StockCode:000553(200553)Stockabbreviation:ADAMAA(B)AnnouncementNo.2026-3

ADAMALtd.AssetImpairmentAnnouncement

InaccordancewiththeAccountingStandardsforBusinessEnterprises,ADAMALtd.(hereinafterreferredtoasthe“Company”),isexpectedtorecordatotalofRMB548million($77million)fortheyearof2025inprovisionsforassetandcreditlossimpairments.Theseprovisionsaremainlyrelatedtoone-timeimpairmentsofsomefixedassets,impairmentofinventoriesandcreditlossimpairmentofaccountsreceivablesmadeduringtheordinarycourseoftheCompany’sbusiness,asprovidedherein.OverviewandFinancialImpactofProvisionfortheAssetImpairmentsDuringtheyear,theCompanyisexpectedtorecordprovisionsforassetandcreditlossimpairmentsbasedon"AccountingStandardsforBusinessEnterprises"andtheCompany’sownapplicableaccountingpolicies.Theseprovisions,chargedtothetotalprofitsoftheCompanyduringtheyear,areexpectedamountingtoRMB548million($77million).Furtherdetailsoftheimpairmentsareasfollows:

Unit:‘000RMB

TheCompanyandallmembersofitsBoardofDirectorsconfirmthatalltheinformationdisclosedhereinistrue,accurate,andcompletewithnofalseormisleadingstatementormaterialomission.Item

BasisandExplanationforImpairmentofFixedAssetsTheCompanyassessateachbalancesheetdatewhetherthereareanyindicationsthatthefixedassetsmaybeimpaired.Ifthereisanyindicationthatsuchassetsmaybeimpaired,recoverableamountsareestimatedforsuchassets(recoverableamountisthehigherbetweentheassets’fairvaluelesscoststosellandthepresentvalueofthefuturecashflowestimatedtobederivedfromtheasset).Iftherecoverableamountis

belowtheassets’netcostrecordedinthebalancesheet,aprovisionforimpairmentismade.In2025,theCompanyisexpectedtoprovideimpairmentsofaroundRMB247million($35million)tofixedassetswithloweroperationalefficiency,aspartoftheFightForwardplan.ThisisduetotheCompany’sstrategicdirectiontoenhanceoperationalefficiencyandfocusonhigh-performingfacilities.Theimpairmentismadebasedontheevaluationoftheassets’netbookvalueandrecoverableamount.BasisandExplanationforImpairmentofInventoriesInventoriesaremeasuredatthelowerofcostandnetrealizablevalue.Ifthenetrealizablevalueisbelowthecostofinventories,aprovisionfordeclineinvalueofinventoriesismade.Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletion,theestimatedcostsnecessarytomakethesaleandrelevanttaxes.InventoryimpairmentsareexpectedtoreachapproximatelyRMB159million($22million)forthefullyear2025.ThisisattributabletothefactthatsomeofthedefectiveinventoriescouldnotbereprocessedbecausecertainfacilitiesareclosingaspartoftheFightForwardPlaninordertoimproveoperationalefficiency.OtherreasonsoftheimpairmentsweremainlyduetoinventorymanagementaspectsduringtheordinarycourseoftheCompany’sbusiness.BasisandExplanationforCreditImpairmentLossesTheCompanyrecognizesanimpairmentprovisionwhichreflectsitsassessmentregardingthecreditriskofaccountsandotherreceivablesonalifetimeexpectedcreditlossbasis.Theexaminationforexpectedcreditlossesisperformedusingamodelincludingaginganalysisandhistoricallossexperience,andisadjustedtakingintoaccountobservablefactorsreflectingcurrentandexpectedfutureeconomicconditions.Ifthereisobjectiveevidenceofarecoveryinthevalueofreceivableswhichcanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognized,thepreviouslyrecognizedimpairmentlossisreversed.ThecreditimpairmentlossesprovidedfortheyearareexpectedtobearoundRMB116million($16million).Theexpectedcreditlossesaremainlyduetoliquidityissuesofsomelocalcustomersincertaincountries,whichareprovidedbasedontheevaluationofthecurrentandfuturefinancialpositionofthelocalcustomers.BasisandExplanationforImpairmentofIntangibleAssetsTheCompanyassessesateachbalancesheetdatewhetherthereisanyindicationthattheintangibleassetswithafiniteusefullifemaybeimpaired,andifsuchindicationexists,theCompanycalculatestherecoverableamountoftheasset.Whentherecoverableamountofanassetislessthanitscarryingamount,animpairmentlossisexpectedtoberecognizedtoreducethecarryingamounttotherecoverableamount.

Impairmentofintangibleassets,mainlyrelatedtoproductregistrations,amountingtoaroundRMB16million($2.2million)isexpectedtobeprovidedfor2025.BasisandExplanationforImpairmentofConstructioninProgressTheCompanyassessateachbalancesheetdatewhetherthereareanyindicationsthattheconstructioninprogressmaybeimpaired.Ifthereisanyindicationthatsuchassetsmaybeimpaired,recoverableamountsareestimatedforsuchassets(recoverableamountisthehigherbetweentheassets’fairvaluelesscoststosellandthepresentvalueofthefuturecashflowestimatedtobederivedfromtheasset).Iftherecoverableamountisbelowtheassets’netcostrecordedinthebalancesheet,aprovisionforimpairmentismade.In2025,theCompanyisexpectedtomakeimpairmentsofaroundRMB11million($1.6million)onconstructioninprogress.ExplanationontheReasonablenessofAssetImpairmentsTheaforementionedprovisionsweremainlyduetoimpairmentsofsomefixedassets,inventoriesandcreditlossimpairmentsofaccountsreceivablesmadeduringtheordinarycourseoftheCompany’sbusiness.Basedonthecurrentstatusoftheassets,theseimpairments,someofwhichnon-recurring,servetocorrectlypresentthebalancesheetoftheCompany,trulyandfairlyreflectsthecompany'sfinancialsituation,assetvalueandoperatingresults,whilemeetingrequirementsofaccountingstandardsandrelatedpolicies.OtherExplanationsTheexpectedprovisionsforassetimpairmentistheresultofthepreliminarycalculationofthefinancialdepartmentoftheCompany,withouttheauditoftheaccountingfirm.Pleaserefertotheaudited2025AnnualReportoftheCompanyforfinalfinancialdata.Investorsarekindlyremindedtopayattentiontoinvestmentrisks.ApprovalProcessfortheProvisionofAssetImpairmentsAccordingtotheCompany’sinternalapprovalprocedures,theabove-mentionedmajorimpairmentoffixedassetsandinventories,aspartoftheFightForwardPlan,wasapprovedbytheCompany’sglobalseniormanagement,withthecalculationoftherecoverableamountoftheassetsperformedbythefinanceteamoftherelatedsubsidiariesandreviewdonebytheglobalfinanceteam.Otherimpairments,wereidentified,calculatedandapprovedlocallybyrespectivesubsidiariesandreviewedbytherelevantglobalteams.

It’sherebyannounced.

BoardofDirectorsADAMALTD.January30,2026