FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

TCL科技集团股份有限公司TCLTechnologyGroupCorporation

INTERIMREPORT2025

August2025

FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

PartIImportantNotes,TableofContentsandDefinitions

TheBoardofDirectors(orthe“Board”),theSupervisoryCommitteeaswellasthedirectors,supervisorsandseniormanagementofTCLTechnologyGroupCorporation(hereinafterreferredtoasthe“Company”)herebyguaranteethefactuality,accuracyandcompletenessofthecontentsofthisReportanditssummary,andshallbejointlyandseverallyliableforanymisrepresentations,misleadingstatementsormaterialomissionstherein.

Mr.LiDongsheng,theperson-in-chargeoftheCompany,Ms.LiJian,theperson-in-chargeoffinancialaffairs(ChiefFinancialOfficer),andMs.JingChunmei,theperson-in-chargeofthefinancialdepartment,herebyguaranteethatthefinancialstatementscarriedinthisInterimReportarefactual,accurate,andcomplete.

AlltheCompany’sdirectorsattendedtheBoardmeetingforthereviewofthisInterimReportanditssummary.

Thefutureplans,developmentstrategiesorotherforward-lookingstatementsmentionedinthisReportanditssummaryshallNOTbeconsideredaspromisesoftheCompanytoinvestors.Therefore,investorsarekindlyremindedtopayattentiontopossibleinvestmentrisks.

TheCompanyhasnointerimdividendplan,eitherintheformofcashorstock,norfortheconversionofcapitalreserveintosharecapital.

ThisReportanditssummaryhavebeenpreparedinbothChineseandEnglish.Shouldtherebeanydiscrepanciesormisunderstandingsbetweenthetwoversions,theChineseversionshallprevail.

FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

TableofContents

PartIImportantNotes,TableofContentsandDefinitions ...... 2

PartIICorporateInformationandKeyFinancialInformation ...... 6

PartIIIManagementDiscussionandAnalysis ...... 9

PartIVCorporateGovernance,EnvironmentandSocialResponsibility ...... 30

PartVSignificantEvents ...... 36

PartVIChangesinSharesandInformationaboutShareholders ...... 46

PartVIIBonds ...... 54

PartVIIIFinancialReport ...... 59

PartIXOtherDataSubmitted ...... 222

FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

DocumentsAvailableforReference

(I)Thefinancialstatementssignedandstampedbytheperson-in-chargeoftheCompany,theChiefFinancialOfficerandperson-in-chargeofthefinancialdepartment.(II)TheoriginalsofallcompanydocumentsandannouncementsthatweredisclosedtothepublicduringtheReportingPeriod.

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Definitions

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PartIICorporateInformationandKeyFinancialInformation

I.CorporateInformation

II.ContactInformation

III.OtherInformation

1.ContactInformationoftheCompanyWhethertheregisteredaddress,officeaddressandtheirzipcodes,websiteaddressandemailaddressoftheCompanychangedduringtheReportingPeriod

□Applicable?NotapplicableNochangesoccurredtotheregisteredaddress,officeaddressandtheirzipcodes,websiteaddress,emailaddressandothercontactinformationoftheCompanyduringtheReportingPeriod.Pleaserefertothe2024AnnualReportfordetails.

2.MediaforInformationDisclosureandPlaceWhereThisReportisLodged

WhetherthemediaforinformationdisclosureandplacewherethisReportislodgedchangedduringtheReportingPeriod

□Applicable?NotapplicableNochangesoccurredtothenameandwebsiteofthestockexchangewebsiteandmediaonwhichtheCompanydisclosesitsInterimReportandtheplaceforlodgingsuchreportsduringtheReportingPeriod.Pleaserefertothe2024AnnualReportfordetails.

3.OtherInformationWhetherotherinformationchangedduringtheReportingPeriod

□Applicable?Notapplicable

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IV.KeyAccountingDataandFinancialIndicators

Indicatewhetherthereisanyretrospectivelyadjustedorrestateddatuminthetablebelow

□Yes?No

V.AccountingDataDifferencesunderChinaAccountingStandardsforBusinessEnterprises(CAS)andInternationalFinancialReportingStandards(IFRS)andForeignAccountingStandards

1.DifferencesinNetProfitsandEquityunderCASandIFRS

□Applicable?NotapplicableThereisnodifferenceinnetprofitsandnetassetsbetweenthefinancialstatementspreparedinaccordancewithInternationalAccountingStandards(IAS)andChineseAccountingStandards(CAS)fortheReportingPeriodoftheCompany.

2.DifferencesinNetProfitsandEquityunderCASandForeignAccountingStandards

□Applicable?NotapplicableThereisnodifferenceinnetprofitsandnetassetsbetweenthefinancialstatementspreparedinaccordancewithforeignaccountingstandardsandChineseAccountingStandards(CAS)fortheReportingPeriodoftheCompany.

3.ReasonsforAccountingDataDifferencesAbove

□Applicable?Notapplicable

VI.Non-RecurringGainsandLosses

?Applicable□Notapplicable

Unit:RMB

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Detailsofotherprofitandlossitemsthatmeetthedefinitionofnon-recurringprofitsandlosses:

□Applicable?NotapplicableTheCompanyhasnootherprofitandlossitemsthatmeetthedefinitionofnon-recurringprofitsandlosses.Notesonnon-recurringprofitandlossitemsthatarelistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-RecurringGain/LossshallbeusedtodefineRecurringGain/Lossitems

□Applicable?NotapplicableTheCompanydoesnothaveanynon-recurringprofitandlossitemslistedintheExplanatoryAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic—Non-RecurringGain/Lossthataredefinedasrecurringprofitandlossitems.

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PartIIIManagementDiscussionandAnalysisI.OverallOperatingPerformanceoftheCompanyDuringtheReportingPeriod

Sincethestartoftheyear,growingglobaleconomicuncertaintiesandarestructuredinternationaltradelandscapehaveacceleratedthetransformationofrulesineconomicglobalization.RisingU.S.tariffsareincreasingworldwidetradecosts,fuelingtrendstowarddeglobalizationandsupplychainregionalization.TheseshiftsarepoisedtosignificantlyimpactthedevelopmentofChina'smanufacturingsector.Inthefaceofexternalchallenges,theCompanyadherestotheleadingstrategy,focusingonthreekeybusinesspillars,includingdisplays,newenergyphotovoltaics,andothersiliconmaterials,withaviewtoimprovingoperationalresilienceandpromotinghigh-qualityandsustainablegrowth.DuringtheReportingPeriod,theCompanyrealizedRMB85.6billioninoperatingrevenue,representinga6.7%year-over-yearincrease.NetprofitattributabletoshareholdersreachedRMB

1.88billion,surging89.3%YoY,whileoperatingcashflowgrew115.9%YoYtoRMB27.3billion.AsoftheendoftheReportingPeriod,theCompany’sdebt-to-assetratiostoodat67.7%,anincreaseof2.78percentagepointsfromtheendofthepreviousreportingperiod;cashandcashequivalentsattheendoftheReportingPeriodwereRMB26.56billion.Drivenbysignificantnewinvestmentsthisyearandtheavailabilityoffavorablelendingrates,thedebt-to-assetratiohasrisen.TheCompanyremainscommittedtomaintainingthisratiowithinareasonablerange.II.OperatingPerformanceoftheCompany’sCoreBusinessesDuringtheReportingPeriod

TheCompanyfocusedonthedevelopmentofthecorebusiness,includingdisplays,newenergyphotovoltaicsandothersiliconmaterials,andwascommittedtoachievingthestrategicgoalofgloballeadership.

(I)DisplayBusiness

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GlobalretaildemandforLCDTVsremainedstableinthefirsthalfof2025.Nationalsubsidiesacceleratedtheshifttowardlargerscreensizes,sustainingthesurgeinthedemandareaforpanels.Increasedsupply-sideproductioncapacityconcentrationandanoptimizedindustrylandscapebalancedsupplyanddemand,leadingtonarrowpricefluctuationsformajorproductsalignedwithseasonalcycles.

DuringtheReportingPeriod,TCLCSOTachievedanoperatingrevenueofRMB50.43billion,anincreaseof14.4%year-on-year;netprofitwasRMB4.32billion,up74.0%year-on-year;andnetprofitattributabletoshareholdersofTCLTECH.wasRMB2.63billion,anincreaseof51%year-on-year.Leveragingitsadvantagesinscaleandefficiency,TCLCSOTcontinuouslyoptimizeditsbusinessandproductstructure,thussignificantlyimprovingitsoperatingperformance,furthersolidifyingitscompetitiveedgeinthedisplayindustry.

TheCompanymaintaineditscompetitiveedgeinlarge-sizedproductslikeTVsandcommercialdisplays,growingitsmarketshareby4percentagepointsyear-on-yearto24%.ItscomprehensivecompetitivenessandEBITDAcontinuedtoleadglobally.Competitivenessinthesmallandmedium-sizedLCDproductsegmentincreasedrapidly:duringtheReportingPeriod,themonitorsalesvolumeincreasedby18%year-on-year;NBsalesvolumeincreasedby71%year-on-year;vehicle-mounteddisplaysalesvolumeincreasedby61%year-on-year;mobilephonesalesvolumeincreasedby51%year-on-year;andsalesinthespecializeddisplaymarketsawasignificantyear-on-yeargrowth.

DuringtheReportingPeriod,theCompanycompletedtheacquisitionof100%equityinLGDisplay(China)Co.,Ltd.andLGDisplay(Guangzhou)Co.,Ltd.,integratingandrenamingthemast11,withaproductioncapacityof180kpieces/month.Sincethesecondquarter,thisacquisitionhasbecomeanincreasinglysignificantcontributortotheCompany'soperatingperformance.Duringthesameperiod,theCompanyalsocompletedthesecond-phaseconstructionofthet9projectin

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Guangzhou.Thestrongindustrialsynergybetweenthet9andt11projectsenhancedtheCompany'sscaleandcompetitivenessinsmallandmedium-sizeddisplays.ThissynergyoptimizestheCompany'sproductstructureandlaidasolidfoundationforthesustainabledevelopmentofitsLCDbusiness.

TheCompany'sOLEDbusiness(t4,G6line),sustaineditsgrowthtrajectorywithanincreaseinyear-over-yearsalesvolumeof8.7%,whileoperatingrevenueisup9.2%YoY.TheCompanysecuredthefourthpositiongloballyforflexibleOLEDsmartphoneshipmentsandremainedatop-threeplayerinfoldableproducts.Thiswascomplementedbythesuccessfulramp-uptomassproductionandshipmentofitswearablesline.Currently,thet4factoryleadsthedomesticindustryinkeymetrics,includingcapacityutilizationrate,projectinput-outputratio,andEBITDAmargin.DuringtheReportingPeriod,theCompanysuccessfullycompletedtheconstructionoftheG5.5printedOLEDproductionline(t12),withcapacityincreasingfrom3kpieces/monthto9kpieces/month.Thet12projectcontinuestooptimizeitsproductionprocesses,efficiency,andproductquality.TheCompanyisalsodrivingtheindustrializationofitshigh-generationprintedOLEDprojects,positioningittoachievemajorbreakthroughsinthenext-generationOLEDindustry.

TheCompanyisactivelyexpandingitspresenceintheMicroLED(hereinafterreferredtoas“MLED”)industry.Attheendof2020,TCLCSOTandSananOptoelectronicsjointlyestablishedalaboratory,andduringtheReportingPeriod,thefirstMLEDproductionlinewasbuiltinSuzhou.TheCompanyplanstocapitalizeonemergingopportunitiesintheMLEDsectorbyexpandinginvestmentsinproducttechnology,materials,andkeysegmentsoftheindustrychain,therebystrengtheningitscompetitivemarketposition.

DuringtheReportingPeriod,theCompanyacquireda21.53%equitystakeinShenzhenChinaStarOptoelectronicsBandaotiDisplayTechnologyCo.,Ltd.—operatoroftheG11productionlines

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(t6,t7)—fromtheShenzhenMajorIndustrialDevelopmentPhaseIFund.TheassettransferforthistransactionwasfinalizedinearlyJuly2025.Thisstrategicacquisitionisexpectedtoboostnetprofitattributabletotheparentcompanyandstrengthenthecontributionofthedisplaybusinesstothelistedcompany’sprofitability.TheCompanywillfurtherimproveitsglobalindustriallayouttoadapttothechallengesoftherestructuredglobaleconomyandtradelandscape.DuringtheReportingPeriod,theCompanyinvestedinandbuiltamoduleplantinVietnam,andsignificantlyimprovedtheoperationalefficiencyofitsexistingmoduleplantinIndiaeachyear.(II)SiliconWaferBusinessDuringtheReportingPeriod,ZhonghuanAdvancedachievedanoperatingrevenueofRMB2.74billion,growing38.2%year-on-yearandsolidifyingitsleadershipinbothscaleandcompetitivenesswithinthedomesticindustry.TheCompany'sproducts,technologies,processes,andqualityhavebeenfurtherenhanced,withproductsconsistentlysuppliedtomajordomesticintegratedcircuitmanufacturersandpartialexportsachieved.TheCompanyisconfidentofsustainingbusinessgrowthandfurtherstrengtheningitsmarketcompetitivenessinthesecondhalfoftheyear.(III)NewEnergyPhotovoltaicsBusiness

DuringtheReportingPeriod,TZE’sphotovoltaicsbusinessachievedanoperatingrevenueofRMB9.87billion,registeringayear-on-yeardecreaseof28.0%,ofwhichcrystalwaferoperatingrevenuewasRMB5.77billion,down7.1%quarter-on-quarter;andcellandmoduleoperatingrevenuewasRMB3.85billion,up26.2%quarter-on-quarter.Amidasevereindustrydownturnandintensecompetitionwithinthephotovoltaicssector,theCompanyisimplementingproactiveandeffectivestrategiestonavigatethemarket’schallenges.Guidedbytheprincipleof“turningcrisisintoopportunitythroughdevelopmentanddiscoveringnewpathsbyovercomingdifficulties,”theCompanyisnotonlytacklingcurrentoperational

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pressuresbutalsostrategicallypositioningitselfforfuturegrowth.Tothisend,itisreinforcingitsleadershipinwafertechnology,strengtheningitscellandmodulesegments,aggressivelyexpandingitsglobalfootprint,andactivelypursuingstrategicmergers,acquisitions,andoverseasinvestmentopportunities.TheCompanyisconfidentinitsabilitytoenhancetheperformanceofTZE’sphotovoltaicsbusiness,reinforceitscompetitiveposition,andestablishastrongfoundationforsustainablegrowth.TheseeffortswillpositiontheCompanytosuccessfullynavigatetheongoingindustrydownturnandunlocknewpathwaysforfutureexpansion.(IV)Non-corebusiness

TheCompany’snon-corebusinessessatisfieditsoperatingbudgetsandmaintainedhealthygrowth.Astheworld'slargestTVODMprovider,MOKAreportedoperatingrevenueofRMB

10.39billionduringtheReportingPeriod,representingayear-on-yearincreaseof16%.TVODMshipmentvolumereached7.49millionunits,generatingoperatingrevenueofRMB8.03billionandsolidifyingitspositionasagloballeader.Meanwhile,MOKA'smonitorODMbusinessalsoexperiencedrapidexpansion,withshipmentsrising28%year-on-yearto4.62millionunits.Additionally,businessessuchasHighlyandTPCalsoachievedthegoalsetatthebeginningoftheyearandsustainedhealthydevelopment.

Facingasevereandcomplexexternalenvironment,theCompanywillembracethespiritof“EmbarkingontheVoyageandPressingAheadAgainstAllOdds.”Byadheringtotheoperationalphilosophyof“StrategicLeadership,Innovation-Driven,AdvancedManufacturing,andGlobalOperations”,theCompanywillseizethehistoricopportunitiespresentedbytheupgradeofthetechnologymanufacturingindustryandthetransformationoftheglobalenergystructuretoachievesustainablehigh-qualitydevelopmentandadvancetowardgloballeadership.

FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

III.AnalysisofCoreCompetitivenessSinceitsestablishmentin1981,TCLhasconsistentlydemonstratedresilienceandadaptability,successfullynavigatingthroughvariousmarketcycles.Throughsustainedexploration,reform,andtransformation,theCompanyhasalwaysstoodfirmattheforefront,demonstratingtheaudacitytopioneer,andemergedasagloballyleadinghigh-techindustrygroup.

In2018,TCLunderwentitsmostsignificantcorporatetransformation,shiftingfromadiversifiedconglomeratetoaspecializedbusinessmodelfocusedondevelopinghigh-techandcapital-intensiveindustrieswithlonginvestmentcycles.Followingitsrebrandingto“TCLTECH.”in2020,theCompanydelistedZhonghuanElectronicinJuly,pavingthewayforitsexpansionintonewenergyphotovoltaicsandsiliconmaterials.TheCompanyacquiredSuzhouSamsunginAugust2020,andachievedmassproductionofprintedOLEDin2024.Additionally,itcompletedtheacquisitionandintegrationofLG’sGuangzhouLCDandmodulefacilityin2025,reinforcingitspositionasakeyplayerinthedisplaysector.

Atpresent,TCLTechhasestablishedabusinessstructurecenteredondisplaysandnewenergyphotovoltaics.Withawell-defineddevelopmentroadmap,efficientoperations,andoutstandingcompetitiveadvantages,theCompanyhasbeengraduallyimprovingitscorecompetitivenessandsustainabledevelopmentcapabilities.

Leadingatscale:Optimizingbusinessportfoliosandbuildingscaleadvantages

TCLCSOT,apreeminentglobaldisplaycompanyandapioneerindomesticdisplaymanufacturing,hascumulativelyinvestedoverRMB280billion.Itcurrentlyoperates11state-of-the-artpanellinesand5modulefactories,servingadiverserangeofglobalclients.TheCompanyhasestablishedaleadingpositioninlarge-sizedpanelsgloballythroughbothself-builtproductionlinesandtheacquisitionofSuzhouSamsung.Inthefirsthalfof2025,TCLCSOTrankedsecondgloballyinTVpanelshipments.TheCompanyhasbuiltt9productionlinetargetinghigh-value-addedmid-sizeproductssuchasITandcommercialdisplays,achievingafull-sizestrategiclayout.Inthefirsthalfof2025,TheCompanysecuredtheworld’ssecond-largestmarketshareinMNTpanelsandrankedfirstinkeysegmentssuchase-sportsmonitorsandLTPSlaptops.Byactivelyimprovingthelayoutofthevaluechainandexpandingtheproductioncapacityofself-builtmodules,TCLCSOThasfurtherimprovedtheCompany'scontrolandprofitabilityinthevaluechain.TCL

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CSOThaspassedthroughseveralindustrycycles,evolvingfroma"follower"toa"peer",andnowa"leader".Ithastransformedfromalarge-sizepanelleadertoanall-sizedisplayplayer,graduallyexpandingfrompanelmanufacturingtocomprehensivedisplaysolutions,drivingtheCompany'shigh-qualitydevelopment.

TZEwillcontinuetoleverageitsadvantagesinproductioncapacity,productofferings,andcoststructure,whilegraduallyimprovingitsrelativecompetitivenessandestablishingitsleadingedgeintheindustrythroughtechnologicalinnovations,manufacturingtransformations,andmanagementreforms.TheCompanyisdrivingongoingimprovementsinitsflexiblephotovoltaicswafermanufacturingtostrengthenitscompetitiveedge.WearethegloballeaderintermsofmonocrystallinesiliconcapacityandholdthelargestworldwidemarketshareforG12wafers.Theinternationalexpansioncontinuestoprogress,markedbytheon-scheduleestablishmentofanoverseaswafermanufacturingfacilityincollaborationwithSaudiArabia’sPublicInvestmentFund(PIF)andVisionIndustries(VI).Intermsofphotovoltaicsmodules,theCompanyleverageditspatentedtechnologicalinnovationstodevelopdifferentiatedproducts.Byactivelyinvestinginnewbatterytechnologies,theCompanyprogressivelyestablishedmanufacturingstrengthstoprovidecustomerswithhigher-qualityproducts.Leadingintechnologyandecology:AchievingleadingedgetechnologybyfocusingoncoreindustriesTheCompanyhasestablishedastrategicfootholdincoretechnologies(i.e.,displaysandnewenergyphotovoltaics)bycapitalizingonitssubsidiariesTCLCSOTandTZE.Throughstrategicpartnershipswithupstreamanddownstreamindustryplayers,theCompanyhasbuiltarobustglobalecosystemfortechnologyandinnovation,andissteadilyadvancingitstechnologicalleadershipinnext-generationdisplaytechnologies,aswellasG12andN-typephotovoltaicsmaterials.TheCompanyhasappliedforover79,000patents,andfacilitatedorparticipatedintheestablishmentofmorethan300industrystandards,underscoringitsstatusasapreeminenthigh-techenterprise.TheCompanyhassecuredover2900patentsinquantumdotdisplaytechnology,rankingsecondglobally,whichwillensuretheindependentandcontrollabledevelopmentofkeytechnologiesfornext-generationdisplays.TCLTechnologyhasestablished29R&Dcentersworldwide,andhasbeencertifiedwith9national-levelopeninnovationplatformsand33provincial-levelinnovationplatformqualifications.

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Leadinginefficiencyandmanagement:navigatingcycleswithindustry-leadingefficiencyandeffectivenessBasedonitsscaleandtechnologicalprowess,TCLTECH.hasachievedefficiencyandbenefitswhichmaintainitsindustryleadershipthroughcontinuousmanagementchangesanddigitalizationupgrades.TCLCSOTleveragesthesynergyofitstwinfactoriestooptimizeproductionlineplanningandmaximizecapacityexpansion.Bypursuingcostexcellence,theCompanyhasestablishedanend-to-endcostadvantage.Throughmanagementreforms,ithasenhancedoveralloperationalefficiency,resultingincontinuousimprovementsinproductqualityandperformance,aswellasaleadingcompetitivepositionintheindustry.Atthesametime,TCLCSOThasestablishedprovenriskmanagementcapabilitiesthathavebeenhonedthroughmultipleindustrycyclefluctuations.Lookingforward,TCLCSOTwillmakeuseofthiscorecompetency,andwillbewell-poisedtonavigatefutureuncertaintiesandachievegloballeadership.

Amidstthecyclicaldownturninthenewenergyphotovoltaicsindustry,TZEhasconsistentlyadheredtoitscorebusinessphilosophyof“diggingin”,andcomprehensivelyimplementedIndustry

4.0intelligentmanufacturingsystems,coupledwithOperation4.0andQuality4.0managementframeworks.Bycontinuouslyimprovingproductionautomation,operationalefficiency,andmanagementcapabilities,TZEiscommittedtosuccessfullynavigatetheindustrycycleandemergeasaleadingglobalplayerinthenewenergyphotovoltaicssector.

CulturalLeadership:Guidedbyourcorevaluesof"change,innovation,accountability,andexcellence",theCompanyisbeingdriventoachieveindustryleadership

In2020,TCLinauguratedanewphaseofcorporateculture,aslaidoutinitsstrategicdocumentThePathtoGlobalLeadership.TheCompanyhasadoptedacoremissioncenteredaround"leadingtechnology,harmoniouscoexistence",underpinnedbythecorevaluesof"change,innovation,accountability,andexcellence".ThisculturaltransformationhasempoweredTCLemployeestoembracechange,drivebusinessoptimizationsandupgradesthroughactiveexplorationandinnovation,andguidedTCLindedicatingitselftodeliveringsuperiorproductsandservicestoitsvaluedcustomersthroughaccountabilityandthepursuitofexcellence.Inthefaceofacomplexandever-changingexternalbusinessenvironment,TCLemployeeswillcontinuetoupholdthespiritandcultureof“ThePathtoGlobalLeadership”.TCLwillboldlyleadtheway,fearlesslycompete,anddrivetheCompanytoeffectivelyrespondtobusinesschanges,enteringa

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newstageofdevelopment.IV.AnalysisofCoreBusinessesOverviewSeetherelevantcontentsin“II.MainBusinessesoftheCompanyduringtheReportingPeriod”.Year-on-yearchangesinkeyfinancialinformation

Unit:RMB

SignificantchangestotheprofitstructureorsourcesoftheCompanyduringtheReportingPeriod

□Applicable?NotapplicableNosignificantchangestotheprofitstructureorsourcesoftheCompanyduringtheReportingPeriod.Breakdownofoperatingrevenue

Unit:RMB

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Note:ThedisplaybusinessrevenuementionedaboveincludestherevenuefromTCLCSOTandMokaTechnology.

Operatingdivision,productcategory,orregioncontributingover10%ofoperatingrevenueoroperatingprofit?Applicable□Notapplicable

Unit:RMB

CorebusinessdataintherecenttermrestatedaccordingtothechangedmethodsofmeasurementthatoccurredintheReportingPeriod

□Applicable?Notapplicable

V.AnalysisofNon-CoreBusinesses?Applicable□Notapplicable

Unit:RMB

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VI.AnalysisofAssetsandLiabilities

1.SignificantChangesinAssetComposition

Unit:RMB

2.MajorAssetsOverseas

□Applicable?Notapplicable

3.AssetsandLiabilitiesatFairValue

?Applicable□Notapplicable

Unit:RMB

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SignificantchangestothemeasurementattributesofthemajorassetsintheReportingPeriod

□Yes?No

4.RestrictedAssetRightsasofthePeriod-End

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VII.InvestmentsMade

1.TotalInvestmentAmount?Applicable□Notapplicable

2.MajorEquityInvestmentsMadeintheReportingPeriod

?Applicable□Notapplicable

Unit:RMB’000,000,000

Note:1.LGDisplay(China)Co.,Ltd.hasbeenrenamedGuangzhouChinaStarOptoelectronicsTechnologyCo.,Ltd.;LGDisplay(Guangzhou)Co.,Ltd.hasbeenrenamedGuangzhouChinaStarOptoelectronicsDisplayCo.,Ltd.

2.ThefinaltransactionpriceissubjecttoTCLCSOT'sreviewoftheclosingstatements.

3.MajorNon-EquityInvestmentsOngoingintheReportingPeriod

□Applicable?Notapplicable

4.FinancialAssetsInvestments

(1)SecuritiesInvestments?Applicable□Notapplicable

Unit:RMB'0,000

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(2)InvestmentsinDerivativeFinancialInstruments?Applicable□Notapplicable

1)DerivativeinvestmentsforhedgingpurposesmadeduringtheReportingPeriod?Applicable□Notapplicable

Unit:RMB'0,000

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2)DerivativeinvestmentsforspeculativepurposesduringtheReportingPeriod

□Applicable?NotapplicableTherewerenoderivativeinvestmentsforspeculativepurposesmadebytheCompanyduringtheReportingPeriod.

5.Useofthecapitalraised

□Applicable?NotapplicableNoraisedcapitalisusedduringtheReportingPeriod.

VIII.SaleofMajorAssetsandEquityInvestments

1.SaleofMajorAssets

□Applicable?NotapplicableTheCompanydidnotdisposeofanymajorassetsattheendoftheReportingPeriod.

2.SaleofMajorEquityInvestments

□Applicable?Notapplicable

IX.PrincipalSubsidiariesandJointStockCompanies

?Applicable□NotapplicablePrincipalsubsidiariesandjointstockcompanieswithanover10%effectontheCompany'snetprofits

Unit:RMB'0,000

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AcquisitionanddisposalofsubsidiariesintheReportingPeriod?Applicable□Notapplicable

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ExplanationofPrincipalSubsidiariesandJointStockCompanies:None

X.StructuredBodiesControlledbytheCompany

□Applicable?Notapplicable

XI.RisksandResponses

1.RisksfromtheMacro-PoliticalandEconomicEnvironmentGlobaleconomicgrowthhasunderperformed,yetadefinitiveturnaroundinmajoreconomieshasyettoemerge.Geopoliticalconflictsandrisingtradebarriersareacceleratingglobaleconomicfragmentation,fuelingashifttowardregionalization.Moreover,withpersistentglobalinflationandsignificantvolatilityincurrencyandfinancialmarkets,companiesfaceconsiderableoperationalrisks.Toaddressthesechallenges,theCompanywillcontinuetocloselymonitormacroeconomicandgeopoliticaldevelopmentstoidentifyemergingrisksanddevelopcontingencyplans.Alignedwiththenationalstrategyof“drivinggrowththroughnewqualityproductiveforcesandpromotinginnovationandtechnologicalbreakthroughs,”theCompanywillstrengthenitsfocusoncorebusinesses,upholdatechnologyandinnovation-drivenstrategytoenhancecompetitiveadvantage,increaseshareholdervalue,andeffectivelynavigatemacroeconomicuncertainty.

2.RisksfromIndustryProsperityFluctuationsThedisplaypanelindustryhasyettoseeasignificantrecoveryindemandforthefirsthalfof2025,withshort-termdemandvolatilityintensifiedbysuchfactorsastradefrictionsandconsumptionstimuluspolicies.Meanwhile,thephotovoltaicindustryisstillgrapplingwithastateofoversupply,whichisunlikelytoimproveinthenearterm.TheCompanywilldiligentlymonitorshiftsinindustrysupplyanddemandandoptimizecapacityallocation.Atthesametime,itwillenhanceitsinvestmentinR&Dtocontinuouslyenhancethetechnologicalcontentofproducts.ThisstrategicapproachwillallowtheCompanytoexpanditsscaleandefficiencyadvantages,therebybuildinghighcompetitivebarriersandstrengtheningitsmarketposition.

3.RisksfromGlobalSupplyChainVolatilityDuetogeopoliticalfrictionandvolatilerawmaterialprices,globalsupplychainsecurityand

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costsarefacingconsiderableuncertainty.Tomitigatetheserisks,theCompanyremainscommittedtoitsglobalizationstrategybydeepeninglocalizedoperationsandoptimizingitsglobalsupplychainlayout,aimingtobuildamoreresilientrisk-responsecapability.Furthermore,theCompanywillestablishlong-term,stablestrategicpartnershipswithitssuppliersthroughcollaborationandothermeans,whichwillstrengthenitsabilitytomonitor,identify,andrespondtoupstreamsupplyrisks.

4.IntellectualPropertyandComplianceRisksAmidintensifiedcompetitioninthedisplayandnewenergymaterialsindustries,theexpandingbusinessandtechnologyfootprintoftheCompanyhasledtomorefrequentpatentdisputesandhigherIPrisks.Toaddressthis,theCompanywillacceleratesubstantialR&Dinvestments,refiningourcoretechnologiesandpatentportfoliothrougha“self-development+ecosystemcollaboration”model.TofurtherfortifyourIPdefense,theCompanyisforgingstrategicpartnershipswithleadingprofessionalagencies.Thesecollaborationswillstrengthenourinvestigationofat-riskpatentsandenhanceourpatentriskearly-warningsystems,effectivelymitigatinglitigationthreatsandelevatingouroverallIPriskmanagement.

Meanwhile,growingtradeprotectionismunderscoresthecriticalimportanceofrobustcompliancemanagementinoverseasoperations.TheCompanywillstrengthenitscomplianceframeworkbyimplementingasystemdesignedtomeettheexportcontrolregulationsofallkeyglobalmarkets.Theseeffortsincludestreamliningcomplianceprocedures,implementingrigorousemployeetrainingprograms,fosteringacultureofawareness,andcollaboratingcloselywithlocalpartnerstoproactivelymanagecompliancerisk.XII.FormulationandImplementationoftheRulesforMarketValueManagementandValuationEnhancementPlanWhethertheCompanyhasformulatedtheRulesforMarketValueManagement?Yes□NoWhethertheCompanyhasdisclosedthevaluationenhancementplan

□Yes?NoOnDecember27,2024,theProposalonFormulatingtheRulesforMarketValueManagementwasdeliberatedonandadoptedatthe7thMeetingofthe8th-termBoardofDirectors.TostrengthentheCompany'smarketvaluemanagement,furtherstandardizeitsmarketvaluemanagementpractices,effectivelyenhancetheCompany'sinvestmentvalue,increaseinvestorreturns,andprotectthe

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legitimaterightsandinterestsoftheCompany,theinvestorsandotherstakeholders,theCompanyhasformulatedtheRulesforMarketCapitalizationManagementinaccordancewiththeCompanyLaw,theSecuritiesLaw,theSeveralOpinionsoftheStateCouncilonStrengtheningRegulationtoPreventRiskandPromotingtheHigh-qualityDevelopmentoftheCapitalMarket,theAdministrativeMeasuresfortheInformationDisclosurebyListedCompanies,theGuidelinesfortheRegulationofListedCompaniesNo.10–MarketValueManagement,andotherrelatedprovisions.

TheCompanyfirmlyupholdstheprincipleofshareholderreturns,takingmeasurestoprotectinvestorinterests,especiallythoseofminorityshareholders.Itupholdsethicaloperations,regulatorycompliance,andafocusedapproachtocorebusiness,ensuringprudentmanagement.Bydevelopingadvancedcapabilities,theCompanycontinuouslyenhancesoperationalefficiencyandqualitygrowth.Additionally,theCompanyprioritizesstronginvestorrelations,enhancingtransparencyandcommunicationstoensureinvestmentvaluereflectsitscorestrengths,whileproactivelystrengtheninginvestorconfidence.

XIII.Implementationofthe"JointImprovementofQualityandInvestmentReturn"ActionPlanWhethertheCompanyhasdisclosedthe"JointImprovementofQualityandInvestmentReturns"ActionPlanAnnouncement.?Yes□No

Tobetterimplementtheguidanceonenhancingthequalityandinvestmentvalueoflistedcompanies,theCompanyhasdevelopedthe"JointImprovementofQualityandInvestmentReturns"ActionPlan,whichisbasedonin-depthresearchonindustrytrendsandcarefulconsiderationofourfuturebusinesstrajectory.Inaddition,theCompanyhasdisclosedtheprogressreportonthe"JointImprovementofQualityandInvestmentReturns"ActionPlanincombinationwiththeimplementation.Formoredetails,pleaseseetheJointImprovementofQualityandInvestmentReturnsActionPlanandtheprogressreportontheJointImprovementofQualityandInvestmentReturnsActionPlandisclosedonFebruary28,2024,andMay8,2024,respectively.

Anchoredinitscoredisplayandnewenergyphotovoltaicbusinesses,theCompanyleveragesitsoperatingprinciples—"StrategicLeadership,Innovation-Driven,AdvancedManufacturing,andGlobalOperations"—toreinforceitsindustryleadershipandaccelerateafutureofsustainable,high-qualitygrowth.MotivatedbyconfidenceintheCompany’sfuturedevelopmentandacommitmenttoprotectingtheinterestsofallshareholders,theProposalonRepurchaseofaPortionoftheCompany’sPubliclyTradedSharesin2025wasapprovedattheninthmeetingoftheEighthBoardofDirectorsonApril15,2025.TheCompanyplannedtorepurchaseaportionofitspubliclyissuedsharesthroughcentralizedbiddingontheShenzhenStockExchangetradingsystem.ThetotalamountoftherepurchasewassetatnolessthanRMB700million(inclusive)andnomorethanRMB800million(inclusive),withapricecapofRMB6.70pershare(inclusive).TherepurchasedshareswillbeusedfortheCompany’semployeestockownershipplanorequityincentiveprogram.Ifthesharesarenotusedwithin36monthsafterthecompletionoftherepurchase,theunusedportionwillbecanceledinaccordancewithrelevantprocedures.AsofJuly25,2025,the2025sharerepurchaseplanhas

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beenfullyimplemented.

Atthe2024AnnualGeneralMeetingheldonMay20,2025,theCompanyapprovedtheProposalfortheCompany’s2024ProfitDistributionPlan:Basedonthetotalexistingsharecapitalof18,779,080,767shares,acashdividendofRMB0.5(taxinclusive)shallbedistributedtoallshareholdersforevery10shares,withatotaldistributedprofitofRMB938,954,038.35.Theremainingundistributedprofitwillbecarriedforwardforfuturedistribution.AsofJuly18,2025,theaforementioneddividenddistributionplanhasbeenfullyimplemented.

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PartIVCorporateGovernance,EnvironmentandSocial

ResponsibilityI.ChangeofDirectors,SupervisorsandSeniorManagement

?Applicable□Notapplicable

II.InterimDividendPlanandConversionfromCapitalReservesintoShareCapitalduringtheReportingPeriod

□Applicable?NotapplicableTheCompanyhasnointerimdividendplanforprofitdistributionorconversionofcapitalreservefundintosharecapital.III.EquityIncentivePlans,EmployeeStockOwnershipPlansorOtherIncentiveMeasuresforEmployees?Applicable□Notapplicable

1.EquityIncentives

□Applicable?Notapplicable

2.ImplementationofEmployeeStockOwnershipPlan?Applicable□NotapplicableAllthevalidemployeestockownershipplansduringtheReportingPeriod

Note:Bytheendofthereportingperiod,2025EmployeeStockOwnershipPlan(Draft)andotherrelatedmattershavebeendeliberatedandapprovedbytheBoardofDirectors.OnJuly17,2025,theplanwasdeliberatedandapprovedbythegeneralmeeting.Theunderlyingshareshavenotbeentransferred/purchased.

ShareholdingsofDirectors,Supervisors,andSeniorManagementundertheEmployeeStockOwnershipPlanduringtheReporting

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Period

ChangesofassetmanagementinstitutionsduringtheReportingPeriod

□Applicable?NotapplicableChangesofequitycausedbytheholder’sdisposalofsharesduringtheReportingPeriod

□Applicable?NotapplicableExerciseofshareholderrightsduringtheReportingPeriod

□Applicable?NotapplicableDuringthereportingperiod,theCompany’sEmployeeStockOwnershipPlansdidnotparticipateinvotingatthegeneralmeetingorexerciseothershareholderrights.OtherrelevantinformationandexplanationsoftheEmployeeStockOwnershipPlanduringtheReportingPeriod

□Applicable?NotapplicableChangesinthemembersofthemanagementcommitteeforEmployeeStockOwnershipPlan

□Applicable?NotapplicableFinancialimpactoftheEmployeeStockOwnershipPlanontheCompanyduringtheReportingPeriodandrelatedaccountingtreatment?Applicable□NotapplicableThefinancial,accountingtreatmentandtaxationinvolvedintheCompany’sEmployeeStockOwnershipPlan(ESOP)shallbeimplementedaccordingtorelevantlaws,regulationsandnormativedocumentssuchasfinancialsystems,accountingstandards,taxationsystems,etc.TheparticipantsoftheESOPshallpaythepersonalincometaxarisingfromtheirparticipationinaccordancewiththelaw,andcanchoosetohavetheplansellacorrespondingamountofsharestooffsetthepersonalincometax,withtheremainingsharesthenallocatedtothem.TerminationofEmployeeStockOwnershipPlanduringtheReportingPeriod?Applicable□NotapplicableBasedontherelevantprovisionsofthe2021-2023EmployeeStockOwnershipPlan(PhaseI)(RevisedDraft)andthe2021-2023EmployeeStockOwnershipPlan(PhaseII)(Draft),duringtheReportingPeriod,allplansharesattributabletoemployeesundertheaforementionedtwoplanshavebeenfullyvested,andthesalesandtransferofsuchshareshavebeencompleted.

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Otherinstructions:none

3.OtherEmployeeIncentives

□Applicable?NotapplicableIV.EnvironmentalInformationDisclosure

Whetherthelistedcompanyanditsmajorsubsidiariesareincludedinthelistofenterprisesrequiredtodiscloseenvironmentalinformationinaccordancewithlaws?Yes□No

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web/web/viewRunner.html?viewId=http://111.56.142.62:40010/support-yfpl-web/web/sps/views/yfpl/views/yfplHomeNew/index.js&cantonCode=15000

TheCompanyplacesahighpriorityonenvironmentalprotectionbystrictlyadheringtonationalandlocalenvironmentallawsandregulations,conductingenvironmentalmanagementinfullcompliancewithlegalandregulatoryrequirements,anddisclosingrelevantinformationinanorderlyfashiontoensureitstruthfulness,accuracy,andcompleteness.V.SocialResponsibility

ConsolidatingandExpandingPovertyAlleviationAchievements,andRuralRevitalization

TCLTECH.isactivelyfulfillingitssocialresponsibilitieswithasustainedcommitmenttopublicwelfare.Drawingonitsindustrialadvantages,theTCLPublicWelfareFoundationhasdonatedphotovoltaicpowergenerationsystemstoruralschools,forginganewgreenandsustainablemodelforeducationalsupport.Ithasalsoadvanceditssmarteducationinitiativesbyexpandinginterconnectedsmartclassroomnetworksbetweenruraland

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urbanregionsandextendingcross-regionalonlineteachingreach—effortsthatfosterequitableaccesstoqualityeducationalresources.Simultaneously,theFoundationhasfortifieditsuniversityinnovationsupportsystem.TheFoundationhasdeepenedstrategiccollaborationswithleadinginstitutions,optimizedmechanismsfornurturingyoungscholarsandtechnologicalinnovationprojects,andboostedtheacademicimpactofitsinnovationandentrepreneurshiplectures.Additionally,theFoundationhascomprehensivelyadvanceditsin-depthruralrevitalizationinitiative,prioritizingtheimplementationoflocalizedprojectsinHuizhou—suchasgreenenergyinfrastructuredevelopmentandruraleducationqualityenhancement.Thisyear,the“TCLRoseAction-EmployeePublicWelfareCreativityCompetition”willbeupgradedtofurtherpromotesustainablepublicwelfarecontributions.

Semi-AnnualSummaryofWorkonConsolidatingandExpandingAchievementsinPovertyAlleviation&PromotingRuralRevitalizationRuraleducationisapivotalpillarofruralrevitalization.Tosupportthis,theTCLPublicWelfareFoundation,incollaborationwithTZE,donatedrooftopphotovoltaic(PV)powergenerationsystemsandtheir25-yearelectricitygenerationrevenuetoruralschoolsinneed.Theprojectnotonlyutilizesgreenandcleanenergy,aligningwithnationalpoliciesonenergyconservationandenvironmentalprotectionandthedualcarbongoals,butalsogeneratesincomefortheschoolstoimprovetheirteachingenvironmentandsupportstudents.Tofurtherbroadenthereachofthiseducationalaidmodelanddeepentheimplementationofthe“NewEraHopeProject”insupportofruraleducation,theTCLPublicWelfareFoundationcollaboratedwiththeChinaYouthDevelopmentFoundationtodonaterooftopphotovoltaicsystemstoHopePrimarySchoolsnationwide.Theprojecthasalreadyreachedruralareas,carryingoutfiledstudiesandvisitsinplaceslikeShaanxitounderstandtheconditionsandneedsoflocalschoolsandstudents.

Topromotethebalanceddevelopmentofeducationbetweenurbanandruralareasandfacilitatetheinterconnectionandsharingofeducationalresources,theTCLPublicWelfareFoundation,incollaborationwithTCLCommercialInformationTechnology(Huizhou)Co.,Ltd.,TCLCommunicationTechnologyHoldingsLimited,andotherpartners,hasestablishedTCLSmartClassroomsinschoolsacrossurbanandruralregions.Leveragingnext-generationtechnology,theseclassroomsforma“1+N”smartclassroomnetworkequippedwithTCL'sadvancededucationaltools,includingsmartinteractiveblackboards,educationaltablets,andeye-protectionlightingsystems.Thisinitiativeenablesthesharingofhigh-qualityeducationalresourcesandpromotesequityineducation.Inthefirsthalfoftheyear,theprogramorganizedsixinterdisciplinaryclasses,enablingover700urbanandruralstudentsfromdiverseregionstolearnandgrowalongsideoneanotherthroughthesmart

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classroomnetwork.Todate,theprojecthasbenefitedmorethan7,700students.The“TCLSmartClassroom”initiativecontinuedtoempowerbalancedurban-ruraleducation,makingthe“zero-distance”sharingofqualityeducationalresourcesareality.TheTCLPublicWelfareFoundationcontinuedtoadvanceitsuniversitydonationseriestoadvanceeducationaldevelopment,fosterinnovativetalent,andpromotebreakthroughsinfrontiertechnologies.Inthefirsthalfof2025,the"TCLUniversityDonationSystem"awardedRMB6.5millioninfundingtoeightpartneruniversities,includingSouthChinaUniversityofTechnology,NankaiUniversity,XidianUniversity,andHuazhongUniversityofScienceandTechnology.TheinitiativealsorecognizedfiveTCLYoungScholarsandselectedfiveprojectsfortheTCLTechnologyInnovationFund.Theselectionprocessfortheseawardswillcontinueinthesecondhalfoftheyear.The“SUSTech-TCLInnovationandEntrepreneurshipLectureSeries”alsocontinued,withadonationofRMB1millioninthefirsthalfof2025.Theseriesfeaturedninethemedlectures,deliveredbydistinguishedexpertssuchasTaoJingzhou,anindependentarbitratorattheParisCourtandamemberoftheExpertCommitteeoftheChinaInternationalCommercialCourtoftheSupremePeople’sCourt,andXieKechang,formerVicePresidentandAcademicianoftheChineseAcademyofEngineeringandaForeignAcademicianoftheU.S.NationalAcademyofEngineering.Inaddition,theTCLPublicWelfareFoundationcontinuedtodeepenitstargetedassistancethroughmeasuressuchasinfrastructureconstruction,ruraldevelopmentsupport,andeducationalqualityimprovement,whichhelpsconsolidatepovertyalleviationachievementsandpromoteurban-ruralintegration.In2025,theFoundationprioritizedthreelocalpublicwelfareprojectsinHuizhou:donatingRMB1milliontoconstructasmart“PV-Storage-Charging”integratedchargingstationinXintangVillage,toadvancethedevelopmentofgreenenergyinfrastructureinruralareas;allocatingRMB1milliontosupportHuizhou’sruralrevitalizationproject,specificallyforimprovinglocaleducationalandlivingconditions;andgrantingRMB150,000tofundanopenreadingspaceatHuizhouZhongkaiHigh-TechZoneNo.6MiddleSchool,enhancingthecampusculturalenvironmentandimprovingyouthliteracy.Concurrently,theFoundationcontinuedtoorganizethe“TCLRoseAction-EmployeePublicWelfareCreativityCompetition”,encouragingemployeestolaunchinnovativeprojectswithsocialvalueandengageincommunityassistanceatmultiplelevels.

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PartVSignificantEventsI.CommitmentsfulfilledduringthereportingperiodandoutstandingcommitmentsasoftheendofthereportingperiodbytheCompany’sactualcontroller,shareholders,relatedparties,acquirers,theCompanyitself,andotherrelevantcommitmentparties

□Applicable?NotapplicableDuringtheReportingPeriod,therewerenocommitmentsthatweremadebytheCompany,itsactualcontroller,shareholders,relatedparties,acquirers,amdotherrelevantpartiestobefulfilledwithinthereportingperiodorremainedoverdueandunfulfilledasattheendofthereportingperiod.II.OccupationoftheCompany’sfundsbytheControllingShareholderoranyofItsRelatedPartiesforNon-OperationalPurposes

□Applicable?NotapplicableNosuchcasesintheReportingPeriod.III.IrregularitiesintheProvisionofGuarantees

□Applicable?NotapplicableNosuchcasesintheReportingPeriod.IV.EngagementandDisengagementofIndependentAuditorWhethertheinterimfinancialreporthasbeenaudited

□Yes?NoTheInterimReporthasnotbeenaudited.V.ExplanationoftheBoardofDirectorsandSupervisoryCommitteeonthe“Non-StandardAuditor’sReport”fortheReportingPeriod

□Applicable?NotapplicableVI.ExplanationoftheBoardofDirectorsonthe“Non-StandardAuditor’sReport”forthePreviousYear

□Applicable?NotapplicableVII.InsolvencyandReorganization

□Applicable?NotapplicableNosuchcasesintheReportingPeriod.

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VIII.LawsuitsSignificantlawsuitsandarbitrations

□Applicable?NotapplicableNosuchcasesintheReportingPeriod.IX.PunishmentsandRectifications

□Applicable?NotapplicableNosignificantpunishmentsorrectificationsintheReportingPeriod.

X.CreditQualityoftheCompanyaswellasitsControllingShareholderandActualController

□Applicable?Notapplicable

XI.MajorRelated-PartyTransactions

1.RecurringRelated-PartyTransactions?Applicable□NotapplicableFortheCompany'srecurringrelated-partytransactionsduringtheReportingPeriod,pleaserefertotherelatedannouncementsdisclosedonwww.cninfo.com.cn.

2.Related-PartyTransactionsRegardingPurchaseorDisposalofAssetsorEquityInterests

□Applicable?NotapplicableDuringtheReportingPeriod,therewerenomajorrelated-partytransactionsregardingpurchaseordisposalofassetsorequityinterests.

3.Related-PartyTransactionsRegardingJointInvestmentsinThirdParties

□Applicable?NotapplicableTherewerenorelated-partytransactionsregardingjointinvestmentsinthirdpartiesduringtheReportingPeriod.

4.AmountsDuetoandfromRelatedParties?Applicable□NotapplicableIndicatewhethertherewereanyamountsduetoandfromrelatedpartiesfornon-operatingpurposes

□Yes?NoDuringtheReportingPeriod,theCompanyhadnoamountsduetoandfromrelatedpartiesfornon-operatingpurposes.

5.TransactionswithRelatedFinanceCompanies

□Applicable?NotapplicableTheCompanyhadnodeposits,loans,creditgrantingorotherfinancialbusinesswiththerelatedfinancecompaniesandrelatedparties.

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6.TransactionswithRelatedPartiesbyFinanceCompaniesControlledbytheCompany

?Applicable□NotapplicableDeposits

Loans

Creditorotherfinancialbusiness

7.OtherMajorRelated-PartyTransactions

?Applicable□NotapplicableRelatedinquiriesonthewebsitefortemporarydisclosureofmajorrelated-partytransactions

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XII.MajorContractsandExecutionthereof

1.Entrustment,Contracting,andLeases

(1)Entrustment

□Applicable?NotapplicableDuringthereportingperiod,theCompanyhadnoentrustmentprojectsthatbroughtprofitorlossofmorethan10%oftheCompany'stotalprofitinthereportingperiod.

(2)Contracting

□Applicable?NotapplicableDuringthereportingperiod,theCompanyhadnocontractingprojectsthatbroughtprofitorlossofmorethan10%oftheCompany'stotalprofitinthereportingperiod.

(3)Leases

□Applicable?NotapplicableDuringthereportingperiod,theCompanyhadnoleaseprojectsthatbroughtprofitorlossofmorethan10%oftheCompany'stotalprofitinthereportingperiod.

2.MajorGuarantees?Applicable□Notapplicable

Unit:RMB'0,000

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Note:(1)Theguaranteeperiodintheabovetableistheremainingguaranteeperiodoftheprincipaldebt.Theactualguaranteeisvalidfortwoorthreeyearsfromtheexpirationdateoftheprincipaldebt,whichissubjecttothesinglecontract.

(2)Inthetableabove,ShenzhenChinaStarOptoelectronicsBandaotiDisplayTechnologyCo.,Ltd.,asubsidiarycontrolledbytheCompany,wasjointlyguaranteedbytheCompanyanditssubsidiary,TCLChinaStarOptoelectronicsTechnologyCo.,Ltd.,inanexternalsyndicatedloan,inwhichtheCompanyprovidedacertainpercentageofguarantee,whileTCLChinaStarOptoelectronicsTechnologyCo.,Ltd.providedfullguarantee.AsattheendoftheReportingPeriod,thedebtportionunderjointguaranteeamountedtoRMB12,141.79million.Thejointguaranteehasbeenfilledinthe"Company’sGuaranteeforSubsidiaries"and"GuaranteeAmongSubsidiaries",respectively.

3.EntrustedWealthManagement

?Applicable□Notapplicable

Unit:RMB'0,000

Thespecificsituationofhigh-riskentrustedwealthmanagementwithalargesingleamountorlowsecurityandpoorliquidity

□Applicable?NotapplicableSituationinwhichtheCompanyfailstorecoveritsprincipalforentrustedwealthmanagementproducts,orothersituationsthatmayresultinimpairment

□Applicable?Notapplicable

4.OtherMajorContracts

□Applicable?NotapplicableTheCompanydidnothaveanyothermajorcontractsthatshouldbedisclosedduringthereportingperiod.

XIII.OtherSignificantEvents

□Applicable?NotapplicableTherearenoothersignificanteventsthatneedtobeexplainedfortheReportingPeriod.

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XIV.SignificantEventsoftheCompany’sSubsidiaries

□Applicable?Notapplicable

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PartVIChangesinSharesandInformationaboutShareholders

I.ChangesinShares

1.Changesinshares

Unit:share

Reasonsforchangesinshares?Applicable□Notapplicable

1.OnJune19,2025,theCompanydisclosedtheVoluntaryAnnouncementontheNon-tradingTransferofCertainSharesofthe

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HoldersundertheEmployeeStockOwnershipPlan.TheCompanyhascompletedthesecondnon-tradingtransferunderthe2021-2023EmployeeStockOwnershipPlan(PhaseII)andthefirstnon-tradingtransferunderthe2021-2023EmployeeStockOwnershipPlan(PhaseIII).Amongthem,3,834,401sharesweretransferredtothecurrentdirectors,supervisors,andseniormanagersoftheCompanythroughnon-tradingtransfer.

2.DuringtheReportingPeriod,restrictedsharesheldbyseniormanagementincreasedby2,875,800shares,asnon-restrictedsharesdecreasedbythesameamount.Approvalofchangesinshares

□Applicable?NotapplicableTransferofshareownership?Applicable□Notapplicable

1.OnJune19,2025,theCompanydisclosedtheVoluntaryAnnouncementontheNon-tradingTransferofCertainSharesofHoldersundertheEmployeeStockOwnershipPlan.TheCompanyhascompletedthesecondnon-tradingtransferunderthe2021-2023EmployeeStockOwnershipPlan(PhaseII)andthefirstnon-tradingtransferunderthe2021-2023EmployeeStockOwnershipPlan(PhaseIII).Amongthem,3,834,401sharesweretransferredtothecurrentdirectors,supervisors,andseniormanagersoftheCompanythroughnon-tradingtransfer,and29,430,560sharesweretransferredtootherholdersthroughnon-tradingtransfer.Progressonanysharerepurchase?Applicable□Notapplicable

1.DuringtheReportingPeriod,theCompanydisclosedtheprogressofitssharerepurchasebythethirdtradingdayofeachmonth.Formoredetails,pleaserefertotherelevantannouncementsreleasedonMay7,2025,andJune4,2025,ondesignatedinformationdisclosuremedia.

2.OnJuly26,2025,theCompanydisclosedtheAnnouncementontheCompletionofthe2025RepurchaseofPubliclyTradedSharesandtheResultsoftheRepurchase(AnnouncementNo.:2025-069).FromJuly18,2025,toJuly25,2025,theCompanyrepurchasedatotalof174,747,985sharesoftheCompanythroughcentralizedbiddingfromthespecialsecuritiesaccountforrepurchase,accountingfor0.88%ofthetotalsharecapitaloftheCompany.ThehighestandlowesttradingpriceswereRMB4.67pershareandRMB4.49pershare,respectively,andthetotalpaymentapproximatedtoRMB800million(excludingtransactionfees).Progressonreducingtherepurchasedsharesbymeansofcentralizedbidding

□Applicable?NotapplicableEffectsofchangesinsharesonthebasicearningspershare,dilutedearningspershare,netassetpershareattributabletotheCompany'sordinaryshareholdersandotherfinancialindicatorsoftheprioryearandtheprioraccountingperiod,respectively?Applicable□Notapplicable

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OtherinformationthattheCompanyconsidersnecessaryorisrequiredbythesecuritiesregulatoryauthoritiestobedisclosed

□Applicable?Notapplicable

2.ChangesinRestrictedShares

?Applicable□Notapplicable

Unit:share

II.IssuanceandListingofSecurities

□Applicable?NotapplicableIII.TotalNumberofShareholdersandTheirShareholdings

Unit:share

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Participationofshareholdersholdingmorethan5%,thetop10shareholders,andthetop10non-restrictedshareholdersinthelendingofsharesundertherefinancingbusiness

□Applicable?NotapplicableChangeinthetop10shareholdersandthetop10non-restrictedshareholdersduetosecuritieslending/returningunderrefinancingascomparedtothepreviousperiod

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□Applicable?NotapplicableIndicatewhetheranyofthetop10ordinaryshareholdersorthetop10non-restrictedordinaryshareholdersoftheCompanyconductedanypromissoryrepurchasetransactionsduringtheReportingPeriod

□Yes?NoNosuchcasesintheReportingPeriod.IV.ChangeinShareholdingsofDirectors,Supervisors,andSeniorManagement?Applicable□Notapplicable

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Note:1.TheincreaseinthenumberofsharesheldbytheCompany'sdirectors,supervisors,andseniormanagementduringtheReportingPeriodwasduetothenon-tradingtransferofsharescorrespondingtoholders'sharesunderthe2021-2023EmployeeStockOwnershipPlan(PhaseII)andthe2021-2023EmployeeStockOwnershipPlan(PhaseIII)toemployees’securitiesaccounts.Fordetails,pleaserefertotheVoluntaryAnnouncementontheNon-TradingTransferofCertainSharesoftheHoldersundertheEmployeeStockOwnershipPlanpublishedbytheCompanyonthedesignatedmediaonJune19,2025.

2.OnAugust28,2025,theCompanyheldthe13thmeetingoftheEighthBoardofDirectorsandtheninthmeetingoftheEighthSupervisoryCommittee.TheyreviewedandapprovedtheProposalonCancelingtheSupervisoryCommitteeandAmendingtheArticlesofAssociationanditsAttachments,accordingtowhichtheCompanyplanstocanceltheSupervisoryCommitteeandsupervisorsandrevisetheArticlesofAssociationanditsattachmentsaccordingly.TheproposalisstillsubjecttoapprovalbytheCompany’sgeneralmeeting.

V.ChangeoftheControllingShareholderortheActualController

Explanationontheabsenceofacontrollingshareholderoractualcontroller:

Mr.LiDongshengandNingboJiutianLianchengEquityInvestmentPartnership(LimitedPartnership)becamepersonsactinginconcertbysigningtheAgreementonConcertedAction,holding1,266,680,807sharesintotalandbecomingthelargestshareholderoftheCompany.

AccordingtotheCompanyLaw,acontrollingshareholderreferstoashareholderwhoownsover50%ofalimitedliabilitycompany’stotalcapitalorover50%ofajointstockcompany’stotalsharecapital;or,despitetheownershipoflessthan50%ofalimitedliabilitycompany’stotalcapitalorlessthan50%ofajointstockcompany’stotalnumberofshares,whocanstillprevailintheresolutionofameetingofshareholdersaccordingtothevotingrightscorrespondingtotheirinterestinthelimitedliabilitycompany’stotalcapitalorthejointstockcompany’stotalnumberofshares.Accordingtothedefinitionabove,theCompanyhasnocontrollingshareholder.

The"actualcontroller"referstoanentitythat,whilenotashareholderofacompany,effectivelycontrolsitsactionsoroperationsthroughinvestmentrelationships,contractualagreements,orotherarrangements.Accordingtothedefinitionabove,theCompanyhasnoactualcontroller.ChangeofthecontrollingshareholderintheReportingPeriod

□Applicable?NotapplicableChangeoftheactualcontrollerintheReportingPeriod

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□Applicable?NotapplicableVIPreferredShares

□Applicable?NotapplicableDuringthereportingperiod,theCompanydidnothavepreferredshares.

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PartVIIBonds

?Applicable□Notapplicable

I.EnterpriseBonds

□Applicable?NotapplicableNoenterprisebondsintheReportingPeriod.

II.CorporateBonds

?Applicable□Notapplicable

1.GeneralInformationonCorporateBonds

Unit:RMB'0,000

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Note1:TheSci-TechInnovationCorporateBonds(DigitalEconomy)PubliclyOfferedbyTCLTechnologyGroupCorporationtoProfessionalInvestorsin2024(Phase3)(Type1)haveatermof5yearsandwillexpireonJuly8,2029.Thebondsincludetheissuer'sredemptionoption,theoptiontoadjustthecouponrate,andtheinvestor'sputoptionattheendofthethirdyear.Iftheissuer'scalloptionorinvestors'putoptionisexercised,thematuritydateoftheexercisedbondswillbeJuly8,2027.Note2:TheSci-TechInnovationCorporateBonds(DigitalEconomy)PubliclyOfferedbyTCLTechnologyGroupCorporationtoProfessionalInvestorsin2024(Phase2)haveatermof5yearsandwillexpireonApril11,2029.Thebondsincludetheissuer'sredemptionoption,theoptiontoadjustthecouponrate,andtheinvestor'sputoptionattheendofthethirdyear.Iftheissuer'scalloptionorinvestors'putoptionisexercised,thematuritydateoftheexercisedbondswillbeApril11,2027.Note3:TheSci-TechInnovationCorporateBonds(DigitalEconomy)PubliclyOfferedbyTCLTechnologyGroupCorporationtoProfessionalInvestorsin2024(Phase1)disbursedtherepurchasefundsonFebruary5,2025basedontheexerciseresultsofinvestors'putoptions,andresoldtherepurchasedbondsfromFebruary6,2025toMarch5,2025.Aftertheresalehasbeencompleted,theoutstandingbalanceisRMB1.5billion,andthematuritydatewillbeFebruary1,2026.Overduebonds

□Applicable?Notapplicable

2.Triggeringandimplementationofissuerorinvestoroptionclausesandinvestorprotectionclauses

?Applicable□NotapplicableDuringtheReportingPeriod,24TCLK1triggereditscouponrateadjustmentoptionanditsputoption.AccordingtotheProspectusfortheSci-TechInnovationCorporateBonds(DigitalEconomy)PubliclyOfferedbyTCLTechnologyGroupCorporationtoProfessionalInvestorsin2024(Phase1),thebondholdersof24TCLK1wereentitledtoexerciseaputoptionduringtheredemptionwindow(December19-23,2024),allowingthemtosellalloraportionoftheirbondsbacktotheissueratRMB100pernote(excludingaccruedinterest).Concurrently,thecouponratewasresetdownwardfrom2.64%to2.10%forthesubsequentone-yearperiod,withsettlementoftherepurchasedbondsscheduledforFebruary5,2025.AccordingtodatafromtheShenzhenBranchofChinaSecuritiesDepositoryandClearingCorporationLimited,2,400,000unitsofthe24TCLK1bondswererepurchasedduringtheredemptionwindow,totalingRMB240,000,000.00inprincipalamount(exclusiveofaccruedinterest).AccordingtotheAnnouncementontheResaleResultsofBondsfor24TCLK1BondsissuedbyTCLTechnologyGroupCorporation,theCompanyconductedtheresaleoftherepurchasedbondsfromFebruary6toMarch5,2025,withthenumberofresoldbondsnotexceeding2,400,000units.Atotalof2,400,000unitsofthebondsweresuccessfullyresoldinthisround.Uponcompletionoftheresaleprocess,noresidualbondsremainpendingresale,andtheremainingcustodyvolumeof24TCLK1is15,000,000units.

3.AdjustmentsofcreditratingresultsduringtheReportingPeriod

□Applicable?Notapplicable

4.Theimplementationandchangesofguarantees,debtrepaymentplans,andothersafeguardmeasuresregardingdebtrepaymentduringtheReportingPeriod,andtheirimpactontheequityofbondinvestors

□Applicable?Notapplicable

FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

III.DebtFinancingInstrumentsofNon-FinancialEnterprises?Applicable□Notapplicable

1.Generalinformationondebtfinancinginstrumentsofnon-financialenterprises

Unit:RMB'0,000

FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

Overduebonds

□Applicable?Notapplicable

2.Triggeringandimplementationofissuerorinvestoroptionclausesandinvestorprotectionclauses

□Applicable?Notapplicable

3.AdjustmentsofcreditratingresultsduringtheReportingPeriod

□Applicable?Notapplicable

4.Theimplementationandchangesofguarantees,debtrepaymentplans,andothersafeguardmeasuresregardingdebtrepaymentduringtheReportingPeriod,andtheirimpactontheequityofbondinvestors

□Applicable?NotapplicableIV.ConvertibleCorporateBonds

□Applicable?NotapplicableDuringthereportingperiod,theCompanydidnothaveconvertiblecorporatebonds.V.ConsolidatedlossoftheReportingPeriodExceeding10%ofNetAssetsofthelastyear-end

□Applicable?Notapplicable

VI.KeyAccountingDataandFinancialIndicatorsoftheCompanyforthePastTwoYearsasattheEndoftheReportingPeriod

FullTextofthe2025InterimReportofTCLTechnologyGroupCorporation

Note:ThesignificantYoYincreaseinthenetprofitsattributabletotheCompany’sshareholdersafternon-recurringgainsandlosses,interestcoverageratioandcashcoverageratiowasprimarilyattributabletotheimprovedoperationalperformanceofthedisplaybusinesscomparedtotheprior-yearperiod.

PartVIIIUnauditedFinancialReport(FortheperiodfromJanuary1,2025toJune30,2025)

I.Auditor’sReportWhetherthe2025interimreporthasbeenauditedornot?

□Yes√NoTheCompany’s2025interimfinancialreporthasnotyetbeenaudited.II.FinancialStatementsTheunitofthenotestothefinancialreportis:RMB’000

TCLTechnologyGroupCorporationConsolidatedBalanceSheet

___________(RMB’000)_____________NoteV

Currentassets

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationConsolidatedBalanceSheet(Continued)

___________(RMB’000)_____________Liabilitiesandshareholders'equity

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationConsolidatedIncomeStatement

___________(RMB’000)_____________NoteV

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationConsolidatedCashFlowStatement

___________(RMB’000)_____________NoteV

Sub-totalofcashgeneratedfromoperatingactivities

Paymentsforcommoditiesandservices

Sub-totalofcashusedinoperatingactivities

Netcashgeneratedfromoperatingactivities

II.Cashflowgeneratedfrominvestingactivities:

Sub-totalofcashgeneratedfrominvestmentactivities

Paymentsfortheacquisitionandconstructionoffixedassets,intangibleassetsandotherlong-termassets

Subtotalofcashusedininvestingactivities

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationConsolidatedCashFlowStatement(Continued)

___________(RMB’000)_____________NoteV

III.Cashflowgeneratedfromfinancingactivities:

Sub-totalofcashgeneratedfromfinancingactivities

Cashpaidfordebtrepayment

Subtotalofcashusedinfinancingactivities

Netcashgeneratedfromfinancingactivities

IV.Effectofexchangeratechangesoncashandcashequivalents

V.Netincreaseincashandcashequivalents

Add:Beginningbalanceofcashandcashequivalents

VI.Endingbalanceofcashandcashequivalents

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationConsolidatedStatementofChangesinShareholders’Equity

___________(RMB’000)_____________

January-June2025

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationConsolidatedStatementofChangesinShareholders’Equity(Continued)

___________(RMB’000)_____________

January-June2024

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationBalanceSheetoftheCompany

___________(RMB’000)_____________Assets

Totalcurrentassets

Non-currentassets

Totalnon-currentassets

Totalassets

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationBalanceSheetoftheCompany(Continued)

___________(RMB’000)_____________Liabilitiesandshareholders'equity

Currentliabilities

Totalcurrentliabilities

Non-currentliabilities

Totalnon-currentliabilities

Totalliabilities

Sharecapital

Totalshareholders’equity

Totalliabilitiesandshareholders'equity

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationIncomeStatementoftheCompany

___________(RMB’000)_____________NoteXVII

I.Operatingrevenue

II.Operatingprofit

III.Grossprofit

IV.Netprofits

V.Othercomprehensiveincome

VI.Totalcomprehensiveincome

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationCashFlowStatementoftheCompany

___________(RMB’000)_____________NoteXVII

I.Netcashgeneratedfromoperatingactivities:

I.Netcashgeneratedfromoperatingactivities:

Proceedsfromthesaleofcommoditiesandrenderingofservices

Sub-totalofcashgeneratedfromoperatingactivities

Paymentsforcommoditiesandservices

Sub-totalofcashusedinoperatingactivities

Netcashgeneratedfromoperatingactivities

II.Cashflowgeneratedfrominvestingactivities:

Sub-totalofcashgeneratedfrominvestmentactivities

Paymentsfortheacquisitionandconstructionoffixedassets,intangibleassetsandotherlong-termassets

Subtotalofcashusedininvestingactivities

Netcashusedininvestingactivities

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationCashFlowStatementoftheCompany(Continued)

___________(RMB’000)_____________

NoteXVII

III.Cashflowgeneratedfromfinancingactivities:

III.Cashflowgeneratedfromfinancingactivities:

Borrowingsraised

Sub-totalofcashgeneratedfromfinancingactivities

Cashpaidfordebtrepayment

Subtotalofcashusedinfinancingactivities

Netcashgeneratedfromfinancingactivities

IV.Effectofexchangeratechangesoncashandcashequivalents

V.Netincreaseincashandcashequivalents

VI.Endingbalanceofcashandcashequivalents

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationStatementofChangesinShareholderEquityoftheCompany

___________(RMB’000)_____________January-June2025

I.Balanceattheendoftheprioryear

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

TCLTechnologyGroupCorporationStatementofChangesinShareholderEquityoftheCompany(Continued)

___________(RMB’000)_____________

January-June2024

I.Balanceattheendoftheprioryear

Legalrepresentative:

Theattachednotestothefinancialstatementsformanintegralpartofthefinancialstatements.

ICorporateInformation

Approvalandissue:ThesefinancialstatementswereauthorizedforissuebytheCompany’sBoardofDirectorsonAugust28,2025.IIBasisforthePreparationofFinancialStatements1Basisforthepreparation

TCLTechnologyGroupCorporation(hereinafterreferredtoas"theCompany")isalimitedliabilitycompanyestablishedinHuizhouonJuly17,1997.Itwaschangedtoalimitedliabilitycompanyasawholein2002andwaslistedontheShenzhenStockExchangeinJanuary2004.Throughyearsofnewshareplacements,privateplacements,capitalconversion,shareoptionexercises,andsharerepurchasesandcancellations,theregisteredcapitalandsharecapitaloftheCompanywereRMB18,779,080,767asofJune30,2025.ThemainbusinessstructureoftheCompanyanditssubsidiariesconsistsofdisplay,newenergyphotovoltaicandothersiliconmaterials,industrialfinance,andotherbusinesses.TherelevantinformationoftheCompany'ssubsidiariesisdetailedinNoteVIII.TheregisteredaddressoftheCompanyis:TCLTECH.Building,17HuifengThirdRoad,ZhongkaiHi-TechDevelopmentDistrict,HuizhouCity,GuangdongProvince.

ThepreparationoffinancialstatementsoftheCompanyisbasedontheactualtransactionsandeventsinaccordancewiththeAccountingStandardsforBusinessEnterprises-BasicStandardspublishedbytheMinistryofFinanceandspecificAccountingStandardsforBusinessEnterprises,applicationguidelinesforAccountingStandardsforBusinessEnterprises,AccountingStandardsforBusinessEnterprisesinterpretationsandotherrelevantregulations(hereinaftercollectivelyreferredtoas"AccountingStandardsforBusinessEnterprises")forconfirmationandmeasurement,combiningtheprovisionsofRegulationsonInformationDisclosureandCompilationofCompaniesOfferingSecuritiestothePublicNo.15-GeneralProvisionsonFinancialReports(revisedin2023)publishedbyCSRC.

2Goingconcernbasis

ThepreparationoffinancialstatementsoftheCompanyisbasedontheactualtransactionsandeventsinaccordancewiththeAccountingStandardsforBusinessEnterprises-BasicStandardspublishedbytheMinistryofFinanceandspecificAccountingStandardsforBusinessEnterprises,applicationguidelinesforAccountingStandardsforBusinessEnterprises,AccountingStandardsforBusinessEnterprisesinterpretationsandotherrelevantregulations(hereinaftercollectivelyreferredtoas"AccountingStandardsforBusinessEnterprises")forconfirmationandmeasurement,combiningtheprovisionsofRegulationsonInformationDisclosureandCompilationofCompaniesOfferingSecuritiestothePublicNo.15-GeneralProvisionsonFinancialReports(revisedin2023)publishedbyCSRC.TheCompanyhasevaluatedtheabilitytocontinueasagoingconcernfor12monthsfromtheendoftheReportingPeriodandhasnotidentifiedanyissuesorcircumstancesthatresultinsignificantdoubtsaboutitsabilitytocontinueasagoingconcern.Therefore,thefinancialstatementshavebeenpreparedonagoingconcernbasis.

IIISignificantaccountingpoliciesandaccountingestimates

ThefollowingsignificantaccountingpoliciesandaccountingestimatesoftheCompanyareformulatedinaccordancewiththeAccountingStandardsforBusinessEnterprises.ThebusinessnotmentionedshallbeimplementedinaccordancewiththerelevantaccountingpoliciesintheAccountingStandardsforBusinessEnterprises.

1StatementofcompliancewithAccountingStandardsforBusinessEnterprises

2Accountingperiod

ThefinancialstatementsareincompliancewiththerequirementsoftheAccountingStandardsforBusinessEnterprises,andtrulyandcompletelyreflectthefinancialposition,operatingresults,cashflow,andotherrelevantinformationoftheCompanyduringtheReportingPeriod.TheCompanyadoptsthecalendaryearasanaccountingperiod,anditsfiscalyearisfromJanuary1toDecember31oftheGregoriancalendar.

3Operationscycle

TheCompanyadoptsthecalendaryearasanaccountingperiod,anditsfiscalyearisfromJanuary1toDecember31oftheGregoriancalendar.Anoperationscyclereferstoaperiodfromthepurchaseofassetsbyanenterpriseforprocessingtotherealizationofcashorcashequivalents.TheCompanytakesa12-months’periodasanoperationscycleandtakestheoperatingcycleasthecriteriaforliquidityclassificationofassetsandliabilities.

4Functionalcurrencyforbookkeeping

Anoperationscyclereferstoaperiodfromthepurchaseofassetsbyanenterpriseforprocessingtotherealizationofcashorcashequivalents.TheCompanytakesa12-months’periodasanoperationscycleandtakestheoperatingcycleasthecriteriaforliquidityclassificationofassetsandliabilities.TheCompanyusesRMBasitsfunctionalcurrency.Itsoverseassubsidiariesusethecurrenciesofthemaineconomicenvironmentinwhichtheyoperateastheirrespectivefunctionalcurrencies,andtheirfinancialstatementsareconvertedintoRMBandpresentedinRMBthousandsunlessotherwisespecified.

5Methodandselectionbasisfordeterminingimportancecriteria

TheCompanyusesRMBasitsfunctionalcurrency.Itsoverseassubsidiariesusethecurrenciesofthemaineconomicenvironmentinwhichtheyoperateastheirrespectivefunctionalcurrencies,andtheirfinancialstatementsareconvertedintoRMBandpresentedinRMBthousandsunlessotherwisespecified.

Item

6Accountingtreatmentsforbusinesscombinationsinvolvingenterprisesunderandnotunder

commoncontrol

(a)

(b)

(c)

(d)

(2)

Acombinationofenterprisesthatareultimatelycontrolledbythesamepartyorpartiesbeforeandafterthecombinationonanon-temporarybasisconstitutesabusinesscombinationundercommoncontrol.

Acombinationofenterprisesthatareultimatelycontrolledbythesamepartyorpartiesbeforeandafterthecombinationonanon-temporarybasisconstitutesabusinesscombinationundercommoncontrol.

AssetsandliabilitiesacquiredbytheCompanyinabusinesscombinationaremeasuredattheircarryingamountsintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyonthecombinationdate.(includingthegoodwillresultingfromtheultimatecontrollingparty'sacquisitionoftheacquiree).Thedifferencebetweenthecarryingamountofnetassetsacquiredinthecombinationandthatoftheconsiderationpaidforthecombination(orthetotalparvalueofsharesissued)isusedtoadjustthesharecapitalpremiuminthecapitalreserve,andwhenthesharecapitalpremiuminthecapitalreserveisinsufficientforoffset,itisusedtoadjusttheretainedearnings.Ifthereisacontingentconsiderationanditisnecessarytoconfirmestimatedliabilitiesorassets,thedifferencebetweentheamountsoftheestimatedliabilitiesorassetsandthesettlementamountofsubsequentcontingentconsiderationisusedtoadjustthecapitalreserve(capitalpremiumorsharecapitalpremium),andwhenthecapitalreserveisinsufficient,itisusedtoadjusttheretainedearnings.

AssetsandliabilitiesacquiredbytheCompanyinabusinesscombinationaremeasuredattheircarryingamountsintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyonthecombinationdate.(includingthegoodwillresultingfromtheultimatecontrollingparty'sacquisitionoftheacquiree).Thedifferencebetweenthecarryingamountofnetassetsacquiredinthecombinationandthatoftheconsiderationpaidforthecombination(orthetotalparvalueofsharesissued)isusedtoadjustthesharecapitalpremiuminthecapitalreserve,andwhenthesharecapitalpremiuminthecapitalreserveisinsufficientforoffset,itisusedtoadjusttheretainedearnings.Ifthereisacontingentconsiderationanditisnecessarytoconfirmestimatedliabilitiesorassets,thedifferencebetweentheamountsoftheestimatedliabilitiesorassetsandthesettlementamountofsubsequentcontingentconsiderationisusedtoadjustthecapitalreserve(capitalpremiumorsharecapitalpremium),andwhenthecapitalreserveisinsufficient,itisusedtoadjusttheretainedearnings.

Forabusinesscombinationthatisultimatelyrealizedthroughmultipletransactions,ifitisapackagetransaction,eachtransactionistreatedasatransactionthatacquirescontrol;ifitisnotapackagetransaction,onthedateofacquisitionofcontrol,thedifferencebetweentheinitialcostoflong-termequityinvestmentsandthecarryingamountoflong-termequityinvestmentsbeforethecombinationplusthecarryingamountofthenewlypaidconsiderationsonthedateofcombinationisusedtoadjustthecapitalreserve;andwhenthecapitalreserveisinsufficientforoffset,itisusedtoadjusttheretainedearnings.Forequityinvestmentsheldpriortothedateofcombination,noaccountingtreatmentiscarriedoutforothercomprehensivegainsrecognizedbyequityaccountingorfinancialinstrumentconfirmationandmeasurementstandards,anduptothedisposaloftheinvestment,theaccountingtreatmentshallbebasedonthesamebasisasthedirectdisposaloftheassetsorliabilitiesoftheinvestedentity;otherchangesintheowner’sequityotherthannetprofitsorloss,othercomprehensiveincome,orprofitdistributionofnetassetsoftheinvestedcompanyrecognizedasequityarenotsubjecttoaccounting,andwillbetransferredtothecurrentprofitandlossuntildisposaloftheinvestment.

Forabusinesscombinationthatisultimatelyrealizedthroughmultipletransactions,ifitisapackagetransaction,eachtransactionistreatedasatransactionthatacquirescontrol;ifitisnotapackagetransaction,onthedateofacquisitionofcontrol,thedifferencebetweentheinitialcostoflong-termequityinvestmentsandthecarryingamountoflong-termequityinvestmentsbeforethecombinationplusthecarryingamountofthenewlypaidconsiderationsonthedateofcombinationisusedtoadjustthecapitalreserve;andwhenthecapitalreserveisinsufficientforoffset,itisusedtoadjusttheretainedearnings.Forequityinvestmentsheldpriortothedateofcombination,noaccountingtreatmentiscarriedoutforothercomprehensivegainsrecognizedbyequityaccountingorfinancialinstrumentconfirmationandmeasurementstandards,anduptothedisposaloftheinvestment,theaccountingtreatmentshallbebasedonthesamebasisasthedirectdisposaloftheassetsorliabilitiesoftheinvestedentity;otherchangesintheowner’sequityotherthannetprofitsorloss,othercomprehensiveincome,orprofitdistributionofnetassetsoftheinvestedcompanyrecognizedasequityarenotsubjecttoaccounting,andwillbetransferredtothecurrentprofitandlossuntildisposaloftheinvestment.(3)

Acombinationofenterprisesthatarenotultimatelycontrolledbythesamepartyorpartiesbeforeandafterthecombinationconstitutesabusinesscombinationnotundercommoncontrol.

(3)

AssetstransferredandliabilitiesincurredorassumedbytheCompanyasconsiderationforthebusinesscombinationaremeasuredatfairvalueonthedateofpurchase,andthedifferencebetweenthefairvalueandtheircarryingamountisrecognizedincurrentprofitsandlosses.

AssetstransferredandliabilitiesincurredorassumedbytheCompanyasconsiderationforthebusinesscombinationaremeasuredatfairvalueonthedateofpurchase,andthedifferencebetweenthefairvalueandtheircarryingamountisrecognizedincurrentprofitsandlosses.

TheexcessofthecostofthebusinesscombinationovertheCompany'sshareofthefairvalueoftheacquiree'sidentifiablenetassetsisrecognizedasgoodwill.IfthecostofthebusinesscombinationislessthantheCompany'sshareofthefairvalueoftheacquiree'sidentifiablenetassets,theCompanyfirstreassessesthemeasurementofthefairvaluesoftheacquiree'sidentifiableassets,liabilitiesandcontingentliabilities,aswellasthemeasurementofthecostofthecombination.Ifafterthisreassessment,thecostofthecombinationisstilllessthantheCompany'sshareofthefairvalueoftheacquiree'sidentifiablenetassets,thedifferenceisrecognizedinthecurrentperiod'sprofitorloss.

TheexcessofthecostofthebusinesscombinationovertheCompany'sshareofthefairvalueoftheacquiree'sidentifiablenetassetsisrecognizedasgoodwill.IfthecostofthebusinesscombinationislessthantheCompany'sshareofthefairvalueoftheacquiree'sidentifiablenetassets,theCompanyfirstreassessesthemeasurementofthefairvaluesoftheacquiree'sidentifiableassets,liabilitiesandcontingentliabilities,aswellasthemeasurementofthecostofthecombination.Ifafterthisreassessment,thecostofthecombinationisstilllessthantheCompany'sshareofthefairvalueoftheacquiree'sidentifiablenetassets,thedifferenceisrecognizedinthecurrentperiod'sprofitorloss.

Inthecasewhereabusinesscombinationnotundercommoncontrolisrealizedthroughmultipleexchangesandtransactions,ifitisapackagetransaction,eachtransactionwillbeaccountedforasatransactionforacquiringcontrol;inthecaseitisnotapackagetransaction,iftheequityinvestmentheldbeforethedateofcombinationisaccountedforusingequitymethod,thesumofthecarryingamountofequityinvestmentsoftheacquiredpartyheldbeforethedateofacquisition,plusthenewinvestmentcostonthedateofacquisitionwillberecognizedastheinitialcostoftheinvestment;theremainingcomprehensiveincomerecognizedinequityinvestmentsusingequitymethodbeforethedateofacquisitionwillberecorded,whentheinvestmentisdisposedofonthesamebasisasthosetheinvesteeadopteddirectlytodisposeoftherelevantassetsorliabilities.Iftheequityinvestmentheldbeforethedateofcombinationisaccountedforbyfinancialinstrumentrecognitionandmeasurementcriteria,thesumofthefairvalueoftheequityinvestmentonthedateofcombinationplusthenewinvestmentcostistakenastheinitialinvestmentcostonthedateofcombination.Thedifferencebetweenthefairvalueandthecarryingamountoftheoriginalequity,andtheaccumulatedfairvaluechangesoriginallyincludedinothercomprehensiveincomeshouldbetransferredtoreturnoninvestmentinthecurrentperiodwhichmatchesthecombinationdate.

Inthecasewhereabusinesscombinationnotundercommoncontrolisrealizedthroughmultipleexchangesandtransactions,ifitisapackagetransaction,eachtransactionwillbeaccountedforasatransactionforacquiringcontrol;inthecaseitisnotapackagetransaction,iftheequityinvestmentheldbeforethedateofcombinationisaccountedforusingequitymethod,thesumofthecarryingamountofequityinvestmentsoftheacquiredpartyheldbeforethedateofacquisition,plusthenewinvestmentcostonthedateofacquisitionwillberecognizedastheinitialcostoftheinvestment;theremainingcomprehensiveincomerecognizedinequityinvestmentsusingequitymethodbeforethedateofacquisitionwillberecorded,whentheinvestmentisdisposedofonthesamebasisasthosetheinvesteeadopteddirectlytodisposeoftherelevantassetsorliabilities.Iftheequityinvestmentheldbeforethedateofcombinationisaccountedforbyfinancialinstrumentrecognitionandmeasurementcriteria,thesumofthefairvalueoftheequityinvestmentonthedateofcombinationplusthenewinvestmentcostistakenastheinitialinvestmentcostonthedateofcombination.Thedifferencebetweenthefairvalueandthecarryingamountoftheoriginalequity,andtheaccumulatedfairvaluechangesoriginallyincludedinothercomprehensiveincomeshouldbetransferredtoreturnoninvestmentinthecurrentperiodwhichmatchesthecombinationdate.(4)

Theintermediaryfeespaidforaudits,legalservices,assessments,andconsultationsandotherdirectlyrelatedexpensesincurredinthebusinesscombinationarerecognizedinprofitorlossduringtheperiodinwhichtheyareincurred.Transactioncostsfortheissuanceofequitysecuritiesforthebusinesscombinationthatmaybedirectlyattributedtoequitytransactionscanbedeductedfromequity.

7Methodsforjudgingcontrolandpreparingconsolidatedfinancialstatements

Controlmeanshavingthepowerofcontrolovertheinvestee,enjoyingvariablereturnsbyparticipatingintherelevantactivitiesoftheinvestee,andhavingtheabilitytousethepowerovertheinvesteetoinfluencetheamountofreturns.

Controlmeanshavingthepowerofcontrolovertheinvestee,enjoyingvariablereturnsbyparticipatingintherelevantactivitiesoftheinvestee,andhavingtheabilitytousethepowerovertheinvesteetoinfluencetheamountofreturns.TheCompanyjudgeswhetheritcontrolstheinvesteebasedoncomprehensiveconsiderationofallrelevantfactsandcircumstances.Onceanychangeinrelevantfactsandcircumstancescausestherelevantelementsinvolvedinthedefinitionofcontroltobechanged,theCompanywillconductareassessment.Therelevantfactsandcircumstancesmainlyinclude:

TheCompanyjudgeswhetheritcontrolstheinvesteebasedoncomprehensiveconsiderationofallrelevantfactsandcircumstances.Onceanychangeinrelevantfactsandcircumstancescausestherelevantelementsinvolvedinthedefinitionofcontroltobechanged,theCompanywillconductareassessment.Therelevantfactsandcircumstancesmainlyinclude:

①Thepurposeforwhichtheinvesteeisestablished;

①Thepurposeforwhichtheinvesteeisestablished;②Therelevantactivitiesoftheinvesteeandhowtomakedecisionsonsuchactivities;

②Therelevantactivitiesoftheinvesteeandhowtomakedecisionsonsuchactivities;③Whethertherightsoftheinvestorgiveitthecurrentabilitytodirecttherelevantactivitiesoftheinvestee;

③Whethertherightsoftheinvestorgiveitthecurrentabilitytodirecttherelevantactivitiesoftheinvestee;④Whethertheinvestorisexposedto,orhasrightsto,variablereturnsfromitsinvolvementwiththeinvestee;

④Whethertheinvestorisexposedto,orhasrightsto,variablereturnsfromitsinvolvementwiththeinvestee;⑤Whethertheinvestorhastheabilitytoexerciseitspowerovertheinvesteetoaffecttheamountofreturn;

⑤Whethertheinvestorhastheabilitytoexerciseitspowerovertheinvesteetoaffecttheamountofreturn;⑥Therelationshipbetweentheinvestorandotherparties.

⑥Therelationshipbetweentheinvestorandotherparties.(2)

ThescopeofconsolidationoftheCompany’sconsolidatedfinancialstatementsisdeterminedonthebasisofcontrol,andallsubsidiaries(includingseparateentitiescontrolledbytheCompany)areincludedintotheconsolidatedfinancialstatements.

ThescopeofconsolidationoftheCompany’sconsolidatedfinancialstatementsisdeterminedonthebasisofcontrol,andallsubsidiaries(includingseparateentitiescontrolledbytheCompany)areincludedintotheconsolidatedfinancialstatements.(3)

TheCompanypreparestheconsolidatedfinancialstatementsbasedonthefinancialstatementsofitselfanditssubsidiariesandotherrelevantinformation.Inpreparingtheconsolidatedfinancialstatements,theCompanytreatsthewholegroupasasingleaccountingentitytoreflectthefinancialposition,operatingresults,andcashflowofthegroupasawholeunderunifiedaccountingpolicies,inaccordancewiththerecognition,measurement,andpresentationrequirementsofrelevantaccountingstandardsforbusinessenterprises.

7Methodsforjudgingcontrolandpreparingconsolidatedfinancialstatements(continued)

Inpreparingtheconsolidatedfinancialstatements,theeffectsofintracompanytransactionsbetweentheCompanyanditssubsidiaries,andamongsubsidiaries,areeliminatedfromtheconsolidatedbalancesheet,consolidatedincomestatement,consolidatedcashflowstatement,andconsolidatedstatementofchangesinshareholders'equity.WhereatransactionisrecognizedbytheCompanyoritssubsidiariesasthetransactionsubject,whichisdifferentfromthatundertheconsolidatedfinancialstatementofthegroup,thetransactionshouldbeadjustedatthegrouplevel.Ifthecurrentlossessharedbytheminorityshareholdersofasubsidiaryexceedtheshareenjoyedbytheminorityshareholderintheinitialowners'equityofthesubsidiary,thebalancewillstillbeusedtooffsettheequityofminorityinterests.DuringtheReportingPeriod,ifasubsidiaryorbusinessisaddedduetothebusinesscombinationinvolvingenterprisesundercommoncontrol,thebeginningbalancesoftheconsolidatedbalancesheetareadjusted;theincome,expensesandprofitsofthesubsidiaryorbusinessasfromthebeginningoftheperiodofcombinationtotheendoftheReportingPeriodareincludedintheconsolidatedincomestatement;thecashflowsofthesubsidiaryorbusinessasfromthebeginningoftheperiodofcombinationtotheendoftheReportingPeriodareincludedintheconsolidatedcashflowstatement,andtherelevantitemsofthecomparativestatementsareadjustedasifthereportingentityafterthecombinationhadexistedsincethetimepointwhentheultimatecontrollerbegantocontrol.IftheCompanyisabletoexercisecontrolovertheinvesteeundercommoncontrolduetoadditionalinvestmentorforotherreasons,itshallbedeemedthatthepartiesparticipatinginthecombinationhadmadeadjustmentsbasedontheircurrentstatewhentheultimatecontrollerbegantocontrol.Foranequityinvestmentintheacquireeheldpriortothebusinesscombination,anyrelatedprofitorloss,othercomprehensiveincome,andotherchangesinnetassetsthatwererecognizedduringtheperiodfromthelaterofi)thedatetheoriginalequityinterestwasacquired,andii)thedatethecombiningpartiescameundercommoncontrol,uptothedateofthebusinesscombination,arereversedagainsttheopeningbalanceofretainedearningsinthecomparativefinancialstatementsoragainstthecurrentperiod'sprofitorloss,respectively.DuringtheReportingPeriod,ifasubsidiaryorbusinessisaddedduetoabusinesscombinationinvolvingenterprisesundernon-commoncontrol,thebeginningbalanceoftheconsolidatedbalancesheetisnotadjusted;theincome,expenses,andprofitsofthesubsidiaryorbusinessfromthedateofacquisitiontotheendoftheReportingPeriodareincludedintheconsolidatedincomestatement;thecashflowofthesubsidiaryorbusinessfromthedateofacquisitiontotheendoftheReportingPeriodisincludedintheconsolidatedcashflowstatement.IftheCompanyisabletoexercisecontrolovertheinvesteenotundercommoncontrolduetoadditionalinvestmentorforotherreasons,theCompanyshallremeasuretheequityofthepurchasedpartyheldbeforethepurchasedateatitsfairvalueasatthepurchasedate,andthedifferencebetweenthefairvalueanditscarryingamountshallberecognizedinthereturnoninvestmentofthecurrentperiod.Iftheequityofthepurchasedpartyheldbeforethepurchasedateinvolvesothercomprehensiveincomeaccountedforundertheequitymethodandotherchangesinowner’sequityotherthannetprofitsandloss,othercomprehensiveincome,andprofitdistribution,therelevantothercomprehensiveincomeandotherchangesinowner’sequityshallbeconvertedintothereturnoninvestmentofthecurrentperiodwhichmatchesthepurchasedate,exceptforothercomprehensiveincomearisingfromtheinvestee’sremeasurementofthechangesinnetliabilitiesornetassetsofdefinedbenefitplans.DuringtheReportingPeriod,iftheCompanydisposesofasubsidiaryorbusiness,theincome,expenses,andprofitsofthesubsidiaryorbusinessfortheperiodfromthebeginningoftheperiodtothedisposaldateareincludedintheconsolidatedincomestatement;andthecashflowofthesubsidiaryorbusinessfortheperiodfromthebeginningofthereportingperiodtothedisposaldateisincludedintheconsolidatedcashflowstatement.

(3)

WhentheCompanylosescontrolovertheinvestedpartyduetodisposalofpartoftheequityinvestmentorotherreasons,theremainingequityinvestmentafterdisposalwillbere-measuredbasedonitsfairvaluebytheCompanyonthedateoflossofcontrol.Thedifferenceofthesumoftheconsiderationobtainedfromthedisposaloftheequityandthefairvalueoftheremainingequity,lessthesumoftheshareofnetassetsandgoodwilloftheoriginalsubsidiarythatshouldbeenjoyedinaccordancewiththeoriginalshare-holdingratiosincethedateofacquisitionorcombination,isaccountedforthereturnoninvestmentinthecurrentperiodoflossofcontrol.Othercomprehensiveincomeornetprofitsandlossesrelatedtotheoriginalsubsidiary'sequityinvestment,othercomprehensiveincome,andotherchangesinowners'equityotherthanprofitdistribution,willbeconvertedintocurrentreturnoninvestmentwhencontrolislost,exceptforothercomprehensivegainsarisingfromthere-measurementofnetliabilitiesoftheBenefitPlanmadebytheinvestedpartyorchangesinnetassets.Whentheequityinvestmentinasubsidiaryisdisposedofstepbystepthroughmultipletransactionsuntilthelossofcontrol,whentheterms,conditions,andeconomicinfluenceofthetransactionsoftheequityinvestmentinthesubsidiaryconformtooneormoreofthefollowing,itusuallyindicatesthatthemultipletransactionitemsshallbeaccountedforasatransactionpackage:

①Thesetransactionsaremadesimultaneouslyorwithconsiderationofinfluenceoneachother;②Thesetransactionscanonlyachieveacompletebusinessoutcomewhentheyareaccountedforcollectively;③Theoccurrenceofatransactiondependsontheoccurrenceofatleastoneoftheothertransactions;④Atransactionisuneconomicalindividually,butiseconomicalwhenconsideredcollectivelywithothertransactions.Iftransactionsthroughwhichtheequityinvestmentinasubsidiaryisdisposedofuntilthelossofcontrolconstituteatransactionpackage,theCompanywillaccountforsuchtransactionsasonetransactionthroughwhichthesubsidiaryisdisposedofwiththelossofcontroloverit;providedthatthedifferencebetweenthepriceforeachdisposalandtheshareinthenetassetofthesubsidiarycorrespondingtotheinvestmentdisposedof,beforethelossofcontrol,isrecognizedasothercomprehensiveincomeintheconsolidatedfinancialstatementsandistransferredtotheprofitsandlossesofthecurrentperiodinwhichthelossofcontroloccurs.Whentransactionsthroughwhichtheequityinvestmentinasubsidiaryisdisposedofuntilthelossofcontroldonotconstituteatransactionpackage,suchtransactionsshallbeaccountedfori)beforethelossofcontrol,inaccordancewiththerelevantpoliciesforpartialdisposalofanequityinvestmentinasubsidiarywithoutlosingcontrol;andii)uponthelossofcontrol,inaccordancewiththegeneralaccountingmethodfordisposingofasubsidiary.Thedifference,betweenthelong-termequityinvestmentobtainedbytheCompanythroughthepurchaseofminorityinterestsandtheshareinthenetassetofthesubsidiarycalculatedcontinuouslyfromthepurchasedate(orcombinationdate)basedonthenewshareholdingpercentageshallbeusedtoadjusti)thesharecapitalpremiumunderthecapitalreserveintheconsolidatedbalancesheetorii)theretainedearnings,ifthesharecapitalpremiumunderthecapitalreserveisinsufficienttooffset.Thedifferencebetweenthedisposalpriceobtainedfromthepartialdisposalofalong-termequityinvestmentinasubsidiarywithoutlosingcontrolandtheshare,correspondingtothelong-termequityinvestmentdisposedof,inthenetassetofthesubsidiarycalculatedcontinuouslyfromthepurchasedateorcombinationdateshallbeusedtoadjusti)thesharecapitalpremiumunderthecapitalreserveintheconsolidatedbalancesheetorii),theretainedearnings,ifthesharecapitalpremiumunderthecapitalreserveisinsufficienttooffset.

8Classificationofjointarrangementsandaccountingtreatmentmethodforjointoperations

TheCompanyclassifiesajointarrangementasajointoperationorajointventureaccordingtofactorssuchasthestructureandlegalformofthejointarrangement,thetermsagreedinthejointarrangement,otherrelevantfactsandcircumstances.Jointarrangementsnotreachedthroughindependententitiesareclassifiedasjointoperations;jointarrangementsreachedthroughindependententitiesareusuallyclassifiedasjointventures;however,ajointarrangementthatisindicatedbyconclusiveevidenceofmeetinganyofthefollowingconditionsandmeetingtheprovisionsofrelevantlawsandregulationsisclassifiedasajointoperation:

①Thelegalformofthejointarrangementshowsthatthepartieshaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.②Thecontractualtermsofthejointarrangementstipulatesthatthepartieshaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.③Otherrelevantfactsandcircumstancesshowthatthepartieshaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.Forexample,thepartiesenjoyalltheoutputsubstantiallyrelatedtothejointarrangement,andtherepaymentoftheliabilitiesrelatingtothearrangementcontinuesrelyingonthesupportoftheparties.

TheCompanyclassifiesajointarrangementasajointoperationorajointventureaccordingtofactorssuchasthestructureandlegalformofthejointarrangement,thetermsagreedinthejointarrangement,otherrelevantfactsandcircumstances.Jointarrangementsnotreachedthroughindependententitiesareclassifiedasjointoperations;jointarrangementsreachedthroughindependententitiesareusuallyclassifiedasjointventures;however,ajointarrangementthatisindicatedbyconclusiveevidenceofmeetinganyofthefollowingconditionsandmeetingtheprovisionsofrelevantlawsandregulationsisclassifiedasajointoperation:

①Thelegalformofthejointarrangementshowsthatthepartieshaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.②Thecontractualtermsofthejointarrangementstipulatesthatthepartieshaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.③Otherrelevantfactsandcircumstancesshowthatthepartieshaverightstotheassets,andobligationsfortheliabilities,relatingtothearrangement.Forexample,thepartiesenjoyalltheoutputsubstantiallyrelatedtothejointarrangement,andtherepaymentoftheliabilitiesrelatingtothearrangementcontinuesrelyingonthesupportoftheparties.(2)

TheCompanyshallrecognizethefollowingitemsinrelationtointerestinthejointoperation,andcarryoutaccountingtreatmentinaccordancewiththeprovisionsofrelevantaccountingstandardsforbusinessenterprises:

①itsassets,includingitsshareofanyassetsheldjointly;②itsliabilities,includingitsshareofanyliabilitiesincurredjointly;③itsrevenuefromthesaleofitsshareoftheoutputarisingfromthejointoperations;④itsshareoftherevenuefromthesaleoftheoutputbythejointoperations;and⑤itsexpenses,includingitsshareofanyexpensesincurredjointly.

TheCompanyshallrecognizethefollowingitemsinrelationtointerestinthejointoperation,andcarryoutaccountingtreatmentinaccordancewiththeprovisionsofrelevantaccountingstandardsforbusinessenterprises:

①itsassets,includingitsshareofanyassetsheldjointly;②itsliabilities,includingitsshareofanyliabilitiesincurredjointly;③itsrevenuefromthesaleofitsshareoftheoutputarisingfromthejointoperations;④itsshareoftherevenuefromthesaleoftheoutputbythejointoperations;and⑤itsexpenses,includingitsshareofanyexpensesincurredjointly.

Ifinvestingorsellingassets(exceptthosethatconstituteabusiness),etc.,intoortothejointoperation,theCompanyshallonlyrecognizethepartoftheprofitandlossarisingfromthetransactionattributabletootherparticipantsinthejointoperation,beforetheassets,etc.,aresoldtoathirdpartybythejointoperation.TheCompanywillrecognizeinfulltheassetimpairmentlossarisingiftheassetsinvestedorsoldareimpairedincompliancewiththeAccountingStandardsforBusinessEnterprisesNo.8-AssetImpairment,etc.

Ifinvestingorsellingassets(exceptthosethatconstituteabusiness),etc.,intoortothejointoperation,theCompanyshallonlyrecognizethepartoftheprofitandlossarisingfromthetransactionattributabletootherparticipantsinthejointoperation,beforetheassets,etc.,aresoldtoathirdpartybythejointoperation.TheCompanywillrecognizeinfulltheassetimpairmentlossarisingiftheassetsinvestedorsoldareimpairedincompliancewiththeAccountingStandardsforBusinessEnterprisesNo.8-AssetImpairment,etc.

Ifpurchasingassets(exceptthosethatconstituteabusiness),etc.,fromthejointoperation,theCompanyshallonlyrecognizethepartoftheprofitandlossarisingfromthetransactionattributabletootherparticipantsinthejointoperation,beforetheassets,etc.,aresoldtoathirdpartybytheCompany.TheCompanywillrecognizeitsshareoftheassetimpairmentlossarisingiftheassetspurchasedareimpairedincompliancewiththeAccountingStandardsforBusinessEnterprisesNo.8-AssetImpairment,etc.

Ifpurchasingassets(exceptthosethatconstituteabusiness),etc.,fromthejointoperation,theCompanyshallonlyrecognizethepartoftheprofitandlossarisingfromthetransactionattributabletootherparticipantsinthejointoperation,beforetheassets,etc.,aresoldtoathirdpartybytheCompany.TheCompanywillrecognizeitsshareoftheassetimpairmentlossarisingiftheassetspurchasedareimpairedincompliancewiththeAccountingStandardsforBusinessEnterprisesNo.8-AssetImpairment,etc.TheCompanydoesnotenjoyjointcontroloverthejointoperations.IftheCompanyhasrightstotheassets,andobligationsfortheliabilities,relatingtothejointoperation,itshallstillbeaccountedforbytheaboveprinciples;otherwise,itshallbeaccountedforbytherelevantaccountingstandardsforbusinessenterprises.

9Criteriafordeterminingcashandcashequivalents

Inthepreparationofthecashflowstatement,theCompanyrecognizescashholdingsanddepositsthatcanbeusedforpaymentatanytimeascash.TheCompanyrecognizescashthatiseasilyconvertedintoaknownamountwithashortholdingperiod(generallyduewithinthreemonthsfromthedateofpurchase)andstrongliquidity,andinvestmentswithalowriskofchangesinvalue(includinginvestmentsinbondswhichduewithinthreemonths,whileexcludingequityinvestments),ascashequivalents.

10Foreigncurrencybusinessandtranslationofforeigncurrencystatements

TheCompanyrecognizescashthatiseasilyconvertedintoaknownamountwithashortholdingperiod(generallyduewithinthreemonthsfromthedateofpurchase)andstrongliquidity,andinvestmentswithalowriskofchangesinvalue(includinginvestmentsinbondswhichduewithinthreemonths,whileexcludingequityinvestments),ascashequivalents.(1)

ForeigncurrencytransactionsbetweentheCompanyanditssubsidiariesaretranslatedintobasecurrencyatthespotexchangerateonthetransactiondate.

ForeigncurrencytransactionsbetweentheCompanyanditssubsidiariesaretranslatedintobasecurrencyatthespotexchangerateonthetransactiondate.

Foreigncurrencymonetaryitemsaretranslatedatthespotexchangerateonthebalancesheetdate,andtheexchangedifferencesresultedtherefrom,exceptthattheexchangedifferencesarisingfromspecialforeigncurrencyloansrelatedtotheacquisitionandconstructionofassetseligibleforcapitalizationshouldbetreatedinaccordancewiththeprincipleofcapitalizationofborrowingcosts,areallincludedinthecurrentprofitandloss.Foreigncurrencynon-monetaryitemsmeasuredathistoricalcostarestilltranslatedatthespotexchangerateonthetransactiondate,andtheamountofbasecurrencyforbookkeepingisnotchanged.

Foreigncurrencymonetaryitemsaretranslatedatthespotexchangerateonthebalancesheetdate,andtheexchangedifferencesresultedtherefrom,exceptthattheexchangedifferencesarisingfromspecialforeigncurrencyloansrelatedtotheacquisitionandconstructionofassetseligibleforcapitalizationshouldbetreatedinaccordancewiththeprincipleofcapitalizationofborrowingcosts,areallincludedinthecurrentprofitandloss.Foreigncurrencynon-monetaryitemsmeasuredathistoricalcostarestilltranslatedatthespotexchangerateonthetransactiondate,andtheamountofbasecurrencyforbookkeepingisnotchanged.Foreigncurrencynon-monetaryitemsmeasuredatfairvaluearetranslatedatthespotexchangeratesonthedatewhenthefairvalueisdetermined,andtheexchangedifferencesresultedtherefromareincludedincurrentprofitsandlossesasachangeinfairvalue.Inthecaseofforeigncurrencynon-monetaryitemsthatareatfairvaluethroughothercomprehensiveincome,theexchangedifferencesincurredareincludedinothercomprehensiveincome.

Foreigncurrencynon-monetaryitemsmeasuredatfairvaluearetranslatedatthespotexchangeratesonthedatewhenthefairvalueisdetermined,andtheexchangedifferencesresultedtherefromareincludedincurrentprofitsandlossesasachangeinfairvalue.Inthecaseofforeigncurrencynon-monetaryitemsthatareatfairvaluethroughothercomprehensiveincome,theexchangedifferencesincurredareincludedinothercomprehensiveincome.(2)

WhentheCompanytranslatesthefinancialstatementsofoverseasoperations,theassetsandliabilitiesinthebalancesheetaretranslatedatthespotexchangerateonthebalancesheetdate.Theowner’sequityitems,exceptforthe"Retainedearnings"item,aretranslatedatthespotexchangerateatthetimeofoccurrenceoftheitems.Alltheincurreditemsintheincomestatementaretranslatedatthecurrentaverageexchangerateoftheperiodinwhichtransactionsoccur.Thetranslationdifferencesofforeigncurrencyfinancialstatementsarisingfromtheabovetranslationareincludedinothercomprehensiveincome.

WhentheCompanytranslatesthefinancialstatementsofoverseasoperations,theassetsandliabilitiesinthebalancesheetaretranslatedatthespotexchangerateonthebalancesheetdate.Theowner’sequityitems,exceptforthe"Retainedearnings"item,aretranslatedatthespotexchangerateatthetimeofoccurrenceoftheitems.Alltheincurreditemsintheincomestatementaretranslatedatthecurrentaverageexchangerateoftheperiodinwhichtransactionsoccur.Thetranslationdifferencesofforeigncurrencyfinancialstatementsarisingfromtheabovetranslationareincludedinothercomprehensiveincome.

Whendisposingofanoverseasoperation,thetranslationdifferencesintheforeigncurrencyfinancialstatementsrelatedtotheoverseasoperationlistedinothercomprehensiveincomeinthebalancesheetaretransferredfromtheothercomprehensiveincometotheprofitandloss.Whenthedisposalofaportionoftheequityinvestmentorotherwisecausesadecreaseintheproportionofequityheldintheoverseasoperationwithoutlosingcontrolovertheoverseasoperation,thetranslationdifferencesintheforeigncurrencystatementsrelatedtothepartoftheoverseasoperationdisposedofwillbeattributedtominorityinterests,ratherthantothecurrentprofitsandlosses.Whentheoverseasoperationdisposesofaportionoftheequityofanassociateorjointventure,thetranslationdifferenceoftheforeignstatementsrelatedtotheoverseasoperationshouldbetransferredtotheprofitorlossfortheperiodinproportiontothedisposaloftheoverseasoperation.

11Financialinstruments

WhentheCompanybecomesapartytoafinancialinstrument,itrecognizesafinancialassetorliability.Theeffectiveinterestmethodreferstothemethodofcalculatingtheamortizedcostoffinancialassetsorliabilitiesandallocatinginterestincomeorinterestexpensesintoeachaccountingperiod.

Theeffectiveinterestmethodreferstothemethodofcalculatingtheamortizedcostoffinancialassetsorliabilitiesandallocatinginterestincomeorinterestexpensesintoeachaccountingperiod.

Theeffectiveinterestratereferstotheinterestrateusedtodiscounttheestimatedfuturecashflowofagrossamountorfinancialliabilityduringitsexpecteddurationtothebookbalanceofthegrossamountortheamortizedcostofthefinancialliability.Whendeterminingtheeffectiveinterestrate,theexpectedcashflowisestimatedonthebasisofconsideringallcontracttermsoffinancialassetsorliabilities(suchasprepayment,extension,calloptions,orothersimilaroptions),buttheexpectedcreditlossisnotconsidered.

Theeffectiveinterestratereferstotheinterestrateusedtodiscounttheestimatedfuturecashflowofagrossamountorfinancialliabilityduringitsexpecteddurationtothebookbalanceofthegrossamountortheamortizedcostofthefinancialliability.Whendeterminingtheeffectiveinterestrate,theexpectedcashflowisestimatedonthebasisofconsideringallcontracttermsoffinancialassetsorliabilities(suchasprepayment,extension,calloptions,orothersimilaroptions),buttheexpectedcreditlossisnotconsidered.Theamortizedcostofafinancialassetorfinancialliabilityistheaccumulatedamortizationamountformedbydeductingtherepaidprincipalfromtheinitialrecognitionamountofthefinancialassetorfinancialliability,addingorsubtractingthedifferencebetweentheinitialrecognitionamountandthematurityamountbyusingtheeffectiveinterestmethod,andthendeductingtheaccumulatedaccruedlossreserve(onlyapplicabletofinancialassets).

Theamortizedcostofafinancialassetorfinancialliabilityistheaccumulatedamortizationamountformedbydeductingtherepaidprincipalfromtheinitialrecognitionamountofthefinancialassetorfinancialliability,addingorsubtractingthedifferencebetweentheinitialrecognitionamountandthematurityamountbyusingtheeffectiveinterestmethod,andthendeductingtheaccumulatedaccruedlossreserve(onlyapplicabletofinancialassets).(1)

Accordingtothebusinessmodelofthefinancialassetsundermanagementandthecontractualcashflowcharacteristicsofthefinancialassets,theCompanydividesthefinancialassetsintothefollowingthreecategories:

Accordingtothebusinessmodelofthefinancialassetsundermanagementandthecontractualcashflowcharacteristicsofthefinancialassets,theCompanydividesthefinancialassetsintothefollowingthreecategories:

(a)

(b)

(c)

Financialassetsaremeasuredatfairvaluewheninitiallyrecognized,butiftheaccountsornotesreceivablearisingfromthesaleofgoodsortheprovisionofservicesdonotcontainsignificantfinancingcomponentsordonotconsiderfinancingcomponentsfornomorethanoneyear,theinitialmeasurementshallbemadeatthetransactionprice.

Financialassetsaremeasuredatfairvaluewheninitiallyrecognized,butiftheaccountsornotesreceivablearisingfromthesaleofgoodsortheprovisionofservicesdonotcontainsignificantfinancingcomponentsordonotconsiderfinancingcomponentsfornomorethanoneyear,theinitialmeasurementshallbemadeatthetransactionprice.Forfinancialassetsmeasuredatfairvaluethroughprofitorloss,transactionexpensesaredirectlyrecognizedinthecurrentprofitandloss.Forotherfinancialassets,transactionexpensesareincludedintheinitialrecognitionamount.

Forfinancialassetsmeasuredatfairvaluethroughprofitorloss,transactionexpensesaredirectlyrecognizedinthecurrentprofitandloss.Forotherfinancialassets,transactionexpensesareincludedintheinitialrecognitionamount.Subsequentmeasurementoffinancialassetsdependsontheirclassification.AllrelatedfinancialassetsaffectedwillbereclassifiedwhenandonlywhentheCompanychangesitsbusinessmodelofmanagingfinancialassets.

Subsequentmeasurementoffinancialassetsdependsontheirclassification.AllrelatedfinancialassetsaffectedwillbereclassifiedwhenandonlywhentheCompanychangesitsbusinessmodelofmanagingfinancialassets.(a)

(1)

(a)

TheCompanyrecognizesinterestincomefromsuchfinancialassetswiththeeffectiveinterestmethod,andcarriesoutsubsequentmeasurementatamortizedcost.Gainsorlossesarisingfromimpairmentorderecognitionormodificationareincludedincurrentprofitsandlosses.TheCompanycalculatesanddeterminestheinterestincomebasedonthebookbalanceoffinancialassetsmultipliedbytheeffectiveinterestrate,exceptforthefollowingcircumstances:

TheCompanyrecognizesinterestincomefromsuchfinancialassetswiththeeffectiveinterestmethod,andcarriesoutsubsequentmeasurementatamortizedcost.Gainsorlossesarisingfromimpairmentorderecognitionormodificationareincludedincurrentprofitsandlosses.TheCompanycalculatesanddeterminestheinterestincomebasedonthebookbalanceoffinancialassetsmultipliedbytheeffectiveinterestrate,exceptforthefollowingcircumstances:

①Forpurchasedororiginatedcredit-impairedfinancialassets,theCompanycalculatesanddeterminestheirinterestincomeattheamortizedcostofthefinancialassetsandthecredit-adjustedeffectiveinterestratesincetheinitialrecognition.②Forfinancialassetsnotcredit-impairedatthetimeofbeingpurchasedororiginatedbutinthesubsequentperiod,theCompanycalculatesanddeterminestheirinterestincomeattheamortizedcostandtheeffectiveinterestrateofthefinancialassetsinthesubsequentperiod.Ifthefinancialinstrumentisnolongercredit-impairedduetotheimprovementofitscreditriskinthesubsequentperiod,theCompanycalculatesanddeterminestheinterestincomebymultiplyingtheeffectiveinterestratebythebookbalanceofthegrossamount.

①Forpurchasedororiginatedcredit-impairedfinancialassets,theCompanycalculatesanddeterminestheirinterestincomeattheamortizedcostofthefinancialassetsandthecredit-adjustedeffectiveinterestratesincetheinitialrecognition.②Forfinancialassetsnotcredit-impairedatthetimeofbeingpurchasedororiginatedbutinthesubsequentperiod,theCompanycalculatesanddeterminestheirinterestincomeattheamortizedcostandtheeffectiveinterestrateofthefinancialassetsinthesubsequentperiod.Ifthefinancialinstrumentisnolongercredit-impairedduetotheimprovementofitscreditriskinthesubsequentperiod,theCompanycalculatesanddeterminestheinterestincomebymultiplyingtheeffectiveinterestratebythebookbalanceofthegrossamount.(b)

Thecontracttermsofafinancialassetstipulatethatthecashflowgeneratedonaspecificdateisonlythepaymentoftheprincipalandtheinterestontheamountofoutstandingprincipal,andthebusinessmodelformanagingthefinancialassetsisbothtocollectcontractualcashflowandforitssale,thentheCompanyclassifiesthefinancialassetsasmeasuredatfairvaluethroughothercomprehensiveincome.

Thecontracttermsofafinancialassetstipulatethatthecashflowgeneratedonaspecificdateisonlythepaymentoftheprincipalandtheinterestontheamountofoutstandingprincipal,andthebusinessmodelformanagingthefinancialassetsisbothtocollectcontractualcashflowandforitssale,thentheCompanyclassifiesthefinancialassetsasmeasuredatfairvaluethroughothercomprehensiveincome.

TheCompanyrecognizesinterestincomefromsuchfinancialassetswiththeeffectiveinterestmethod.Exceptthattheinterestincome,impairmentloss,andexchangedifferencearerecognizedasthecurrentprofitandloss,otherchangesinfairvalueareincludedinothercomprehensiveincome.Whenthefinancialassetisderecognized,theaccumulatedgainsorlossespreviouslyincludedinothercomprehensiveincomearetransferredoutandincludedincurrentprofitsandlosses.

TheCompanyrecognizesinterestincomefromsuchfinancialassetswiththeeffectiveinterestmethod.Exceptthattheinterestincome,impairmentloss,andexchangedifferencearerecognizedasthecurrentprofitandloss,otherchangesinfairvalueareincludedinothercomprehensiveincome.Whenthefinancialassetisderecognized,theaccumulatedgainsorlossespreviouslyincludedinothercomprehensiveincomearetransferredoutandincludedincurrentprofitsandlosses.Notesandaccountsreceivablemeasuredatfairvaluethroughothercomprehensiveincomearereportedasreceivablesfinancing,andsuchotherfinancialassetsarereportedasotherdebtinvestments.Amongthem,otherdebtinvestmentsmaturingwithinoneyearfromthebalancesheetdatearereportedasthecurrentportionofnon-currentassets,andotherdebtinvestmentsmaturingwithinoneyeararereportedasothercurrentassets.

(1)

(c)

Atthetimeofinitialrecognition,theCompanymayirrevocablydesignatenon-tradingequityinstrumentinvestmentsasfinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomeonthebasisofindividualfinancialassets.

Atthetimeofinitialrecognition,theCompanymayirrevocablydesignatenon-tradingequityinstrumentinvestmentsasfinancialassetsmeasuredatfairvaluethroughothercomprehensiveincomeonthebasisofindividualfinancialassets.

Changesinthefairvalueofsuchfinancialassetsareincludedinothercomprehensiveincomewithoutallowanceforimpairment.Whenthefinancialassetisderecognized,theaccumulatedgainsorlossespreviouslyincludedinothercomprehensiveincomearetransferredoutandincludedintheretainedearnings.DuringtheinvestmentperiodwhentheCompanyholdstheequityinstrument,thedividendincomeisrecognizedandincludedinthecurrentprofitandloss.WhentheCompany'srighttoreceivedividendshasbeenestablished,theeconomicbenefitsrelatedtodividendsarelikelytoflowintotheCompany,andtheamountofdividendscanbemeasuredreliably.TheCompanyreportssuchfinancialassetsundertheitemofinvestmentsinotherequityinstruments.

Changesinthefairvalueofsuchfinancialassetsareincludedinothercomprehensiveincomewithoutallowanceforimpairment.Whenthefinancialassetisderecognized,theaccumulatedgainsorlossespreviouslyincludedinothercomprehensiveincomearetransferredoutandincludedintheretainedearnings.DuringtheinvestmentperiodwhentheCompanyholdstheequityinstrument,thedividendincomeisrecognizedandincludedinthecurrentprofitandloss.WhentheCompany'srighttoreceivedividendshasbeenestablished,theeconomicbenefitsrelatedtodividendsarelikelytoflowintotheCompany,andtheamountofdividendscanbemeasuredreliably.TheCompanyreportssuchfinancialassetsundertheitemofinvestmentsinotherequityinstruments.Aninvestmentinequityinstrumentsisafinancialassetmeasuredatfairvaluethroughcurrentprofitsandlosseswhenitisobtainedmainlyforrecentsale,orispartoftheidentifiableportfoliooffinancialassetscentrallymanagedwheninitiallyrecognizedandobjectiveevidenceexistsforashort-termprofitmodelinthenearfuture,orisaderivative(exceptforderivativesdefinedasfinancialguaranteecontractsanddesignatedaseffectivehedginginstruments).

Aninvestmentinequityinstrumentsisafinancialassetmeasuredatfairvaluethroughcurrentprofitsandlosseswhenitisobtainedmainlyforrecentsale,orispartoftheidentifiableportfoliooffinancialassetscentrallymanagedwheninitiallyrecognizedandobjectiveevidenceexistsforashort-termprofitmodelinthenearfuture,orisaderivative(exceptforderivativesdefinedasfinancialguaranteecontractsanddesignatedaseffectivehedginginstruments).(d)

Iffailingtobeclassifiedasthosemeasuredatamortizedcostoratfairvaluethroughothercomprehensiveincome,ornotdesignatedasmeasuredatfairvaluethroughothercomprehensiveincome,financialassetsareallclassifiedasthosemeasuredatfairvaluethroughprofitorloss.

Iffailingtobeclassifiedasthosemeasuredatamortizedcostoratfairvaluethroughothercomprehensiveincome,ornotdesignatedasmeasuredatfairvaluethroughothercomprehensiveincome,financialassetsareallclassifiedasthosemeasuredatfairvaluethroughprofitorloss.TheCompanycarriesoutsubsequentmeasurementofsuchfinancialassetsatfairvalue,andincludesgainsorlossesarisingfromchangesinfairvalueaswellasdividendsandinterestincomeassociatedwithsuchfinancialassetsintocurrentprofitsandlosses.

TheCompanycarriesoutsubsequentmeasurementofsuchfinancialassetsatfairvalue,andincludesgainsorlossesarisingfromchangesinfairvalueaswellasdividendsandinterestincomeassociatedwithsuchfinancialassetsintocurrentprofitsandlosses.TheCompanyreportssuchfinancialassetsasheld-for-tradingfinancialassetsandothernon-currentfinancialassetsaccordingtotheirliquidity.

(1)

(e)

Atthetimeofinitialrecognition,theCompanymayirrevocablydesignatefinancialassetsasmeasuredatfairvaluethroughcurrentprofitsandlossesonthebasisofindividualfinancialassetsinordertoeliminateorsignificantlyreduceaccountingmismatches.

Atthetimeofinitialrecognition,theCompanymayirrevocablydesignatefinancialassetsasmeasuredatfairvaluethroughcurrentprofitsandlossesonthebasisofindividualfinancialassetsinordertoeliminateorsignificantlyreduceaccountingmismatches.Ifthemixedcontractcontainsoneormoreembeddedderivativeinstrumentsanditsmaincontractisnotanyfinancialassetasabove,theCompanymaydesignatethewholeofthemixedcontractasafinancialinstrumentmeasuredatfairvaluethroughcurrentprofitsandlosses.Exceptunderthefollowingcircumstances:

Ifthemixedcontractcontainsoneormoreembeddedderivativeinstrumentsanditsmaincontractisnotanyfinancialassetasabove,theCompanymaydesignatethewholeofthemixedcontractasafinancialinstrumentmeasuredatfairvaluethroughcurrentprofitsandlosses.Exceptunderthefollowingcircumstances:

①Embeddedderivativesdonotsignificantlychangethecashflowofmixedcontracts.②Whendetermininginitiallywhethersimilarmixedcontractsneedtobesplit,itissubstantiallyclearthatembeddedderivativescontainedinthemshouldnotbesplitwithoutanalysis.Iftheprepaymentrightembeddedinaloanallowstheholdertoprepaytheloanatanamountclosetotheamortizedcost,theprepaymentrightdoesnotneedtobesplit.

①Embeddedderivativesdonotsignificantlychangethecashflowofmixedcontracts.②Whendetermininginitiallywhethersimilarmixedcontractsneedtobesplit,itissubstantiallyclearthatembeddedderivativescontainedinthemshouldnotbesplitwithoutanalysis.Iftheprepaymentrightembeddedinaloanallowstheholdertoprepaytheloanatanamountclosetotheamortizedcost,theprepaymentrightdoesnotneedtobesplit.TheCompanycarriesoutsubsequentmeasurementofsuchfinancialassetsatfairvalue,andincludesgainsorlossesarisingfromchangesinfairvalueaswellasdividendsandinterestincomeassociatedwithsuchfinancialassetsintocurrentprofitsandlosses.

TheCompanycarriesoutsubsequentmeasurementofsuchfinancialassetsatfairvalue,andincludesgainsorlossesarisingfromchangesinfairvalueaswellasdividendsandinterestincomeassociatedwithsuchfinancialassetsintocurrentprofitsandlosses.TheCompanyreportssuchfinancialassetsasheld-for-tradingfinancialassetsandothernon-currentfinancialassetsaccordingtotheirliquidity.

(2)

TheCompanyclassifiesafinancialinstrumentoritscomponentsintofinancialliabilitiesorequityinstrumentsuponinitialrecognitionaccordingtothecontracttermsandtheeconomicsubstancereflectedbythefinancialinstrumentissued,ratherthanonlyinlegalform,incombinationwiththedefinitionsoffinancialliabilitiesandequityinstruments.Financialliabilitiesareclassifiedatinitialrecognitionasmeasuredatfairvaluethroughprofitorloss,orotherfinancialliabilities,orderivativesdesignatedaseffectivehedginginstruments.

TheCompanyclassifiesafinancialinstrumentoritscomponentsintofinancialliabilitiesorequityinstrumentsuponinitialrecognitionaccordingtothecontracttermsandtheeconomicsubstancereflectedbythefinancialinstrumentissued,ratherthanonlyinlegalform,incombinationwiththedefinitionsoffinancialliabilitiesandequityinstruments.Financialliabilitiesareclassifiedatinitialrecognitionasmeasuredatfairvaluethroughprofitorloss,orotherfinancialliabilities,orderivativesdesignatedaseffectivehedginginstruments.Financialliabilitiesaremeasuredatfairvalueuponinitialrecognition.Forfinancialliabilitiesmeasuredatfairvaluethroughcurrentprofitsandlosses,relevanttransactionexpensesaredirectlyincludedincurrentprofitsandlosses;forothercategoriesoffinancialliabilities,relevanttransactionexpensesareincludedintheinitialrecognitionamount.

Financialliabilitiesaremeasuredatfairvalueuponinitialrecognition.Forfinancialliabilitiesmeasuredatfairvaluethroughcurrentprofitsandlosses,relevanttransactionexpensesaredirectlyincludedincurrentprofitsandlosses;forothercategoriesoffinancialliabilities,relevanttransactionexpensesareincludedintheinitialrecognitionamount.Subsequentmeasurementoffinancialliabilitiesdependsontheirclassification:

Subsequentmeasurementoffinancialliabilitiesdependsontheirclassification:

(a)

Suchfinancialliabilitiesincludeheld-for-tradingfinancialliabilities(includingderivativesfallingunderfinancialliabilities)andfinancialliabilitiesdesignatedasmeasuredatfairvalueuponinitialrecognitionandthroughcurrentprofitsandlosses.

Suchfinancialliabilitiesincludeheld-for-tradingfinancialliabilities(includingderivativesfallingunderfinancialliabilities)andfinancialliabilitiesdesignatedasmeasuredatfairvalueuponinitialrecognitionandthroughcurrentprofitsandlosses.

Afinancialliabilityisaheld-for-tradingfinancialliabilityifitismainlyundertakenforrecentsaleorrepurchase,orispartoftheidentifiableportfoliooffinancialinstrumentscentrallymanaged,andthereisobjectiveevidencethattheenterprisehasrecentlyemployedashort-termprofitmodel,orisaderivativeinstrument,exceptforderivativesdesignatedaseffectivehedginginstrumentsandderivativesconformingtofinancialguaranteecontracts.Held-for-tradingfinancialliabilities(includingderivativesfallingunderfinancialliabilities)aresubsequentlymeasuredatfairvalue.Allchangesinfairvaluesexceptforhedgingaccountingareincludedincurrentprofitsandlosses.

Afinancialliabilityisaheld-for-tradingfinancialliabilityifitismainlyundertakenforrecentsaleorrepurchase,orispartoftheidentifiableportfoliooffinancialinstrumentscentrallymanaged,andthereisobjectiveevidencethattheenterprisehasrecentlyemployedashort-termprofitmodel,orisaderivativeinstrument,exceptforderivativesdesignatedaseffectivehedginginstrumentsandderivativesconformingtofinancialguaranteecontracts.Held-for-tradingfinancialliabilities(includingderivativesfallingunderfinancialliabilities)aresubsequentlymeasuredatfairvalue.Allchangesinfairvaluesexceptforhedgingaccountingareincludedincurrentprofitsandlosses.TheCompanyirrevocablydesignatesfinancialliabilitiesasmeasuredatfairvaluethroughcurrentprofitsandlossesatthetimeofinitialrecognitioninordertoprovidemorerelevantaccountinginformation,provided:

TheCompanyirrevocablydesignatesfinancialliabilitiesasmeasuredatfairvaluethroughcurrentprofitsandlossesatthetimeofinitialrecognitioninordertoprovidemorerelevantaccountinginformation,provided:

①Suchfinancialliabilitiescaneliminateorsignificantlyreduceaccountingmismatches.②Thefinancialliabilityportfolio,ortheportfoliooffinancialassetsandliabilitiesismanagedandevaluatedforperformanceonthebasisoffairvalueaccordingtotheenterpriseriskmanagementorinvestmentstrategystatedintheofficialwrittendocuments,andisreportedtokeymanagementpersonnelwithintheenterpriseonthisbasis.

(2)

(b)

TheCompanyclassifiesfinancialliabilities,exceptforthefollowingitemsasmeasuredatamortizedcost.Suchfinancialliabilitiesarerecognizedbytheeffectiveinterestmethodandsubsequentlymeasuredatamortizedcost.Gainsorlossesarisingfromderecognitionoramortizationareincludedincurrentprofitsandlosses:

TheCompanyclassifiesfinancialliabilities,exceptforthefollowingitemsasmeasuredatamortizedcost.Suchfinancialliabilitiesarerecognizedbytheeffectiveinterestmethodandsubsequentlymeasuredatamortizedcost.Gainsorlossesarisingfromderecognitionoramortizationareincludedincurrentprofitsandlosses:

①Financialliabilitiesmeasuredatfairvaluethroughcurrentprofitsandlosses.②Financialliabilitiesresultingfromthetransferoffinancialassetsthatdonotmeettheconditionsforderecognitionorcontinuetobeinvolvedinthetransferredfinancialassets.③Financialguaranteecontractsthatdonotfallunderthefirsttwocategorieshereof,andloancommitmentsthatdonotfallundercategory(1)hereofandlendatabelow-marketinterestrate.

①Financialliabilitiesmeasuredatfairvaluethroughcurrentprofitsandlosses.②Financialliabilitiesresultingfromthetransferoffinancialassetsthatdonotmeettheconditionsforderecognitionorcontinuetobeinvolvedinthetransferredfinancialassets.③Financialguaranteecontractsthatdonotfallunderthefirsttwocategorieshereof,andloancommitmentsthatdonotfallundercategory(1)hereofandlendatabelow-marketinterestrate.

Financialguaranteecontractsrefertocontractsthatrequiretheissuertopayaspecificamounttothecontractholderwhohassufferedlosseswhenaspecificdebtorfailstopaythedebtinaccordancewiththeoriginalormodifiedtermsofthedebtinstrument.Financialguaranteecontractsthatarenotfinancialliabilitiesdesignatedasmeasuredatfairvaluethroughprofitorlossaremeasuredafterinitialrecognitionaccordingtothelossreserveamountandtheinitialrecognitionamount,lesstheaccumulatedamortizationamountduringtheguaranteeperiod,whicheverishigher.

Financialguaranteecontractsrefertocontractsthatrequiretheissuertopayaspecificamounttothecontractholderwhohassufferedlosseswhenaspecificdebtorfailstopaythedebtinaccordancewiththeoriginalormodifiedtermsofthedebtinstrument.Financialguaranteecontractsthatarenotfinancialliabilitiesdesignatedasmeasuredatfairvaluethroughprofitorlossaremeasuredafterinitialrecognitionaccordingtothelossreserveamountandtheinitialrecognitionamount,lesstheaccumulatedamortizationamountduringtheguaranteeperiod,whicheverishigher.(3)

(a)

①Thecontractualrighttoreceivecashflowfromthefinancialassetisterminated;or②Thefinancialassethasbeentransferred,whichmeetstherequirementsforderecognitionoffinancialassets.

①Thecontractualrighttoreceivecashflowfromthefinancialassetisterminated;or②Thefinancialassethasbeentransferred,whichmeetstherequirementsforderecognitionoffinancialassets.(b)

Ifthecurrentobligationofafinancialliability(orpartthereof)hasbeendischarged,suchfinancialliability(orpartthereof)isderecognized.

Ifthecurrentobligationofafinancialliability(orpartthereof)hasbeendischarged,suchfinancialliability(orpartthereof)isderecognized.

Theexistingfinancialliabilityisderecognizedwithanewonerecognized,andthedifferencebetweenthecarryingamountandtheconsiderationpaid(includingtransferrednon-cashassetsorassumedliabilities)isincludedincurrentprofitsandlosses,ifanagreementissignedbetweentheCompanyandthelendertoreplacetheexistingfinancialliabilitybyassuminganewone,andthecontracttermsofthesetwofinancialliabilitiesaresubstantiallydifferent,orthecontracttermsoftheexistingfinancialliability(orpartthereof)aresubstantiallymodified.

Theexistingfinancialliabilityisderecognizedwithanewonerecognized,andthedifferencebetweenthecarryingamountandtheconsiderationpaid(includingtransferrednon-cashassetsorassumedliabilities)isincludedincurrentprofitsandlosses,ifanagreementissignedbetweentheCompanyandthelendertoreplacetheexistingfinancialliabilitybyassuminganewone,andthecontracttermsofthesetwofinancialliabilitiesaresubstantiallydifferent,orthecontracttermsoftheexistingfinancialliability(orpartthereof)aresubstantiallymodified.

IftheCompanyrepurchasespartofafinancialliability,thecarryingamountofthefinancialliabilityshallbedistributedaccordingtotheproportionofthefairvalueofthecontinuingrecognitionportionandthederecognitionportiontotheoverallfairvalueontherepurchasedate.Thedifferencebetweenthecarryingamountallocatedtothederecognizedportionandtheconsiderationpaid(includingtransferrednon-cashassetsorliabilitiesassumed)shallbeincludedincurrentprofitsandlosses.

(4)

Whenafinancialassetistransferred,theCompanyevaluatestherisksandrewardsretainedofthefinancialassetownership:

Whenafinancialassetistransferred,theCompanyevaluatestherisksandrewardsretainedofthefinancialassetownership:

(a)

(b)

(c)

①Thefinancialassetshallbederecognized,andtherightsandobligationsgeneratedorretainedinthetransfershallbeseparatelyrecognizedasassetsorliabilitiesifsuchcontrolisnotretained;or②Therelevantfinancialassetshallcontinuetoberecognizedtotheextentthatitcontinuestobeinvolvedinthetransferredfinancialasset,andtherelevantliabilitiesshallberecognizedaccordinglyifsuchcontrolisretained.TheextentthatitcontinuestobeinvolvedinthetransferredfinancialassetreferstotheextenttheCompanybearstherisksorrewardsofchangesinthevalueofthetransferredfinancialasset.

①Thefinancialassetshallbederecognized,andtherightsandobligationsgeneratedorretainedinthetransfershallbeseparatelyrecognizedasassetsorliabilitiesifsuchcontrolisnotretained;or②Therelevantfinancialassetshallcontinuetoberecognizedtotheextentthatitcontinuestobeinvolvedinthetransferredfinancialasset,andtherelevantliabilitiesshallberecognizedaccordinglyifsuchcontrolisretained.TheextentthatitcontinuestobeinvolvedinthetransferredfinancialassetreferstotheextenttheCompanybearstherisksorrewardsofchangesinthevalueofthetransferredfinancialasset.Whenjudgingwhetherthetransferoffinancialassetsmeetstheaboveconditionsforderecognitionoffinancialassets,theprincipleofsubstanceoverformshallbeadopted.TheCompanydividesthetransferoffinancialassetsintooveralltransferandpartialtransfer.

Whenjudgingwhetherthetransferoffinancialassetsmeetstheaboveconditionsforderecognitionoffinancialassets,theprincipleofsubstanceoverformshallbeadopted.TheCompanydividesthetransferoffinancialassetsintooveralltransferandpartialtransfer.(a)

①Thecarryingamountofthetransferredgrossamountonthedateofderecognition.②Thesumoftheconsiderationreceivedforthetransferoffinancialassetsandtheamountoftherespectivederecognizedportionoftheaccumulatedchangesinfairvalueoriginallyincludedinothercomprehensiveincomedirectly(thefinancialassetsinvolvedinthetransferarefinancialassetsatfairvaluethroughothercomprehensiveincome).

①Thecarryingamountofthetransferredgrossamountonthedateofderecognition.②Thesumoftheconsiderationreceivedforthetransferoffinancialassetsandtheamountoftherespectivederecognizedportionoftheaccumulatedchangesinfairvalueoriginallyincludedinothercomprehensiveincomedirectly(thefinancialassetsinvolvedinthetransferarefinancialassetsatfairvaluethroughothercomprehensiveincome).(b)

①Thecarryingamountofthederecognizedportiononthederecognitiondate.②Thesumoftheconsiderationreceivedforthederecognizedportionandtheamountofthecorrespondingderecognizedportionoftheaccumulatedchangesinfairvalueoriginallyincludedinothercomprehensiveincome(thefinancialassetsinvolvedinthetransferarefinancialassetsatfairvaluethroughothercomprehensiveincome).

(4)

Ifthetransferofafinancialassetdoesnotmeettheconditionsforderecognition,thefinancialassetshallcontinuetoberecognized,andtheconsiderationreceivedshallberecognizedasafinancialliability.

Ifthetransferofafinancialassetdoesnotmeettheconditionsforderecognition,thefinancialassetshallcontinuetoberecognized,andtheconsiderationreceivedshallberecognizedasafinancialliability.(5)

Thefairvalueofafinancialassetorliabilitywithanactivemarketshallbedeterminedbythequotedpriceintheactivemarket,unlessthefinancialassethasasell-offperiodfortheassetitself.Forthefinancialassetsrestrictedfortheassetsthemselves,thecompensationamountdemandedbymarketparticipantsduetotheriskofnotbeingabletosellthefinancialassetsontheopenmarketwithinthespecifiedperiodshallbedeductedfromthequotedpriceintheactivemarket.Quotedpricesintheactivemarketincludethoseforrelatedassetsorliabilitiesthatcanbeeasilyandregularlyobtainedfromexchanges,dealers,brokers,industrygroups,pricingorregulatoryagencies,andcanrepresentactualandrecurringmarkettransactionsonthebasisoffairtrade.

Thefairvalueofafinancialassetorliabilitywithanactivemarketshallbedeterminedbythequotedpriceintheactivemarket,unlessthefinancialassethasasell-offperiodfortheassetitself.Forthefinancialassetsrestrictedfortheassetsthemselves,thecompensationamountdemandedbymarketparticipantsduetotheriskofnotbeingabletosellthefinancialassetsontheopenmarketwithinthespecifiedperiodshallbedeductedfromthequotedpriceintheactivemarket.Quotedpricesintheactivemarketincludethoseforrelatedassetsorliabilitiesthatcanbeeasilyandregularlyobtainedfromexchanges,dealers,brokers,industrygroups,pricingorregulatoryagencies,andcanrepresentactualandrecurringmarkettransactionsonthebasisoffairtrade.Financialassetsinitiallyacquiredorderivedorfinancialliabilitiesassumedshallbedeterminedonthebasisofmarkettransactionprice.

Financialassetsinitiallyacquiredorderivedorfinancialliabilitiesassumedshallbedeterminedonthebasisofmarkettransactionprice.

Thefairvalueoffinancialassetsorliabilitieswithoutanactivemarketshallbedeterminedbyvaluationtechniques.Atthetimeofvaluation,theCompanyadoptsvaluationtechniquesthatareapplicableunderthecurrentcircumstancesandaresupportedbysufficientavailabledataandotherinformation,selectsinputvaluesconsistentwiththecharacteristicsofrelevantassetsorliabilitiesconsideredbymarketparticipantsinthetransactionsthereof,andgivesprioritytotheuseofrelevantobservableinputvalueswheneverpossible.Iftherelevantobservableinputvaluecannotbeobtainedorbefeasiblyobtained,theunobservableinputvalueshallbeused.

Thefairvalueoffinancialassetsorliabilitieswithoutanactivemarketshallbedeterminedbyvaluationtechniques.Atthetimeofvaluation,theCompanyadoptsvaluationtechniquesthatareapplicableunderthecurrentcircumstancesandaresupportedbysufficientavailabledataandotherinformation,selectsinputvaluesconsistentwiththecharacteristicsofrelevantassetsorliabilitiesconsideredbymarketparticipantsinthetransactionsthereof,andgivesprioritytotheuseofrelevantobservableinputvalueswheneverpossible.Iftherelevantobservableinputvaluecannotbeobtainedorbefeasiblyobtained,theunobservableinputvalueshallbeused.Basedontheexpectedcreditloss,theCompanyconductsimpairmentaccountingoffinancialassetsclassifiedasthosemeasuredatamortizedcost,financialassetsclassifiedasthosemeasuredatfairvaluethroughothercomprehensiveincome,andfinancialguaranteecontractsandrecognizeslossreserves.

(6)

Expectedcreditlossreferstotheweightedaverageofthecreditlossesoffinancialinstrumentsweightedbytheriskofdefault.CreditlossreferstothedifferencebetweenallcontractualcashflowsdiscountedattheoriginaleffectiveinterestrateandreceivableaccordingtothecontractandallcashflowsexpectedtobecollectedbytheCompany,i.e.thepresentvalueofallcashshortfalls.Amongthem,credit-impairedpurchasedororiginatedfinancialassetsoftheCompanyshallbediscountedatthecredit-adjustedeffectiveinterestrateofsuchfinancialassets.

Expectedcreditlossreferstotheweightedaverageofthecreditlossesoffinancialinstrumentsweightedbytheriskofdefault.CreditlossreferstothedifferencebetweenallcontractualcashflowsdiscountedattheoriginaleffectiveinterestrateandreceivableaccordingtothecontractandallcashflowsexpectedtobecollectedbytheCompany,i.e.thepresentvalueofallcashshortfalls.Amongthem,credit-impairedpurchasedororiginatedfinancialassetsoftheCompanyshallbediscountedatthecredit-adjustedeffectiveinterestrateofsuchfinancialassets.Forreceivablesarisingfromtransactionsregulatedbytheincomecriteria,theCompanyusesthesimplifiedmeasurementmethodtomeasurethelossreserveaccordingtotheamountequivalenttotheexpectedcreditlossduringtheentireduration.

Forreceivablesarisingfromtransactionsregulatedbytheincomecriteria,theCompanyusesthesimplifiedmeasurementmethodtomeasurethelossreserveaccordingtotheamountequivalenttotheexpectedcreditlossduringtheentireduration.

Forcredit-impairedpurchasedororiginatedfinancialassets,onlytheaccumulatedchangesintheexpectedcreditlossesduringtheentiredurationsincetheinitialrecognitionarerecognizedaslossreservesonthebalancesheetdate.Oneachbalancesheetdate,theamountofchangeintheexpectedcreditlossduringtheentiredurationisincludedinthecurrentgainsandlossesasimpairmentlossorgains.Eveniftheexpectedcreditlossduringtheentiredurationonthebalancesheetdateislessthanthatreflectedintheestimatedcashflowuponinitialrecognition,thefavorablechangeintheexpectedcreditlossisrecognizedasimpairmentgains.

Forcredit-impairedpurchasedororiginatedfinancialassets,onlytheaccumulatedchangesintheexpectedcreditlossesduringtheentiredurationsincetheinitialrecognitionarerecognizedaslossreservesonthebalancesheetdate.Oneachbalancesheetdate,theamountofchangeintheexpectedcreditlossduringtheentiredurationisincludedinthecurrentgainsandlossesasimpairmentlossorgains.Eveniftheexpectedcreditlossduringtheentiredurationonthebalancesheetdateislessthanthatreflectedintheestimatedcashflowuponinitialrecognition,thefavorablechangeintheexpectedcreditlossisrecognizedasimpairmentgains.Inadditiontootherfinancialassetsadoptingtheabovesimplifiedmeasurementmethodandotherthanthecredit-impairedpurchasedororiginatedones,theCompanyevaluateswhetherthecreditriskofrelevantfinancialinstrumentshasincreasedsignificantlysincetheinitialrecognition,measuresitslossreserves,andrecognizestheexpectedcreditlossanditschangesrespectivelyaccordingtothefollowingcircumstancesoneachbalancesheetdate:

Inadditiontootherfinancialassetsadoptingtheabovesimplifiedmeasurementmethodandotherthanthecredit-impairedpurchasedororiginatedones,theCompanyevaluateswhetherthecreditriskofrelevantfinancialinstrumentshasincreasedsignificantlysincetheinitialrecognition,measuresitslossreserves,andrecognizestheexpectedcreditlossanditschangesrespectivelyaccordingtothefollowingcircumstancesoneachbalancesheetdate:

(a)

(b)

Theincreaseorreversedamountofthecreditlossreserveforfinancialinstrumentsshallbeincludedinthecurrentprofitsandlossesasimpairmentlossorgains.Exceptforfinancialassetsclassifiedasthosemeasuredatfairvaluethroughothercomprehensiveincome,thecreditlossreservewilloffsetthecarryingamountofthefinancialassets.Forfinancialassetsclassifiedasthosemeasuredatfairvaluethroughothercomprehensiveincome,theCompanyrecognizesitscreditlossreserveinothercomprehensiveincomewithoutreducingitscarryingamountpresentedinthebalancesheet.

(6)

Inthepreviousaccountingperiod,theCompanymeasuredthelossreserve,theamountequivalenttotheexpectedcreditlossofthefinancialinstrumentsthroughouttheirlife.However,onthebalancesheetdateofthecurrentperiod,thefinancialinstrumentnolongerconformstothesituationofsignificantincreaseincreditrisksinceinitialconfirmation;onthebalancesheetdateofthecurrentperiod,theCompanyhasmeasuredthelossreserveofthefinancialinstruments,theamountequivalenttotheexpectedcreditlossinthenext12months,andthereversedamountofthelossreservethusformedisincludedincurrentprofitsandlossesasimpairmentprofit.

Inthepreviousaccountingperiod,theCompanymeasuredthelossreserve,theamountequivalenttotheexpectedcreditlossofthefinancialinstrumentsthroughouttheirlife.However,onthebalancesheetdateofthecurrentperiod,thefinancialinstrumentnolongerconformstothesituationofsignificantincreaseincreditrisksinceinitialconfirmation;onthebalancesheetdateofthecurrentperiod,theCompanyhasmeasuredthelossreserveofthefinancialinstruments,theamountequivalenttotheexpectedcreditlossinthenext12months,andthereversedamountofthelossreservethusformedisincludedincurrentprofitsandlossesasimpairmentprofit.(a)

Inordertodeterminewhetherthecreditriskoffinancialinstrumentshasincreasedsignificantlysincetheinitialrecognition,theCompanyusestheavailablereasonableandbasedforward-lookinginformationandcomparestheriskofdefaultoffinancialinstrumentsonthebalancesheetdatewiththeriskofdefaultontheinitialconfirmationdate.WhentheCompanyappliesprovisionsondepreciationoffinancialinstrumentstofinancialguaranteecontracts,theinitialrecognitiondateshallberegardedasthedatewhentheCompanybecomesapartytomakeirrevocablecommitments.

Inordertodeterminewhetherthecreditriskoffinancialinstrumentshasincreasedsignificantlysincetheinitialrecognition,theCompanyusestheavailablereasonableandbasedforward-lookinginformationandcomparestheriskofdefaultoffinancialinstrumentsonthebalancesheetdatewiththeriskofdefaultontheinitialconfirmationdate.WhentheCompanyappliesprovisionsondepreciationoffinancialinstrumentstofinancialguaranteecontracts,theinitialrecognitiondateshallberegardedasthedatewhentheCompanybecomesapartytomakeirrevocablecommitments.Fortheassessmentofwhetherthecreditriskhasincreasedsignificantly,theCompanywillconsiderthefollowingfactors:

Fortheassessmentofwhetherthecreditriskhasincreasedsignificantly,theCompanywillconsiderthefollowingfactors:

①Accordingtowhethertheactualorexpecteddebtor'soperationsresultshavechangedsignificantly;

②Whethertheregulatory,economic,ortechnologicalenvironmentofthedebtorhasundergonesignificantadversechanges;③Whetherthefollowingitemshavechangedsignificantly:thevalueofcollateralasdebtmortgage,ortheguaranteeprovidedbyathirdparty,orthequalityofcreditenhancement;thesechangeswillreducethedebtor’seconomicmotivationtorepaytheloanwithinthetimelimitstipulatedinthecontractandcouldimpacttheprobabilityofdefault;④Whetherthedebtor'sexpectedperformanceandrepaymentbehaviorhavechangedsignificantly;⑤WhethertheCompany'screditmanagementmethodsforfinancialinstrumentshavechanged,etc.

①Accordingtowhethertheactualorexpecteddebtor'soperationsresultshavechangedsignificantly;

②Whethertheregulatory,economic,ortechnologicalenvironmentofthedebtorhasundergonesignificantadversechanges;③Whetherthefollowingitemshavechangedsignificantly:thevalueofcollateralasdebtmortgage,ortheguaranteeprovidedbyathirdparty,orthequalityofcreditenhancement;thesechangeswillreducethedebtor’seconomicmotivationtorepaytheloanwithinthetimelimitstipulatedinthecontractandcouldimpacttheprobabilityofdefault;④Whetherthedebtor'sexpectedperformanceandrepaymentbehaviorhavechangedsignificantly;⑤WhethertheCompany'screditmanagementmethodsforfinancialinstrumentshavechanged,etc.

If,onthebalancesheetdate,thecreditriskofthefinancialinstrumentisjudgedtobelowbytheCompany,theCompanyassumesthatthecreditriskofthefinancialinstrumenthasnotincreasedsignificantlysincetheinitialrecognition.Thefinancialinstrumentwillbedeemedtohavelowercreditriskunderthefollowingcircumstances:thedefaultriskofthefinancialinstrumentislower;theborrowerhasastrongcapacitytofulfillitscontractualcashflowobligationsinashorttime;furthermore,evenifthereareadversechangesintheeconomicsituationandoperatingenvironmentforalongperiodoftime,itmaynotnecessarilyreducetheborrower’sabilitytofulfillitscontractualcashflowobligations.

(6)

(b)

Ifoneormoreeventshaveadverseeffectsontheexpectedfuturecashflowofafinancialasset,thefinancialassetwillbecomeafinancialassetthathassufferedcreditimpairment.Thefollowingobservableinformationcanberegardedasevidenceofcreditimpairmentoffinancialassets:

Ifoneormoreeventshaveadverseeffectsontheexpectedfuturecashflowofafinancialasset,thefinancialassetwillbecomeafinancialassetthathassufferedcreditimpairment.Thefollowingobservableinformationcanberegardedasevidenceofcreditimpairmentoffinancialassets:

①Theissuerordebtorisinseriousfinancialdifficulty;②Thedebtorbreachesthecontract,suchasdefaultoroverduepaymentofinterestorprincipal,etc.;③Thecreditorgivesconcessionstothedebtorduetoeconomicorcontractualconsiderationsrelatedtothedebtor'sfinancialdifficulties;theconcessionswillnotbemadeunderanyothercircumstances;④Thereisagreatpossibilityofbankruptcyorotherfinancialrestructuringofthedebtor;⑤Theissuerordebtorhasfinancialdifficulties,resultinginthedisappearanceoftheactivemarketforthefinancialassets;⑥Purchasingorgeneratingafinancialassetwithalargediscount,whichreflectsthefactofcreditloss.