - - 1,910,247,781.94 14,415,288.09
Shenzhen Lisi Industrial Development Co., - - - 8,073,388.25 -
Ltd.
Shenzhen Meibainian Garment Co., Ltd. - 564,480.00 - 564,480.00 - 22,975,479.55
Shenzhen Shenfang Property Management - - - 1,713,186.55 -
Co., Ltd.
Shenzhen Shenfang Sungang Property - - - 5,827,623.93 -
Management Co., Ltd.
Total 1,925,861,980.67 564,480.00 - 564,480.00 1,925,861,980.67 37,390,767.64
(2) Investment in associates and joint ventures
RMB
Changes in the current year
Balance of
Other Cash dividends
Balance at the Investment profit Balance as at the provision for
comprehensi or profits
Investees beginning of the Additional Reduced or loss recognized end of the current impairment
ve income Change in declared to be Provision for Others
year investment investment under the equity year as at the end
adjustment other equity paid impairment
method of the current
year
Joint ventures
Shenzhen Guanhua Printing - - (7,280,934.44) - - - - - 104,274,952.84 -
and Dyeing Co., Ltd.
Sub-total 111,555,887.28 - - (7,280,934.44) - - - - - 104,274,952.84 -
Associates
Shenzhen Changlianfa - - 269,945.31 - - (233,450.00) - - 3,308,634.07 -
Printing and Dyeing Co., Ltd.
Sub-total 3,272,138.76 - - 269,945.31 - - (233,450.00) - - 3,308,634.07 -
Total 114,828,026.04 - - (7,010,989.13) - - (233,450.00) - - 107,583,586.91 -
- 108 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
(XVI) Notes to the main items of the parent company's financial statements - Continued
(1) Operating revenue and operating costs
RMB
Amount for the current year Amount for the previous year
Item
Revenue Cost Revenue Cost
Primary business 76,736,666.87 10,942,684.48 77,167,496.95 10,205,157.84
Other business 903,094.00 684,545.01 - -
Total 77,639,760.87 11,627,229.49 77,167,496.95 10,205,157.84
(2) Primary business by product
RMB
Amount for the current year Amount for the previous year
Products Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Property leasing 76,736,666.87 10,942,684.48 77,167,496.95 10,205,157.84
(3) Primary business by region
RMB
Amount for the current year Amount for the previous year
Region Income from primary Income from primary
Cost of primary business Cost of primary business
business business
Domestic 76,736,666.87 10,942,684.48 77,167,496.95 10,205,157.84
RMB
Amount for the current Amount for the previous
Item
year year
Long-term equity investment income calculated under the equity method (7,010,989.13) (10,701,895.08)
Income from long-term equity investments under cost method 5,200,000.00 4,700,000.00
Investment income from the recovery of long-term equity investments - 5,838,587.94
Investment income obtained during holding the financial assets held for trading 14,540,478.82 10,795,474.10
Dividend income from investments in other equity instrument during the 1,235,735.85
holding period
Total 13,965,225.54 12,077,902.81
- 109 -
Shenzhen Textile (Holdings) Co., Ltd.
Notes to the financial statements
For the year ended December 31, 2025
According to the Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to
the Public - Non-recurring Profit or Loss (Revision 2024) (hereinafter referred to as "Interpretive Announcement
No. 1") issued by the China Securities Regulatory Commission, the Group's non-recurring profit or loss for 2025
are as follows:
RMB
Amount for the current
Item
year
Profit or loss from disposal of non-current assets, including the writing-off part for which the asset
impairment provision is made
Government subsidies included in the current profit or loss (except for those that are closely related to the
Company's normal business operations, comply with national policies and regulations, are enjoyed
according to determined standards, and have a sustained impact on the Company's profit or loss) 6,426,316.96
Profit or loss from changes in fair value of financial assets and liabilities held by non-financial enterprises
and profit or loss from the disposal of financial assets and financial liabilities, except for effective hedging
operations related to the Company's normal business operations (11,769,635.37)
Reversal of provision for impairment of accounts receivable subject to separate impairment test 4,371,571.58
Non-operating revenue and expenses other than the above-mentioned items 5,481,728.35
Total non-recurring profit or loss 5,647,224.33
Less: income tax effect of non-recurring profit or loss 906,584.80
Net amount of non-recurring profit or loss 4,740,639.53
Less: net effect of non-recurring profit or loss attributable to minority shareholders (after tax) (243,998.88)
Non-recurring profit or loss attributable to the Company's ordinary shareholders 4,984,638.41
This return on net assets and earnings per share table is prepared by Shenzhen Textile (Holdings) Co., Ltd. in
accordance with the Rules for the Compilation and Reporting of Information Disclosure by Companies Issuing
Securities in Public (No. 9) - Calculation and Disclosure of Return on Net Assets and Earnings per Share
(Revision 2010) issued by the China Securities Regulatory Commission.
RMB
Weighted average rate of Earnings per share
Profit in the reporting period return on net assets % Diluted earnings per
Basic earnings per share
share
Net profit attributable to ordinary shareholders of
the COOEC
Net profit attributable to ordinary shareholders of
the Company after deducting non-recurring profit or
loss 2.14 0.13 0.13
Shenzhen Textile (Holdings) Co., Ltd.
Board of Directors
March 30, 2026
