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公司公告

深华发B:2022年半年度报告(英文版)2022-08-23  

                        SHENZHEN ZHONGHENG HUAFA CO., LTD.



     SEMI-ANNUAL REPORT 2022




           【23 Aug,2022】
          Section I. Important Notice, Contents and Interpretation

Board of Directors, Board of Supervisory, all directors, supervisors and senior executives of
Shenzhen Zhongheng HUAFA Co., Ltd. (hereinafter referred to as the Company) hereby
confirm that there are no any fictitious statements, misleading statements, or important
omissions carried in this report, and shall take all responsibilities, individual and/or joint, for
the reality, accuracy and completion of the whole contents.


Li Zhongqiu, Principal of the Company, Chen Zhigang, person in charger of accounting
works and Chuai Guoxu, person in charge of accounting organ (accounting principal) hereby
confirm that the Financial Report of 2022 Semi-Annual Report is authentic, accurate and
complete.


All directors are attended the Board Meeting for report deliberation.


Concerning the forward-looking statements with future planning involved in the Report, they
do not constitute a substantial commitment for investors. Majority investors are advised to
exercise caution of investment risks.


Risks factors are being well-described in the Report, found more in risks factors and
countermeasures disclosed in Prospects for Future Development of the Board of Directors’
Report.


The Company has no plan of cash dividends carried out, bonus issued and capitalizing of
common reserves either.




                                                 1
                                                               Contents




Section I Important Notice, Contents and Interpretation .............................................................. 1

Section II Company Profile and Main Financial Indexes .............................................................. 5

Section III Management Discussion and Analysis ............................................................................................... 8


Section IV Corporate Governance ................................................................................................................ 15


Section V Enviornmental and Social Responsibility           .......................................................................................... 16

Section VI Important Matters ........................................................................................................ 17

Section VII Changes in shares and particular about shareholders ............................................. 32

Section VIII Preferred Stock .......................................................................................................... 37

Section IX Corporate Bonds ........................................................................................................... 38

Section X Financial Report ............................................................................................................. 39




                                                                         2
                              Documents Available for Reference


I. Financial statement carrying the signatures and seals of the person in charge of the Company, principal of the

accounting works and person in charge of accounting organ;

II. All documents of the Company and manuscripts of public notices that disclosed in the Securities Times and

Hong Kong Commercial Daily designated by CSRC in the report period;

III. Article of Association

IV. Other relevant files.




                                                         3
                                  Interpretation
                 Items               Refers to                Contents
                                                   SHENZHEN ZHONGHENG HUAFA
Company, Shen HUAFA                  Refers to
                                                   CO., LTD.
Hengfa Technology                    Refers to     Wuhan Hengfa Technology Co., Ltd.
                                                   Shenzhen Zhongheng HUAFA Property
HUAFA Property                       Refers to
                                                   Co., Ltd
                                                   Shenzhen HUAFA Property Lease
HUAFA Lease                          Refers to
                                                   Management Co., Ltd
                                                   Wuhan Zhongheng New Science &
Wuhan Zhongheng Group                Refers to
                                                   Technology Industrial Group Co., Ltd
                                                   Hong Kong Yutian International
HK Yutian                            Refers to
                                                   Investment Co., Ltd.
                                                   Wuhan Hengsheng Photo-electricity
Hengsheng Photo-electricity          Refers to
                                                   Industry Co., Ltd.
                                                   Wuhan Hengsheng Yutian Industrial Co.,
Hengsheng Yutian                     Refers to
                                                   Ltd.
Yutian Henghua                       Refers to     Shenzhen Yutian Henghua Co., Ltd.
HUAFA Hengtian                       Refers to     Shenzhen HUAFA Hengtian Co., Ltd.
HUAFA Hengtai                        Refers to     Shenzhen HUAFA Hengtai Co., Ltd.
                                                   Shenzhen Vanke Real Estate Co., Ltd,
Shenzhen Vanke                       Refers to     renamed as“Shenzhen Vanke
                                                   Development Co., Ltd”
                                                   Shenzhen Vanke Guangming Real Estate
Vanke Guangming                      Refers to
                                                   Development Co., Ltd
V& T Law Firm                        Refers to     Shenzhen V& T Law Firm
                                                   Shenzhen Zhongheng Semiconductor
Zhongheng Semiconductor (former
                                     Refers to     Co., Ltd. (former Zhongheng Huafa
Huafa Technology)
                                                   Technology Co., Ltd)




                                          4
               Section II. Company Profile and Main Financial Indexes

I. Company profile

                                  Shen HUAFA -A,
Short form of the stock                                          Stock code                       000020
                                  Shen HUAFA- B
Stock exchange for listing        Shenzhen Stock Exchange
Name of the Company (in
                                  深圳中恒华发股份有限公司
Chinese)

Short form of the Company
                                  深华发
(in Chinese) (if applicable)

Foreign name of the
                                  SHENZHEN ZHONGHENG HUAFA CO., LTD.
Company (if applicable)
Legal representative              Li Zhongqiu


II. Person/Way to contact

                                                     Secretary of the Board                     Rep. of security affairs
Name                                        Niu Zhuo
                                            618, 6/F, East Tower, Huafa Building,
Contact add.                                No.411 Building, Huafa (N) Road,
                                            Futian District, Shenzhen
Tel.                                        0755-86360201
Fax.                                        0755-86360201
E-mail                                      huafainvestor@126.com.cn


III. Others

1. Way of contact

Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2021.


2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2021.



                                                                 5
3. Other relevant information

Whether other relevant information has changed in the reporting period

□ Applicable √ Not applicable


VI. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data
□ Yes     √ No
                                                                                                         Changes in the current
                                                                                                       reporting period compared
                                           Current period                Same period last year
                                                                                                       with the same period of the
                                                                                                           previous year (+,-)
Operating income(RMB)                             354,146,920.81                   391,633,808.55                             -9.57%
Net     profit     attributable    to
shareholders of the listed                          8,806,785.10                     6,989,362.48                            26.00%
company(RMB)
Net     profit     attributable    to
shareholders of the listed
company after deducting non-                        4,150,928.94                     7,034,198.78                            -40.99%
recurring           gains         and
losses(RMB)
Net cash flow arising from
                                                   49,720,222.38                    -21,818,369.59                           327.88%
operating activities(RMB)
Basic            earnings         per
                                                            0.0311                            0.0248                         25.40%
share(RMB/Share)
Diluted          earnings         per
                                                            0.0311                            0.0248                         25.40%
share(RMB/Share)
Weighted average ROE                                        2.53%                             2.07%                           0.46%
                                                                                                        Changes at the end of the
                                                                                                       reporting period compared
                                        End of current period              End of last year
                                                                                                       with the end of the previous
                                                                                                                year (+,-)
Total assets(RMB)                                 638,152,495.34                   659,933,225.57                             -3.30%
Net     assets     attributable    to
shareholder          of       listed              352,257,424.41                   343,450,639.31                             2.56%
company(RMB)


V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable


                                                                     6
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.


2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.


VI. Items and amounts of extraordinary profit (gains)/loss

√Applicable □ Not applicable

                                                                                                                         Unit: RMB/CNY
                     Item                                      Amount                                          Note
Gains/losses from the disposal of non-
current asset (including the write-off that                                  789,308.26
accrued for impairment of assets)
Governmental subsidy reckoned into
current gains/losses (except for those
with       normal     operation         business
concerned, and conform to the national
                                                                           4,515,323.81
policies     &      regulations    and       are
continuously enjoyed at a fixed or
quantitative basis according to certain
standards)
Gain/loss of entrusted investment or
                                                                             180,088.19
assets management
Other      non-operating      income        and
expenditure         except        for        the                               25,266.61
aforementioned items
Less: Impact on income tax                                                   854,130.71
Total                                                                      4,655,856.16

Specific information on other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss
□Applicable √Not applicable
The Company does not have other items of profits/losses that qualified the definition of non-recurring profit(gain)/loss


Information on the definition of non-recurring profit(gain)/loss that listed in the Q&A Announcement No.1 on Information Disclosure
for Companies Offering Their Securities to the Public --- Extraordinary (non-recurring) Profit(gain)/loss as the recurring
profit(gain)/loss
□Applicable √Not applicable
The Company does not have any non-recurring profit(gain)/loss listed under the Q&A Announcement No.1 on Information
Disclosure for Companies Offering Their Securities to the Public --- Extraordinary (non-recurring) Profit(gain)/loss defined as
recurring profit(gain)/loss


                                                                    7
                     Section III Management Discussion and Analysis

I. Main businesses of the company in the reporting period

After years of development, the company has gradually formed two main businesses in industry and property
management. Among them, the industrial business mainly includes injection molding, Styrofoam (light-weight
packaging materials), and complete machine production and sales of liquid crystal display, property management
business is mainly the lease of its own property.


II. Core competitiveness analysis

All industrial lands of the Company located in Shenzhen were taken into the first batch of plan under 2010
Shenzhen urban upgrade planning. In the future, development and operation of self-owned land resources would
become the income source of the Company on a long-term and stable basis.


III. Main business analysis

Overview
See the “I. Main businesses of the company in the reporting period”


Change of main financial data on a y-o-y basis

                                                                                                                 Unit: RMB/CNY
                                                        Same period of last
                               Current period                                   y-o-y changes (+,-)            Reasons
                                                              year
Operation income                   354,146,920.81             391,633,808.55                  -9.57%
Operation cost                     311,845,943.49             334,523,805.25                  -6.78%
                                                                                                       Decrease in commodity
Sales expenses                       9,503,158.57              14,094,617.96                -32.58%
                                                                                                       wastage
Administrative
                                    17,627,621.80              22,680,307.24                -22.28%
expenses
                                                                                                       Decrease in foreign
Financial cost                       1,940,816.62                5,241,702.86               -62.97%
                                                                                                       exchange losses
Income tax expense                   2,858,046.44                1,584,720.39                80.35%    Increase in profitability
Net cash flow arising
                                                                                                       Decrease in inventories
from operation                      49,720,222.38              -21,818,369.59              -327.88%
                                                                                                       and assets occupancy
activities
Net cash flow arising
from investment                      2,353,325.62               -2,316,374.60               201.60%    Disposal of fixed assets
activities
Net cash flow arising
                                                                                                       Decrease in long-term
from financing                     -24,458,104.11              23,182,219.89               -205.50%
                                                                                                       loans
activities


                                                                   8
Net increase of cash                                                                                          Decrease in inventories
                                       27,879,096.12             -1,355,867.36                   2,156.18%
and cash equivalent                                                                                           and assets occupancy
Major changes on profit composition or profit resources in reporting period



No major changes on profit composition or profit resources occurred in reporting period


Constitution of operation income
                                                                                                                        Unit: RMB/CNY
                                   Current period                            Same period of lat year                 Increase/decrease
                                            Ratio in operation                            Ratio in operation             y-o-y(+,-)
                             Amount                                        Amount
                                                  income                                        income
Total operation
                           354,146,920.81                  100%        391,633,808.55                    100%                   -9.57%
income
According to industries
Computer,
communications
and           other
                           203,847,819.16                 57.56%       205,727,604.15                  52.53%                   -0.91%
electronic
equipment
manufacturing
Rubber and plastic
                           122,229,453.44                 34.51%       160,400,235.93                  40.96%                  -23.80%
products industry
Leasing and others          28,069,648.21                 7.93%            25,505,968.47                6.51%                  10.05%
According to products
Display                    203,847,819.16                 57.56%       205,727,604.15                  52.53%                   -0.91%
Plastic injection
                            99,672,642.36                 28.33%       137,963,397.80                  35.23%                  -27.75%
hardware
Foam parts                  22,556,811.08                 6.37%            22,437,585.36                5.73%                    0.53%
Property leasing
                            28,069,648.21                 7.74%            25,505,221.24                6.51%                  10.05%
and others
According to region
Domestic                   303,461,034.26                 85.69%       295,887,424.63                  75.55%                    2.56%
Overseas                    50,685,886.55                 14.31%        95,746,383.92                  24.45%                  -47.06%


The industries, products, or regions accounting for over 10% of the company’s operating revenue or operating profit


√Applicable □ Not applicable

                                                                                                                        Unit: RMB/CNY
                                                                                                                       Increase/decrea
                                                                               Increase/decrea     Increase/decrea
                        Operation                           Gross profit                                                 se of gross
                                         Operation cost                        se of operation     se of operation
                         income                                ratio                                                   profit ratio y-o-
                                                                                income y-o-y          cost y-o-y
                                                                                                                               y
According to industries
Computer,
communication
s and other
                      203,847,819.16     191,933,490.52             5.84%              -0.91%                3.83%              -4.31%
electronic
equipment
manufacturing
Rubber and
                      122,229,453.44     114,807,915.44             6.07%             -23.80%             -20.62%               -3.76%
plastic products


                                                                   9
industry
According to products
Display             203,847,819.16        191,933,490.52               5.84%            -0.91%             3.83%             -4.31%
Plastic injection
                      99,672,642.36        90,817,327.84               8.88%           -27.75%            -26.39%            -1.69%
hardware
According to region
Domestic            303,461,034.26        263,711,937.83             13.10%              2.56%              5.46%            -2.39%
Overseas             50,685,886.55         48,134,005.66              5.03%            -47.61%            -43.01%            -6.76%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
□ Applicable √ Not applicable


Reasons for y-o-y relevant data with over 30% changes
□ Applicable √ Not applicable


IV. Analysis of the non-main business

√Applicable □Not applicable

                                                                                                                     Unit: RMB/CNY

                                                                                        Description of       Whether be sustainable
                                   Amount                  Ratio in total profit
                                                                                         formation                  (Y/N)
                                                                                   Invoicing margin
Investment income                         180,088.19                       1.54%                             N
                                                                                   earnings
Non-operation revenue                      40,574.92                       0.35%   Three generation fee      N
Non-operation expense                      15,308.31                       0.13%   Tax late fees             N
Other income                             4,515,323.81                     38.71%   Government subsidy        N


V. Assets and liability analysis

1. Major changes of assets composition

                                                                                                                     Unit: RMB/CNY
                         End of the current period                   End of last year
                                                                                                       Ratio        Notes of major
                                         Ratio in total                         Ratio in total      changes(+,-)       changes
                        Amount                                   Amount
                                            assets                                  assets
                                                                                                                    Increase       in
                                                                                                                    management
                                                                                                                    efficiency     of
Monetary fund         75,664,614.16              11.86%       34,426,043.11              5.22%             6.64%    inventory, and
                                                                                                                    the       capital
                                                                                                                    occupancy
                                                                                                                    declined
Account
                    133,872,767.55               20.98%      128,675,327.97            19.50%              1.48%
receivable
                                                                                                                    Improve    the
                                                                                                                    management
                                                                                                                    efficiency  of
Inventory             66,100,631.11              10.36%       90,585,670.27            13.73%              -3.37%
                                                                                                                    inventory and
                                                                                                                    reduced    the
                                                                                                                    inventory

                                                                     10
Investment real
                     45,327,612.66                 7.10%    46,191,777.80     7.00%    0.10%
estate
Fixed assets        183,280,126.25             28.72%      187,889,261.50     28.47%   0.25%
Construction in
                         740,000.00                0.12%         740,000.00   0.11%    0.01%
process
Right-of-use
                         156,974.04                0.02%         209,298.72   0.03%    -0.01%
assets
                                                                                                Decrease      in
Short-term                                                                                      inventory,
                     11,433,573.00                 1.79%    26,480,857.00     4.01%    -2.22%
loans                                                                                           operational
                                                                                                loans declined
Contract
                         273,518.20                0.04%         736,355.70   0.11%    -0.07%
liability
Lease liability           86,325.75                0.01%         115,101.00   0.02%    -0.01%

2. Major overseas assets

□ Applicable √ Not applicable


3. Assets and liability measured by fair value

□ Applicable √ Not applicable


4. Assets right restriction till end of reporting period

            Item          Ending book value          Restriction reasons
Monetary fund                      14,890,386.86 Note payable margin
Fixed assets                       11,972,048.26 Collateral for borrowing
Intangible assets                   6,463,333.15 Collateral for borrowing
Monetary fund                          92,568.28 Judicial freeze
Investment real estate             33,323,610.66 Collateral for borrowing
Disposal of fixed
                                   92,857,471.69 Court seizure
assets
Total                             159,599,418.90




VI. Investment analysis

1. Overall situation

□ Applicable √ Not applicable


                                                                    11
2. The major equity investment obtained in the reporting period

□ Applicable √ Not applicable


3. The major non-equity investment doing in the reporting period

□ Applicable √ Not applicable


4. Financial assets investment

(1) Securities investment

□ Applicable √ Not applicable


The Company has no securities investment in the Period


(2) Derivative investment

□ Applicable √ Not applicable
The Company has no derivatives investment in the Period.


5. Application of raised proceeds

□ Applicable √ Not applicable
The Company has no application of raised proceeds in the Period.


VII. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.


2. Sales of major equity

□ Applicable √ Not applicable


VIII. Analysis of main holding company and stock-jointly companies

√Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%

                                                                                                                 Unit: RMB/CNY

 Company                           Main       Register                                 Operation    Operation
                  Type                                     Total assets   Net assets                               Net profit
  name                            business    capital                                   income       profit
Hengfa         Subsidiary     Production     181,643,11    490,082,27     224,594,86   326,746,16   694,597.45     583,906.55


                                                                 12
Technolog                         & sales    1.00                     4.87         3.57          9.37
y Company
HUAFA                            Property
                                             1,000,000.0    17,055,193.      1,798,595.8   3,278,337.4   1,271,549.0   1,497,741.9
Property       Subsidiary        manageme
                                             0                      87                 7             4             3             6
Company                          nt
Particular about subsidiaries obtained or disposed in report period
□Applicable √ Not applicable


Explanation of main holding company and stock-jointly companies


IX. Structured vehicle controlled by the Company

□ Applicable √Not applicable


X. Risks and countermeasures

(1)Risk analysis
Wuhan Hengfa Technology, as an important subsidiary of the company, is faced with increasing pressure under
the influence of intensifying market competition and tight supply of raw and auxiliary materials and other factors,
the key to solve the dilemma is to upgrade technology, enhance the added value of technology, and improve
profitability; In the context of downstream consumer demand upgrading, it improves production efficiency by
increasing the research and development of new products, adjusting and improving the product structure, and
improving the production process; At the same time, it expands upstream supply channels of raw and auxiliary
materials to avoid material shortage affecting production.


For a certain period of time, property leasing is still another important business for the development of the
company. Making full use of the self-owned property to provide operation, leasing and service businesses will
bring a certain contribution to the company's cash flow. After the gradual implementation of the urban renewal
project, it will bring long-term and stable sources of income for the company.


(2) Countermeasures
◆Industrial Business Upgrade
The epidemic of COVID-19 is not over yet, and all colleagues in the company continued to work hard to serve
existing customers, vigorously expanded the market, and gained more market share; Meanwhile, the Company
will intensify the development of raw & auxiliary materials suppliers in shortage within the market, try to avoid
the negative impact of upstream material shortage on the Company’s production. On the basis of maintaining
customers, actively looked for high-quality technology projects in consumer electronics, and gradually realized
industrial upgrading through technology optimization and management optimization; at the same time, it
strengthened management, improved production efficiency, improved product quality, and made full use of the
geographical advantages of the company to make the business bigger and stronger.


◆Promote the urban renewal project

                                                                  13
Speed up the promotion of renewal unit project of Huafa District, Gongming Street, Guangming New District,
Shenzhen and the renewal project renovation progress of Huafa Building, Huaqiang North Street, Futian District,
Shenzhen, accelerate the settlement of project procedures, and strive to make stage progress as early as possible.


◆Continue to focus on strengthening the company’s internal control
In 2022, the company will further optimize the corporate governance structure and improve the internal control
system and process and strictly implement and improve the executive ability of relevant system in accordance
with the governance requirements of listed companies, the company’s management and relevant departments will
execute the administrative provisions for approval procedures of fund utilizing, management system of related
transactions, working system of internal audit, internal reporting system of major information in strict accordance
with the requirements of internal control documents.




                                                         14
                                     Section IV Corporate Governance

I. In the report period, the Company held annual general meeting and extraordinary
shareholders’ general meeting

1. Shareholders’ General Meeting in the report period

                                                  Ratio of investor
Session of meeting            Type                                             Date           Date of disclosure      Resolutions
                                                   participation
                                                                                                                   http://www.cninfo.
                                                                                                                   com.cn/new/disclo
                                                                                                                   sure/detail?stockC
                                                                                                                   ode=000020&ann
Annual General
                      AGM                                   48.15%       2022-06-09          2022-06-10            ouncementId=121
Meeting of 2021
                                                                                                                   3660641&orgId=g
                                                                                                                   ssz0000020&anno
                                                                                                                   uncementTime=20
                                                                                                                   22-06-10


2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable √ Not applicable


II. Changes of directors, supervisors and senior executives

√ Applicable □ Not applicable
         Name                     Position held                       Type                    Date                    Causes
Yang Bin                   Deputy GM, CFO                Leaving office               2022-02-17               Personal reasons
Chen Zhigang               Deputy GM, CFO                Appointments                 2022-02-18               Appointments
                           Director, Deputy
Jiang Junming                                            Leaving office               2022-06-08               Personal reasons
                           President
                           Director, Deputy
Yang Hongyu                                              Be elected                   2022-06-09               Be elected
                           President


III. Profit distribution plan and capitalizing of common reserves plan for the Period

□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the midterm.


IV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives

□ Applicable √ Not applicable
The Company had no stock incentive plan, employee stock ownership plan or other employee incentive in the reporting period.



                                                                        15
16
                  Section V. Environmental and Social Responsibility

I. Important environmental issues

The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department

□ Yes √No


Administrative penalties imposed for environmental issues during the reporting period
                                                                                          Impact on the
 The company or           Reasons for                                                     production &              Corrective
                                                  Violations         Penalty results
   subsidiary               penalty                                                     operation of listed         measures
                                                                                            company
N/A                   N/A                   N/A                   N/A                   N/A                   N/A
Other environmental information disclosed with reference to the key emission units

Not applicable




Measures taken to reduce carbon emission during the reporting period and their effectiveness
□ Applicable √ Not applicable



Reasons for not disclosed other environmental information

Not applicable


II. Social responsibility

N/A




                                                                17
                                       Section VI. Important Matters

I. Commitments that the actual controller, shareholders, related party, offeror and committed party as the
Company etc. have fulfilled during the reporting period and have not yet fulfilled by the end of reporting
period

□ Applicable √ Not applicable
There were no commitments that the actual controller, shareholders, related party, offeror and committed party as the Company etc.
have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period


II. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.


III. Guarantee outside against the regulation


□Applicable √Not applicable
No guarantee outside against the regulation in Period.


IV. Appointment and non-reappointment (dismissal) of CPA

Whether the financial report has been audited or not
□Yes √no
The company's semi-annual report has not been audited.


V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”
that issued by CPA

□ Applicable √Not applicable


VI. Explanation from the Board for “Qualified Opinion” of last year’s

□ Applicable √Not applicable


VII. Bankruptcy reorganization

□ Applicable √Not applicable
No bankruptcy reorganization for the Company in reporting period


VIII. Lawsuits

Significant lawsuits and arbitration


                                                                 18
√Applicable    □Not applicable
                   Amount of
  The basic                                                            The results
                     money             Predicted     Advances in                       Execution of
 situation of                                                         and effects of                       Disclosure    Disclosure
                  involved (in         liabilities     litigation                      the litigation
  litigation                                                            litigation                            date         index
                  10 thousand            (Y/N)       (Arbitration)                     (Arbitration)
(Arbitration)                                                         (Arbitration)
                     Yuan)
                                                                                       In September
                                                                                       2018,
                                                                                       Shenzhen
                                                                                       Vanke
                                                                                       applied      for
                                                                                       compulsory
                                                                                       execution. In
                                                                                       October
                                                                                       2019, due to
In September                                                                           the outsider's
2016, Wuhan                                                                            application
Zhongheng
                                                                                       of "objection                    http://www.c
Group Co.,
                                                                                                                        ninfo.com.cn
Ltd. and the                                                                           to execution"
                                                                                                                        /cninfo-
Company                                                                                and       "non-
                                                     Ruling on 16                                                       new/disclosu
and
                                                     August 2017;                      enforcement"                     re/szse_main
Shenzhen
                                                     put forward                       ,            the                 /bulletin_det
Vanke were
                                                     the                                                                ail/true/1204
applied for                                                                            execution
                                                     application                                                        406606?anno
arbitration                                                                            procedure
                                                     for                                                                unceTime=2
due to the                                                           Found more
                                                     dismantling                       was                              018-02-09 ;
dispute case                                                         in
                                                     by the                                                             http://www.c
of “Contract           46,460     N                                 announceme        terminated. If     2018-02-09
                                                     Company         nt of the                                          ninfo.com.cn
for the                                                                                the outsider's
                                                     and             Company                                            /new/disclos
Cooperative
                                                     controlling                       application                      ure/detail?pla
Operation of
                                                     shareholder,                      was rejected                     te=szse&stoc
the Old
                                                     the                                                                kCode=0000
Projects at                                                                            by           the
                                                     application                                                        20&announc
Huafa
                                                     was rejected                      Shenzhen                         ementId=120
Industrial
                                                     by the court                      Intermediate                     5326846&an
Park,
                                                                                                                        nouncement
Gongming                                                                               People’s
                                                                                                                        Time=2018-
Street,                                                                                Court,                           08-25
Guangming
                                                                                       Shenzhen
New
District”.                                                                            Vanke would
                                                                                       have         the
                                                                                       right         to
                                                                                       continue      to
                                                                                       apply for the
                                                                                       resumption
                                                                                       of
                                                                                       compulsory
                                                                                       execution.

                                                     The             A decision
Application                                                                            Implementin                      http://www.c
                       1,940.2     N                 arbitration     was issued                           2018-11-14
for                                                                                    g                                ninfo.com.cn
                                                     has been        and the

                                                                     19
arbitration in                heard            Company’s                               /new/disclos
case of                                        motion to                                ure/detail?pla
                                               dismiss was
contract                                                                                te=szse&stoc
                                               denied
dispute                                                                                 kCode=0000
between the                                                                             20&announc
V&T Law                                                                                 ementId=120
Firm and                                                                                5602053&an
Shenzhen                                                                                nouncement
Zhongheng                                                                               Time=2018-
Huafa Co.,                                                                              11-14
Ltd. and
Wuhan
Zhongheng
Group
Shenzhen
Zhongheng
Huafa
Semiconduct
or Co., Ltd
bring a suit
against the                                                                             http://www.c
Company,                                                                                ninfo.com.cn
request for                   The
                              judgment                                                  /new/disclos
continuation
of the assets                 (2020) Yue                                                ure/detail?sto
replacement                   03 Min Chu                                                ckCode=000
contract.                     No.17 was        Semiconduct                              020&announ
According to                  issued      in   or Company     Trial in
                  5,200   N                                                2021-06-03   cementId=12
the contract,                 May 2021,        has filed an   progress
                              all claims of    appeal                                   10151395&o
the        two
                              Semiconduct                                               rgId=gssz000
parcels      of
lands       are               or Company                                                0020&annou
transferred to                were rejected                                             ncementTim
Semiconduct                                                                             e=2021-06-
or Company                                                                              03
and
compensated
economic
losses of 52
million yuan

Shenzhen
Zhongheng
Huafa
Semiconduct
                                                                                        http://www.c
or Co., Ltd
                                                                                        ninfo.com.cn
bring a suit
                                                                                        /new/disclos
against the
                                                                                        ure/detail?sto
Company,
                                                                                        ckCode=000
Zhongheng                     The second       The second     The second
                                                                                        020&announ
Group and                     trial has        trial has      trial has
                     0    N                                                2022-03-05   cementId=12
Shenzhen                      issued a         issued a       issued a
                                                                                        12510555&o
Vanke,                        verdict          verdict        verdict
                                                                                        rgId=gssz000
request for
                                                                                        0020&annou
judgment
                                                                                        ncementTim
that the
                                                                                        e=2022-03-
above
                                                                                        05
Business
Cooperation
Contract is
invalid


                                               20
Other lawsuits
□Applicable √ Not applicable


IX. Penalty and rectification

□Applicable √ Not applicable


X. Integrity of the company and its controlling shareholders and actual controllers

□ Applicable √Not applicable


XI. Major related transaction

1. Related transaction with routine operation concerned

√Applicable □ Not applicable
                                                        Relate                       Whet
                                                                             Tradi
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party      p                                    ction                  r    (in 10
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                                                price              transa   thousa
                    ction     ction                     thousa                        d or    transa   t price
                                                                   ctions      nd
                                                          nd                           not     ction
                                                                            Yuan)
                                                        Yuan)                        (Y/N)
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                                                                  21
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                                                               22
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                                                               23
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                                                                                                              2022-
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                                                               24
Ltd.      contro                                                                                             2022
          ller                                                                                               for
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                                                                                                             e No:
                                                                                                             2022-
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          by                         Deter    Deter
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          same                       mined    mined
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          contro                     by       by
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          lling                      fair     fair                                  Wire
-                          d                                            510.0                        2022-   Telec
          shareh   Sales             marke    marke    62.65    0.63%           N   transf   ditto
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          and                        tradin   tradin
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          te                         price    price
Co.,                       injecti                                                                           ess”
          contro
Ltd.                       on                                                                                (Notic
          ller
                           hardw                                                                             e No:
                           are                                                                               2022-
                                                                                                             16) on
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                                                                                                             .cn)



                                                               25
                                                           15,21               53,74
Total                                    --        --                     --             --        --       --        --       --
                                                             6.4                7.16
Detail of sales return with major
                                       N/A
amount involved
                                       During the reporting period, Hengfa Technology actually has 32.0934 million yuan
                                       procurement from HK Yutian, 25.17% of the annual amount predicted at the beginning of
                                       the year; purchased LCD monitor from Hengsheng Photo-electricity with 44.9609 million
                                       yuan approximately, 35.26% of the annual amount predicted at the beginning of the year;
Report the actual implementation       purchasing LCD Display from Hengsheng Photo-electricity with about 10.9161 million
of the daily related transactions      yuan, 21.4% of the annual amount predicted at the beginning of the year; sold LCD Display
which were projected about their       whole machine to HK Yutian with 35.6806 million yuan approximately, 22.39% of the
total amount by types during the       annual amount predicted at the beginning of the year; sold LCD display to Hengsheng
reporting period(if applicable)        Photo-electricity with about 27.8865 million yuan, 43.74% of the annual amount predicted
                                       at the beginning of the year; and sold LCD relevant products of plastic injection hardware to
                                       Hengsheng Photo-electricity with about 626,500 yuan,12.28% of the annual amount
                                       predicted at the beginning of the year

Reasons for major differences
between trading price and market       N/A
reference price


2. Related transactions of assets or equity acquisition and sold

□Applicable √Not applicable
There were no related transactions of assets or equity acquisition and sold during the reporting period


3. Main related transactions of mutual investment outside

□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.


4. Contact of related credit and debt

□ Applicable √ Not applicable
No contact of related credit and debt during the reporting period.

5. Contact with the related finance companies

□ Applicable √ Not applicable
There are no deposits, loans, credits or other financial business between the Company and the finance companies with related
relationships or between the related parties




6. Contact between the finance companies that controlled by the Company and related parties

□ Applicable √ Not applicable
There are no deposits, loans, credits or other financial business between the finance companies that controlled by the Company and
related parties




                                                                     26
7. Other significant related transactions

□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.


XII. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √ Not applicable
No trusteeship for the Company in reporting period.


(2) Contract

□ Applicable √ Not applicable
No contract for the Company in reporting period.


(3) Leasing

√ Applicable   □Not applicable



Explanation on leasing


Wuhan Hengfa Technology Co., Ltd entered into the storage area lease contract with TCL Air Conditioner (Wuhan) Co., Ltd due to
production and operation requirements. Leased 300 square meters warehouses for business use, the contract expires at end of 2023
and the Company exercised the right of first renewal in 2021. Relevant accounting treatment are recognized as Right-of-use assets
and Lease liability in line with the new leasing standards.




Projects that bring gain/loss to the Company accounting to 10% or more of the total profit for the reporting period

□ Applicable √ Not applicable

There was no leasing projects that bring gain/loss to the Company accounting to 10% or more of the total profit during the reporting
period


2. Major guarantees

√Applicable □ Not applicable
                                                                                                                  In 10 thousand Yuan
                 Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Name of      Related                  Actual                                                                             Guarante
                                                  Actual                                                     Impleme
   the      Announc Guarante          date of                 Guarante              Counter Guarante                        e for
                                                 guarante               Collatera                              nted
                                                                                    guarante
Compan       ement        e limit    happenin                  e type   l (if any)                e term                   related
                                                  e limit                           e(if any)                 (Y/N)
    y       disclosur                    g                                                                                 party


                                                                  27
guarante       e date                                                                                                         (Y/N)
   ed
                                                                Joint and
                                                                several
                                                                liability                                         N          N
                                                                guarante
                                                                e
                                               Guarantee to subsidiary by the Company
Name of
              Related                                                                                                        Guarante
   the                                Actual
              Announc                              Actual                                                         Impleme        e for
Compan                    Guarante   date of                    Guarante                   Counter     Guarante
               ement                              guarante                    Collatera                               nted    related
                                                                                           guarante
   y                       e limit   happenin                    e type       l (if any)                e term
              disclosur                            e limit                                 e(if any)               (Y/N)         party
guarante                                g
               e date                                                                                                         (Y/N)
   ed
                                                                                           Wuhan
                                                                                           Hengfa
                                                                                           Technol
                                                                                           ogy Co.,
                                                                                           Ltd
                                                                                           offering
                                                                                           a
                                                                                           counter-
                                                                                           guarante
                                                                                           e to
Wuhan                                                           Joint and                  Shenzhe
Hengfa                                                          several                    n
              2022-04-
Technol                     20,000                1,143.36      liability                  Zhonghe     One year   N          Y
              26
ogy Co.,                                                        guarante                   ng
Ltd.                                                            e                          Huafa
                                                                                           Technol
                                                                                           ogy Co.,
                                                                                           Ltd
                                                                                           within
                                                                                           the
                                                                                           scope of
                                                                                           36
                                                                                           million
                                                                                           yuan

                                                  Total      amount     of
Total    amount      of
                                                  actual        occurred
approving guarantee
                                       20,000     guarantee             for                                                   3,633.3
for subsidiaries in
                                                  subsidiaries in report
report period (B1)
                                                  period (B2)
Total    amount      of                           Total      balance    of
approved guarantee                                actual guarantee for
for subsidiaries at                    20,000     subsidiaries at the                                                        1,143.36
the end of reporting                              end      of   reporting
period (B3)                                       period (B4)

                                         Guarantee of the subsidiaries for the subsidiaries
Name of       Related     Guarante    Actual     Actual     Guarante Collatera Counter                 Guarante   Complet    Guarante
                                                                          l (if any) guarante

                                                                       28
     the          Announc        e limit    date of    guarante       e type              e(if any)    e term          e       e for
Compan             ement                   happenin     e limit                                                     impleme   related
     y            disclosur                    g                                                                    ntation    party
guarante           e date                                                                                            or not
     ed

                              Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total       amount      of                             Total amount of
approving guarantee                                    actual        occurred
                                             20,000                                                                            3,633.3
in       report     period                             guarantee in report
(A1+B1+C1)                                             period (A2+B2+C3)
Total       amount      of                             Total      balance    of
approved guarantee                                     actual guarantee at
                                             20,000                                                                           1,143.36
at the end of report                                   the end of report
period (A3+B3+C2)                                      period (A4+B4+C4)

The proportion of the total amount of
actually guarantee in the net assets of the                                                                                     3.25%
Company (that is A4+ B4+C4)
Including:
Explanation on compound guarantee


3.Trust financing


□Applicable √Not applicable
No trust financing occurred in the reporting period


4. Other material contracts

□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.


XIII. Explanation on other significant events

√ Applicable □ Not applicable


(1) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology
Industrial Group Co., Ltd (hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were
referred to in the announcement dated 30 April 2009), and pursuant to the contract, since part of the assets of the
Company (namely two parcel of industrial lands located at Huafa road, Gongming town, Guangming new district,
Shenzhen (the property certificate No. were SFDZ No.7226760 and SFDZ No.7226763, No. of parcels were
A627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first batch of plan
for 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and
joint cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.




                                                                            29
The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first
extraordinary general meeting of the Board in 2015 on March 4, 2015, which considered and approved the
“Motion on promoting and implementing the urban renewal project for the renewal units of Huafa area at
Gongming street, Guangming new district, Shenzhen”, specified that the Company and Wuhan Zhongheng Group
shall obtain the corresponding compensatory consideration for removal from the respectively owned project plots
and the respectively contributed and constructed above-ground buildings before the land development, it is
estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total
consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.


The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of
2015 have considered and adopted the “Proposal on the project promotion and implementation of urban renewal
and the progress of related transactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming New
District, Shenzhen’”, the company has signed the “Agreement on the cooperation of urban renewal project of the
updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”, “Contract for the
cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street, Guangming New
District” on 26 August 2015, and “Agreement on housing acquisition and removal compensation and resettlement”
with Wuhan Wuhan Zhongheng Group, Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as
“Shenzhen Vanke”), and Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to
as “Vanke Guangming”).


On 12 September 2016, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of
urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”
against the Company and Wuhan Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has
given a ruling in August 2017. On August 29, 2018, the court accepted the compulsory execution application of
Shenzhen Vanke. In October 2019, as a number of outsiders filed an “execution objection” and applied for “no
execution” to Shenzhen Intermediate People’s Court, the Shenzhen Intermediate People’s Court ruled to terminate
the enforcement procedure on March 20, 2020. If the “execution objection” and “no execution” proposed by
outsiders are rejected according to law, Shenzhen Vanke may continue to apply to the Shenzhen Intermediate
People’s Court to resume execution.


In April 2020, Zhongheng Semiconductor sued the company to Shenzhen Intermediate People’s Court, and
requested the company to transfer the above mentioned two pieces of lands and compensate the economic loss of
52 million yuan, the first and second trial judgments reject the Semiconductor’s appeal; Zhongheng
Semiconductor sued the Company and the invalid of “Agreement on the cooperation of urban renewal project of
the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” signed by Wuhan
Zhongheng Group Company and Vanke, the second trial rejects all claims of Zhongheng Semiconductor. Progress
of the case found more in the Notices released on Juchao website dated 14 Sept. 2016, 1 Nov. 2016, 16 Nov. 2016,
on 18 Feb. 2017, 24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017, 9 Feb. 2018, 25 Aug. 2018, 7 Sept.


                                                       30
2018, 21 Apr. 2020, 3 Jun, 2021, 22 Jul. 2021 and Mar. 5, 2022 respectively.


(2) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China
Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. On 1 Feb. 2016, Wuhan Zhongheng
Group pledge the 27,349,953 shares held to China Merchants Securities Assets Co., Ltd. with due date of 31
December 2016. The above-mentioned pledged shares are deferred by Wuhan Zhongheng Group; pledge expired
on 31 December 2017. The trading day for repurchase put off to the date when pledge actually removed. Till end
of this period released, controlling shareholder still not removed the pledge and the Company has apply by letter,
relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice
released on Juchao website date 2 Feb. 2018.


In March 2021, Wuhan Zhongheng Group received the judgment on case of “pledged securities repurchase
dispute” brought by China Merchants Securities Assets Management Co., Ltd from High People’s Court of
Guangdong Province. Wuhan Zhongheng Group appealed to the Supreme People’s Court against the decision.
Found more in notice released on Juchao Website dated March 19, 2021.


(3) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock,
accounting for 42.13% of the total share capital of the Company, of which 116,489,894 shares were judicially
frozen by Shenzhen Intermediate People's Court (hereinafter referred to as "Shenzhen Intermediate Court") on
September 27, 2016, which were frozen again by the Shenzhen Intermediate People's Court on December 14,
2018, with a frozen period of 36 months; the remaining 2,800,000 shares were frozen by the Shenzhen
Intermediate People's Court on May 29, 2019, and were frozen again by the Higher People’s Court of Guangdong
Province on July 5, 2019. For details, please refer to the company’s announcements published on Juchao Website
dated October 27, 2016, January 11, 2019, May 31, 2019 and August 7, 2019.


(4) On September 29, 2016, the company and its controlling shareholder, Wuhan Zhongheng Group, signed the
“Agency Contract” with V&T Law Firm. On October 8, 2016, the three parties also signed the “Supplemental
Agreement for Agency Contract”, it was agreed that V&T acted as an agent for the company and Wuhan
Zhongheng Group to deal with the arbitration case with Shenzhen Vanke. After losing the lawsuit, due to
differences in the payment of attorney fees, V&T sued our company and Wuhan Zhongheng Group to the
Shenzhen Court of International Arbitration, and applied to the court to seize a bank account under our company’s
name and part of our company dormitories, please refer to “Other Announcements on the Progress Involving
Litigation and Arbitration” (Announcement Numbers: 2018-43, 2019-02) released on Juchao Website dated
November 14, 2018 and March 6, 2019. In November 2019, the Shenzhen Court of International Arbitration ruled
that the company and Wuhan Zhongheng Group paid the corresponding fees. According to the relevant agreement
of the “Entrusted Agency Contract” and “Supplementary Agreement” signed by the three parties, loss of the
ruling in the case shall be fully borne by Wuhan Zhongheng Group, therefore, it has no impact on the profit of the




                                                       31
Company. Found more on “Other Announcements on the Progress Involving Litigation and Arbitration”
(Announcement No.: 2019-34) released on Juchao Website dated November 25, 2019.


(5) Business of the Company - Styrofoam is a traditional manufacturing industry. The industry has stepping into
the maturity with severe overcapacity, the oversupply leads to a low gross margin and downward trend of
profitability of the Company’s products. The “proposal to shut down the Styrofoam business from wholly-owned
subsidiary” was deliberated and approved by the third interim meeting of BOD of 2022. Closure of the plant is
progressing steadily.


XIV. Significant event of subsidiary of the Company

□ Applicable √Not applicable




                                                      32
   Section VII. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

                                                                                                                                  Unit: Share


                                  Before the Change             Increase/Decrease in the Change (+, -)               After the Change
                                                                                   Public
                                                           New                     reserve
                                                Proporti             Bonus                                                        Proportio
                                  Amount                   shares                  transfer       Others Subtotal   Amount
                                                  on                 shares                                                          n
                                                           issued                 into share
                                                                                   capital
I. Restricted shares                        0     0.00%          0            0               0        0        0            0       0.00%
 1. State-owned shares
 2. State-owned legal
person’s shares
 3. Other domestic shares
  Including: Domestic
legal person’s shares
     Domestic natural
person’s shares
 4. Foreign shares
  Including: Foreign legal
person’s shares
     Foreign natural
person’s shares
II. Unrestricted shares           283,161,227 100.00%            0            0               0        0        0   283,161,227 100.00%
 1. RMB ordinary shares           181,165,391 63.98%             0            0               0        0        0   181,165,391    63.98%
 2. Domestically listed
                                  101,995,836 36.02%             0            0               0        0        0   101,995,836    36.02%
foreign shares
 3. Overseas listed foreign
shares
 4. Others
III. Total shares                 283,161,227 100.00%            0            0               0        0        0   283,161,227 100.00%
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable

                                                                     33
Progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of reducing holdings of shares buy-back by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable


2. Changes of lock-up stocks

□ Applicable √ Not applicable


II. Securities issuance and listing

□ Applicable √ Not applicable


III. Amount of shareholders of the Company and particulars about shares holding

                                                                                                                            Unit: Share
                                                           Total preference shareholders with
Total common stock
                                                           voting rights recovered at end of
shareholders in reporting                        24,938                                                                              0
                                                           reporting period (if applicable) (see note
period-end
                                                           8)
                Particulars about common shares held above 5% by shareholders or top ten common shareholders
                                            Amount of                                                        Information of shares
                                                                                            Amount of
Full name                                    common                       Amount of                        pledged, tagged or frozen
                              Proportion                   Changes in                        common
      of        Nature of                   shares held                    restricted
                              of shares                         report                      shares held
Shareholde    shareholder                    at the end                     common                          State of
                                  held                          period                       without                      Amount
      rs                                    of reporting                  shares held                        share
                                                                                            restriction
                                              period
              Domestic
Wuhan         non-state-
                                            119,289,89                                      119,289,89                   119,289,89
Zhongheng     owned               42.13%                   0                            0                  Frozen
                                                       4                                               4                             4
Group         legal
              person
SEG
              Overseas
(HONG
              legal                5.85%    16,569,560     0                            0   16,569,560
KONG)
              person
CO., LTD.
GOOD
              Overseas
HOPE
              legal                2.50%      7,072,000    0                            0    7,072,000
CORNER
              person
INVESTM


                                                                   34
ENTS
LTD.
Changjiang
Securities
               Overseas
Brokerage
               legal                   1.89%     5,355,249    0                        0     5,355,249
(Hong
               person
Kong) Co.,
Ltd.
Guoyuan
Securities
               Overseas
Brokerage
               legal                   1.37%     3,870,117    0                        0     3,870,117
(Hong
               person
Kong)
Limited
               Overseas
Li
               nature                  1.00%     2,830,000    0                        0     2,830,000
Zhongqiu
               person
               Domestic
Jin
               nature                            1,849,300                             0     1,849,300
Guoping
               person
               Domestic
He Wei         nature                            1,818,319                             0     1,818,319
               person
               Domestic
Yao Ming       nature                            1,577,300                             0     1,577,300
               person
               Domestic
Li Wei         nature                            1,546,800                             0     1,546,800
               person
Strategy investor or
general legal person
becoming the top 10
                                 N/A
common shareholders by
placing new shares (if
applicable) (see note 3)
                                 Among the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng New
Explanation on associated        Science & Technology Industrial Group Co., Ltd. and is a party acting in concert. The Company
relationship   among       the   neither knew whether there exists associated relationship among the other shareholders, nor they
aforesaid shareholders           belong to consistent actors that are prescribed in Measures for the Administration of Disclosure of
                                 Shareholder Equity Changes of Listed Companies.
Description of the above
shareholders in relation to
                                 N/A
delegate/entrusted voting
rights and abstention from



                                                                    35
voting rights.
Special note on the
repurchase account among
                               N/A
the top 10 shareholders (if
applicable) (see note 11)
                              Particular about top ten shareholders with un-lock up common stocks held
                                                                                                                 Type of shares
   Shareholders’ name            Amount of common shares held without restriction at Period-end
                                                                                                            Type           Amount
                                                                                                         RMB
                                                                                                                          119,289,89
Wuhan Zhongheng Group                                                                   119,289,894      common
                                                                                                                                    4
                                                                                                         share
                                                                                                         Domestical
SEG (HONG KONG)                                                                                          ly listed
                                                                                         16,569,560                       16,569,560
CO., LTD.                                                                                                foreign
                                                                                                         shares
                                                                                                         Domestical
GOOD HOPE CORNER                                                                                         ly listed
                                                                                          7,072,000                        7,072,000
INVESTMENTS LTD.                                                                                         foreign
                                                                                                         shares
                                                                                                         Domestical
Changjiang Securities
                                                                                                         ly listed
Brokerage (Hong Kong)                                                                     5,355,249                        5,355,249
                                                                                                         foreign
Co., Ltd.
                                                                                                         shares
                                                                                                         Domestical
Guoyuan Securities
                                                                                                         ly listed
Brokerage (Hong Kong)                                                                     3,870,117                        3,870,117
                                                                                                         foreign
Limited
                                                                                                         shares
                                                                                                         Domestical
                                                                                                         ly listed
Li Zhongqiu                                                                               2,830,000                        2,830,000
                                                                                                         foreign
                                                                                                         shares
                                                                                                         RMB
Jin Guoping                                                                               1,849,300      common            1,849,300
                                                                                                         share
                                                                                                         Domestical
                                                                                                         ly listed
He Wei                                                                                    1,818,319                        1,818,319
                                                                                                         foreign
                                                                                                         shares
                                                                                                         Domestical
                                                                                                         ly listed
Yao Ming                                                                                  1,577,300                        1,577,300
                                                                                                         foreign
                                                                                                         shares
                                                                                                         Domestical
Li Wei                                                                                    1,546,800                        1,546,800
                                                                                                         ly listed



                                                                  36
                                                                                                       foreign
                                                                                                       shares
Expiation on associated
relationship or consistent
actors within the top 10       Among the top ten shareholders, Li Zhongqiu is the actual controller of Wuhan Zhongheng New
un-lock up common              Science & Technology Industrial Group Co., Ltd. and is a party acting in concert. The Company
shareholders and between       neither knew whether there exists associated relationship among the other shareholders, nor they
top 10 un-lock up              belong to consistent actors that are prescribed in Measures for the Administration of Disclosure of
common shareholders and        Shareholder Equity Changes of Listed Companies.
top 10 common
shareholders
Explanation on top 10
common shareholders            Among the top ten shareholders, Jin Guoping holds 0 shares through regular securities account and
involving margin business      1,849,300 shares through credit securities account.
(if applicable) (see note 4)

Whether top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-lock up shares held of the Company have no
buy-back agreement dealing in reporting period.


IV. Changes of shares held by directors, supervisors and senior executives

□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2021.


V. Changes in controlling shareholders or actual controllers

Change of controlling shareholder during the reporting period
□ Applicable   √ Not applicable
The Company had no change of controlling shareholder during the reporting period
Change of actual controller during the reporting period
□ Applicable   √ Not applicable
The Company had no change of actual controller during the reporting period




                                                                   37
                                     Section VIII. Preferred Stock

□ Applicable √ Not applicable
The Company had no preferred stock in the Period.




                                                    38
                                  Section IX. Corporate Bonds

□ Applicable √ Not applicable




                                              39
                                                                       深圳中恒华发股份有限公司 2022 年半年度报告全文




                                          Section X. Financial Report

I. Audit report

Whether the semi annual report is audited
□ Yes √ No
The company's semi annual financial report has not been audited


II. Financial Statement

Statement in Financial Notes are carried Unit: RMB/CNY/CNY


1. Consolidated Balance Sheet

Prepared by SHENZHEN ZHONGHENG HUAFA CO., LTD.
                                                                                                     Unit: RMB/CNY
                                   Item                                June 30, 2022            January 1, 2022
Current assets:
     Monetary funds                                                           75,664,614.16             34,426,043.11
     Settlement provisions
     Capital lent
     Trading financial assets
     Derivative financial assets
     Note receivable                                                          60,827,292.54            105,922,317.60
     Account receivable                                                      133,872,767.55            128,675,327.97
     Receivable financing                                                                                 500,000.00
     Accounts paid in advance                                                 19,963,828.94              7,996,570.95
     Insurance receivable
     Reinsurance receivables
     Contract reserve of reinsurance receivable
     Other account receivable                                                  4,628,853.27              4,520,412.70
        Including: Interest receivable
                  Dividend receivable
     Buying back the sale of financial assets
     Inventories                                                              66,100,631.11             90,585,670.27
     Contractual assets
     Assets held for sale
     Non-current asset due within one year
     Other current assets                                                        105,743.48              3,732,033.86
Total current assets                                                         361,163,731.05            376,358,376.46
Non-current assets:



                                                                  40
                                                     深圳中恒华发股份有限公司 2022 年半年度报告全文


     Loans and payments on behalf
     Debt investment
     Other debt investment
     Long-term account receivable
     Long-term equity investment
     Investment in other equity instrument
     Other non-current financial assets
     Investment real estate                                45,327,612.66              46,191,777.80
     Fixed assets                                         183,280,126.25             187,889,261.50
     Construction in progress                                 740,000.00                740,000.00
     Productive biological asset
     Oil and gas asset
     Right-of-use assets                                      156,974.04                209,298.72
     Intangible assets                                     38,310,208.33              39,171,573.09
     Expense on Research and Development
     Goodwill
     Long-term expenses to be apportioned                   1,528,018.90               1,691,257.89
     Deferred income tax asset                              7,645,824.11               7,681,680.11
     Other non-current asset
Total non-current asset                                   276,988,764.29             283,574,849.11
Total assets                                              638,152,495.34             659,933,225.57
Current liabilities:
     Short-term loans                                      11,433,573.00              26,480,857.00
     Loan from central bank
     Capital borrowed
     Trading financial liability
     Derivative financial liability
     Note payable                                          22,605,511.76              21,554,981.30
     Account payable                                       95,152,390.13              88,529,478.96
     Accounts received in advance
     Contractual liability                                    273,518.20                736,355.70
     Selling financial asset of repurchase
     Absorbing deposit and interbank deposit
     Security trading of agency
     Security sales of agency
     Wage payable                                           4,427,543.85               3,844,381.07
     Taxes payable                                         14,566,092.54              14,657,117.69
     Other account payable                                 40,932,188.01              30,448,913.14
        Including: Interest payable                            93,178.03                113,080.26
                  Dividend payable
     Commission charge and commission payable
     Reinsurance payable
     Liability held for sale


                                                41
                                                             深圳中恒华发股份有限公司 2022 年半年度报告全文


     Non-current liabilities due within one year                   55,104,400.61              61,104,400.61
     Other current liabilities                                     37,185,847.90              64,644,280.61
Total current liabilities                                         281,681,066.00             312,000,766.08
Non-current liabilities:
     Insurance contract reserve
     Long-term loans
     Bonds payable
        Including: Preferred stock
                    Perpetual capital securities
     Lease liability                                                   86,325.75                115,101.00
     Long-term account payable
     Long-term wages payable
     Accrual liability                                                801,159.18                801,159.18
     Deferred income                                                3,326,520.00               3,565,560.00
     Deferred income tax liabilities
     Other non-current liabilities
Total non-current liabilities                                       4,214,004.93               4,481,820.18
Total liabilities                                                 285,895,070.93             316,482,586.26
Owner’s equity:
     Share capital                                                283,161,227.00             283,161,227.00
     Other equity instrument
        Including: Preferred stock
                    Perpetual capital securities
     Capital public reserve                                       146,577,771.50             146,577,771.50
     Less: Inventory shares
     Other comprehensive income
     Reasonable reserve
     Surplus public reserve                                        77,391,593.25              77,391,593.25
     Provision of general risk
     Retained profit                                             -154,873,167.34            -163,679,952.44
Total owner’ s equity attributable to parent company             352,257,424.41             343,450,639.31
     Minority interests
Total owner’ s equity                                            352,257,424.41             343,450,639.31
Total liabilities and owner’ s equity                            638,152,495.34             659,933,225.57


Legal Representative: Li Zhongqiu


Person in charge of accounting works: Chen Zhigang


Person in charge of accounting institute: Chuai Guoxu


2. Balance Sheet of Parent Company

                                                                                          Unit: RMB/CNY

                                                        42
                                                        深圳中恒华发股份有限公司 2022 年半年度报告全文


                                   Item                 June 30, 2022            January 1, 2022
Current assets:
     Monetary funds                                               819,726.82                619,099.39
     Trading financial assets
     Derivative financial assets
     Note receivable
     Account receivable
     Receivable financing
     Accounts paid in advance                                     402,189.53                  52,129.33
     Other account receivable                                  95,039,705.78             92,468,697.71
        Including: Interest receivable
                   Dividend receivable
     Inventories                                                   14,806.50                  14,806.50
     Contractual assets
     Assets held for sale
     Non-current assets maturing within one year
     Other current assets
Total current assets                                           96,276,428.63             93,154,732.93
Non-current assets:
     Debt investment
     Other debt investment
     Long-term receivables
     Long-term equity investments                             186,618,400.00            186,618,400.00
     Investment in other equity instrument
     Other non-current financial assets
     Investment real estate                                    22,840,740.28             23,444,941.60
     Fixed assets                                              96,561,485.97             96,839,357.63
     Construction in progress                                     740,000.00                740,000.00
     Productive biological assets
     Oil and natural gas assets
     Right-of-use assets
     Intangible assets                                          4,191,344.94               4,263,817.80
     Research and development costs
     Goodwill
     Long-term deferred expenses                                  969,444.45                969,444.45
     Deferred income tax assets                                 7,555,266.74               7,555,266.74
     Other non-current assets
Total non-current assets                                      319,476,682.38            320,431,228.22
Total assets                                                  415,753,111.01            413,585,961.15
Current liabilities:
     Short-term borrowings
     Trading financial liability
     Derivative financial liability


                                                   43
                                                        深圳中恒华发股份有限公司 2022 年半年度报告全文


     Notes payable
     Account payable                                          10,745,840.16              10,745,840.16
     Accounts received in advance
     Contractual liability                                       269,268.20                263,321.38
     Wage payable                                                939,175.02               1,209,937.19
     Taxes payable                                             7,802,338.58               9,236,248.86
     Other accounts payable                                   23,797,881.84              21,695,466.51
        Including: Interest payable
                    Dividend payable
     Liability held for sale
     Non-current liabilities due within one year              55,000,000.00              61,000,000.00
     Other current liabilities                                                               13,859.02
Total current liabilities                                     98,554,503.80             104,164,673.12
Non-current liabilities:
     Long-term loans
     Bonds payable
        Including: Preferred stock
                    Perpetual capital securities
     Lease liability
     Long-term account payable
     Long term employee compensation payable
     Accrued liabilities                                         801,159.18                801,159.18
     Deferred income
     Deferred income tax liabilities
     Other non-current liabilities
Total non-current liabilities                                    801,159.18                801,159.18
Total liabilities                                             99,355,662.98             104,965,832.30
Owners’ equity:
     Share capital                                           283,161,227.00             283,161,227.00
     Other equity instrument
        Including: Preferred stock
                    Perpetual capital securities
     Capital public reserve                                  146,587,271.50             146,587,271.50
     Less: Inventory shares
     Other comprehensive income
     Special reserve
     Surplus reserve                                          77,391,593.25              77,391,593.25
     Retained profit                                        -190,742,643.72            -198,519,962.90
Total owner’s equity                                        316,397,448.03             308,620,128.85
Total liabilities and owner’s equity                        415,753,111.01             413,585,961.15




                                                   44
                                                                              深圳中恒华发股份有限公司 2022 年半年度报告全文


3. Consolidated Profit Statement

                                                                                                             Unit: RMB/CNY
                                   Item                                      2022 semi-annual          2021 semi-annual
I. Total operating income                                                           354,146,920.81            391,633,808.55
     Including: Operating income                                                    354,146,920.81            391,633,808.55
             Interest income
             Insurance gained
             Commission charge and commission income
II. Total operating cost                                                            347,992,076.14            381,924,442.73
     Including: Operating cost                                                      311,845,943.49            334,523,805.25
             Interest expense
             Commission charge and commission expense
             Cash surrender value
             Net amount of expense of compensation
             Net amount of withdrawal of insurance contract
reserve
             Bonus expense of guarantee slip
             Reinsurance expense
             Tax and extras                                                            2,051,860.11             1,428,361.92
             Sales expense                                                             9,503,158.57            14,094,617.96
             Administrative expense                                                  17,627,621.80             22,680,307.24
             R&D expense                                                               5,022,675.55             3,955,647.50
             Financial expense                                                         1,940,816.62             5,241,702.86
                Including: Interest expenses                                           2,729,221.86             3,774,381.48
                           Interest income                                                   -88.74              189,945.55
     Add: Other income                                                                 4,515,323.81                 3,553.35
           Investment income (Loss is listed with “-”)                                180,088.19               149,767.58
           Including: Investment income on affiliated company and
joint venture
                The termination of income recognition for financial
assets measured by amortized cost
           Exchange income (Loss is listed with “-”)
           Net exposure hedging income (Loss is listed with “-”)
           Income from change of fair value (Loss is listed with “-”)
           Loss of credit impairment (Loss is listed with “-”)
           Losses of devaluation of asset (Loss is listed with “-”)                           0.00           -1,350,000.00
           Income from assets disposal (Loss is listed with “-”)                      789,308.26
III. Operating profit (Loss is listed with “-”)                                    11,639,564.93              8,512,686.75
     Add: Non-operating income                                                           40,574.92               276,599.04
     Less: Non-operating expense                                                         15,308.31               215,202.92
IV. Total profit (Loss is listed with “-”)                                         11,664,831.54              8,574,082.87
     Less: Income tax expense                                                          2,858,046.44             1,584,720.39



                                                                        45
                                                                           深圳中恒华发股份有限公司 2022 年半年度报告全文


V. Net profit (Net loss is listed with “-”)                                     8,806,785.10                 6,989,362.48
  (i) Classify by business continuity
     1.continuous operating net profit (net loss listed with ‘-”)               8,806,785.10                 6,989,362.48
     2.termination of net profit (net loss listed with ‘-”)
  (ii) Classify by ownership
     1.Net profit attributable to owner’s of parent company                      8,806,785.10                 6,989,362.48
     2.Minority shareholders’ gains and losses
VI. Net after-tax of other comprehensive income
  Net after-tax of other comprehensive income attributable to
owners of parent company
     (I) Other comprehensive income items which will not be
reclassified subsequently to profit of loss
             1.Changes of the defined benefit plans that re-
measured
             2.Other comprehensive income under equity method
that cannot be transfer to gain/loss
             3.Change of fair value of investment in other equity
instrument
             4.Fair value change of enterprise's credit risk
             5. Other
      (ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
             1.Other comprehensive income under equity method
that can transfer to gain/loss
             2.Change of fair value of other debt investment
             3.Amount of financial assets re-classify to other
comprehensive income
             4.Credit impairment provision for other debt
investment
             5.Cash flow hedging reserve
             6.Translation differences arising on translation of
foreign currency financial statements
             7.Other
  Net after-tax of other comprehensive income attributable to
minority shareholders
VII. Total comprehensive income                                                   8,806,785.10                 6,989,362.48
     Total comprehensive income attributable to owners of parent
                                                                                  8,806,785.10                 6,989,362.48
Company
     Total comprehensive income attributable to minority
shareholders
VIII. Earnings per share:
     (i) Basic earnings per share                                                      0.0311                        0.0248
     (ii) Diluted earnings per share                                                   0.0311                        0.0248

As for the enterprise combined under the same control, net profit of 0 Yuan achieved by the merged party before combination

                                                                      46
                                                                              深圳中恒华发股份有限公司 2022 年半年度报告全文


while 0 Yuan achieved last period.


Legal Representative: Li Zhongqiu


Person in charge of accounting works: Chen Zhigang


Person in charge of accounting institute: Chuai Guoxu


4. Profit Statement of Parent Company

                                                                                                            Unit: RMB/CNY
                                    Item                                     2022 semi-annual         2021 semi-annual
I. Operating income                                                                  24,122,414.00             22,146,204.31
     Less: Operating cost                                                              4,518,020.17             4,439,887.16
           Taxes and surcharge                                                          590,485.14               572,280.19
           Sales expenses
           Administration expenses                                                     6,887,075.97             7,444,373.84
           R&D expenses
           Financial expenses                                                          2,812,875.27             3,381,988.26
                 Including: Interest expenses                                          2,812,961.00               52,129.33
                           Interest income                                                   -88.74
     Add: Other income                                                                    4,085.02                  3,306.96
           Investment income (Loss is listed with “-”)
           Including: Investment income on affiliated Company and
joint venture
                 The termination of income recognition for financial
assets measured by amortized cost (Loss is listed with “-”)
           Net exposure hedging income (Loss is listed with “-”)
           Changing income of fair value (Loss is listed with “-”)
           Loss of credit impairment (Loss is listed with “-”)
           Losses of devaluation of asset (Loss is listed with “-”)
           Income on disposal of assets (Loss is listed with “-”)                     254,400.00
II. Operating profit (Loss is listed with “-”)                                       9,572,442.47             6,310,981.82
     Add: Non-operating income                                                           22,167.01                      0.35
     Less: Non-operating expense                                                            240.23                  8,500.00
III. Total Profit (Loss is listed with “-”)                                          9,594,369.25             6,302,482.17
     Less: Income tax                                                                  1,817,050.07             1,236,934.73
IV. Net profit (Net loss is listed with “-”)                                         7,777,319.18             5,065,547.44
     (i) continuous operating net profit (net loss listed with ‘-”)                  7,777,319.18             5,065,547.44
     (ii) termination of net profit (net loss listed with ‘-”)
V. Net after-tax of other comprehensive income
     (i) Other comprehensive income items which will not be
reclassified subsequently to profit of loss
              1.Changes of the defined benefit plans that re-


                                                                        47
                                                                           深圳中恒华发股份有限公司 2022 年半年度报告全文


measured
              2.Other comprehensive income under equity method
that cannot be transfer to gain/loss
              3.Change of fair value of investment in other equity
instrument
              4.Fair value change of enterprise's credit risk
              5. Other
     (ii) Other comprehensive income items which will be
reclassified subsequently to profit or loss
              1.Other comprehensive income under equity method
that can transfer to gain/loss
              2.Change of fair value of other debt investment
              3.Amount of financial assets re-classify to other
comprehensive income
              4.Credit impairment provision for other debt
investment
              5.Cash flow hedging reserve
              6.Translation differences arising on translation of
foreign currency financial statements
              7.Other
VI. Total comprehensive income                                                      7,777,319.18             5,065,547.44
VII. Earnings per share:
     (i) Basic earnings per share
     (ii) Diluted earnings per share


5. Consolidated Cash Flow Statement

                                                                                                         Unit: RMB/CNY
                                  Item                                    2022 semi-annual         2021 semi-annual
I. Cash flows arising from operating activities:
     Cash received from selling commodities and providing labor
                                                                                 296,973,278.94            244,756,106.28
services
     Net increase of customer deposit and interbank deposit
     Net increase of loan from central bank
     Net increase of capital borrowed from other financial
institution
     Cash received from original insurance contract fee
     Net cash received from reinsurance business
     Net increase of insured savings and investment
     Cash received from interest, commission charge and
commission
     Net increase of capital borrowed
     Net increase of returned business capital



                                                                     48
                                                                       深圳中恒华发股份有限公司 2022 年半年度报告全文


     Net cash received by agents in sale and purchase of securities
     Write-back of tax received                                               2,582,436.42               2,152,394.35
     Other cash received concerning operating activities                     13,894,131.24              16,266,093.74
Subtotal of cash inflow arising from operating activities                   313,449,846.60             263,174,594.37
     Cash paid for purchasing commodities and receiving labor
                                                                            174,717,587.41             180,586,052.16
service
     Net increase of customer loans and advances
     Net increase of deposits in central bank and interbank
     Cash paid for original insurance contract compensation
     Net increase of capital lent
     Cash paid for interest, commission charge and commission
     Cash paid for bonus of guarantee slip
     Cash paid to/for staff and workers                                      30,684,125.76              38,342,263.84
     Taxes paid                                                              18,183,319.71              13,863,743.82
     Other cash paid concerning operating activities                         40,144,591.34              52,200,904.14
Subtotal of cash outflow arising from operating activities                  263,729,624.22             284,992,963.96
Net cash flows arising from operating activities                             49,720,222.38             -21,818,369.59
II. Cash flows arising from investing activities:
     Cash received from recovering investment
     Cash received from investment income                                       180,088.19                186,685.90
     Net cash received from disposal of fixed, intangible and other
                                                                              3,855,290.26                  21,750.00
long-term assets
     Net cash received from disposal of subsidiaries and other units
     Other cash received concerning investing activities                     57,000,000.00
Subtotal of cash inflow from investing activities                            61,035,378.45                208,435.90
     Cash paid for purchasing fixed, intangible and other long-term
                                                                              1,682,052.83               2,524,810.50
assets
     Cash paid for investment
     Net increase of mortgaged loans                                                  0.00
     Net cash received from subsidiaries and other units obtained
     Other cash paid concerning investing activities                         57,000,000.00
Subtotal of cash outflow from investing activities                           58,682,052.83               2,524,810.50
Net cash flows arising from investing activities                              2,353,325.62              -2,316,374.60
III. Cash flows arising from financing activities:
     Cash received from absorbing investment
     Including: Cash received from absorbing minority
shareholders’ investment by subsidiaries
     Cash received from loans                                                18,332,990.00              57,190,879.00
     Other cash received concerning financing activities
Subtotal of cash inflow from financing activities                            18,332,990.00              57,190,879.00
     Cash paid for settling debts                                            39,754,209.00              30,430,404.00
     Cash paid for dividend and profit distributing or interest
                                                                              3,036,885.11               3,578,255.11
paying



                                                                  49
                                                                        深圳中恒华发股份有限公司 2022 年半年度报告全文


     Including: Dividend and profit of minority shareholder paid by
subsidiaries
     Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities                             42,791,094.11             34,008,659.11
Net cash flows arising from financing activities                              -24,458,104.11             23,182,219.89
IV. Influence on cash and cash equivalents due to fluctuation in
                                                                                 263,652.23                -403,343.06
exchange rate
V. Net increase of cash and cash equivalents                                   27,879,096.12             -1,355,867.36
     Add: Balance of cash and cash equivalents at the period -begin            32,802,562.90             60,968,053.58
VI. Balance of cash and cash equivalents at the period -end                    60,681,659.02             59,612,186.22


6. Cash Flow Statement of Parent Company

                                                                                                      Unit: RMB/CNY
                                  Item                                  2022 semi-annual          2021 semi-annual
I. Cash flows arising from operating activities:
     Cash received from selling commodities and providing labor
                                                                                14,657,628.10             2,336,572.26
services
     Write-back of tax received                                                            0.00                   0.00
     Other cash received concerning operating activities                           404,017.91            12,794,492.62
Subtotal of cash inflow arising from operating activities                       15,061,646.01            15,131,064.88
     Cash paid for purchasing commodities and receiving labor
service
     Cash paid to/for staff and workers                                            555,796.92              548,093.93
     Taxes paid                                                                   5,094,652.76            3,454,113.92
     Other cash paid concerning operating activities                               398,328.69             1,380,064.32
Subtotal of cash outflow arising from operating activities                        6,048,778.37            5,382,272.17
Net cash flows arising from operating activities                                  9,012,867.64            9,748,792.71
II. Cash flows arising from investing activities:
     Cash received from recovering investment
     Cash received from investment income
     Net cash received from disposal of fixed, intangible and other
long-term assets
     Net cash received from disposal of subsidiaries and other units
     Other cash received concerning investing activities
Subtotal of cash inflow from investing activities
     Cash paid for purchasing fixed, intangible and other long-term
assets
     Cash paid for investment
     Net cash received from subsidiaries and other units obtained
     Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities
Net cash flows arising from investing activities



                                                                   50
                                                                                  深圳中恒华发股份有限公司 2022 年半年度报告全文


III. Cash flows arising from financing activities:
     Cash received from absorbing investment
     Cash received from loans
     Other cash received concerning financing activities
Subtotal of cash inflow from financing activities
     Cash paid for settling debts                                                              6,000,000.00                    6,000,000.00
     Cash paid for dividend and profit distributing or interest paying                         2,812,240.21                    3,383,290.96
     Other cash paid concerning financing activities
Subtotal of cash outflow from financing activities                                             8,812,240.21                    9,383,290.96
Net cash flows arising from financing activities                                              -8,812,240.21                   -9,383,290.96
IV. Influence on cash and cash equivalents due to fluctuation in
                                                                                                    -1,509.10                          0.00
exchange rate
V. Net increase of cash and cash equivalents                                                       199,118.33                    365,501.75
     Add: Balance of cash and cash equivalents at the period -begin                                526,531.11                    966,379.17
VI. Balance of cash and cash equivalents at the period -end                                        725,649.44                  1,331,880.92


7. Statement of Changes in Owners’ Equity (Consolidated)

Current Amount
                                                                                                                          Unit: RMB/CNY
                                                                      2022 semi-annual
                                           Owners’ equity attributable to the parent Company
                                Other
                                equity
                                                               Othe
                             instrument                 Less                                                                          Tota
                                                                r                           Prov
                                 Per                     :                Reas                                                Min       l
                   Sha                         Capi            com                Surp      ision     Reta
      Item                       pet                    Inve              onab                                                ority   own
                    re    Pre                   tal            preh                lus       of       ined      Othe   Subt
                                 ual                    ntor               le                                                 inter   ers’
                   cap    fer                  reser           ensi               reser     gene     profi       r     otal
                                 cap     Ot              y                reser                                               ests    equit
                   ital   red                   ve              ve                 ve        ral       t
                                 ital    her            shar               ve                                                          y
                          sto                                  inco                         risk
                                 sec                     es
                          ck                                   me
                                 urit
                                 ies
                   283                                                                                     -
                                               146,                               77,3                                 343,           343,
 I. The ending     ,16                                                                                163,
                                               577,                               91,5                                 450,           450,
 balance of the    1,2                                                                                679,
                                               771.                               93.2                                 639.           639.
 previous year     27.                                                                                952.
                                                   50                                   5                                31             31
                    00                                                                                  44
 Add: Changes
 of accounting
 policy
 Error
 correction of
 the last period


                                                                     51
                                    深圳中恒华发股份有限公司 2022 年半年度报告全文


Enterprise
combine
under the
same control
Other
                  283                               -
II. The                 146,        77,3                       343,         343,
                  ,16                            163,
beginning               577,        91,5                       450,         450,
                  1,2                            679,
balance of the          771.        93.2                       639.         639.
                  27.                            952.
current year             50            5                        31           31
                   00                              44
III. Increase/
Decrease in
                                                 8,80          8,80         8,80
the period
                                                 6,78          6,78         6,78
(Decrease is
                                                 5.10          5.10         5.10
listed with “-
”)
(i) Total                                        8,80          8,80         8,80
comprehensiv                                     6,78          6,78         6,78
e income                                         5.10          5.10         5.10
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with share-
based
payment
4. Other
(iii) Profit
distribution
1. Withdrawal
of surplus
reserves


                               52
                      深圳中恒华发股份有限公司 2022 年半年度报告全文


2. Withdrawal
of general
risk
provisions
3.
Distribution
for owners (or
shareholders)
4. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4. Carry-over
retained
earnings from
the defined
benefit plans
5. Carry-over
retained
earnings from
other
comprehensiv
e income
6. Other
(v)
Reasonable
reserve
1. Withdrawal


                 53
                                                                                   深圳中恒华发股份有限公司 2022 年半年度报告全文


 in the report
 period
 2. Usage in
 the report
 period
 (vi) Others
                  283                                                                                              -
                                                146,                                77,3                                       352,             352,
 IV. Balance at    ,16                                                                                     154,
                                                577,                                91,5                                       257,             257,
 the end of the    1,2                                                                                     873,
                                                771.                                93.2                                       424.             424.
 period            27.                                                                                     167.
                                                  50                                         5                                   41               41
                    00                                                                                         34

Amount of the previous period
                                                                                                                                     Unit: RMB/CNY
                                                                      2021 semi-annual
                                           Owners’ equity attributable to the parent Company
                                Other
                                equity
                              instrument
                                 Pe                           Othe
                                                       Less
                                 rpe                            r                                Prov                                          Total
                                                        :                  Reas                                                        Mino
                  Sha            tua           Capi            com                 Surp          ision   Reta                                  owne
        Item             Pr                            Inve                onab                                                        rity
                  re              l             tal           preh                  lus           of     ined          Othe   Subt              rs’
                         efe                           ntor                 le                                                        intere
                  cap            ca            reser           ensi                reser         gene    profi          r     otal             equit
                         rre             Oth            y                  reser                                                        sts
                  ital           pit            ve              ve                  ve            ral      t                                     y
                         d               er            shar                 ve
                                 al                            inco                              risk
                         sto                            es
                                 sec                           me
                         ck
                                 uri
                                 tie
                                  s
                  283                                                                                          -
 I. The ending                                 146,                                77,3                                       336,
                  ,16                                                                                    170,                                  336,2
 balance of                                    577,                                91,5                                       248,
                  1,2                                                                                    881,                                  48,73
 the previous                                  771.                                93.2                                       737.
                  27.                                                                                    854.                                   7.29
 year                                            50                                      5                                     29
                   00                                                                                      46
 Add:
 Changes of
 accounting
 policy
 Error
 correction of
 the last
 period
 Enterprise
 combine


                                                                      54
                                    深圳中恒华发股份有限公司 2022 年半年度报告全文


under the
same control
Other
II. The           283                              -
                        146,        77,3                     336,
beginning         ,16                           170,                       336,2
                        577,        91,5                     248,
balance of        1,2                           881,                       48,73
                        771.        93.2                     737.
the current       27.                           854.                        7.29
                         50           5                        29
year               00                             46
III. Increase/
Decrease in
                                                6,98         6,98          6,989
the period
                                                9,36         9,36          ,362.
(Decrease is
                                                2.48         2.48            48
listed with “-
”)
(i) Total                                       6,98         6,98          6,989
comprehensi                                     9,36         9,36          ,362.
ve income                                       2.48         2.48            48
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners
equity with
share-based
payment
4. Other
(iii) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.


                               55
                      深圳中恒华发股份有限公司 2022 年半年度报告全文


Withdrawal
of general
risk
provisions
3.
Distribution
for owners
(or
shareholders)
4. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3.
Remedying
loss with
surplus
reserve
4. Carry-over
retained
earnings
from the
defined
benefit plans
5. Carry-over
retained
earnings
from other
comprehensi
ve income
6. Other
(v)



                 56
                                                                          深圳中恒华发股份有限公司 2022 年半年度报告全文


 Reasonable
 reserve
 1.
 Withdrawal
 in the report
 period
 2. Usage in
 the report
 period
 (vi) Others
                   283                                                                         -
                                            146,                         77,3                                343,
 IV. Balance       ,16                                                                      163,                              343,2
                                            577,                         91,5                                238,
 at the end of     1,2                                                                      892,                              38,09
                                            771.                         93.2                                099.
 the period        27.                                                                      491.                                9.77
                                             50                                5                                 77
                    00                                                                       98


8. Statement of Changes in Owners’ Equity (Parent Company)

Current Amount
                                                                                                                      Unit: RMB/CNY
                                                                2022 semi-annual
                                    Other
                              equity instrument                        Other
                                    Perp           Capita     Less:    compr       Reaso    Surplu     Retai
                    Share                                                                                                    Total
        Item                        etual            l        Invent   ehensi      nable       s       ned
                    capit   Prefe                                                                                 Other     owners’
                                    capit   Othe   reserv      ory      ve         reserv    reserv    profi
                     al     rred                                                                                             equity
                                     al       r      e        shares   incom         e         e         t
                            stock
                                    secur                                e
                                    ities
                                                                                                             -
 I. The ending      283,1                          146,58                                   77,391     198,
                                                                                                                            308,620,
 balance of the     61,22                          7,271.                                    ,593.2    519,
                                                                                                                             128.85
 previous year       7.00                                50                                        5   962.
                                                                                                         90
      Add:
 Changes of
 accounting
 policy
        Error
 correction of
 the last period
        Other
 II. The            283,1                          146,58                                   77,391           -              308,620,
 beginning          61,22                          7,271.                                    ,593.2    198,                  128.85


                                                               57
                                      深圳中恒华发股份有限公司 2022 年半年度报告全文


balance of the       7.00   50                          5   519,
current year                                                962.
                                                              90
III. Increase/
Decrease in                                                 7,77
                                                                          7,777,31
the period                                                  7,31
                                                                              9.18
(Decrease is                                                9.18
listed with “-”)
(i) Total                                                   7,77
                                                                          7,777,31
comprehensive                                               7,31
                                                                              9.18
income                                                      9.18
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments
3. Amount
reckoned into
owners equity
with share-
based payment
4. Other
(iii) Profit
distribution
1. Withdrawal
of surplus
reserves
2. Distribution
for owners (or
shareholders)
3. Other
(iv) Carrying
forward
internal
owners’ equity
1. Capital


                                 58
                                                                                    深圳中恒华发股份有限公司 2022 年半年度报告全文


 reserves
 conversed to
 capital (share
 capital)
 2. Surplus
 reserves
 conversed to
 capital (share
 capital)
 3. Remedying
 loss with
 surplus reserve
 4. Carry-over
 retained
 earnings from
 the defined
 benefit plans
 5. Carry-over
 retained
 earnings from
 other
 comprehensive
 income
 6. Other
 (v) Reasonable
 reserve
 1. Withdrawal
 in the report
 period
 2. Usage in the
 report period
 (vi) Others
                                                                                                                    -
 IV. Balance at     283,1                           146,58                                           77,391   190,
                                                                                                                                316,397,
 the end of the     61,22                            7,271.                                          ,593.2   742,
                                                                                                                                  448.03
 period              7.00                                  50                                            5    643.
                                                                                                                72

Amount of the previous period
                                                                                                                          Unit: RMB/CNY
                                                                        2021 semi-annual
                   Shar            Other          Capit         Less:      Other               Surpl
                                                                                     Reason                                      Total
      Item          e        equity instrument      al      Invent         compr                us       Retaine
                                                                                      able                              Other   owners’
                   capit    Pref   Perp    Othe   reserv        ory        ehensi              reserv    d profit
                                                                                     reserve                                     equity
                    al      erre   etual    r       e       shares           ve                  e


                                                                      59
                                                             深圳中恒华发股份有限公司 2022 年半年度报告全文


                          d     capit                incom
                         stoc    al                    e
                          k     secu
                                ritie
                                 s
                  283,                                                               -
I. The ending                           146,5                          77,39
                  161,                                                         206,88            300,252,
balance of the                          87,27                          1,593
                  227.                                                         7,603.6             488.06
previous year                            1.50                            .25
                   00                                                               9
      Add:
Changes of
accounting
policy
        Error
correction of
the last
period
        Other
II. The           283,                                                               -
                                        146,5                          77,39
beginning         161,                                                         206,88            300,252,
                                        87,27                          1,593
balance of the    227.                                                         7,603.6             488.06
                                         1.50                            .25
current year       00                                                               9
III. Increase/
Decrease in
the period                                                                     5,065,5           5,065,54
(Decrease is                                                                    47.44                7.44
listed with “-
”)
(i) Total
                                                                               5,065,5           5,065,54
comprehensiv
                                                                                47.44                7.44
e income
(ii) Owners’
devoted and
decreased
capital
1.Common
shares
invested by
shareholders
2. Capital
invested by
holders of
other equity
instruments



                                                60
                      深圳中恒华发股份有限公司 2022 年半年度报告全文


3. Amount
reckoned into
owners equity
with share-
based
payment
4. Other
(iii) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Distribution
for owners
(or
shareholders)
3. Other
(iv) Carrying
forward
internal
owners’
equity
1. Capital
reserves
conversed to
capital (share
capital)
2. Surplus
reserves
conversed to
capital (share
capital)
3. Remedying
loss with
surplus
reserve
4. Carry-over
retained
earnings from
the defined
benefit plans
5. Carry-over


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 retained
 earnings from
 other
 comprehensiv
 e income
 6. Other
 (v)
 Reasonable
 reserve
 1.
 Withdrawal
 in the report
 period
 2. Usage in
 the report
 period
 (vi) Others
                 283,                                                                       -
 IV. Balance                                 146,5                            77,39
                 161,                                                                  201,82           305,318,
 at the end of                               87,27                            1,593
                 227.                                                                 2,056.2             035.50
 the period                                   1.50                              .25
                  00                                                                        5




III. Company profile

1. The registration place of the enterprise, the form of organization and the headquarters address
Shenzhen Zhongheng HUAFA Company Limited (hereinafter referred to as Company or the Company),
established on 8 December 1981. Uniform social credit code 91440300618830372G.
Registered place and head office of the Company: 411 Bldg., Huafa (N) Road, Futian District, Shenzhen
Legal representative: Li Zhongqiu
Registered capital: RMB 283,161,227.00


2. The nature of the business and the main business activities.
The Company belongs to the computer, telecommunication and manufacturing of other electronic equipment.
Business scope: producing and sales of vary color TV set, liquid crystal display, LCD (operates in branch), radio-
recorder, sound equipment, electronic watch, electronic game and computers, the printed wiring board, precision
injection parts, light packaging material (operates in Wuhan) and hardware (including tool and mould) for various
electronic products and supporting parts, plating and surface treatment and tin wire, development and operation of
real estate (Shen Fang Di Zi No.: 7226760) and property management. Funded affiliated companies in Wuhan and
Jilin. Setting up branches in capital of the province (Lhasa City excluded) in China and municipality directly
under the central government.



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3. Relevant party offering approval reporting of financial statements and date thereof
The financial statement has been deliberated and approved by BOD on August 20, 2022.


Main subsidiaries included in the consolidate scope of the statement found in Note VIII-Equity in other subjects


IV. Preparation basis of Financial Statements

1. Preparation basis


Base on the running continuously and actual transactions and events, in line with the Accounting Standards for
Business Enterprise – Basic Standards and specific principle of accounting standards issued by the Ministry of
Finance (hereinafter collectively referred to as Accounting Standards for Business Enterprise), the Company
prepared and formulate the financial statement lies on the followed important accounting policy and estimation.


2. Going concern


The Company expects that the production and sales will be in a virtuous cycle within 12 months from the end of
he reporting period, and there is no risk that affects the continued operations.


V. Important accounting policy and estimation

Notes on specific accounting policies and accounting estimation:
The following disclosure has covered the specific accounting policies and accounting estimates formulated by the
Company according to the actual production and operation characteristics.


1. Declaration of obedience to Accounting Standards for Business Enterprise


The Financial Statements of the Company are up to requirements of Accounting Standards for Business
Enterprise and also a true and thorough reflection to the relevant information as the Company’s financial position
dated 30th June 2022 and the operation results as well as cash flow from January to June of 2022.


2. Accounting period


The Company’s accounting year is Gregorian calendar year, namely from 1st January to 31st December of every
year.


3. Business cycle


The Company’s business cycle is one year (12 months) as a normal cycle, and the business cycle is the
determining criterion for the liquidity of assets and liabilities of the Company.




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4. Bookkeeping standard currency


The Renminbi (RMB) is taken as the book-keeping standard currency.


5. Accounting methods for consolidation of enterprises under the same control or otherwise


5.1 Consolidation of enterprises under the same control
Where the Company for long term equity investment arising from business combination under common control
satisfies the combination consideration by payment of cash, transfer of non-cash assets or assumption of debt, the
carrying value of the net assets of the acquire in combined financial statement of the ultimate controller shared by
the Company as at the combination date shall be deemed as the initial investment cost of such long term equity
investment. If the equity instrument issued by combining party are consider as the combination consideration,
than the total value of the issuing shares are consider as the share capital. The difference between the initial cost
of long-term equity investment and book value of consideration (or total face value of the shares issued) paid,
capital surplus adjusted; if the capital surplus not enough to written down, than retained earning adjusted.


5.2 Business combination not under common control
As for business combination not under common control, combination costs refer to the sum of the fair value of the
assets paid, liabilities occurred or assumed as well as equity securities issued by the acquirer to obtain control over
the acquire as at the acquisition date. As for acquiree that obtained by consolidation not under the same control,
the qualified confirmation of identified assets, liability and contingency liabilities should calculated by fair value
on day of purchased. If the consolidation cost larger than the fair value amount of identified net assets from
acquiree’s, the differences should be recognized as goodwill. If the consolidation cost less than the fair value
amount of identified net assets from acquiree’s, the differences should reckoned into current non-operating
income.


6. Preparation methods for consolidated financial statements


6.1 Consolidation financial statement range
The Company includes all the subsidiaries (including the separate entities controlled by the Company) into
consolidated financial statement, including companies controlled by the Company, non-integral part of the
investees and structural main body.


6.2 Centralize accounting policies, balance sheet dates and accounting periods of parent and subsidiaries.
As for the inconsistency between the subsidiaries and the Company in the accounting policies and periods, the
necessary adjustment is made on the subsidiaries’ financial statements in the preparation of the consolidated
financial statements according to the Company’s accounting policies and periods.


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6.3 Offset of consolidated financial statement
The consolidated financial statements shall be prepared on the basis of the balance sheet of the parent company
and subsidiaries, which offset the internal transactions incurred between the parent company and subsidiaries and
within subsidiaries. The owner’s equity of the subsidiaries not attributable to the parent company shall be
presented as minority equity under the owner’s equity item in the consolidated balance sheet. The long term
equity investment of the parent company held by the subsidiaries, deemed as treasury stock of the corporate group
as well as the reduction of owners’ equity, shall be presented as “Less: treasury stock” under the owners’ equity
item in the consolidated balance sheet.


6.4Accounting for acquisition of subsidiary through combination
For subsidiaries acquired under enterprise merger involving enterprises under common control, the assets,
liabilities, operating results and cash flows of the subsidiaries are included in the consolidated financial statements
from the beginning of the financial year in which the combination took place. When preparing the
consolidated financial statements, for the subsidiaries acquired from business combination not involving
entities under common control, the identifiable net assets of the subsidiaries are adjusted on the basis of their fair
values on the date of acquisition.


6.5 Accounting treatment of disposal subsidiaries
In the case of partial disposal of long-term equity investments in subsidiaries without loss of control, in the
consolidated financial statements, the difference between the disposal price and the net asset share corresponding
to the disposal of long-term equity investments and enjoying the subsidiaries’ continued calculation from the
purchase date or the merger date is used to adjust the capital reserve (capital premium or equity premium). If the
capital reserve is insufficient to offset, the retained earnings are adjusted.




7. Determination criteria of cash and cash equivalent


The cash recognized in the preparation of the cash flow statements, is the Company’s storage cash and deposits
available for payment anytime. The cash equivalents recognized in the preparation of the cash flow statements
refers to the investment held by the Company with characteristic of short-term, strong mobility, easy transfer to
known sum cash and has slim risk from value changes.




8. Foreign currency exchange and the conversion of foreign currency statements


8.1 Foreign currency exchange
The approximate exchange rate of the spot exchange rate on transaction occurred should be used for standard
money conversion while foreign currency exchange occurred On the balance sheet day, the monetary items are

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converted on the current rate on the balance sheet day, concerning the exchange differences between the spot
exchange rate on that date and initial confirmation or the sport exchange rate on previously balance sheet date,
should reckoned in to current gains/losses except the capitalizing on exchange differences for foreign specific
loans, which was reckoned into cost for capitalizing. The non-monetary items measured on the historic cost are
still measured by the original bookkeeping rate with the sum of the bookkeeping standard currency unchanged.
Items of non-monetary foreign currency which was calculated by fair value, should converted by spot exchange
rate on the confirmation day of fair value, difference between the converted amount of bookkeeping currency and
original amount of bookkeeping currency, was treated as changes of fair value (including exchange rate changed)
reckoned into current gains/losses or recognized as other consolidated income.


8.2 Conversion of foreign currency financial statements
Upon the conversion of the foreign currency financial statements of the controlling subsidiaries, joint enterprises,
and the affiliated enterprises on the bookkeeping standard currency different from the Company’s, the accounting
check and preparation of the consolidated financial statements are made. Assets and liabilities items in the balance
sheet are converted on the current rate on the balance sheet day; owners’ equity items besides the “retained profit”
item, the other items are converted on the actual rate. Items of revenue and expenses in profit statement, should
converted by the approximate exchange rate of spot exchange rate on occurring date. The conversion difference of
the foreign currency financial statements is listed specifically in the owners’ equity in the balance sheet. If the
foreign cash flow determined by rational system method, the approximate exchange rate of spot exchange rate on
occurring date should prevail. The cash influenced by the rate fluctuation is listed specifically in the cash flow
statement. As for the foreign operation, the conversion difference of the foreign currency statement related to the
foreign operation is transferred in proportion into the disposal of the current loss/gain.




9. Financial instrument


9.1 Category and recognition of financial instrument
Financial instrument is the contract that taken shape of the financial asses for an enterprise and of the financial
liability or equity instrument for other units.


(1) Financial assets
The Company classifies financial assets that meet the following conditions as financial assets measured at
amortized cost: ① The Company’s business model for managing financial assets is to collect contractual cash
flows as its goal; ② The contractual terms of the financial assets stipulate that the cash flow generated on a
specific date is only the payment of principal and interest based on the outstanding principal amount.


For investment in non-trading equity instruments, the Company may irrevocably designate it as a financial asset
measured at fair value and its changes included in other comprehensive income at initial recognition. The

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designation is made on the basis of a single investment, and the relevant investment meets the definition of equity
instruments from the perspective of the issuer.


Except for financial assets classified as financial assets measured at amortized cost and financial assets measured
at fair value and whose changes are included in other comprehensive income, the Company classifies the financial
assets as financial assets measured at fair value and whose changes are included in current profit or loss. At the
initial recognition, if the accounting mismatch can be eliminated or reduced, the Company can irrevocably
designate the financial asset as a financial asset measured at fair value and its changes are included in the current
profit and loss.


(2) Financial liabilities
Financial liabilities are classified as financial liabilities measured at fair value and whose changes are included in
the current profit or loss, financial liabilities formed by the transfer of financial assets that does not meet the
conditions for derecognition or continues to be involved in the transferred financial assets, and financial liabilities
measured at amortized cost at initial recognition. All financial liabilities are not reclassified.


9.2 Measurement of financial instruments
The initial recognition of the Company’s financial instruments is measured at fair value. For financial assets and
financial liabilities measured at fair value and whose changes are included in the current profit and loss, the
related transaction costs are directly included in the current profit and loss; for other types of financial assets or
financial liabilities, the related transaction costs are included in the initial recognition amount. For the accounts
receivable or bills receivable arising from the sale of products or the provision of labor services, not containing or
not considering significant financing components, the Company shall use the amount of consideration expected to
be received as the initial recognition amount. The subsequent measurement of financial instruments depends on
their classification.


(1) Financial assets
① Financial assets measured at amortized cost. After initial recognition, such financial assets are measured at
amortized cost by using the effective interest method. Gains or losses arising from financial assets that are
measured at amortized cost and do not belong to any hedging relationship are included in the current profit or loss
when they are derecognized, reclassified, amortized in accordance with the effective interest rate method, or
recognized for impairment.


② Financial assets measured at fair value and whose changes are included in the current profit and loss. After
initial recognition, for such financial assets (except for a part of financial assets that belong to the hedging
relationship), the fair value is used for subsequent measurement, and the resulting gains or losses (including
interest and dividend income) are included in the current profit and loss.



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③ Investment in debt instruments measured at fair value and whose changes are included in other comprehensive
income. After initial recognition, the subsequent measurement of such financial assets is conducted at fair value.
Interest, impairment losses or gains calculated by using the effective interest rate method and the exchange gains
and losses are included in the current profit and loss, and other gains or losses are included in other
comprehensive income. In derecognition, the accumulated gains or losses previously included in other
comprehensive income are transferred out of other comprehensive income and included in the current profit and
loss.


(2) Financial liabilities
① Financial liabilities measured at fair value and whose changes are included in the current profit and loss. Such
financial liabilities include trading financial liabilities (including derivatives that belong to financial liabilities)
and financial liabilities designated to be measured at fair value and whose changes are included in the current
profit and loss. After initial recognition, the subsequent measurement of such financial liabilities is at fair value,
except for those related to hedge accounting, gains or losses (including interest expenses) resulting from changes
in the fair value of trading financial liabilities are included in the current profit and loss. If a financial liability
designated to be measured at fair value and whose changes are included in the current profit or loss, the amount of
change in the fair value of the financial liability caused by changes in the enterprise’s own credit risk is included
in other comprehensive income, other changes in fair value are included in the current profit and loss. If the
impact of changes in the financial liability’s own credit risk included in other comprehensive income causes or
expands the accounting mismatch in profit or loss, the Company will include all gains or losses on the financial
liability in the current profit and loss.
② Financial liabilities measured at amortized cost. After initial recognition, such financial liabilities are measured
at amortized cost by using the effective interest method.


9.3 The Company’s methods for confirming the fair value of financial instruments
If the financial instrument has an active market, the fair value is determined by the quoted price in the active
market; if the financial instrument doesn’t have an active market, the fair value is determined by adopting the
valuation technique. Valuation techniques mainly include market approach, income approach and cost approach.
In limited circumstances, if the recent information used to determine fair value is insufficient, or the range of
possible estimated amounts of fair value is widely distributed, and the cost represents the best estimate of fair
value within this range, the cost may represent the appropriate estimates of fair value within this distribution range.
The Company uses all information on the performance and operation of the investee gettable after the initial
recognition date to determine whether the cost represents the fair value or not.


9.4 Confirmation basis and measurement method for the transfer of liabilities of financial assets
(1)Financial assets
If the Company’s financial asset meets one of the following conditions, it shall be terminated for confirmation: ①

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The contract right to receive the cash flow of the financial asset is terminated; ② The financial asset has been
transferred, and the Company has transferred almost all risks and rewards of ownership of the financial asset; ③
The financial asset has been transferred, although the Company has neither transferred nor retained almost all the
remuneration in the ownership of the financial asset, it has not retained control of the financial asset.


If the transfer of financial assets meets the conditions for derecognition, the difference between the following two
amounts shall be included in the current profit and loss: ① The book value of the transferred financial assets on
the date of derecognition; ② The sum of the consideration received for the transfer of financial assets and the
amount corresponding to the derecognized part of the cumulative amount of changes in fair value that was directly
included in other comprehensive income (the financial assets involved in the transfer are classified as financial
assets measured at fair value and their changes are included in other comprehensive income).


(2) Financial liability
If the current obligation of the financial liability (or part of it) has been discharged, the Company derecognizes the
financial liability (or part of the financial liability).


If the financial liability (or part of it) is derecognized, the Company shall include the difference between its book
value and the consideration paid (including non-cash assets transferred out or liabilities assumed) into the current
profit and loss.




10.Note receivable


10.1 How to determine expected credit losses
Based on expected credit losses, the Company makes impairment accounting treatment and confirm loss
provisions for financial assets (including receivables) measured at amortized cost and financial assets (including
receivables financing) that are measured at fair value and whose changes are included in other comprehensive
income, and lease receivables.


The Company assesses on each balance sheet date whether the credit risk of relevant financial instruments has
increased significantly since initial recognition, and divides the process of credit impairment of financial
instruments into three stages, and adopts different accounting treatment methods for financial instruments
impairment at different stages: (1) In the first stage, if the credit risk of a financial instrument has not increased
significantly since its initial recognition, the Company shall measure the loss provisions according to the expected
credit losses of the financial instrument in the next 12 months, and calculate the interest income according to its
book balance (i.e. without deducting impairment) and actual interest rate; (2) In the second stage, if the credit risk
of a financial instrument has increased significantly since the initial recognition but no credit impairment has


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occurred, the Company shall measure the loss provisions according to the expected credit losses of the financial
instrument during the entire duration, and calculate the interest income according to its book balance and actual
interest rate; (3) In the third stage, if the credit impairment occurs after initial recognition, the Company shall
measure loss provisions based on the expected credit losses of the financial instrument for the entire duration, and
calculate the interest income according to its book balance and actual interest rate.


(1) Methods of measuring loss provisions for financial instruments with lower credit risk
For financial instruments with lower credit risk on the balance sheet date, the Company can directly make the
assumption that the credit risk of the instrument has not increased significantly since the initial recognition
without comparing with the credit risk at the initial recognition.


If the default risk of financial instruments is low, the debtor’s ability to fulfill its contractual cash flow obligations
is strong in the short term, and even if there are adverse changes in the economic situation and operating
environment over a long period of time, it may not necessarily reduce the borrower’s ability to fulfill the
contractual cash flow obligations, the financial instrument shall be considered to have lower credit risk.


(2) Methods of measuring loss provisions for accounts receivable and lease receivables
①Receivables that do not contain significant financing components. For the receivables formed by transactions
regulated by “Accounting Standards for Business Enterprises No.14-Revenue” and without containing significant
financing components, the Company adopts a simplified method, that is, it always calculates the loss provisions
based on the expected credit losses for the entire duration.


Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly
on the basis of individual financial assets or financial assets portfolios. The Company divides the notes receivable
and accounts receivable into several portfolios based on the characteristics of credit risk, and calculates the
expected credit losses on the basis of the portfolios, the basis for determining the portfolios is as follows:


Accounts receivable portfolio 1: A portfolio that uses the aging of accounts receivables as credit risk
characteristics,
Accounts receivable portfolio 2: Combination of related parties included in the scope of consolidated statements
Notes receivable portfolio 1: Same as the division of accounts receivable portfolio
Notes receivable portfolio 2: Management evaluates that this type of fund is bank acceptance portfolio with lower
credit risk


For the accounts receivable and notes receivable being divided into portfolio 1, the Company refers to the
historical credit loss experience, combines with the current conditions and the prediction of future economic
situation, and prepares a comparison table of the aging of accounts receivable and the expected credit loss rate of
the entire duration, and calculates the expected credit losses.


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For accounts receivable and notes receivable being divided into portfolio 2, the Company refers to historical credit
loss experience, combines with the current conditions and the predictions of future economic conditions, and
calculates the expected credit losses of 0% through default risk exposure and expected credit loss rate for the
entire duration.


② Accounts receivables and leases receivables that contain significant financing components. For accounts
receivables that contain significant financing components and leases receivables regulated by “Accounting
Standards for Business Enterprises No. 21-Leases”, the Company measures loss provisions in accordance with the
general method, that is, the “third stage” model.


(3) Methods of measuring loss reserves for other financial assets
For financial assets other than the above, such as debt investment, other debt investment, other receivables, long-
term receivables other than lease receivables, etc., the Company uses the general method, that is, the three-stage
model to measure loss reserves.
When measuring the credit impairment of financial instruments, the Company considers the following factors in
assessing whether the credit risk has increased significantly:


The Company divides other receivables into a number of portfolios based on the nature of the money, and
calculates the expected credit loss on the basis of the portfolio. The basis for determining the portfolio is as
follows:
Other receivables portfolio 1: A portfolio of unrelated parties with provision for impairment in accordance with
the expected loss rate


Other receivables portfolio 2: A portfolio of related parties included in the scope of the consolidated statement


For other receivables classified into portfolio 1, the Company refers to historical credit loss experience, combines
with current conditions and forecasts of future economic conditions, compiles a comparison table of accounts
receivable aging and expected credit loss rate of the entire duration, and calculates the expected credit loss.


For other receivables classified into portfolio 2, the Company refers to historical credit loss experience, combines
with current conditions and forecasts of future economic conditions, and calculates an expected credit loss of 0%
through the default risk exposure and the expected credit loss rate of the entire duration .


(4)Accrual method of bad debt provision for those accrual by account age as the portfolio


Account age Expected credit loss rate of receivable (%) Expected credit loss rate of other receivable (%)
Within one year (one year included) 0 0


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1-2 years 5 5
2-3 years 10 10
Over 3 years 30 30


10.2 Accounting treatment methods of expected credit losses
In order to reflect the changes in the credit risk of financial instruments since initial recognition, the Company
remeasures the expected credit losses on each balance sheet date, and the resulting increase or reversal of the loss
provisions should be counted as an impairment loss or gain and included in the current profit and loss, and based
on the type of financial instrument, offsets the book value of the financial asset listed in the balance sheet or
includes in the estimated liability (loan commitment or financial guarantee contract) or includes in other
comprehensive income (debt investments measured at fair value and whose changes are included in other
comprehensive income).


11. Account receivable


Same as 10. Note receivable


12.Receivable financing


Same as 10. Note receivable


13. Other account receivable


Determination and accounting treatment on the expected credit losses of other account receivable


Same as 10. Note receivable




14. Inventory


14.1 Categories of inventory
The inventory is goods or manufactured products held for sale, products in process, and materials and matters
utilized in the production or supply of labor. Mainly including raw material, revolving materials (wrappage and
low-value consumption goods etc.), outside processing materials, goods in process, semi-finished goods, stocks
and so on.


14.2 Accounting method for inventory delivery
When inventories are issued, the actual cost is determined by weighted average method.




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14.3 Accrual method inventory falling price reserves
On the balance sheet day, the inventory is measured on the lower one between the cost and the net realizable value,
and the provision for the falling price reserves is accrued on each inventory item; however, as for the inventory of
large quantity and low price, the provision is accrued on the inventory category.


14.4 Inventory system
Inventory system of the Company is perpetual inventory system


14.5 Amortization method for the low-value consumables and wrap page
Low-value consumables and packages are amortized by one-point method



15. Contract assets


The Company lists the right to receive consideration (and this right depends on factors other than the passage of
time) that has transferred goods or services to the customer as a contract asset.


Impairment of contract assets is based on expected credit losses. For the determination method and accounting
treatment method of the expected credit loss of the contract assets of the Company, please refer to (11) Notes
Receivable.




16.Contract costs


The Company’s contract cost includes the incremental cost for obtaining contracts and contract performance cost.
The incremental cost incurred to obtain a contract (contract acquisition cost) is the cost that would not have been
incurred if the contract had not been obtained. If the cost is expected to be recovered, the Company shall
recognize it as an asset as the contract acquisition cost.


If the cost incurred by the Company for performing the contract does not fall within the scope of the inventory and
other accounting standards and meets the following conditions at the same time, it shall be recognized as an asset
as the contract performance cost:


1. The cost is directly related to a current or expected contract, including direct labor, direct materials,
manufacturing overhead (or similar expenses), cost clearly borne by the user, and other cost incurred solely as a
result of the contract;


2. The cost increases the Company’s future resources for fulfilling its performance obligations;


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3. The cost is expected to be recovered.
The Company amortizes the asset (hereinafter referred to as the “asset related to the contract cost”) recognized by
the contract acquisition cost and the contract performance cost on the same basis as the revenue from the
commodity related to the asset, and includes it in the current profit and loss. If the amortization period of the asset
formed by the incremental cost for obtaining the contract does not exceed one year, it shall be included in the
current profit and loss when it occurs.


When the book value of the asset related to the contract cost is higher than the difference between the following
two items, the Company shall make provision for impairment of the excess and recognize it as an asset
impairment loss:
1. The remaining consideration expected to be obtained due to the transfer of commodity related to the asset;
2. The estimated cost to be incurred for the transfer of the relevant commodity.


17. Long-term equity investment


17.1 Recognition of initial investment cost
For a long-term equity investment obtained by a business combination, if it is a business combination under the
same control, take the share of the combine party obtained in the book value of the net assets in the consolidated
financial statements of the ultimate controlling party on the combination date as the initial investment cost; in the
case of the consolidation of enterprises not under the same control, recognized as the initial cost is the recognized
consolidation cost on the purchase day. As for the long term equity investment obtained by cash payment, the
initial investment cost is the actual purchase payment. As for the long term equity investment obtained by the
equity securities offering, the initial investment cost is the fair value of the equity securities. As for the long-term
equity investment obtained by debt reorganization, initial investment cost of such investment should determine by
relevant regulation of the “Accounting Standards for Business Enterprise No.12- Debt Reorganization”; as for the
long term equity investment obtained by the exchange of the non-monetary assets, the initial investment cost is
recognized on the relevant rules in the “Accounting Standards for Business Enterprise No. 7- Exchange of Non-
Monetary Assets”


17.2 Subsequent measurement and profit or loss recognition
Where the company has a control over the investee, long-term equity investments are measured using cost method.
Long-term equity investments in associates and joint ventures are measured using equity method. Where part of
the equity investments of an investor in its associates are held indirectly through venture investment institutions,
common fund, trust companies or other similar entities including investment linked insurance funds, such part of
equity investments indirectly held by the investor shall be measured at fair value through profit or loss according
to according to relevant requirements of Accounting Standards for Business Enterprises No.22—Recognition and
measurement of Financial Instruments regardless whether the above entities have significant influence on such
part of equity investments, while the remaining part shall be measured using equity method.

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17.3 Basis of conclusion for common control and significant influence over the investee
Joint control over an investee refers to where the activities which have a significant influence on return on certain
arrangement could be decided only by mutual consent of the investing parties sharing the control, which includes
the sales and purchase of goods or services, management of financial assets, acquisition and disposal of assets,
research and development activities and financing activities, etc.; Significant influence on the investee refers to
that: significant influence over the investee exists when holding more than 20% but less than 50% of the shares
with voting rights or even if the holding is below 20%, there is still significant influence if any of the following
conditions is met: there is representative in the board of directors or similar governing body of the investee;
participation in the investee’s policy setting process; assign key management to the investee; the investee relies on
the technology or technical information of the investing company; or major transactions with the investee.


18. Investment real estate


Measurement for investment real estate
Cost method
Depreciation or amortization method
The leased buildings in the Company’s investment property adopts straight-line depreciation to calculate and
distill depreciation, specific accounting policy are same as part of the fixed assets. The leased land use rights in
the investment property and the land use rights to be transferred after appreciation adopt straight-line amortization,
specific accounting policy are same as part of the intangible assets.


19. Fixed assets


(1) Recognition


Fixed assets refers to the tangible assets holding for purpose of producing goods, providing labor services, leasing
or operation management, which has one accounting fiscal year of using life. Meanwhile as up to the following
conditions, they are recognized: the economic interest related to the fixed assets probably flow into the Company;
the cost of the fixed assets can be measured reliably.


(2) Depreciation method


                                                                                                      Annual depreciation
      Category          Depreciation method    Depreciation life (year)          Salvage rate
                                                                                                              rate
                       Straight-line
House building                                 20-50                        10                    1.80-4.50
                       depreciation
                       Straight-line
Machinery equipment                            10                           10                    9
                       depreciation
Mold equipment         Straight-line           3                            10                    30



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                        depreciation
Transportation          Straight-line
                                                5                       10                      18
equipment               depreciation
                        Straight-line
Instrument equipment                            5                       10                      18
                        depreciation
                        Straight-line
Tool equipment                                  5                       10                      18
                        depreciation
                        Straight-line
Office equipment                                5                       10                      18
                        depreciation
The fixed assets under financing lease are the lease that has substantially transferred all the risks and rewards
associated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lower
one between the fair value of the leased assets and the present value of the minimum lease payments on the start
date of the lease period as the entry value; the subsequent valuation of the fixed assets under financing lease
adopts the depreciation policy consistent with the own fixed assets to make depreciation and impairment provision.


(3) Recognition basis, valuation and depreciation method for fixed assets under financing lease


The fixed assets under financing lease are the lease that has substantially transferred all the risks and rewards
associated with asset ownership. The initial valuation of the fixed assets under financing lease is to take the lower
one between the fair value of the leased assets and the present value of the minimum lease payments on the start
date of the lease period as the entry value; the subsequent valuation of the fixed assets under financing lease
adopts the depreciation policy consistent with the own fixed assets to make depreciation and impairment provision.


20. Construction in process


21. Borrowing expenses


21.1 Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets, investment real estate, and inventory reaching the expectant availability or sale ability.


21.2 Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or
production.


As for the borrowing of the specific borrowing,         the capitalization sum is recognized on the current actual


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interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is
recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and
times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or
premium to be diluted in every accounting period is recognized in the actual rate method.


The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future
cash flow in the expectant duration period as the current book value of the borrowing.


22. Right-of-use assets


For right-of-use assets, if the lessee can reasonably determine that the ownership of the leased asset can be
obtained when the lease term expires, it shall accrue depreciation over the remaining useful life of the leased asset.
If it cannot be reasonably determined that the ownership of the leased asset can be obtained at the expiration of the
lease term, depreciation shall be accrued within the shorter of the lease term and the remaining useful life of the
leased asset. At the same time, the lessee needs to determine whether the right-of-use asset is impaired, and
conducts accounting treatment for the recognized impairment loss.


23. Intangible assets


(1) Accounting method, service life and impairment test


1. Recognition principle on capitalization of borrowing expenses
As for the Company’s actual borrowing expenses directly attributable to the assets construction or production, it is
capitalized and reckoned into the relevant assets cost; as for other borrowing expenses, it is recognized on the
actual sum and reckoned into the current loss/gain. The assets up to the capitalization are assets as the capital
assets, investment real estate, and inventory reaching the expectant availability or sale ability.


2. Calculation of the capitalization
Capitalization term: the period from the time starts to capitalization to the time the capitalization ends. The period
of capitalization suspended is not included. The capitalization of borrowing expenses should be suspended while
the abnormal interrupt, which surpass three months continuously, in the middle of acquisition or construction or
production.


As for the borrowing of the specific borrowing,          the capitalization sum is recognized on the current actual
interest expenses less the interest income of the borrowing capital not utilized but deposited in the bank or the
return of the temporary investment; As for the appropriation of the general borrowing, the capitalization sum is
recognized on the weighted average of, the accumulative assets expenditure above the specific borrowing, and


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times the capitalization rate of the appropriation; As for the discount or premium of the borrowing, the discount or
premium to be diluted in every accounting period is recognized in the actual rate method.


The effective interest method is the method for the measurement of the diluted discount or premium or interest
expenses on the actual interest rate; and the actual interest rate is the interest rate used in the discount of the future
cash flow in the expectant duration period as the current book value of the borrowing.


(2) Accounting policies for internal research and development expenditure


Specific criteria for the research phase and development phase of internal R&D projects, and specific criteria for
development phase expenditures to qualify for capitalization


Expenditures for internal research and development projects at the research phase shall be included in the current
profit or loss when incurred; expenditures incurred at the development phase and recognized as intangible assets
shall be transferred to intangible assets accounting.


24. Long-term assets impairment


Long-term equity investments, investment properties measured at cost and long-term assets such as fixed assets,
construction in progress, productive biological assets at cost method, oil and gas assets, intangible assets and
goodwill are tested for impairment if there is any indication that an asset may be impaired at the balance date. If
the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount,
a provision for impairment and an impairment loss are recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount.


The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future
cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognized on
the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the
recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest
group of assets that is able to generate independent cash inflows.


Goodwill arising from a business combination is tested for impairment at least at each year end, irrespective of
whether there is any indication that the asset may be impaired. For the purpose of impairment testing, the carrying
amount of goodwill acquired in a business combination is allocated from the acquisition date on a reasonable
basis to each of the related asset groups; if it is impossible to allocate to the related asset groups, it is allocated to
each of the related set of asset groups. If the carrying amount of the asset group or set of asset groups is higher
than its recoverable amount, the amount of the impairment loss first reduced by the carrying amount of the
goodwill allocated to the asset group or set of asset groups, and then the carrying amount of other assets (other
than the goodwill) within the asset group or set of asset groups, pro rata based on the carrying amount of each


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asset.


Once the impairment loss of such assets is recognized, it is not be reversed in any subsequent period.


25. Long-term deferred expenses


The Company’s long-term deferred expenditure are expenses paid out and with one year above (one-year
excluded) benefit period. The long-term deferred expenses are diluted by periods according to the benefit period.
As the long-term deferred expenses cannot enable the accounting period’s beneficiary, all dilution values of the
project undiluted yet, are transferred into the current loss/gain.


26. Contract liability


The company presents the obligation to transfer goods or provide services to customers for consideration received
or receivable as a contract liability.




27. Employees remuneration


(1) Accounting for short-term benefits


In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit
or loss, or if otherwise required or allowed by other accounting standards, to the related costs of assets for the
current period. At the time of actual occurrence, The Company’s employee benefits are recorded into the profits
and losses of the current year or assets associated costs according to the actual amount. The non-monetary
employee benefits are measured at fair value. Regarding to the medical and health insurance, industrial injury
insurance, maternity insurance and other social insurances, housing fund and labor union expenditure and
personnel education that the Company paid for employees, the Company should recognize corresponding
employees benefits payable according to the appropriation basis and proportion as stipulated by relevant
requirements and recognize the corresponding liabilities and include these expenses in the profits or losses of the
current period or recognized as respective assets costs.


(2) Accounting for post-employment benefits


During the accounting period in which an employee provides service, the amount payable calculated under
defined contribution scheme shall be recognized as a liability and recorded in profit and loss of the current period
or in assets. In respect of the defined benefit scheme, the Company shall use the projected unit credit method and
attribute the welfare obligations calculated using the formula stipulated by the defined benefit scheme to the
service period of the employee, and record the obligation in the current profit and loss or related assets cost.


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(3) Accounting for termination benefits


The Company recognizes a liability and expenses in the current profit or loss for termination benefits at the earlier
of the following dates: when the Company can no longer withdraw the offer of those benefits; and when the
Company recognizes costs for restructuring involving the payment of termination costs.


(4) Accounting for other long-term employee benefits


The Company provides other long-term employee benefits to its employees. For those falling within the scope of
defined contribution scheme, the Company shall account for them according to relevant requirements of the
defined contribution scheme. In addition, the Company recognizes and measures the net liabilities or net assets of
the other long-term employee benefits according to relevant requirements of the defined contribution scheme.



28. Lease liability


For the lease liabilities, the lessee shall calculate the interest expenses on the lease liability for each period of the
lease term and reckon into current gain/loss.




29. Accrual liability


The obligation related to contingencies is the current obligation assumed by the company, and performing this
obligation may result in an outflow of economic benefits, and this obligation can be determined as the estimated
liabilities when the amount can be reliably measured. The Company makes initial measurement in accordance
with the best estimate for performing the related current obligation, if the expenditure as needed has a continuous
range, and the likelihood of occurrence of various results in this range is the same, the best estimate is determined
by the median value within the range; if a number of items are involved, the best estimate is determined by the
calculation of various possible outcomes and related probabilities.


At the balance sheet date, the book value of estimated liabilities should be rechecked, if there is conclusive
evidence indicates that this book value cannot truly reflect the current best estimate, and then the book value
should be adjusted in accordance with the current best estimate.


30. Revenue (income)


Accounting policy for recognition and measurement of revenue(income)
Different business models of similar business resulted in different accounting policies for revenue recognition




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31. Government subsidy


31.1Category of government subsidy and accounting treatment
Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from government
for free (excluding the capital invested by government as an owner). If the government grants are monetary assets,
it shall be measured according to the amount received or receivable. If the government grants are non-monetary
assets, it shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at the
nominal amount.


Government grants related to daily activities are included in other income in accordance with the economic
business. Government grants not related to daily activities are included in the non-operating income and
expenditure.


Government grants that the government documents clearly stipulate to be used for the purchase and establishment
or forming long-term assets in other way are recognized as government grants related to assets. For the
government grants that the government documents do not clearly specify the subsidy target and can form long-
term assets, the part corresponding to the asset value is recognized as the government grants related to the assets,
and the rest is recognized as the government grants related to the income. For the government grants which are
difficult to be distinguished, recognize the whole as the government grants related to the income. Government
grants related to assets are recognized as deferred income. The amount recognized as deferred income is included
in the current profit and loss in a reasonable and systematic manner within the useful life of the relevant asset.


Government grants other than government grants related to assets are recognized as government grants related to
income. If the government grants related to the income are used to compensate the related expenses or losses of
the enterprise in the future period, recognize them as deferred income and include them in the current profit and
loss during the period of recognizing the related expenses. The government grants used to compensate the relevant
expenses or losses incurred by the enterprise are directly included in the current profit and loss.


The Company obtained the policy preferential loan interest subsidy, and the finance allocated the interest subsidy
funds to the loan bank, and the loan bank provides loans to the Company at a preferential interest rate, take the
actual amount of the loan received as the entry value of the loan, and calculate the relevant borrowing costs
according to the loan principal the policy preferential interest rate. If the finance directly appropriates the interest
subsidy funds to the Company, the Company will offset the relevant borrowing costs with the corresponding
interest subsidy.


31.2 Time points to recognize the government grants
Government grants are recognized when they meet the conditions attached to government grants and can be
received. Government grants measured in accordance with the amount receivable are recognized when there is
conclusive evidence at the end of the period that it meets the relevant conditions stipulated in the financial support

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policy and is expected to receive financial support funds. Other government grants other than government grants
measured in accordance with the receivable amount are recognized when the grant is actually received.




32. Deferred income tax asset / deferred income tax liability


32.1 Where there is difference between the carrying amount of the assets or liabilities and its tax base, (as for an
item that has not been recognized as an asset or liability, if its tax base can be determined in light of the tax law,
the tax base shall recognized as the difference) the deferred income tax and deferred income tax liabilities shall be
determined according to the applicable tax rate in period of assets expected to recover or liability expected to pay
off.


32.2 The deferred income tax assets shall be recognized to the extent of the amount of the taxable income which it
is most likely to obtain and which can be deducted from the deductible temporary difference. On balance sheet
date, if there have concrete evidence of obtaining, in future period, enough taxable amounts to deduct the
deductible temporary difference, the un-confirmed deferred income tax assets in previous accounting period shall
be recognized. If there has no enough taxable amounts, obtained in future period, to deducted the deferred income
tax assets, book value of the deferred income tax assets shall be kept in decreased.


32.3The taxable temporary differences related to the investments of subsidiary companies and associated
enterprises shall recognized as deferred income tax liability, unless the Company can control the time of the
reverse of temporary differences and the temporary differences are unlikely to be reversed in the expected future.
As for the deductible temporary difference related to the investment of the subsidiary companies and associated
enterprises, deferred income tax assets shall be recognized while the temporary differences are likely to be
reversed in the expected future and it is likely to acquire any amount of taxable income tax that may be used for
making up the deductible temporary differences.




33. Leasing


(1) Accounting treatment for operating lease


Operating lease payments are recognized on a straight-line basis over the term of the relevant lease, and are either
included in the cost of related asset or charged to profit or loss for the period.


(2) Accounting treatment for finance lease


Accounting treatment for finance lease: At the commencement of the lease term, the Group records the leased


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asset at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum
lease payments. The difference between the recorded amounts is accounted for as unrecognized finance charge,
using the effective interest method amortization during the lease term. Minimum lease payments deducting
unrecognized financing charges are listed as long-term payable.


34. Changes in important accounting policies and estimates

(1) Changes in important accounting policies

□ Applicable √Not applicable


(2)Changes in important accounting estimates

□ Applicable √Not applicable


VI. Taxes

1. Major tax and tax rate

                  Taxes                                    Taxation basis                             Tax rate
VAT                                          Domestic sales revenue                   13%, 9%, 6%, 5%, 3%
Consumption tax                              Turnover tax payable                     7%
Corporate income tax                         Taxable income                           15%, 25%
Educational surtax                           Turnover tax payable                     3%
Local educational surtax                     Turnover tax payable                     2%
Property tax                                 70% of original value of the property    1.2%


Explain the different taxation entity of the enterprise income tax
                    Taxation entity                                                     Income tax rate
Wuhan Hengfa Technology Co., Ltd.                                     15%


2. Tax preferences


According to the “Measures for the Determination of High-tech Enterprises”, and through the enterprise
application, expert review, and public announcement and other procedures, the Company’s wholly-owned
subsidiary, Wuhan Hengfa Technology Co., Ltd., has been identified as a high-tech enterprise, and obtained the
“High-tech Enterprise Certificate” jointly issued by the Science and Technology Department of Hubei Province,
Hubei Provincial Finance Department, Hubei Provincial Office, SAT, and Local Taxation Bureau of Hubei
Province on December 1, 2020, the certificate number is GR202042003237, which is valid for 3 years. The
applicable corporate income tax rate of the subsidiary Wuhan Hengfa Technology Co., Ltd. for 2022 was 15%.




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VII. Notes to main items in consolidated financial statement

1. Monetary fund

                                                                                                                Unit: RMB/CNY
                    Item                                   Ending balance                              Opening balance
 Cash on hand                                                                   460.00                                   220,467.15
 Bank deposit                                                            60,773,767.30                                32,674,664.03
 Other monetary fund                                                     14,890,386.86                                 1,530,911.93
 Total                                                                   75,664,614.16                                34,426,043.11
 The total amount of money that has
 restrictions on use due to mortgage,                                        92,568.28                                     92,568.28
 pledge or freezing
Other explanation

Amount of the restricted monetary funds at end of the period was 14,982,955.14 yuan, including bank deposits of 92,568.28 yuan,
which were restricted due to the freezing of litigation; other monetary fund was 14,890,386.86 yuan, which were restricted due to the
note deposit. Other than that, the Company has no other amounts that are subject to restriction on use and potential recovery risks due
to mortgages, pledges or freezes.


2. Trading financial assets

                                                                                                                Unit: RMB/CNY
                    Item                                   Ending balance                              Opening balance
    Including:
    Including:
Other note:


3. Derivative financial assets

                                                                                                                 Unit: RMB/CNY
                    Item                                   Ending balance                              Opening balance
Other note:


4. Note receivable

(1) Category

                                                                                                                Unit: RMB/CNY
                  Item                                     Ending balance                              Opening balance
 Bank acceptance bill                                                    2,298,990.09                               62,186,577.09
 Commercial acceptance bill                                             58,528,302.45                               43,735,740.51
 Total                                                                  60,827,292.54                              105,922,317.60
                                                                                                                Unit: RMB/CNY
                                        Ending balance                                          Opening balance
                                                Bad debt
                          Book balance                                          Book balance         Bad debt provision
      Category                                  provision           Book                                                     Book
                        Amoun Proport Amoun Accrua                  value     Amoun      Proport                 Accrual     value
                                                                                                     Amount
                           t       ion        t        l ratio                   t         ion                    ratio
                        62,827, 100.00                             62,827,     105,92     100.00                              105,92
    Including:                                0.00     0.00%                                             0.00     0.00%
                         292.54        %                            292.54    2,317.6          %                             2,317.6


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                                                                                深圳中恒华发股份有限公司 2022 年半年度报告全文


                                                                                      0                                                0
 Note receivable
 with bad debt
 provision accrual
 by combination
                        2,298,9                                       2,298,9   62,186,                                        62,186,
    Including:                          3.66%        0.00    0.00%                           58.71%         0.00      0.00%
                          90.09                                         90.09    577.09                                         577.09
 Bank acceptance        60,528,          96.34                        60,528,   43,735,                                        43,735,
                                                     0.00    0.00%                           41.29%         0.00      0.00%
 bill                    302.45             %                          302.45    740.51                                         740.51
                                                                                 105,92                                         105,92
 Commercial             62,827,         100.00                        62,827,                 100.00
                                                     0.00    0.00%              2,317.6                     0.00      0.00%    2,317.6
 acceptance bill         292.54             %                          292.54                     %
                                                                                      0                                              0
                                                                                 105,92                                         105,92
                        62,827,         100.00                        62,827,                 100.00
 Total                                               0.00    0.00%              2,317.6                     0.00      0.00%    2,317.6
                         292.54             %                          292.54                     %
                                                                                      0                                              0
If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable


(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:
                                                                                                                   Unit: RMB/CNY
                                                                Amount changed in the period
                        Opening
     Category                                                   Collected or                                            Ending balance
                        balance                  Accrual                        Written-off               Other
                                                                 reversal
Including major amount bad debt provision that collected or reversal in the period:
□ Applicable √Not applicable


(3) Notes receivable that the company has pledged at the end of the period

                                                                                                                   Unit: RMB/CNY
                                 Item                                                     Amount pledge at period-end
 Commercial acceptance bill                                                                                               7,715,431.89
 Total                                                                                                                    7,715,431.89


(4) Notes endorsement or discount and undue on balance sheet date

                                                                                                                   Unit: RMB/CNY
                 Item                                Amount derecognition at period-end        Amount not derecognition at period-end
 Commercial acceptance bill                                                                                            37,185,847.90
 Total                                                                                                                 37,185,847.90


5. Account receivable

(1) Category

                                                                                                                   Unit: RMB/CNY
                                      Ending balance                                                Opening balance
                                             Bad debt
         Category        Book balance                                  Book       Book balance         Bad debt provision      Book
                                             provision
                                                                       value                                                   value
                        Amoun Proport Amoun Accrua                              Amoun        Proport   Amoun       Accrual

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                          t         ion          t      l ratio                  t      ion          t           ratio
 Account receivable
 with bad debt         13,146,                13,146,   100.00               13,146,               13,146,      100.00
                                   9.94%                                               9.27%
 provision accrual      290.18                 290.18       %                 290.18                290.18          %
 on a single basis
 Including:
 Account receivable     133,91                                      133,87    128,71
 with bad debt                      91.06     39,021.                                              39,021.                   128,675,
                       1,789.3                          0.03%      2,767.5   4,349.7   90.73%                   0.03%
 provision accrual                     %          77                                                   77                      327.97
 by combination              2                                           5         4
 Including:
 Combination 1:
 Take account ages      133,91                                      133,87    128,71
 of receivables as a                91.06     39,021.                                              39,021.                   128,675,
                       1,789.3                          0.03%      2,767.5   4,349.7   90.73%                   0.03%
 combination of                        %          77                                                   77                      327.97
 credit risk                 2                                           5         4
 characteristics
                        147,05                                      133,87    141,86
                                   100.00     13,185,                                  100.00      13,185,                   128,675,
 Total                 8,079.5                          8.97%      2,767.5   0,639.9                            9.29%
                                       %       311.95                                      %        311.95                     327.97
                             0                                           5         2
Accrual of bad debt provision on single basis: 13,146,290.18
                                                                                                                Unit: RMB/CNY
                                                                      Ending balance
         Name
                                 Book balance           Bad debt provision         Accrual ratio                 Accrual causes
 Shenzhen Portman
 Bowling Club Co.,                   2,555,374.75                 2,555,374.75                100.00%        Uncollectible
 Ltd.
 Hong Kong Haowei
                                     1,870,887.18                 1,870,887.18                100.00%        Uncollectible
 Industrial Co., Ltd.
 TCL ACE ELECTRIC
 APPLIANCE
                                     1,325,431.75                 1,325,431.75                100.00%        Uncollectible
 (HUIZHOU) CO.,
 LTD.
 Qingdao Haier Parts
                                     1,225,326.15                 1,225,326.15                100.00%        Uncollectible
 Procurement Co., Ltd.
 SKYWORTH
 Multimedia                               579,343.89               579,343.89                 100.00%        Uncollectible
 (Shenzhen) Co., Ltd.
 Shenzhen Huixin
 Video Technology Co.,                    381,168.96               381,168.96                 100.00%        Uncollectible
 Ltd.
 Shenzhen Wandelai
 Digital Technology                       351,813.70               351,813.70                 100.00%        Uncollectible
 Co., Ltd.
 Shenzhen Dalong
                                          344,700.00               344,700.00                 100.00%        Uncollectible
 Electronic Co., Ltd.
 Shenzhen Keya
                                          332,337.76               332,337.76                 100.00%        Uncollectible
 Electronic Co., Ltd.
 Shenzhen Qunping
                                          304,542.95               304,542.95                 100.00%        Uncollectible
 Electronic Co., Ltd.
 China Galaxy
 Electronics (Hong                        288,261.17               288,261.17                 100.00%        Uncollectible
 Kong) Co., Ltd.
 Dongguan Weite
                                          274,399.80               274,399.80                 100.00%        Uncollectible
 Electronic Co., Ltd.
 Chuangjing                               247,811.87               247,811.87                 100.00%        Uncollectible
 Hong Kong New
 Century Electronics                      207,409.40               207,409.40                 100.00%        Uncollectible
 Co., Ltd.
 Shenyang Beitai
                                          203,304.02               203,304.02                 100.00%        Uncollectible
 Electronic Co., Ltd.
 Beijing Xinfang Weiye
                                          193,000.00               193,000.00                 100.00%        Uncollectible
 Technology Co., Ltd.
 TCL Electronics                          145,087.14               145,087.14                 100.00%        Uncollectible

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                                                                               深圳中恒华发股份有限公司 2022 年半年度报告全文


 (Hong Kong) Co., Ltd.
 Huizhou TCL Xinte
                                         142,707.14                  142,707.14                   100.00%         Uncollectible
 Electronics Co., Ltd.
 Sky Worth – RGB
                                         133,485.83                  133,485.83                   100.00%         Uncollectible
 Electronic Co., Ltd.
 Other                                  2,039,896.72               2,039,896.72                   100.00%         Uncollectible
 Total                                 13,146,290.18              13,146,290.18
Accrual of bad debt provision on portfolio: 39,021.77
                                                                                                                     Unit: RMB/CNY
                                                                            Ending balance
             Name
                                            Book balance                   Bad debt provision                      Accrual ratio
 Within one year                                 133,167,210.49                                                                      0.00%
 1-2 years                                           718,833.35                           35,941.67                                  5.00%
 2-3 years                                            23,217.71                            2,321.77                                 10.00%
 Over 3 years                                           2,527.77                             758.33                                 30.00%
 Total                                           133,911,789.32                           39,021.77
Explanation on portfolio basis:
Take account ages of receivables as a combination of credit risk characteristics
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable


By account age
                                                                                                                     Unit: RMB/CNY
                         Account ages                                                           Book balance
 Within one year (one year included)                                                                                     146,313,500.67
 1-2 years                                                                                                                   718,833.35
 2-3 years                                                                                                                    23,217.71
 Over 3 years                                                                                                                  2,527.77
   3-4 years                                                                                                                   2,527.77
 Total                                                                                                                   147,058,079.50


(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:
                                                                                                                     Unit: RMB/CNY
                                                               Amount changed in the period
                        Opening
     Category                                                  Collected or                                              Ending balance
                        balance             Accrual                            Written-off                Other
                                                                reversal
 Accounts
 receivable with
 provision for
                      13,146,290.18                                                                                       13,146,290.18
 bad debts based
 on individual
 assessments
 Accounts
 receivable with
 provision for             39,021.77                                                                                              39,021.77
 bad debts by
 combination
 Total                13,185,311.95                                                                                       13,185,311.95
Including major amount bad debt provision that collected or reversal in the period:
                                                                                                                     Unit: RMB/CNY
                 Company                               Amount collected or reversal                       Way of collection


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(3) Actual written-off accounts receivable in the current period

                                                                                                                   Unit: RMB/CNY
                                 Item                                                         Written-off amount
Including the important accounts receivable written-off situation:
                                                                                                                   Unit: RMB/CNY
                                                                                                                       Whether the
                                                                                                  Written-off           payment is
                        Nature of accounts        Written-off
         Name                                                           Written-off reason        procedure            generated by
                            receivable             amount
                                                                                                  performed            related party
                                                                                                                       transactions
Written-off description of accounts receivable:

(4) Top 5 account receivables collected by arrears party at ending balance

                                                                                                                   Unit: RMB/CNY
                                 Ending balance of account          Proportion in total account           Ending balance of bad debt
         Company
                                        receivable                   receivables at period-end                    provision
 Qingdao Haidayuan
 Purchasing Service Co.,                       31,949,615.40                                 23.87%
 Ltd.
 Hefei Hangjia Display
                                               29,729,570.68                                 22.21%
 Technology Co., Ltd.
 ViewSonic Technology
                                               13,159,959.00                                 9.83%
 (China) Co., Ltd.
 Xiamen Edmond
 Electronic Technology                           8,261,850.62                                6.17%
 Co., Ltd.
 TCL Air Conditioner
                                                 7,306,764.13                                5.46%
 (Wuhan) Co., Ltd.
 Total                                         90,407,759.83                                 67.54%


6. Receivable financing

                                                                                                                   Unit: RMB/CNY
                     Item                                    Ending balance                               Opening balance
 Notes receivable                                                                                                           500,000.00
 Total                                                                                                                      500,000.00
Receivable financing Changes in the period and changes in fair value
□ Applicable √Not applicable
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses, please
refer to the disclosure of other receivables to disclose related information about bad-debt provisions:
□ Applicable √Not applicable


Other explanation:


7. Accounts paid in advance

(1) By account age

                                                                                                                   Unit: RMB/CNY

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                                            Ending balance                                        Opening balance
      Account ages
                                    Amount                 Proportion                     Amount                 Proportion
 Within one year                     19,963,828.94                 100.00%                  7,996,570.95                 100.00%
 Total                               19,963,828.94                                          7,996,570.95
Explanation on reasons of failure to settle on important account paid in advance with age over one year:
Not applicable


(2) Top 5 account paid in advance at ending balance by prepayment object

Name of supplier                                                                        Amount                        Ratio
Hong Kong Yutian International Investment Co., Ltd.                                                   14,502,424.33            72.64%
AU Optronics Co., Ltd.                                                                                 1,549,115.87 7.76%
Mingyan Technology (Shenzhen) Co., Ltd.                                                                  876,919.77 4.39%
Nanjing CLP Panda LCD Technology Co., Ltd.                                                               616,945.60 3.09%
Zhengzhou Haier Air Conditioner Co., Ltd.                                                                441,126.00 2.21%
Total                                                                                                 17,986,531.57            90.09%
Other explanation:

8. Other account receivable

                                                                                                               Unit: RMB/CNY
                   Item                                   Ending balance                                Opening balance
 Other account receivable                                               4,628,853.27                                  4,520,412.70
 Total                                                                  4,628,853.27                                  4,520,412.70


(1) Interest receivable

1) Category of interest receivable

                                                                                                               Unit: RMB/CNY
                   Item                                   Ending balance                                Opening balance


2) Significant overdue interest

                                                                                                               Unit: RMB/CNY
                                                                                                                Whether there is
        Borrower                Ending balance             Overdue time             Reason for overdue         impairment and its
                                                                                                                 judgment basis
Other note:

3) Accrual of bad debt provision

√ Applicable □ Not applicable
                                                                                                                  Unit: RMB/CNY
                                   Phase I                   Phase II                     Phase III
                                                      Expected credit losses       Expected credit losses
  Bad debt provision        Expected credit losses    for the entire duration      for the entire duration             Total
                             over next 12 months          (without credit         (with credit impairment
                                                      impairment occurred)                occurred)


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Balance of 1 Jan. 2022
in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable


(2) Dividend receivable

1) Category of dividend receivable

                                                                                                               Unit: RMB/CNY
           Item (or invested unit)                       Ending balance                                 Opening balance


2) Important dividend receivable with account age over one year

                                                                                                               Unit: RMB/CNY
                                                                                                                Whether there is
                                                                                     Reasons for non-
  Item (or invested unit)        Ending balance            Account age                                         impairment and its
                                                                                        recovery
                                                                                                                 judgment basis


3) Accrual of bad debt provision

√ Applicable □ Not applicable
                                                                                                                  Unit: RMB/CNY
                                     Phase I                Phase II                     Phase III
                                                     Expected credit losses       Expected credit losses
  Bad debt provision        Expected credit losses   for the entire duration      for the entire duration           Total
                             over next 12 months         (without credit         (with credit impairment
                                                     impairment occurred)                occurred)
Balance of 1 Jan. 2022
in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other note:


(3) Other account receivable

1) Other account receivable by nature

                                                                                                               Unit: RMB/CNY
                  Nature                              Ending book balance                           Opening book balance
 Margin & deposit                                                       279,076.70                                   1,829,768.00
 Borrow money                                                         3,031,923.33                                   1,481,984.12
 Intercourse funds                                                    8,723,023.54                                   7,844,053.53
 Rental receivable                                                    7,013,623.97                                   6,999,971.21
 Other                                                                  141,721.91                                     925,152.02
 Less: Bad debt provision                                           -14,560,516.18                                 -14,560,516.18
 Total                                                                4,628,853.27                                   4,520,412.70




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2) Accrual of bad debt provision

                                                                                                                 Unit: RMB/CNY
                                  Phase I                   Phase II                       Phase III
                                                    Expected credit losses for     Expected credit losses for
                              Expected credit
   Bad debt provision                                  the entire duration         the entire duration (with           Total
                            losses over next 12
                                                         (without credit              credit impairment
                                  months
                                                     impairment occurred)                  occurred)
 Balance on1 Jan. 2022                                                                         14,560,516.18          14,560,516.18
 Balance of 1 Jan. 2022
 in the period
 Balance on Dec. 31,
                                                                                              14,560,516.18           14,560,516.18
 2022
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
                                                                                                                 Unit: RMB/CNY
                         Account ages                                                          Book balance
 Within one year (one year included)                                                                                   1,697,997.65
 1-2 years                                                                                                             1,725,961.49
 2-3 years                                                                                                               265,630.40
 Over 3 years                                                                                                         15,790,653.83
   3-4 years                                                                                                          15,790,653.83
 Total                                                                                                                19,480,243.37


3) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:
                                                                                                                 Unit: RMB/CNY
                                                         Amount changed in the period
                        Opening
    Category                                           Collected or                                               Ending balance
                        balance        Accrual                       Written-off                Other
                                                        reversal
Including the important amount collected or switches back in the period:
                                                                                                                 Unit: RMB/CNY
                Company                           Amount collected or switches back                     Way of collection


4) The actual written-off other receivables in the current period

                                                                                                                 Unit: RMB/CNY
                               Item                                                         Written-off amount
Including the important written-off situation of other receivables:
                                                                                                                 Unit: RMB/CNY
                                                                                                                    Whether the
                                                                                                Written-off          payment is
                          Nature of other         Written-off
       Name                                                            Written-off reason       procedure           generated by
                           receivables             amount
                                                                                                performed           related party
                                                                                                                    transactions
Description of other receivables written-off:

5) Top 5 other receivables collected by arrears party at ending balance

                                                                                                                 Unit: RMB/CNY


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                                                                                          Proportion in total
                                                                                                                  Ending balance of
     Company                 Nature            Ending balance          Account ages       other receivables
                                                                                                                  bad debt provision
                                                                                            at period-end
 Portman               Rental receivable           4,021,734.22    Over 3 years                      20.96%             4,021,734.22
 Jackfang
 Investment 1F         Rental receivable           1,380,608.00    Over 3 years                       7.19%             1,380,608.00
 1076
 TPV Electronic
 Technology            Margin                        800,000.00    Over 3 years                       4.17%
 (Fujian) Co., Ltd.
 Jiang Hong            Borrow money                  600,000.00    Within 1 year                      3.13%
 Compensation for
                       Intercourse funds             555,785.81    Over 3 years                       2.90%              555,785.81
 traffic accidents
 Total                                             7,358,128.03                                      38.34%             5,958,128.03


6) Receivables involving government subsidies

                                                                                                                 Unit: RMB/CNY
                                                                                                                  Estimated time,
                            Government subsidy
           Name                                           Ending balance           Ending account age           amount and basis of
                                  item
                                                                                                                      receipt


7) Other receivable for termination of confirmation due to the transfer of financial assets

8) The amount of assets and liabilities that are transferred other receivable and continued to be involved

Other note:

9. Inventories

Whether companies need to comply with the disclosure requirements of the real estate industry
No

(1) Category

                                                                                                                 Unit: RMB/CNY
                                      Ending balance                                            Opening balance
                                      Inventories fall                                          Inventories fall
                                        provision or                                              provision or
                                          contract                                                  contract
         Item
                      Book balance     performance         Book value         Book balance       performance           Book value
                                            costs                                                     costs
                                        impairment                                                impairment
                                         provision                                                 provision
 Raw materials        38,396,272.13      2,085,289.46      36,310,982.67      51,030,203.86        2,085,289.46        48,944,914.40
 Inventory
                      23,660,783.35        2,210,144.58    21,450,638.77      32,258,568.10        2,210,144.58        30,048,423.52
 goods
 Low priced and
 easily worn              97,988.60          21,905.99          76,082.61          141,953.08         21,905.99           120,047.09
 articles
 Homemade
 semi-finished         8,588,301.98         325,374.92      8,262,927.06      11,797,660.18         325,374.92         11,472,285.26
 products
 Total                70,743,346.06        4,642,714.95    66,100,631.11      95,228,385.22        4,642,714.95        90,585,670.27




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(2) Inventories fall provision or contract performance costs impairment provision

                                                                                                                     Unit: RMB/CNY
                                                   Current increased                      Current decreased
                       Opening
      Item                                                                          Reversal or                        Ending balance
                       balance              Accrual                 Other                                Other
                                                                                     write-off
 Raw materials         2,085,289.46                                                                                      2,085,289.46
 Inventory
                       2,210,144.58                                                                                      2,210,144.58
 goods
 Homemade
 semi-finished             325,374.92                                                                                      325,374.92
 products
 Low priced and
 easily worn                21,905.99                                                                                       21,905.99
 articles
 Total                 4,642,714.95                                                                                      4,642,714.95


(3) Explanation on capitalization of borrowing costs at ending balance of inventory

(4) Assets completed without settlement from construction contract at period-end

10. Contract assets

                                                                                                                     Unit: RMB/CNY
                                                   Ending balance                                     Opening balance
             Item                  Book             Provision for                         Book         Provision for
                                                                       Book value                                     Book value
                                  balance            impairment                          balance        impairment
The amount and reasons for major changes in the book value of contract assets during the current period:
                                                                                              Unit: RMB/CNY
             Item                       Change amount                                       Reason for change
If the provision for bad debts of contract assets is made in accordance with the general model of expected credit
losses, please refer to the disclosure of other receivables to disclose related information about bad-debt
provisions:
□ Applicable √Not applicable
Accrual provision for impairment of contract assets in the current period
                                                                                                   Unit: RMB/CNY
                                                                                     Current resell/Written-
         Item                    Current accrual            Current reversal                                            Reason
                                                                                               off
Other note:

11. Assets held for sale

                                                                                                                     Unit: RMB/CNY
                     Ending book         Provision for        Ending book                             Estimated           Estimated
      Item                                                                          Fair value
                       balance            impairment             value                               disposal cost      disposal time
Other note:

12. Non-current assets due within one year

                                                                                                                     Unit: RMB/CNY
                    Item                                     Ending balance                              Opening balance


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Important debt investment/other debt investment
                                                                                                                    Unit: RMB/CNY
                                               Ending balance                                        Opening balance
                                                           Real                                                  Real
 Creditor’s Rights Item      Face           Coupon                       Expiry        Face        Coupon                         Expiry
                                                         interest                                              interest
                              value           rate                         date         value        rate                           date
                                                           rate                                                  rate
Other note:

13. Other current assets

                                                                                                                    Unit: RMB/CNY
                   Item                                     Ending balance                                  Opening balance
 Value-added tax to be deducted                                                                                           3,732,033.86
 Gain/loss on properties held for disposal                                     105,743.48
 Total                                                                         105,743.48                                   3,732,033.86
Other explanation:

14. Debt investment

                                                                                                                    Unit: RMB/CNY
                                       Ending balance                                                  Opening balance
         Item                           Provision for                                                   Provision for
                     Book balance                               Book value         Book balance                             Book value
                                         impairment                                                      impairment
Important debt investment
                                                                                                                    Unit: RMB/CNY
                                               Ending balance                                        Opening balance
                                                           Real                                                  Real
 Creditor’s Rights Item      Face           Coupon                       Expiry        Face        Coupon                         Expiry
                                                         interest                                              interest
                              value           rate                         date         value        rate                           date
                                                           rate                                                  rate
Provision for impairment accrual
                                                                                                                    Unit: RMB/CNY
                                  Phase I                    Phase II                        Phase III
                                                     Expected credit losses for      Expected credit losses for
                              Expected credit
   Bad debt provision                                   the entire duration          the entire duration (with              Total
                            losses over next 12
                                                          (without credit               credit impairment
                                  months
                                                      impairment occurred)                   occurred)
 Balance of 1 Jan. 2022
                                    ——                        ——                            ——                        ——
 in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other note:

15. Other debt investment

                                                                                                                    Unit: RMB/CNY
                                                                                                               Accumulat
                                                                                                                  ed loss
                                                                                                                 reserves
                                                  Fair value                                    Cumulativ
                    Opening        Accrued                          Ending                                     recognized
      Item                                        changes in                         Cost       e fair value                        Note
                    balance        interest                         balance                                      in other
                                                  this period                                     changes
                                                                                                               comprehen
                                                                                                                   sive
                                                                                                                 income


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Important other debt investment
                                                                                                                  Unit: RMB/CNY
                                              Ending balance                                        Opening balance
    Other Creditor’s                                     Real                                                  Real
                              Face          Coupon                      Expiry         Face        Coupon                       Expiry
      Rights Item                                       interest                                              interest
                              value          rate                        date          value        rate                         date
                                                          rate                                                  rate
Provision for impairment accrual
                                                                                                                  Unit: RMB/CNY
                                  Phase I                   Phase II                        Phase III
                                                    Expected credit losses for      Expected credit losses for
                              Expected credit
   Bad debt provision                                  the entire duration          the entire duration (with            Total
                            losses over next 12
                                                         (without credit               credit impairment
                                  months
                                                     impairment occurred)                   occurred)
 Balance of 1 Jan. 2022
                                   ——                       ——                             ——                      ——
 in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other note:

16. Long-term receivables

(1) Long-term receivables

                                                                                                                  Unit: RMB/CNY
                                      Ending balance                                   Opening balance
                                                                                                                           Discount
      Item               Book           Bad debt                           Book           Bad debt
                                                       Book value                                      Book value         rate range
                        balance         provision                         balance         provision
Bad debt provision impairment
                                                                                                                  Unit: RMB/CNY
                                  Phase I                   Phase II                        Phase III
                                                    Expected credit losses for      Expected credit losses for
                              Expected credit
   Bad debt provision                                  the entire duration          the entire duration (with            Total
                            losses over next 12
                                                         (without credit               credit impairment
                                  months
                                                     impairment occurred)                   occurred)
 Balance of 1 Jan. 2022
                                   ——                       ——                             ——                      ——
 in the period
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable

(2) Long-term receivables derecognized due to the transfer of financial assets

(3) The amount of assets and liabilities formed by the transfer of long-term receivables and continued
involvement

Other note

17. Long-term equity investment

                                                                                                                  Unit: RMB/CNY
             Openin                                    Current changes (+, -)                                     Ending         Ending
 Enterpr        g       Additio   Capital      Investm   Other      Other      Cash            Impair             balance        balance
                                                                                                          Other
   ise       balance     nal      reducti        ent    compre     equity     dividen           ment               (book            of


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              (book       investm      on      gain/los   hensive        change      d or     accrual                 value)     depreci
              value)        ent                   s       income                    profit                                        ation
                                               recogni    adjustm                  announ                                        reserve
                                                 zed        ent                     ced to                                          s
                                                under                              issued
                                                equity
 I. Joint venture
 II. Associated enterprise
Other note

18. Other equity instrument investment

                                                                                                                  Unit: RMB/CNY
                       Item                                Ending balance                                  Opening balance
Itemized disclosure of investment in non-trading equity instruments for the current period
                                                                                                                  Unit: RMB/CNY
                                                                                                        Reasons
                                                                                                     designated as
                                                                                  The amount of                            Reason for
                                                                                                       fair value
                                                                                  comprehensive                           transferring
                         Recognized                                                                  measurement
                                            Cumulative      Accumulated                income                           comprehensive
      Item                dividend                                                                  and its changes
                                              gain              loss               transferred to                          income to
                           income                                                                     included in
                                                                                      retained                              retained
                                                                                                         other
                                                                                      earnings                               income
                                                                                                    comprehensive
                                                                                                        income
Other note:

19. Other non-current financial assets

                                                                                                                  Unit: RMB/CNY
                       Item                                Ending balance                                  Opening balance
Other note:

20. Investment real estate

(1) Investment real estate measured at cost

√ Applicable □ Not applicable
                                                                                                                  Unit: RMB/CNY
                                                                                         Construction in
          Item                 House and building          Land use right                                                Total
                                                                                            process
 I. Original book value
 1. Opening balance                   134,798,893.94                                                                    134,798,893.94
 2. Current increased
 (1) Outsourcing
 (2) Inventory\fixed
 assets\construction in
 process transfer-in
 (3) Increased by
 combination

 3. Current decreased
 (1) Disposal
 (2) Other transfer-out



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 4. Ending balance               134,798,893.94                                                          134,798,893.94
 II. Accumulated
 depreciation and
 accumulated
 amortization
 1. Opening balance               88,607,116.14                                                           88,607,116.14
 2. Current increased                864,165.14                                                              864,165.14
 (1) Accrual or
                                    864,165.14                                                               864,165.14
 amortization

 3. Current decreased
 (1) Disposal
 (2) Other transfer-out

 4. Ending balance                89,471,281.28                                                           89,471,281.28
 III. Impairment
 provision
 1. Opening balance
 2. Current increased
 (1) Accrual

 3. Current decreased
 (1) Disposal
 (2) Other transfer-out

 4. Ending balance
 IV. Book value
 1. Ending book value             45,327,612.66                                                           45,327,612.66
 2. Opening book value            46,191,777.80                                                           46,191,777.80


(2) Investment real estate measured by fair value

□ Applicable √Not applicable

(3) Investment real estate without property certification held

                                                                                                    Unit: RMB/CNY
                                                                                  Reason without property certification
                   Item                               Book value
                                                                                                 held
Other note

21. Fixed assets

                                                                                                    Unit: RMB/CNY
                   Item                              Ending balance                         Opening balance
 Fixed assets                                                     83,306,441.83                          95,031,789.81
 Disposal of fixed assets                                         99,973,684.42                          92,857,471.69
 Total                                                           183,280,126.25                         187,889,261.50


(1) Fixed asset

                                                                                                    Unit: RMB/CNY
    Item          House     Machinery     Means of       Office     Instrument     Tool          Mold           Total


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               building     equipment     transportati   equipment    equipment    equipment    equipment
                                               on
I. Original
book value
1. Opening    72,063,410    95,810,002     3,473,225.    8,470,322.   3,424,013.   9,766,024.   27,439,464    220,446,46
balance              .41            .45           86            17           01           86            .52          3.28
2. Current                                                                                       1,503,759.    1,503,759.
increased                                                                                                73            73
(1)                                                                                              1,503,759.    1,503,759.
Purchasing                                                                                               73            73
(2)
Constructio
n in
process
transfer-in
(3)
Increased
by
combinatio
n

3. Current                  17,472,879                                                                        18,159,963
                                                           7,822.14    42,777.24   636,484.30
decreased                           .92                                                                              .60
(1)
                            17,472,879                                                                        18,159,963
Disposal or                                                7,822.14    42,777.24   636,484.30
scrapping                           .92                                                                              .60


4. Ending     72,063,410    78,337,122     3,473,225.    8,462,500.   3,381,235.   9,129,540.   28,943,224    203,790,25
balance              .41            .53           86            03           77           56            .25         9.41
II.
Accumulati
ve
depreciatio
n
1. Opening    22,443,385    66,166,210     1,467,827.    6,590,289.   2,881,961.   5,946,957.   19,918,041    125,414,67
balance               .19           .12           24            96           79           87            .30          3.47
2. Current     1,372,440.    3,905,303.                                                          1,477,365.    7,690,371.
                                           40,471.06     159,101.19   165,847.79   569,841.46
increased              94            66                                                                  31            41
               1,372,440.    3,905,303.                                                          1,477,365.    7,690,371.
(1) Accrual                                40,471.06     159,101.19   165,847.79   569,841.46
                       94            66                                                                  31            41

3. Current                  12,132,347                                                                        12,621,227
                                                          38,190.65   127,945.12   307,465.30    15,278.41
decreased                           .82                                                                              .30
(1)
                            12,132,347                                                                        12,621,227
Disposal or                                               38,190.65   127,945.12   307,465.30    15,278.41
scrapping                           .82                                                                              .30


4. Ending     23,815,826    57,939,165     1,508,298.    6,711,200.   2,919,864.   6,209,334.   21,380,128    120,483,81
balance              .13            .96           30            50           46           03            .20         7.58
III.
Depreciatio
n reserves
1. Opening
balance
2. Current
increased
(1) Accrual

3. Current
decreased
(1)


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 Disposal or
 scrapping

 4. Ending
 balance
 IV. Book
 value
 1. Ending     48,247,584      20,397,956    1,964,927.     1,751,299.                   2,920,206.       7,563,096.     83,306,441
                                                                           461,371.31
 book value           .28              .57          56             53                           53                05            .83
 2. Opening    49,620,025      29,643,792    2,005,398.     1,880,032.                   3,819,066.       7,521,423.     95,031,789
                                                                           542,051.22
 book value           .22              .33          62             21                           99                22            .81


(2) Temporarily idle fixed assets

                                                                                                              Unit: RMB/CNY
                           Original book       Accumulated           Provision for
        Item                                                                                 Book value                  Note
                               value           depreciation           impairment


(3) Fixed assets leasing-out by operational lease

                                                                                                              Unit: RMB/CNY
                               Item                                                      Ending book value


(4) Fixed assets without property certification held

                                                                                                              Unit: RMB/CNY
                                                                                          Reason without property certification
                  Item                                     Book value
                                                                                                         held
Other note

(5) Disposal of fixed assets

                                                                                                              Unit: RMB/CNY
                   Item                                   Ending balance                              Opening balance
 Renovation of Gongming Huafa Electric
                                                                         92,857,471.69                                 92,857,471.69
 Town
 Disposal of aged equipment and others                                    7,116,212.73
 Total                                                                   99,973,684.42                                 92,857,471.69
Other explanation

22. Construction in process

                                                                                                              Unit: RMB/CNY
                   Item                                   Ending balance                              Opening balance
 Construction in process                                                   740,000.00                                    740,000.00
 Total                                                                     740,000.00                                    740,000.00


(1) Construction in process

                                                                                                              Unit: RMB/CNY
                                       Ending balance                                         Opening balance
      Item
                    Book balance        Impairment         Book value         Book balance      Impairment             Book value

                                                                99
                                                                               深圳中恒华发股份有限公司 2022 年半年度报告全文


                                           provision                                                 provision
 Huafa Building
 Reconstruction            240,000.00                           240,000.00           240,000.00                            240,000.00
 Project
 Gongming
 Electronic City
                           500,000.00                           500,000.00           500,000.00                            500,000.00
 Reconstruction
 Project
 Total                     740,000.00                           740,000.00           740,000.00                            740,000.00


(2) Changes of major projects under construction

                                                                                                                    Unit: RMB/CNY
                                                                                                         includi
                                                                                               Accum
                                                                           Propor                           ng:      Interes
                                            Fixed                                              ulated
                                                       Other               tion of                       interes         t
                       Openi     Curren     assets                                             amoun
                                                       decrea   Ending     project                           t       capital
                         ng         t      transfe                                    Progre     t of                          Sourceof
  Item     Budget                                      sed in   balanc     invest                        capital     ization
                       balanc    increas   r-in in                                      ss     interes                          funds
                                                        the        e        ment                           ized      rate of
                          e        ed        the                                                   t
                                                       Period                 in                         amoun         the
                                           Period                                              capital
                                                                           budget                        t of the      year
                                                                                               ization
                                                                                                           year


(3) The provision for impairment of construction projects

                                                                                                                    Unit: RMB/CNY
                    Item                                Current accrual amount                           Accrual reason
Other note

(4) Engineering materials

                                                                                                                    Unit: RMB/CNY
                                                 Ending balance                                     Opening balance
             Item                                 Provision for                            Book      Provision for
                                 Book balance                           Book value                                  Book value
                                                   impairment                             balance     impairment
Other note:

23. Right to use assets

                                                                                                                    Unit: RMB/CNY
                   Item                                    House building                                    Total
I. Original book value
1. Opening balance                                                           313,948.08                                   313,948.08
2. Current increased

3. Current decreased

4. Ending balance                                                            313,948.08                                   313,948.08
II. Accumulative depreciation
1. Opening balance                                                           104,649.36                                   104,649.36
2. Current increased                                                          52,324.68                                    52,324.68
(1) Accrual                                                                   52,324.68                                    52,324.68

3. Current decreased
(1) Disposal

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4. Ending balance                                                      156,974.04                            156,974.04
III. Depreciation reserves
1. Opening balance
2. Current increased
(1) Accrual

3. Current decreased
(1) Disposal

4. Ending balance
IV. Book value
1. Ending book value                                                   156,974.04                            156,974.04
2. Opening book value                                                  209,298.72                            209,298.72
Other note:

24. Intangible assets

(1) Intangible assets

                                                                                                        Unit: RMB/CNY
                                                                    Non-patented       Computer
        Item                 Land use right    Patent right                                                  Total
                                                                     technology        software
 I. Original book
 value
 1. Opening
                               55,415,814.36                                             3,172,234.92      58,588,049.28
 balance
 2. Current
 increased
 (1) Purchasing
 (2) Internal R&D
 (3) Increased by
 combination

 3. Current
                                                                                          498,858.97         498,858.97
 decreased
 (1) Disposal                                                                             498,858.97         498,858.97

 4. Ending balance             55,415,814.36                                             2,673,375.95      58,089,190.31
 II. Accumulated
 amortization
 1. Opening
                               18,096,524.31                                             1,210,523.98      19,307,048.29
 balance
 2. Current
                                  722,744.45                                              139,090.94         861,835.39
 increased
 (1) Accrual                      722,744.45                                              139,090.94         861,835.39

 3. Current
                                                                                          499,329.60         499,329.60
 decreased
 (1) Disposal                                                                             499,329.60         499,329.60

 4. Ending balance             18,819,269.00                                              850,285.32       19,669,554.08
 III. Depreciation
 reserves
 1. Opening
                                                                                          109,427.90         109,427.90
 balance
 2. Current
 increased


                                                              101
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 (1) Accrual

 3. Current
 decreased
 (1) Disposal

 4. Ending balance                                                                               109,427.90          109,427.90
 IV. Book value
 1. Ending book
                            36,596,545.60                                                      1,713,662.73       38,310,208.33
 value
 2. Opening book
                            37,319,290.05                                                      1,852,283.04       39,171,573.09
 value
The proportion of intangible assets form by internal R&D in total book value of intangible assets at period-end

(2) The situation of land use rights that have not completed the ownership certificate

                                                                                                               Unit: RMB/CNY
                                                                                          Reason without property certification
                     Item                                   Book value
                                                                                                         held
Other note:

25. Development expenditure

                                                                                                               Unit: RMB/CNY
                                    Increase in the current period            Decrease in the current period
                               Internal
                                                                          Recognize      Transferred
                 Opening      developme                                                                                Ending
    Item                                                                     d as        into current
                 balance          nt            Other                                                                  balance
                                                                          intangible      profit and
                              expenditur
                                                                            assets           loss
                                   e

    Total
Other note

26. Goodwill

(1) Goodwill original book value

                                                                                                               Unit: RMB/CNY
 Invested name                           Increase in the current period      Decrease in the current period
   or matters           Opening          Formed by
                                                                                                                 Ending balance
    forming             balance           business                             Dispose
    goodwill                            combination

      Total


(2) Goodwill provision for impairment

                                                                                                               Unit: RMB/CNY
 Invested name                           Increase in the current period      Decrease in the current period
   or matters           Opening
                                                                                                                 Ending balance
    forming             balance             Accrual                            Dispose
    goodwill

      Total

                                                                102
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Information about the asset group or combination of asset groups where the goodwill is located
Explain the process of goodwill impairment testing, key parameters (such as the growth rate of the forecast period when the present
value of future cash flows are expected, the growth rate of the stable period, the profit rate, the discount rate, the forecast period, etc.)
and the confirmation method of the impairment loss of goodwill:
The impact of goodwill impairment testing
Other note


27. Long-term deferred expenses

                                                                                                                     Unit: RMB/CNY
                                                                           Amortized in
         Item             Opening balance        Current increased                              Other decreased         Ending balance
                                                                             Period
 Lawyer fee                      969,444.45                                                                                   969,444.45
 Amortization of
                                 512,893.11                                    109,905.66                                     402,987.45
 cloud service fees
 Huafa Building
 Central Air
                                 150,787.00                                                                                   150,787.00
 Conditioning
 Overhaul Project
 China Telecom
 Corporation
                                   4,800.00                                                                                      4,800.00
 Limited Shenzhen
 Branch
 Huafa Building
 Elevator Overhaul                53,333.33                                      53,333.33                                           0.00
 Project
 Total                         1,691,257.89                                    163,238.99                                   1,528,018.90
Other explanation

28. Deferred income tax assets/Deferred income tax liabilities

(1) Deferred income tax assets without offset

                                                                                                                     Unit: RMB/CNY
                                              Ending balance                                        Opening balance
             Item             Deductible temporary      Deferred income tax           Deductible temporary    Deferred income tax
                                  differences                  assets                     differences                assets
 Provision for assets
                                       29,705,573.64                 6,946,556.32              29,705,573.64                6,946,556.32
 impairment
 Accrual liability                        801,159.18                   200,289.79                 801,159.18                  200,289.79
 Deferred income                        3,326,520.00                   498,978.00               3,565,560.00                  534,834.00
 Total                                 33,833,252.82                 7,645,824.11              34,072,292.82                7,681,680.11


(2) Deferred income tax liabilities that are not offset

                                                                                                                     Unit: RMB/CNY
                                               Ending balance                                        Opening balance
             Item               Taxable temporary        Deferred income tax            Taxable temporary      Deferred income tax
                                   differences                liabilities                  differences               liabilities


(3) Amount of deferred income tax asset and deferred income tax liability after trade-off

                                                                                                                     Unit: RMB/CNY

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                                                          Ending balance of          Trade-off between the       Opening balance of
                           Trade-off between the
                                                         deferred income tax          deferred income tax        deferred income tax
          Item              deferred income tax
                                                          assets or liabilities      assets and liabilities at    assets or liabilities
                            assets and liabilities
                                                             after off-set                period-begin               after off-set
 Deferred income tax
                                                                    7,645,824.11                                          7,681,680.11
 assets


(4) Deferred income tax asset without recognized

                                                                                                                  Unit: RMB/CNY
                  Item                                     Ending balance                                  Opening balance
 Deductible temporary differences                                        3,163,837.81                                    3,163,837.81
 Deductible loss                                                         5,081,160.28                                    5,081,160.28
 Total                                                                   8,244,998.09                                    8,244,998.09


(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year

                                                                                                                  Unit: RMB/CNY
              Year                      Ending amount                        Opening amount                          Note
 2027 and future years
 (applicable to high-tech
                                                     5,079,572.71                       5,079,572.71
 enterprises and technology-
 based SMEs)
 2026                                                   1,587.57                             1,587.57
 2025
 2024
 2023
 2022
 Total                                               5,081,160.28                       5,081,160.28
Other explanation:

29. Other non-current assets

                                                                                                                  Unit: RMB/CNY
                                                           Ending balance                               Opening balance
                   Item                        Book         Impairment                           Book     Impairment
                                                                          Book value                                    Book value
                                              balance        provision                          balance    provision
Other explanation:

30. Short-term borrowings

(1) Category

                                                                                                                  Unit: RMB/CNY
                   Item                                    Ending balance                                  Opening balance
 Mortgage loan                                                                                                           7,290,000.00
 Secured portfolio loan                                                   11,433,573.00                                 19,190,857.00
 Total                                                                    11,433,573.00                                 26,480,857.00
Explanation on category of short-term loans:




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(2) Short-term loans that have been overdue and have not been repaid

The total amount of short-term loans that were overdue and not repaid at the end of the period was RMB 0.00,
and the important short-term loans that were overdue and not repaid are as follows:
                                                                                               Unit: RMB/CNY
       Borrower               Ending balance     Borrowing rate            Overdue time         Overdue interest rate
Other note:

31. Trading financial liabilities

                                                                                                     Unit: RMB/CNY
                   Item                          Ending balance                           Opening balance
   Including:
   Including:
Other note:

32. Derivative financial liabilities

                                                                                                     Unit: RMB/CNY
                   Item                          Ending balance                           Opening balance
Other note:

33. Notes payable

                                                                                                     Unit: RMB/CNY
               Category                          Ending balance                           Opening balance
 Bank acceptance draft                                        22,605,511.76                            21,554,981.30
 Total                                                        22,605,511.76                            21,554,981.30
Totally 0 Yuan due note payable are paid at period-end

34. Account payable

(1) Account payable

                                                                                                     Unit: RMB/CNY
                   Item                          Ending balance                           Opening balance
 Within one year                                              84,279,098.42                            76,362,296.93
 Over one year                                                10,873,291.71                            12,167,182.03
 Total                                                        95,152,390.13                            88,529,478.96


(2) Major account payable over one year

                                                                                                     Unit: RMB/CNY
                   Item                          Ending balance                Reasons for non-payment or carry over
 Shenzhen Yuehai Global Logistics Co.,
                                                               2,858,885.97    Without settlement
 Ltd.
 LG                                                            1,906,267.50    Without settlement
 Tokin Electronics (Nanjing) Plasma Co.,
                                                                  617,963.45   Without settlement
 Ltd.
 Total                                                         5,383,116.92                         --

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Other explanation:

35. Accounts received in advance

(1) Accounts received in advance

                                                                                                       Unit: RMB/CNY
                    Item                            Ending balance                             Opening balance


(2) Important accounts received in advance with account age over one year

                                                                                                       Unit: RMB/CNY
                    Item                            Ending balance                   Reasons for outstanding or carry-over
Other note:

36. Contract liabilities

                                                                                                       Unit: RMB/CNY
                    Item                            Ending balance                             Opening balance
 Lease received in advance                                             4,250.00                                  473,034.32
 Sales received in advance                                           269,268.20                                  263,321.38
 Total                                                               273,518.20                                  736,355.70
Amount and reasons for significant changes in book value during the reporting period
                                                                                                       Unit: RMB/CNY
             Item                  Change Amount                                  Reason for change


37. Wage payable

(1) Wage payable

                                                                                                       Unit: RMB/CNY
                                                   Increase during the       Decrease during the
           Item              Opening balance                                                            Ending balance
                                                         period                    period
 I. Short-term benefits            3,844,381.07           30,004,922.98             29,423,338.40             4,427,543.85
 II. Post-employment
 benefits-defined                                          2,923,103.38              2,923,103.38
 contribution plans
 III. Dismiss welfare                                        17,830.00                  17,830.00
 Total                             3,844,381.07          32,945,856.36              32,364,271.78             4,427,543.85


(2) Short-term benefits

                                                                                                       Unit: RMB/CNY
                                                   Increase during the       Decrease during the
           Item              Opening balance                                                            Ending balance
                                                         period                    period
 1. Wages,bonuses,
                                   2,813,561.11          26,048,826.55              25,425,203.47             3,437,184.19
 allowancesand subsidies
 2. Employee benefits                 51,391.40            2,419,193.30              2,460,442.70                 10,142.00
 3. Social insurance
                                      22,287.98            1,304,063.69              1,304,852.79                 23,077.08
 premium
       Including:                     22,287.98            1,171,767.28              1,170,978.18                 23,077.08


                                                           106
                                                                        深圳中恒华发股份有限公司 2022 年半年度报告全文


 Medical insurance
              Work
                                                             50,802.86                 50,802.86
 injury insurance
              Maternity
                                                             82,282.65                 82,282.65
 insurance
 4. Housing
                                      24,310.00             171,415.44                171,415.44                 24,310.00
 accumulation fund
 5. Labor union
 expenditure and
                                     932,830.58              61,424.00                 61,424.00                932,830.58
 personnel education
 expense
 Total                             3,844,381.07         30,004,922.98              29,423,338.40            4,427,543.85


(3) Defined contribution plans

                                                                                                     Unit: RMB/CNY
                                                  Increase during the       Decrease during the
          Item               Opening balance                                                          Ending balance
                                                        period                    period
 1. Basic endowment
                                                          2,824,232.22              2,824,232.22
 insurance
 2. Unemployment
                                                             98,871.16                 98,871.16
 insurance
 Total                                                    2,923,103.38              2,923,103.38
Other explanation:

38. Taxes payable

                                                                                                     Unit: RMB/CNY
                    Item                           Ending balance                             Opening balance
 VAT                                                             5,512,451.48                               4,271,423.08
 Corporate income tax                                            6,153,723.35                               7,387,839.94
 Individual income tax                                               9,766.38                                  22,943.65
 Urban maintenance and construction tax                            406,704.84                                 658,864.50
 Property tax                                                      588,618.67                                 544,525.98
 Land use tax                                                      251,640.57                                 107,577.53
 Educational surtax                                                175,459.14                                 283,138.75
 Local educational surtax                                           86,688.01                                 159,099.46
 Dike fee                                                            1,665.00                                   1,665.00
 Stamp tax                                                          27,875.10                                  34,839.80
 Disposal fund of waste electrical
                                                                  1,351,500.00                              1,185,200.00
 products
 Total                                                           14,566,092.54                             14,657,117.69
Other explanation:

39. Other accounts payable

                                                                                                     Unit: RMB/CNY
                    Item                           Ending balance                             Opening balance
 Interest payable                                                    93,178.03                                113,080.26
 Other payable                                                   40,839,009.98                             30,335,832.88
 Total                                                           40,932,188.01                             30,448,913.14




                                                          107
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(1) Interest payable

                                                                                                    Unit: RMB/CNY
                     Item                        Ending balance                           Opening balance
 Interest of short-term loans payable                              93,178.03                                113,080.26
 Total                                                             93,178.03                                113,080.26
Significant overdue and unpaid interest:
                                                                                                    Unit: RMB/CNY
                 Loan unit                       Overdue amount                          Reason for overdue
Other explanation:

(2) Dividend payable

                                                                                                    Unit: RMB/CNY
                   Item                          Ending balance                           Opening balance
Other note, including important dividends payable that have not been paid for more than 1 year, should disclose
the reasons for the non-payment:

(3) Other accounts payable

1) Other account payable by nature

                                                                                                    Unit: RMB/CNY
                   Item                          Ending balance                           Opening balance
 Margin & deposit                                             13,943,459.17                            11,702,750.67
 Lease management fee                                          3,647,788.39                             3,647,788.39
 Intercourse funds                                            13,732,977.24                             5,411,882.45
 After sale and repairmen                                      3,043,012.42                             1,920,745.00
 Energy consumption (Water, electricity
                                                                  781,678.27                            2,554,906.95
 and steam)
 Shipping                                                     1,355,093.10                              1,762,758.03
 Reserve fund                                                 1,300,000.00                              1,300,000.00
 Other                                                        3,035,001.39                              2,035,001.39
 Total                                                       40,839,009.98                             30,335,832.88


2) Significant other account payable with over one year age

                                                                                                    Unit: RMB/CNY
                  Item                           Ending balance                Reasons for non-payment or carry over
 Shenzhen SED Property Development
                                                              2,158,060.75     Without settlement
 Co., Ltd.
 Shenzhen Huayongxing Environmental
                                                              1,000,000.00     Deposit
 Protection Technology Co., Ltd.
 Linghang Technology (Shenzhen) Co.,
                                                                  656,345.28   Without settlement
 Ltd
 Shenzhen Tongxing Electronics Co.,
                                                                  578,259.83   Without settlement
 Ltd.
 Shenzhen Yongdasheng Investment
                                                                  558,970.00   Deposit
 Development Co., Ltd.
 Total                                                        4,951,635.86
Other explanation
Nil

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40. Non-current liabilities due within one year

                                                                                                             Unit: RMB/CNY
                     Item                               Ending balance                             Opening balance
 Long-term loans due within one year                                 55,000,000.00                              61,000,000.00
 Lease liabilities due within one year                                  104,400.61                                 104,400.61
 Total                                                               55,104,400.61                              61,104,400.61
Other explanation:

41. Other current liabilities

                                                                                                             Unit: RMB/CNY
                   Item                                 Ending balance                             Opening balance
 Unterminated confirmation on note
                                                                       37,185,847.90                            64,546,944.94
 receivable
 Pending sales tax                                                                                                  97,335.67
 Total                                                                 37,185,847.90                            64,644,280.61
Changes in short-term bonds payable:
                                                                                                             Unit: RMB/CNY
                                                                                         Premiu
                                                                                                   Repay
                                                                              Interest    m and
                                    Bond       Issue   Openin                                      ment in
  Name       Face           Issue                                  Current    accrued    discoun                      Ending
                                    maturit   Amoun       g                                          the
 of bond     value           date                                   issue      at face       t                        balance
                                      y          t     balance                                     current
                                                                                value    amortiz
                                                                                                   period
                                                                                          ation

 Total
Other explanation:

42. Long-term loans

(1) Category

                                                                                                             Unit: RMB/CNY
                     Item                               Ending balance                             Opening balance
Description of Long-term loans classification:
Other explanation, including interest rate range:

43. Bonds payable

(1) Bonds payable

                                                                                                             Unit: RMB/CNY
                     Item                               Ending balance                             Opening balance


(2) Changes in increase or decrease in bonds payable (excluding preferred stocks, perpetual bonds and
other financial instruments classified as financial liabilities)

                                                                                                             Unit: RMB/CNY
  Name       Face           Issue   Bond      Issue    Openin      Current    Interest   Premiu    Repay             Closing


                                                                 109
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 of bond         value          date      maturit   Amoun        g            issue     accrued     m and    ment in                 balance
                                            y         t       balance                    at face   discoun     the
                                                                                          value        t     current
                                                                                                   amortiz   period
                                                                                                    ation

  Total                          --


(3) Description of the conditions and time for the conversion of convertible corporate bonds

(4) Description of other financial instruments classified as financial liabilities

Basic situation of other financial instruments such as preferred stocks and perpetual bonds issued at the end of
the period
Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of the period
                                                                                                Unit: RMB/CNY
  Financial                                          Increase in the current          Decrease in the current
                         Beginning of period                                                                           Ending of period
 instruments                                                 period                          period
    issued          Amount             Book value    Amount       Book value          Amount       Book value      Amount         Book value
Explanation of the basis for the classification of other financial instruments into financial liabilities
Other note

44. Lease liabilities

                                                                                                                        Unit: RMB/CNY
                         Item                                  Ending balance                                   Opening balance
 Lease liability                                                                      86,325.75                                   115,101.00
 Total                                                                                86,325.75                                   115,101.00
Other note

45. Long-term payables

                                                                                                                        Unit: RMB/CNY
                         Item                                  Ending balance                                   Opening balance


(1) List long-term payables according to the nature of the payment

                                                                                                                        Unit: RMB/CNY
                         Item                                  Ending balance                                   Opening balance
Other note:

(2) Special accounts payable

                                                                                                                        Unit: RMB/CNY
                                                     Increase in the          Decrease in the                                 Cause of
          Item                  Opening balance                                                     Ending balance
                                                     current period           current period                                 formation
Other note:




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46. Long-term Wages payable

(1) Long-term Wages payable

                                                                                                                    Unit: RMB/CNY
                     Item                                        Ending balance                           Opening balance


(2) Changes in defined benefit plans

Present value of defined benefit plan obligations:
                                                                                                                    Unit: RMB/CNY
                     Item                                          The Period                                Last Period
Plan assets:
                                                                                                                      Unit: RMB/CNY
                     Item                                          The Period                                Last Period
Defined benefit plan net liabilities (net assets)
                                                                                                                      Unit: RMB/CNY
                     Item                                          The Period                                Last Period
Description of the content of the defined benefit plan and related risks, the impact on the company's future cash
flow, time and uncertainty:
Explanation of major actuarial assumptions and sensitivity analysis results of defined benefit plans:
Other note:

47. Accrual liability

                                                                                                                    Unit: RMB/CNY
             Item                             Ending balance                      Opening balance                    Causes
 Pending action                                          801,159.18                          801,159.18
 Total                                                   801,159.18                          801,159.18
Other explanations, including important assumptions and estimation about important estimated liabilities:

48. Deferred income

                                                                                                                    Unit: RMB/CNY
                                                    Increase during          Decrease during
         Item               Opening balance                                                      Ending balance            Causes
                                                       the period              the period
 Government
                                3,565,560.00                                       239,040.00        3,326,520.00
 subsidy
 Total                          3,565,560.00                                       239,040.00        3,326,520.00
Items involving Government subsidy:
                                                                                                                    Unit: RMB/CNY
                                                      Amount         Amount       Amount of
                                      New
                                                     reckoned        included      cost and                                     Assets-
                                    subsidy
                   Opening                            in non-         in other      expense      Other        Ending          related/Inc
  Liability                        increased
                   balance                          operating       income in      offset in    change        balance            ome-
                                     in the
                                                    income in      the current    the current                                   related
                                     period
                                                    the period         period        period
 Provincial
 special                                                            100,000.0                                                 Assets-
                 1,400,000.00                                                                               1,300,000.00
 fund for                                                                   0                                                 related
 transforma

                                                                       111
                                                                      深圳中恒华发股份有限公司 2022 年半年度报告全文


 tion and
 upgrading
 of
 traditional
 industry
 for 2018
 Incentive
 fund for
 Wuhan
 industrial
 intelligent
                                                                                                            Assets-
 transforma      413,560.00                             29,540.00                            384,020.00
                                                                                                            related
 tion
 demonstra
 tion
 project in
 2019
 Special
 funds for
 industrial
 investment
 and
 technologi
                                                        109,500.0                                           Assets-
 cal            1,752,000.00                                                               1,642,500.00
                                                                0                                           related
 transforma
 tion and
 intelligent
 transforma
 tion in
 2020
Other explanation:

49. Other non-current liabilities

                                                                                                  Unit: RMB/CNY
                  Item                              Ending balance                        Opening balance
Other note:

50. Share capital

                                                                                                  Unit: RMB/CNY
                                                      Changes in the Period (+,-)
                                                               Shares
                   Opening                                                                                  Ending
                                Issuing new                transfer from
                   balance                    Bonus shares                        Other    Subtotal         balance
                                   shares                      public
                                                              reserves
                 283,161,227.                                                                             283,161,227.
 Total shares
                          00                                                                                       00
Other explanation:




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51. Other equity instruments

(1) Basic information of other financial instruments such as preferred stocks and perpetual bonds issued
at the end of the period

(2) Changes in financial instruments such as preferred stocks and perpetual bonds issued at the end of
the period

                                                                                                                   Unit: RMB/CNY
  Financial                                    Increase in the current        Decrease in the current
                    Beginning of period                                                                           Ending of period
 instruments                                           period                        period
    issued       Amount        Book value      Amount       Book value        Amount       Book value       Amount          Book value
Other equity instruments' changes in the current period, explanations of the reasons for the changes, and the
basis for related accounting treatments:
Other note:

52. Capital public reserve

                                                                                                                   Unit: RMB/CNY
                                                        Increase during the         Decrease during the
         Item                  Opening balance                                                                      Ending balance
                                                              period                      period
 Capital premium
                                   146,577,771.50                                                                      146,577,771.50
 (equity premium)
 Total                             146,577,771.50                                                                      146,577,771.50
Other explanation, including changes and reasons of changes:

53. Treasury stocks

                                                                                                                   Unit: RMB/CNY
                                                      Increase in the current     Decrease in the current
         Item                  Opening balance                                                                      Ending balance
                                                              period                     period
Other note, including changes in the current period and explanations of the reasons for the changes:

54. Other comprehensive income

                                                                                                                   Unit: RMB/CNY
                                                                                   The Period
                                                                                 Less:
                                                                  Less:        written
                                                               written in     in other
                                                                  other       compreh
                                                              comprehen         ensive
                                                                  sive         income
                                                 Account                                                            Belong to    Endin
                                                               income in           in        Less:   Belong to
                                     Opening       before                                                            minority      g
               Item                                             previous      previous      income     parent
                                     balance      income                                                            sharehold    balanc
                                                              period and        period        tax    company
                                                 tax in the                                                          ers after      e
                                                                 carried          and      expense    after tax
                                                    year                                                               tax
                                                              forward to       carried
                                                               gains and      forward
                                                                losses in          to
                                                                 current      retained
                                                                 period       earnings
                                                                                   in


                                                                113
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                                                                              current
                                                                              period
Other explanation, including the adjustment on initial recognition for arbitrage items that transfer from the
effective part of cash flow hedge profit/loss:

55. Surplus public reserve

                                                                                                             Unit: RMB/CNY
                                                        Increase during the        Decrease during the
          Item                 Opening balance                                                               Ending balance
                                                              period                     period
 Statutory surplus
                                     77,391,593.25                                                                77,391,593.25
 reserves
 Total                               77,391,593.25                                                                77,391,593.25
Other explanation, including changes and reasons for changes:

56. Retained profit

                                                                                                             Unit: RMB/CNY
                        Item                                      Current period                         Last period
 Retained profit at the end of the previous period
                                                                           -163,679,952.44                       -170,881,854.46
 before adjustment
 Retained profit at period-begin after adjustment                          -163,679,952.44                       -170,881,854.46
 Add: net profit attributable to owners of the
                                                                              8,806,785.10                          6,989,362.48
 parent company
 Retained profit at period-end                                             -154,873,167.34                       -163,892,491.98
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new
regulations affect the retained profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0
Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to
0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period
amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan

57. Operating revenue and cost

                                                                                                             Unit: RMB/CNY
                                              Current Period                                       Last Period
          Item
                                   Revenue                       Cost                   Revenue                   Cost
 Main business                     343,768,461.90               302,427,802.11          323,468,602.68           282,596,348.19
 Other business                     10,378,458.91                 9,418,141.38           68,165,205.87            47,447,861.39
 Total                             354,146,920.81               311,845,943.49          391,633,808.55           330,044,209.58
Information relating to revenue:
                                                                                                             Unit: RMB/CNY
      Category                    Branch 1                     Branch 2                                           Total
Product types
Including:
Display                            201,380,980.94                                                                201,380,980.94


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Plastic injection
                                 92,476,910.14                                                       92,476,910.14
hardware
Foam parts                       22,509,819.38                                                       22,509,819.38
Property lease                   26,482,662.15                                                       26,482,662.15
Material income                   9,553,238.60                                                        9,553,238.60
Utility bills and others          1,743,309.60                                                        1,743,309.60
Classification by
business area
  Including:
Domestic                        303,461,034.26                                                      303,461,034.26
Overseas                         50,685,886.55                                                       50,685,886.55
Market or customer
type
  Including:

Contract types
  Including:

Classification by time
of goods transfer
  Including:

Classification by
contract duration
  Including:

Classification by sales
channel
  Including:


Total                           354,146,920.81                                                      354,146,920.81
Information relating to performance obligations:
Nil
Information related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations that have been signed at the end of this
reporting period but have not yet been fulfilled or have not done with fulfillment is 0.00 yuan, among them,
yuan of revenue is expected to be recognized in YEAR, yuan of revenue is expected to be recognized in YEAR,
and yuan of revenue is expected to be recognized in YEAR.
Other explanation

58. Tax and surcharges

                                                                                                Unit: RMB/CNY
                   Item                          Current Period                            Last Period
 Urban maintenance and construction tax                             524,812.63                             53,181.85
 Educational surtax                                                 337,932.44                             23,402.05
 Property tax                                                       803,504.10                            671,892.72
 Land use tax                                                       140,595.85                            380,897.71
 Vehicle use tax                                                        420.00
 Stamp tax                                                          225,040.10                             283,562.58
 Local education development fee                                     19,554.99                              15,425.01
 Total                                                            2,051,860.11                           1,428,361.92
Other explanation:

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59. Sales expense

                                                                                        Unit: RMB/CNY
                    Item                 Current Period                            Last Period
 Employee compensation                                    1,511,113.24                            1,940,607.71
 Customs fee                                                428,889.32                              204,766.55
 After-sales service fee                                  2,181,327.83                            3,190,859.79
 Business entertainment expense                             103,382.79                              264,119.35
 Transportation fee                                       3,362,898.88                            4,858,694.34
 Commodity loss and others                                1,915,546.51                            3,635,570.22
 Total                                                    9,503,158.57                           14,094,617.96
Other explanation:

60. Administrative expense

                                                                                        Unit: RMB/CNY
                  Item                   Current Period                           Last Period
Salary                                                    4,569,059.54                            6,033,625.10
Depreciation                                              1,034,235.99                            1,259,331.29
Social security fee                                       1,196,121.34                            1,182,922.32
Business entertainment expense                              721,167.15                            1,829,623.45
Employee benefits                                           451,211.62                            1,205,669.37
Travel expenses                                             304,754.99                              705,255.91
Depreciation and amortization cost                          956,561.62                              863,491.01
Transportation expenses                                     190,138.32                              220,781.91
Intermediary agency service fee                           1,392,751.91                            2,163,145.90
Security fee                                                783,054.02                              460,539.40
Repair cost                                               2,792,908.99                            3,428,358.44
Office expenses                                             612,830.43                            1,075,155.32
Communication fee                                            70,790.74                               61,127.20
Securities Information Disclosure Fee                        33,532.00                               46,361.00
Environmental protection fee                                312,500.95                               47,617.53
Staff education and labor union funds                        99,228.19                               12,689.53
Water and electricity                                       262,980.96                              284,729.15
Property insurance premium                                  145,636.56
Litigation fee                                              502,311.00
Other expenses                                            1,195,845.48                            1,799,883.41
Total                                                 17,627,621.80                              22,680,307.24
Other explanation:

61. R& D expenses

                                                                                        Unit: RMB/CNY
                   Item                  Current Period                            Last Period
 Personnel labor costs                                    3,349,821.11                            3,424,760.68
 Depreciation and amortization expense                      461,134.94                              437,009.74
 Maintenance and inspection fees                            972,301.14
 Other related expenses                                     239,418.36                               93,877.08
 Total                                                    5,022,675.55                            3,955,647.50
Other explanation:




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                                                               深圳中恒华发股份有限公司 2022 年半年度报告全文


62. Financial expense

                                                                                           Unit: RMB/CNY
                    Item                   Current Period                            Last Period
 Interest costs                                             3,018,586.99                           3,731,443.17
 Less: Interest income                                       -197,692.42                             203,041.26
 Exchange loss                                              1,232,863.24                           4,068,036.84
 Less: exchange gains                                       2,188,048.69                           2,461,568.22
 Handing expense                                               73,802.64                             106,832.13
 Total                                                      1,940,816.62                           5,241,702.86
Other explanation:

63. Other income

                                                                                           Unit: RMB/CNY
                  Sources                  Current Period                           Last Period
Three generations of fees refunds                              4,283.81                               3,553.35
Special funds of 2021 provincial foreign
                                                            3,500,000.00
trade and economic development
Special funds of 2021 provincial foreign
trade and economic development                               575,800.00
(processing trade matters)
Special funds of 2020 Caidian District
Industrial enterprise technology                             130,000.00
transformation
Special funds of 2021 Central foreign
economic and trade development (to
                                                              66,200.00
promote the development of foreign
trade SMEs)
Provincial special fund for
transformation and upgrading of                              100,000.00
traditional industry for 2018
Incentive fund for Wuhan industrial
intelligent transformation demonstration                      29,540.00
project in 2019
Special funds for industrial investment
and technological transformation and                         109,500.00
intelligent transformation in 2020
Total                                                       4,515,323.81                              3,553.35


64. Investment income

                                                                                           Unit: RMB/CNY
                     Item                      Current Period                          Last Period
 Financial income                                                180,088.19                          149,767.58
 Total                                                           180,088.19                          149,767.58
Other explanation:

65. Credit impairment loss

                                                                                          Unit: RMB/CNY
                Item                       Current Period                           Last Period
Other explanation:


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66. Losses on assets impairment

                                                                                                                 Unit: RMB/CNY
                     Item                                   Current Period                                 Last Period
 II. Inventory falling price loss and
 impairment loss of contract performance                                                                                 -1,350,000.00
 cost
 Total                                                                               0.00                                -1,350,000.00
Other explanation:

67. Asset disposal income

                                                                                                                 Unit: RMB/CNY
     Source of asset disposal income                        Current Period                                 Last Period
 Fixed assets disposal                                                        789,308.26


68. Non-operating income

                                                                                                                 Unit: RMB/CNY
                                                                                                        Amount included in current
             Item                          Current Period                       Last Period
                                                                                                       non-recurring profits or losses
 Government subsidy                                                                      256,000.00
 Handling fee and others                              40,574.92                           20,599.04                         40,574.92
 Total                                                40,574.92                          276,599.04                         40,574.92
Government subsidy reckoned into current gains/losses:
                                                                                                                 Unit: RMB/CNY
                                                              Subsidy
                                                                                                                             Assets-
                                                               impact         The special
                 Issuing      Offering                                                        Amount in    Amount in       related/Inc
    Item                                        Nature         current         subsidy
                 subject       causes                                                         the Period   last period        ome-
                                                             gains/losse        (Y/N)
                                                                                                                             related
                                                              s (Y/N)
Other explanation:

69. Non-operating expenditure

                                                                                                                 Unit: RMB/CNY
                                                                                                        Amount included in current
             Item                          Current Period                       Last Period
                                                                                                       non-recurring profits or losses
 Other                                                15,308.31                          215,202.92                        15,308.31
 Total                                                15,308.31                          215,202.92                        15,308.31
Other explanation:

70. Income tax expense

(1) Statement of income tax expense

                                                                                                                 Unit: RMB/CNY
                  Item                                      Current Period                                 Last Period
 Current income tax expense                                                  2,858,046.44                                1,584,720.39
 Total                                                                       2,858,046.44                                1,584,720.39




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(2) Adjustment on accounting profit and income tax expenses

                                                                                                              Unit: RMB/CNY
                                Item                                                         Current Period
 Total profit                                                                                                          11,664,831.54
 Income tax based on statutory/applicable rate                                                                          2,935,595.03
 Impact by different tax rate applied by subsidies                                                                         77,548.59
 Income tax expense                                                                                                     2,858,046.44
Other explanation
Nil

71. Other comprehensive income

See note

72. Annotation of cash flow statement

(1) Cash received with other operating activities concerned

                                                                                                              Unit: RMB/CNY
                   Item                                        The Period                                Last Period
 Unit intercourse account                                                    9,264,523.28                              15,891,476.38
 Repayment from employees                                                        8,000.00                                  81,510.67
 Margin and deposit                                                            308,402.50                                   3,420.00
 Interest income                                                                41,205.46                                  30,133.34
 Government subsidy                                                          4,272,000.00                                 259,553.35
 Total                                                                      13,894,131.24                              16,266,093.74
Note of cash received with other operating activities concerned:
Nil

(2) Cash paid with other operating activities concerned

                                                                                                              Unit: RMB/CNY
                   Item                                        The Period                               Last Period
Unit intercourse account                                                    17,410,896.15                              19,499,576.94
Employee loan                                                                2,418,943.00                                  47,686.67
Deposit and security deposit                                                   310,606.20                               1,804,581.00
Communication fee                                                              315,763.72                                 165,926.34
Utility bill                                                                 1,791,131.38                               4,662,103.00
Travel expenses                                                                168,703.63                               1,168,068.54
Shipping fee                                                                 3,191,066.04                               2,706,778.65
Repair cost                                                                  1,114,725.46                               1,369,952.77
Consultation fee                                                                                                        1,400,000.00
Office expenses                                                                  6,485.97                                  19,086.70
Communication fee                                                               56,794.86                                 437,439.91
Other                                                                       13,359,474.93                              18,919,703.62
Total                                                                       40,144,591.34                              52,200,904.14
Note of cash paid with other operating activities concerned:


”Other” refers to note receivable margin, which is restricted funds.


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                                                                           深圳中恒华发股份有限公司 2022 年半年度报告全文


(3) Cash received with other investment activities concerned

                                                                                                      Unit: RMB/CNY
                  Item                                 Current Period                            Last Period
 Financial redemption                                               57,000,000.00
 Total                                                             57,000,000.00
Note of cash received with other investment activities concerned:

(4) Cash paid related with investment activities

                                                                                                      Unit: RMB/CNY
                   Item                                Current Period                            Last Period
 Investment and financial management                                57,000,000.00
 Total                                                             57,000,000.00
Note of cash paid related with investment activities:

(5) Other cash received related to financing activities

                                                                                                      Unit: RMB/CNY
                   Item                                Current Period                            Last Period
Description of other received cash related to financing activities:

(6) Cash paid related with financing activities

                                                                                                      Unit: RMB/CNY
                   Item                                Current Period                            Last Period
Note of cash paid related with financing activities:

73. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

                                                                                                      Unit: RMB/CNY
          Supplementary information                      This Period                             Last Period
 1. Net profit adjusted to cash flow of
 operation activities:
        Net profit                                                      8,806,785.10                           6,989,362.48
      Add: Assets impairment provision                                                                         1,350,000.00
         Depreciation of fixed assets,
 consumption of oil assets and depreciation                             7,690,371.41                           5,855,066.65
 of productive biology assets
             Depreciation of right-of-use
                                                                          52,324.68
 assets
         Amortization of intangible assets                               362,505.79                             875,257.88
         Amortization of long-term deferred
                                                                         163,238.99                             114,127.72
 expenses
         Loss from disposal of fixed assets,
 intangible assets and other long-term                                  -789,308.26
 assets (gain is listed with “-”)
         Losses on scrapping of fixed assets
 (gain is listed with “-”)
           Gain/loss of fair value changes

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 (gain is listed with “-”)
            Financial expenses (gain is listed
                                                             1,940,816.62                           5,241,702.86
 with “-”)
            Investment loss (gain is listed
                                                              -180,088.19                               -149,767.58
 with “-”)
            Decrease of deferred income tax
                                                                  35,856.00
 asset ((increase is listed with “-”)
            Increase of deferred income tax
 liability (decrease is listed with “-”)
            Decrease of inventory (increase is
                                                            24,485,039.16                         -61,101,647.02
 listed with “-”)
          Decrease of operating receivable
                                                            28,321,886.92                          97,224,785.91
 accounts (increase is listed with “-”)
          Increase of operating payable
                                                            -21,169,205.84                        -78,217,258.49
 accounts (decrease is listed with “-”)
             Other
            Net cash flows arising from
                                                            49,720,222.38                         -21,818,369.59
 operating activities
 2. Material investment and financing not
 involved in cash flow
    Conversion of debt into capital
    Switching Company bonds due within
 one year
    Financing lease of fixed assets
 3. Net change of cash and cash
 equivalents:
      Balance of cash at period end                         60,681,659.02                          59,612,186.22
      Less: Balance of cash equivalent at
                                                            32,802,562.90                          60,968,053.58
 year-begin
      Add: Balance at year-end of cash
 equivalents
    Less: Balance at year-begin of cash
 equivalents
      Net increase of cash and cash
                                                            27,879,096.12                          -1,355,867.36
 equivalents


(2) Net cash payment for the acquisition of a subsidiary in the period

                                                                                             Unit: RMB/CNY
                                                                                 Amount
 Including:                                                                        --
 Including:                                                                        --
 Including:                                                                        --
Other note:

(3) Net cash received from the disposal of subsidiaries

                                                                                             Unit: RMB/CNY
                                                                                 Amount
 Including:                                                                        --
 Including:                                                                        --
 Including:                                                                        --
Other note:

(4) Constitution of cash and cash equivalent

                                                                                             Unit: RMB/CNY
                     Item                        Ending balance                       Opening balance

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                                                                             深圳中恒华发股份有限公司 2022 年半年度报告全文


 I. Cash                                                                60,681,659.02                              32,802,562.90
 Including: Cash on hand                                                       460.00                                 220,467.15
         Bank deposit available for payment
                                                                        75,664,154.16                              32,582,095.75
 at any time
 III. Balance of cash and cash equivalent at
                                                                        60,681,659.02                              32,802,562.90
 period-end
Other explanation:

74. Note of the changes of owners’ equity

Explain the items and amount at period-end adjusted for “Other” at end of the last year:
Nil

75. Assets with ownership or use right restricted

                                                                                                              Unit: RMB/CNY
                    Item                              Ending book value                              Limited reason
Monetary fund                                                           14,890,386.86   Note payable margin
Fixed assets                                                            11,972,048.26   Collateral for borrowing
Intangible assets                                                        6,463,333.15   Collateral for borrowing
Monetary fund                                                               92,568.28   Judicial freeze
Investment real estate                                                  33,323,610.66   Collateral for borrowing
Disposal of fixed assets                                                92,857,471.69   Court seizure
Total                                                                  159,599,418.90
Other explanation:

76. Item of foreign currency

(1) Item of foreign currency

                                                                                                              Unit: RMB/CNY
                                     Ending balance of foreign                                         Ending RMB balance
                Item                                                     Rate of conversion
                                             currency                                                       converted
 Monetary funds
 Including: USD                                     144,521.39     6.6863                                             966,313.38
        Euro
        HKD

 Account receivable
 Including: USD                                   3,148,466.55     6.6863                                          21,051,591.91
        Euro
        HKD

 Long-term loans
 Including: USD
        Euro
        HKD


Other explanation:




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(2) Explanation on foreign operational entity, including as for the major foreign operational entity,
disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping
currency changed, explain reasons

□ Applicable √Not applicable

77. Government subsidy

(1) Government subsidy

                                                                                              Unit: RMB/CNY
                                                                                     Amount reckoned into current
          Category                Amount                     Item for presentation
                                                                                            gains/losses
Special funds of 2021
provincial foreign trade and           3,500,000.00     Other income                                3,500,000.00
economic development
Special funds of 2021
provincial foreign trade and
                                        575,800.00      Other income                                  575,800.00
economic development
(processing trade matters)
Special funds of 2020 Caidian
District Industrial enterprise          130,000.00      Other income                                  130,000.00
technology transformation
Special funds of 2021 Central
foreign economic and trade
development (to promote the                66,200.00    Other income                                   66,200.00
development of foreign trade
SMEs)
Provincial special fund for
transformation and upgrading
                                        100,000.00      Other income                                  100,000.00
of traditional industry for
2018
Incentive fund for Wuhan
industrial intelligent
                                           29,540.00    Other income                                   29,540.00
transformation demonstration
project in 2019
Special funds for industrial
investment and technological
                                        109,500.00      Other income                                  109,500.00
transformation and intelligent
transformation in 2020
Three generation of fees                    4,283.81    Other income                                     4,283.81


(2) Government grants rebate

□ Applicable √Not applicable
Other explanation:




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VIII. Equity in other entity

1. Equity in subsidiary

(1) Constitute of enterprise group

                    Main operation       Registration                                  Share-holding ratio
  Subsidiary                                               Business nature                                             Acquired way
                        place               place                                   Directly          Indirectly
Wuhan Hengfa
                                                           Production &                                               Investment
Technology          Wuhan              Wuhan                                          100.00%
                                                           sales                                                      establishment
Co., Ltd.
Shenzhen
Zhongheng
                                                           Property                                                   Investment
HUAFA               Shenzhen           Shenzhen                                       100.00%
                                                           management                                                 establishment
Property Co.,
Ltd
Shenzhen
HUAFA                                                      Property                                                   Investment
                    Shenzhen           Shenzhen                                       100.00%
Hengtian Co.,                                              management                                                 establishment
Ltd.
Shenzhen
HUAFA                                                      Property                                                   Investment
                    Shenzhen           Shenzhen                                       100.00%
Hengtai Co.,                                               management                                                 establishment
Ltd.
Shenzhen
HUAFA
                                                           Property                                                   Investment
Property Lease      Shenzhen           Shenzhen                                       100.00%
                                                           management                                                 establishment
Management
Co., Ltd
                  Hong Kong,          Hong Kong,                                                                      Equity
Ruth Co., Ltd.                                                                        100.00%
                  China               China                                                                           acquisition
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
Major structured entity included in consolidates statement:


The scope of consolidate financial statement is determined on a control basis, which not only includes the subsidiaries determined
on the basis of voting rights themselves or in combination with other arrangements, but also structured subjects determined on the
basis of one or more contractual arrangements.


The control means that the Company owns a power over the investee, obtains variable returns through participation in the
investee’s related activities, and has the ability to use its power over the investee to influence the amount of variable returns. The
subsidiary is the subject that are controlled by the Company, the structured subjects are subjects that are not designed to have
voting rights as a determinant in determining the controlling party.

Basis of termination of agent or consignor:

Other explanation




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IX. Related party and related party transactions

1. Parent company of the enterprise

                                                                                             Share-holding
                                                                                              ratio on the       Voting right ratio
   Parent company       Registration place      Business nature      Registered capital
                                                                                             enterprise for      on the enterprise
                                                                                            parent company
 Wuhan                                        Production and
 Zhongheng New                                sales, real estate
 Science &                                    development and
                       Wuhan                                         138,000,000.00                   42.13%                42.13%
 Technology                                   sales, housing
 Industrial Group                             leasing and
 Co., Ltd                                     management
Explanation on parent company of the enterprise
Nil
The ultimate control of the enterprise is Li Zhongqiu.
Other note:


2. Subsidiary of the Enterprise

Found more in VIII. Equity in other entity in the Note

3. Other related party

                    Other Related party                                           Relationship with the Enterprise
Shenzhen Zhongheng Semiconductor Co., Ltd.                          Control by same controlling shareholder and ultimate controller
Wuhan Hengsheng Yutian Industrial Co., Ltd.                         Control by same controlling shareholder and ultimate controller
Wuhan Hengsheng Photo-electricity Industry Co., Ltd.                Control by same controlling shareholder and ultimate controller
Hong Kong Yutian International Investment Co., Ltd.                 Control by same controlling shareholder and ultimate controller
Wuhan New Oriental Real Estate Development Co., Ltd.                Control by same controlling shareholder and ultimate controller
Wuhan Zhongheng Property Management Co., Ltd.                       Control by same controlling shareholder and ultimate controller
Wuhan Optical Valley Display System Co., Ltd.                       Control by same controlling shareholder and ultimate controller
Wuhan Yutian Dongfang Property Co., Ltd.                            Control by same controlling shareholder and ultimate controller
Wuhan Xiahua Zhongheng Electronics Co. Ltd.                         Control by same controlling shareholder and ultimate controller
Wuhan Zhongheng Yutian Trading Co,, Ltd                             Control by same controlling shareholder and ultimate controller
Wuhan Yutian Hongguang Real Estate Co., Ltd.                        Control by same controlling shareholder and ultimate controller
Shenzhen Zhongheng Huayu Investment Holding Co., Ltd.               Control by same controlling shareholder and ultimate controller
Famous Sky Capital Limited                                          Control by same controlling shareholder and ultimate controller
Hong Kong Zhongheng Yutian Co., Ltd.                                Control by same controlling shareholder and ultimate controller
Shenzhen Zhongheng Yongye Technology Co., Ltd.                      Control by same controlling shareholder and ultimate controller
Shenzhen Yutian Hengrui Co., Ltd.                                   Control by same controlling shareholder and ultimate controller
Wuhan Henglian Optoelectronics Co., Ltd.                            Control by same controlling shareholder and ultimate controller
Other note

4. Related transaction

(1) Goods purchasing, labor service providing and receiving

Goods purchasing/labor service receiving
                                                                                                               Unit: RMB/CNY
      Related party        Content           Current Period         Trading limit         Whether over the         Last Period


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                                                                         approved         approved limited or
                                                                                              not (Y/N)
 Hong Kong
 Yutian
 International        Purchasing             32,093,434.47           127,514,000.00       N                              37,751,811.11
 Investment Co.,
 Ltd.
 Wuhan
 Hengsheng
                      Purchasing             55,876,974.75           178,519,600.00       N                              60,509,427.57
 Photo-electricity
 Industry Co., Ltd.
 Total                                       87,970,409.22           306,033,600.00       N                              98,261,238.68
Goods sold/labor service providing
                                                                                                                    Unit: RMB/CNY
           Related party                     Content                        Current Period                      Last Period
 Hong Kong Yutian
 International Investment Co.,     Sales                                            35,680,578.23                        62,100,265.79
 Ltd.
 Wuhan Hengsheng Photo-
                                   Sales                                            28,513,041.72                        17,319,716.68
 electricity Industry Co., Ltd.
 Total                                                                              64,193,619.95                        79,419,982.47
Explanation on goods purchasing, labor service providing and receiving

(2) Related guarantee

As the guarantor
                                                                                                                    Unit: RMB/CNY
                                                                                                                    Completed or not
     Secured party            Amount guarantee                 Start                          End
                                                                                                                        (Y/N)
 Wuhan Hengfa
                                     36,000,000.00     2022-04-21                   2026-04-21                  N
 Technology Co., Ltd.
As the secured party
                                                                                                                    Unit: RMB/CNY
                                                                                                                    Completed or not
       Guarantor              Amount guarantee                 Start                          End
                                                                                                                        (Y/N)
 Li Zhongqiu                         90,000,000.00     2019-07-01                   2022-07-01                  Y
Explanation on related guarantee

5. Receivable/payable items of related parties

(1) Receivable

                                                                                                                    Unit: RMB/CNY
                                                         Ending balance                                Opening balance
        Item              Related party
                                                Book balance     Bad debt provision            Book balance     Bad debt provision
                        Hong Kong
                        Yutian
 Account
                        International            17,899,401.57                                      24,428,463.68
 receivable
                        Investment Co.,
                        Ltd.
                        Wuhan Hengsheng
 Account
                        Photo-electricity              12,099.44                                    13,902,449.94
 receivable
                        Industry Co., Ltd.


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                      Hong Kong
                      Yutian
 Advance payment      International                14,502,424.33
                      Investment Co.,
                      Ltd.
 Total                                             32,413,925.34                                 38,330,913.62


(2) Payable

                                                                                                                 Unit: RMB/CNY
              Item                           Related party                Closing book balance            Opening book balance
                                   Wuhan Hengsheng Photo-
 Accounts payable                                                                    21,924,311.63                  17,295,609.05
                                   electricity Industry Co., Ltd.
                                   Hong Kong Yutian
 Accounts payable                  International Investment Co.,                                                    10,025,769.59
                                   Ltd.
 Total                                                                               21,924,311.63                  27,321,378.64


X. Commitments or contingency

1. Important commitments

Important commitments on balance sheet date

As of the date of this report, the company has no important commitments that should be disclosed but not

disclosed.

2. Contingency

(1) Contingency on balance sheet date


As of the date of this report, the company has no undisclosed contingencies that should be disclosed.

(2) For the important contingency not necessary to disclosed by the Company, explained reasons

The Company has no important contingency that need to disclosed

XI. Other important events

1. Previous accounting errors collection

(1) Retrospective restatement method

                                                                                                                 Unit: RMB/CNY
                                                                      Names of report items in each
 Correction of accounting errors         Processing program                                               Cumulative influence
                                                                       comparison period affected




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(2) Future applicable law

                                                                                            Reasons for adopting future applicable
       Correction of accounting errors                  Approval procedure
                                                                                                            law


2. Debt restructuring

3. Assets replacement

(1) Exchange of non-monetary assets

(2) Other asset replacement

4. Pension plan

5. Termination of operation

                                                                                                                Unit: RMB/CNY
                                                                                                                   Termination of
                                                                                                                   operation profit
                                                                               Income tax                           attributable to
       Item             Income            Expense          Total profit                            Net profit
                                                                                 expense                            owners of the
                                                                                                                         parent
                                                                                                                       company
Other note

6. Segment

(1) Recognition basis and accounting policy for reportable segment

(2) Financial information for reportable segment

                                                                                                                Unit: RMB/CNY
              Item                                                        Offset of segment                      Total



(3) If the company has no reportable segments or is unable to disclose the total assets and liabilities of
each reportable segment, it should state the reasons

(4) Other explanations

7. Major transaction and events makes influence on investor’s decision

8. Other

(1) The Company signed Asset Exchange Contract with Wuhan Zhongheng New Science & Technology Industrial Group Co., Ltd
(hereinafter referred to as Wuhan Zhongheng Group) on 29 April 2009 (details were referred to in the announcement dated 30 April
2009), and pursuant to the contract, since part of the assets of the Company (namely two parcel of industrial lands located at Huafa


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road, Gongming town, Guangming new district, Shenzhen (the property certificate No. were SFDZ No.7226760 and SFDZ
No.7226763, No. of parcels were A627-005 andA627-007, and the aggregate area was 48,200 sq.m) were the lands listed in the first
batch of plan for 2010 Shenzhen urbanization unit planning preparation plan. For promotion of such urbanization project and joint
cooperation, the Company has not completed the transfer procedures in respect of the aforesaid land.


The Company convoked the first extraordinary meeting of the Board in 2015 on February 16, 2015 and the first extraordinary general
meeting of the Board in 2015 on March 4, 2015, which considered and approved the “Motion on promoting and implementing the
urban renewal project for the renewal units of Huafa area at Gongming street, Guangming new district, Shenzhen”, specified that the
Company and Wuhan Zhongheng Group shall obtain the corresponding compensatory consideration for removal from the
respectively owned project plots and the respectively contributed and constructed above-ground buildings before the land
development, it is estimated that the compensatory consideration obtained by the Company accounts for 50.5% of the total
consideration and Wuhan Zhongheng Group accounts for 49.5% by calculation.


The sixth extraordinary meeting of the board of directors in 2015 and the third extraordinary general meeting of 2015 have
considered and adopted the “Proposal on the project promotion and implementation of urban renewal and the progress of related
transactions of ‘the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen’”, the company has signed
the “Agreement on the cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New
District, Shenzhen”, “Contract for the cooperative venture of reconstruction project for Huafa Industrial Park, Gong Ming Street,
Guangming New District” on 26 August 2015, and “Agreement on housing acquisition and removal compensation and resettlement”
with Wuhan Wuhan Zhongheng Group, Shenzhen Vanke Real Estate Co., Ltd. (hereinafter referred to as “Shenzhen Vanke”), and
Shenzhen Vanke Guangming Real Estate Development Co., Ltd. (hereinafter referred to as “Vanke Guangming”).


On 12 September 2016, Shenzhen Vanke applied for arbitration in respect of “Agreement on the cooperation of urban renewal
project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen” against the Company and Wuhan
Zhongheng Group. Shenzhen Court of International Arbitration (SCIA) has given a ruling in August 2017. On August 29, 2018, the
court accepted the compulsory execution application of Shenzhen Vanke. In October 2019, as a number of outsiders filed an
“execution objection” and applied for “no execution” to Shenzhen Intermediate People’s Court, the Shenzhen Intermediate People’s
Court ruled to terminate the enforcement procedure on March 20, 2020. If the “execution objection” and “no execution” proposed by
outsiders are rejected according to law, Shenzhen Vanke may continue to apply to the Shenzhen Intermediate People’s Court to
resume execution.


In April 2020, Zhongheng Semiconductor sued the company to Shenzhen Intermediate People’s Court, and requested the company to
transfer the above mentioned two pieces of lands and compensate the economic loss of 52 million yuan, the first and second trial
judgments reject the Semiconductor’s appeal; Zhongheng Semiconductor sued the Company and the invalid of “Agreement on the
cooperation of urban renewal project of the updated units at Huafa Area, Gong Ming Street, Guangming New District, Shenzhen”
signed by Wuhan Zhongheng Group Company and Vanke, the second trial rejects all claims of Zhongheng Semiconductor. Progress
of the case found more in the Notices released on Juchao website dated 14 Sept. 2016, 1 Nov. 2016, 16 Nov. 2016, on 18 Feb. 2017,
24 March 2017, 25 April 2017, 1 July 2017, 18 August 2017, 9 Feb. 2018, 25 Aug. 2018, 7 Sept. 2018, 21 Apr. 2020, 3 Jun, 2021, 22
Jul. 2021 and Mar. 5, 2022 respectively.


(2) On 31 December 2015, the 88,750,047 shares held by Wuhan Zhongheng Group, are pledge to China Merchants Securities Assets
Co., Ltd. with due date of 31 December 2016. On 1 Feb. 2016, Wuhan Zhongheng Group pledge the 27,349,953 shares held to China
Merchants Securities Assets Co., Ltd. with due date of 31 December 2016. The above-mentioned pledged shares are deferred by
Wuhan Zhongheng Group; pledge expired on 31 December 2017. The trading day for repurchase put off to the date when pledge
actually removed. Till end of this period released, controlling shareholder still not removed the pledge and the Company has apply by

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letter, relevant Notice of Presentment on Stock Pledge from Controlling Shareholder was released. Found more in notice released on
Juchao website date 2 Feb. 2018.


In March 2021, Wuhan Zhongheng Group received the judgment on case of “pledged securities repurchase dispute” brought by
China Merchants Securities Assets Management Co., Ltd from High People’s Court of Guangdong Province. Wuhan Zhongheng
Group appealed to the Supreme People’s Court against the decision. Found more in notice released on Juchao Website dated March
19, 2021.


(3) The controlling shareholder Wuhan Zhongheng Group holds 119,289,894 shares of the Company’ stock, accounting for 42.13%
of the total share capital of the Company, of which 116,489,894 shares were judicially frozen by Shenzhen Intermediate People's
Court (hereinafter referred to as "Shenzhen Intermediate Court") on September 27, 2016, which were frozen again by the Shenzhen
Intermediate People's Court on December 14, 2018, with a frozen period of 36 months; the remaining 2,800,000 shares were frozen
by the Shenzhen Intermediate People's Court on May 29, 2019, and were frozen again by the Higher People’s Court of Guangdong
Province on July 5, 2019. For details, please refer to the company’s announcements published on Juchao Website dated October 27,
2016, January 11, 2019, May 31, 2019 and August 7, 2019.


(4) On September 29, 2016, the company and its controlling shareholder, Wuhan Zhongheng Group, signed the “Agency Contract”
with V&T Law Firm. On October 8, 2016, the three parties also signed the “Supplemental Agreement for Agency Contract”, it was
agreed that V&T acted as an agent for the company and Wuhan Zhongheng Group to deal with the arbitration case with Shenzhen
Vanke. After losing the lawsuit, due to differences in the payment of attorney fees, V&T sued our company and Wuhan Zhongheng
Group to the Shenzhen Court of International Arbitration, and applied to the court to seize a bank account under our company’s name
and part of our company dormitories, please refer to “Other Announcements on the Progress Involving Litigation and Arbitration”
(Announcement Numbers: 2018-43, 2019-02) released on Juchao Website dated November 14, 2018 and March 6, 2019. In
November 2019, the Shenzhen Court of International Arbitration ruled that the company and Wuhan Zhongheng Group paid the
corresponding fees. According to the relevant agreement of the “Entrusted Agency Contract” and “Supplementary Agreement”
signed by the three parties, loss of the ruling in the case shall be fully borne by Wuhan Zhongheng Group, therefore, it has no impact
on the profit of the Company. Found more on “Other Announcements on the Progress Involving Litigation and Arbitration”
(Announcement No.: 2019-34) released on Juchao Website dated November 25, 2019.


(5) Business of the Company - Styrofoam is a traditional manufacturing industry. The industry has stepping into the maturity with
severe overcapacity, the oversupply leads to a low gross margin and downward trend of profitability of the Company’s products. The
“proposal to shut down the Styrofoam business from wholly-owned subsidiary” was deliberated and approved by the third interim
meeting of BOD of 2022. Closure of the plant is progressing steadily.




XII. Principle notes of financial statements of parent company

1. Account receivable

(1) Category of account receivable

                                                                                                               Unit: RMB/CNY
                                       Ending balance                                           Opening balance
      Category                                Bad debt             Book                                                    Book
                          Book balance                                          Book balance       Bad debt provision
                                              provision            value                                                   value


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                      Amoun      Proport   Amoun     Accrua                Amoun     Proport    Amoun       Accrual
                        t          ion       t       l ratio                 t         ion        t          ratio
 Account receivable
 with bad debt        10,293,     100.00   10,293,   100.00                10,293,   100.00     10,293,      100.00
 provision accrual     424.29         %     424.29       %                  424.29       %       424.29          %
 on a single basis
 Including:
 Including:
                      10,293,     100.00   10,293,   100.00                10,293,   100.00     10,293,      100.00
 Total
                       424.29         %     424.29       %                  424.29       %       424.29          %
Accrual of bad debt provision on single basis: 10,293,424.29
                                                                                                             Unit: RMB/CNY
                                                                   Ending balance
         Name
                                Book balance         Bad debt provision         Accrual ratio                 Accrual causes
 Hong Kong Haowei
                                    1,870,887.18                1,870,887.18               100.00%        Uncollectible
 Industrial Co., Ltd.
 TCL ACE ELECTRIC
 APPLIANCE
                                    1,325,431.75                1,325,431.75               100.00%        Uncollectible
 (HUIZHOU) CO.,
 LTD.
 Qingdao Haier Parts
                                    1,225,326.15                1,225,326.15               100.00%        Uncollectible
 Procurement Co., Ltd.
 SKYWORTH
 Multimedia                           579,343.89                 579,343.89                100.00%        Uncollectible
 (Shenzhen) Co., Ltd.
 Shenzhen Huixin
 Video Technology Co.,                381,168.96                 381,168.96                100.00%        Uncollectible
 Ltd.
 Shenzhen Wandelai
 Digital Technology                   351,813.70                 351,813.70                100.00%        Uncollectible
 Co., Ltd.
 Shenzhen Dalong
                                      344,700.00                 344,700.00                100.00%        Uncollectible
 Electronic Co., Ltd.
 Shenzhen Keya
                                      332,337.76                 332,337.76                100.00%        Uncollectible
 Electronic Co., Ltd.
 Shenzhen Qunping
                                      304,542.95                 304,542.95                100.00%        Uncollectible
 Electronic Co., Ltd.
 China Galaxy
 Electronics (Hong                    288,261.17                 288,261.17                100.00%        Uncollectible
 Kong) Co., Ltd.
 Dongguan Weite
                                      274,399.80                 274,399.80                100.00%        Uncollectible
 Electronic Co., Ltd.
 Hong Kong New
 Century Electronics                  207,409.40                 207,409.40                100.00%        Uncollectible
 Co., Ltd.
 Shenyang Beitai
                                      203,304.02                 203,304.02                100.00%        Uncollectible
 Electronic Co., Ltd.
 Beijing Xinfang Weiye
                                      193,000.00                 193,000.00                100.00%        Uncollectible
 Technology Co., Ltd.
 TCL Electronics
                                      145,087.14                 145,087.14                100.00%        Uncollectible
 (Hong Kong) Co., Ltd.
 Huizhou TCL Xinte
                                      142,707.14                 142,707.14                100.00%        Uncollectible
 Electronics Co., Ltd.
 Sky Worth – RGB
                                      133,485.83                 133,485.83                100.00%        Uncollectible
 Electronic Co., Ltd.
 Other                              1,990,217.45                1,990,217.45               100.00%        Uncollectible
 Total                             10,293,424.29               10,293,424.29                                        --
If the provision for bad debts of accounts receivable is made in accordance with the general model of expected
credit losses, please refer to the disclosure of other receivables to disclose related information about bad-debt
provisions:
□ Applicable √Not applicable
By account age

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                                                                                                                Unit: RMB/CNY
                         Account age                                                        Ending balance
 Over 3 years                                                                                                      10,293,424.29
   Over 5 years                                                                                                    10,293,424.29
 Total                                                                                                             10,293,424.29


(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:
                                                                                                                Unit: RMB/CNY
                                                        Amount changed in the period
                    Opening
    Category                                            Collected or                                              Ending balance
                    balance            Accrual                          Written-off                  Other
                                                         reversal
Including major amount bad debt provision that collected or reversal in the period:
                                                                                                                Unit: RMB/CNY
                  Name                            Amount collected or reversal                        Way of collection


(3) Actual written-off accounts receivable in the current period

                                                                                                                Unit: RMB/CNY
                             Item                                                          Written-off amount
Including the important accounts receivable written-off situation:
                                                                                                                Unit: RMB/CNY
                                                                                                                  Whether the
                          Nature of                                                           Written-off          payment is
                                             Written-off
       Name                accounts                               Written-off reason          procedure           generated by
                                              amount
                          receivable                                                          performed           related party
                                                                                                                  transactions
Written-off description of accounts receivable:

(4) Top 5 account receivables collected by arrears party at ending balance

                                                                                                                Unit: RMB/CNY
                                 Ending balance of account            Proportion in total account     Ending balance of bad debt
          Company
                                        receivable                     receivables at period-end              provision
 Hong Kong Haowei
                                                 1,870,887.18                              18.18%                    1,870,887.18
 Industrial Co., Ltd.
 TCL ACE ELECTRIC
 APPLIANCE (HUIZHOU)                             1,325,431.75                              12.88%                    1,325,431.75
 CO., LTD.
 Qingdao Haier Parts
                                                 1,227,646.55                              11.93%                    1,227,646.55
 Procurement Co., Ltd.
 SKYWORTH Multimedia
                                                  579,343.89                                5.63%                     579,343.89
 (Shenzhen) Co., Ltd.
 Shenzhen Huixin Video
                                                  381,168.96                                3.70%                     381,168.96
 Technology Co., Ltd.
 Total                                           5,384,478.33                              52.32%


(5) Account receivable derecognition due to financial assets transfer

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Other note:

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2. Other account receivable

                                                                                                   Unit: RMB/CNY
                   Item                           Ending balance                            Opening balance
 Other account receivable                                      95,039,705.78                             92,468,697.71
 Total                                                         95,039,705.78                             92,468,697.71


(1) Interest receivable

1) Category of interest receivable

                                                                                                   Unit: RMB/CNY
                    Item                          Ending balance                            Opening balance


2) Significant overdue interest

                                                                                                    Whether there is
        Borrower                 Ending balance   Overdue time            Overdue reason           impairment and its
                                                                                                     judgment basis
Other note:

3) Accrual of bad debt provision

□ Applicable √Not applicable


(2) Dividend receivable

1) Category of dividend receivable

                                                                                                   Unit: RMB/CNY
           Item (or invested unit)                Ending balance                            Opening balance


2) Important dividend receivable with account age over one year

                                                                                                   Unit: RMB/CNY
                                                                                                    Whether there is
                                                                         Reasons for non-
  Item (or invested unit)        Ending balance    Account age                                     impairment and its
                                                                            recovery
                                                                                                     judgment basis


3) Accrual of bad debt provision

□ Applicable √Not applicable
Other note:




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(3) Other account receivable

1) Other account receivable by nature

                                                                                                                Unit: RMB/CNY
                  Nature                                Ending book balance                           Opening book balance
 Intercourse funds                                                    103,557,917.67                                101,523,586.62
 Borrow money                                                           2,779,815.03                                   1,441,111.12
 Margin & deposit                                                           85,304.70                                    304,608.00
 Rent receivable and utilities                                          7,001,429.97                                   6,999,971.21
 Other                                                                    141,721.91                                     725,904.26
 Less: Bad debt provision                                             -18,526,483.50                                 -18,526,483.50
 Total                                                                 95,039,705.78                                  92,468,697.71


2) Accrual of bad debt provision

                                                                                                                Unit: RMB/CNY
                                  Phase I                   Phase II                       Phase III
                                                    Expected credit losses for     Expected credit losses for
                              Expected credit
   Bad debt provision                                  the entire duration         the entire duration (with           Total
                            losses over next 12
                                                         (without credit              credit impairment
                                  months
                                                     impairment occurred)                  occurred)
 Balance on1 Jan. 2022                                                                         18,526,483.50          18,526,483.50
 Balance of 1 Jan. 2022
 in the period
 Balance on Jun. 30,
                                                                                              18,526,483.50           18,526,483.50
 2022
Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable


By account age
                                                                                                                Unit: RMB/CNY
                         Account age                                                          Ending balance
 Within one year (one year included)                                                                                  16,763,629.05
 1-2 years                                                                                                             4,969,630.70
 2-3 years                                                                                                            73,307,622.03
 Over 3 years                                                                                                         18,525,307.50
   Over 5 years                                                                                                       18,525,307.50
 Total                                                                                                               113,566,189.28


3) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:
                                                                                                                Unit: RMB/CNY
                                                             Amount changed in the period
                        Opening
    Category                                                 Collected or                                            Ending balance
                        balance             Accrual                          Written-off                Other
                                                              reversal
Including the important amount collected or switches back in the period:
                                                                                                                Unit: RMB/CNY
                   Name                           Amount collected or switches back                     Way of collection




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4) The actual written-off other receivables in the current period

                                                                                                                Unit: RMB/CNY
                              Item                                                        Written-off amount
Including the important written-off situation of other receivables:
                                                                                                                Unit: RMB/CNY
                                                                                                                   Whether the
                                                                                              Written-off           payment is
                          Nature of other       Written-off
          Name                                                      Written-off reason        procedure            generated by
                           receivables           amount
                                                                                              performed            related party
                                                                                                                   transactions
Description of other receivables written-off:

5) Top 5 other receivables collected by arrears party at ending balance

                                                                                                                Unit: RMB/CNY
                                                                                          Proportion in total
                                                                                                                Ending balance of
         Company              Nature          Ending balance            Account ages      other receivables
                                                                                                                bad debt provision
                                                                                            at period-end
 Wuhan Hengfa
                                                                    Within 1 year/1-2
 Technology Co.,        Intercourse funds       79,365,808.06                                        69.89%
                                                                    years/2-3 years
 Ltd.
 Shenzhen
 Zhongheng
                        Intercourse funds       20,661,335.28       Within 1 year                    18.19%
 HUAFA Property
 Co., Ltd
 Shenzhen HUAFA
 Property Leasing       Rent receivable            4,559,659.15     Over 5 years                      4.01%           4,559,659.15
 Co., Ltd.
 Portman                Rent receivable            4,021,734.22     Over 5 years                      3.54%           4,021,734.22
 Jackfang
                        Rent receivable            1,380,608.00     Over 5 years                      1.22%           1,380,608.00
 Investment 1F 1076
 Total                                         109,989,144.71                                        96.85%           9,962,001.37


6) Receivables involving government subsidies

                                                                                                                Unit: RMB/CNY
                              Government subsidy                                                            Estimated time, amount
            Name                                         Ending balance             Ending account age
                                    item                                                                      and basis of receipt


7) Other receivable for termination of confirmation due to the transfer of financial assets

8) The amount of assets and liabilities that are transferred other receivable and continued to be involved

Other note:

3. Long-term equity investments

                                                                                                                Unit: RMB/CNY
                                       Ending balance                                           Opening balance
         Item                           Provision for                                            Provision for
                      Book balance                         Book value          Book balance                          Book value
                                         impairment                                               impairment


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 Investment for
                     187,218,400.00           600,000.00   186,618,400.00    187,218,400.00     600,000.00      186,618,400.00
 subsidiary
 Total               187,218,400.00           600,000.00   186,618,400.00    187,218,400.00     600,000.00      186,618,400.00


(1) Investment for subsidiary

                                                                                                          Unit: RMB/CNY
                                                        Changes in the period                                       Closing
                      Opening                                                                     Closing
  The invested                                                       Accrual of                                    balance of
                      balance        Additional        Reduce                                     balance
     entity                                                         impairment        Other                       impairment
                    (Book value)     investment      investment                                 (Book value)
                                                                     provision                                     provision
 Wuhan
 Hengfa             183,608,900.                                                                 183,608,900.
 Technology                  00                                                                           00
 Co., Ltd.
 Shenzhen
 Zhongheng
 HUAFA              1,000,000.00                                                                 1,000,000.00
 Property Co.,
 Ltd
 Shenzhen
 HUAFA
                    1,000,000.00                                                                 1,000,000.00
 Hengtian Co.,
 Ltd.
 Shenzhen
 HUAFA
                    1,000,000.00                                                                 1,000,000.00
 Hengtai Co.,
 Ltd.
 Shenzhen
 HUAFA
 Property                                                                                                          600,000.00
 Leasing Co.,
 Ltd.
 Ruth Co., Ltd.         9,500.00                                                                     9,500.00
                    186,618,400.                                                                 186,618,400.
 Total                                                                                                             600,000.00
                              00                                                                           00


4. Operating revenue and cost

                                                                                                          Unit: RMB/CNY
                                                  The Period                                    Last Period
             Item
                                    Revenue                       Cost                Revenue                    Cost
 Other business                      24,122,414.00                4,518,020.17         22,146,204.31             4,439,887.16
 Total                               24,122,414.00                4,518,020.17         22,146,204.31             4,439,887.16
Information relating to revenue:
                                                                                                          Unit: RMB/CNY
         Category                  Branch 1                    Branch 2                                         Total
Product types
Including:
Property lease                      22,853,967.50                                                               22,853,967.50
Utility bill                         1,268,446.50                                                                1,268,446.50
Classification by
business area
  Including:
Domestic                            24,122,414.00                                                               24,122,414.00


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Market or customer
type
  Including:

Contract types
  Including:

Classification by time
of goods transfer
  Including:

Classification by
contract duration
  Including:

Classification by sales
channel
  Including:


Total                                24,122,414.00                                                                 24,122,414.00
Information relating to performance obligations:
Nil
Information relating to the transaction price assigned to the remaining performance obligation:
At end of the period, the corresponding revenue amount for performance obligations that have been signed but have not been
performed or have not been performed is 0.00 yuan, of which, yuan expected to recognized as revenue in the year.
Other explanation:


XIII. Supplementary Information

1. Current non-recurring gains/losses

√ Applicable □ Not applicable
                                                                                                            Unit: RMB/CNY
                      Item                                     Amount                                     Note
 Gains/losses from the disposal of non-
                                                                            789,308.26
 current asset
 Governmental subsidy reckoned into
 current gains/losses (except for those with
 normal operation business concerned, and
 conform to the national policies &                                       4,515,323.81
 regulations and are continuously enjoyed
 at a fixed or quantitative basis according to
 certain standards)
 Gain/loss of entrusted investment or assets
                                                                            180,088.19
 management
 Other non-operating income and
 expenditure except for the aforementioned                                   25,266.61
 items
 Less: Impact on income tax                                                 854,130.71
 Total                                                                    4,655,856.16                     --
Details of other gains/losses items that meets the definition of non-recurring gains/losses:
□ Applicable √ Not applicable

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There are no other gains/losses items that meet the definition of non-recurring gains/losses in the Company.
Explain the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss
in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public -
-- Extraordinary Profit/loss
□ Applicable √Not applicable

2. ROE and earnings per share

                                                                                       Earnings per share
    Profits during report period         Weighted average ROE             Basic earnings per       Diluted earnings per
                                                                         share (RMB/Share)         share (RMB/Share)
 Net profits belong to common
 stock stockholders of the                                      2.53%                  0.0311                    0.0311
 Company
 Net profits belong to common
 stock stockholders of the
                                                                1.19%                  0.0147                    0.0147
 Company       after     deducting
 nonrecurring gains and losses


3. Difference of the accounting data under accounting rules in and out of China

(1) Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable




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